Everything has a price


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In the current phase of extreme imbalances, it seems logical that politics should do what it always does: more or less the same, but never really enough.

In my youth, I had a rather violent car accident. I came out unscathed from a completely dented Citroën 2CV, but overwhelmed by the events, I suffered a shock. And I fainted. I will never forget that feeling of losing my balance and slumping. It is not for nothing that we speak of balance. By this we mean that something is in balance and in economics in particular the balance has an incredible importance, far too important in my eyes. It’s all about balance. Private households or companies seek a balance that best meets their needs, in accordance with budgetary restrictions. At the macroeconomic level, we speak of equilibrium price or equilibrium quantity, of balanced interest rate and during the studies we were bothered to calculate the equilibrium of a national economy. There are still many other equilibria in the economy, from Walras to Nash and all the others.

On the other hand, it is a fact that there is never an equilibrium in practice and even less in economics. This rule, which once found some justification in political economy textbooks, is now a thing of the past. There is simply no state of society or economy that could be called stable. Once we understand this, we realize the reason for these imbalances. The financial markets are THE home par excellence of this instability. They are never balanced, not even a little. Information is constantly processed there, reassessments are daily and the next day everything is totally different from the day before. As for the omniscient market, it ignores day after day where the journey takes it. The feeling that we have that our existence is more and more ephemeral is also explained by the predominance of the financial system, which over the past thirty years has experienced much stronger growth than the real economy and which constantly spreads turmoil that the media escalate. This agitation also affects our daily life, a hundredfold by the digital madness. For many people today it is more important to be present everywhere, to be informed of everything, to not miss any trends and to always be in tune with the times, than to find a balance that they risk losing with this constant inclination. Everyone seeks their balance, because everything else is too uncertain, too unstable no doubt.

I never encountered the perfect state of balance, which I was taught in college. What would it look like? Growth of how many percent? And how high could inflation or interest rates go? The complexity of the real evolution of the economy undermines all models whose shameless simplification of reality is a joke that, at best, still interests a few students. At times I have felt that certain imbalances or shifts could be predicted, but now that my working life is coming to an end, I have to admit that the economy is even more unpredictable than one might have expected. to imagine. Currently, we seem to be going through a phase of extreme imbalances. Post-(?)pandemic, supply difficulties, war in Ukraine, soaring inflation and probable recession keep us in suspense and no textbook explains these scenarios. So it seems logical that politics does what it always does: more or less the same, but never quite enough. She had announced that inflation could get out of control, but the monetary authorities hesitated too much and now find themselves facing a disastrous situation. This imbalance was noticeable upstream and did not happen overnight. It’s easy to pin the blame solely on oil and gas, but that doesn’t hold up, especially as prices are now rising across a broad front. As in the textbooks where the balance is lost.


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