As a senior civil servant, an Academician, and, above all, an economist, Jacques Rueff (1896-1978) played an important role in the economic reforms implemented in France in the 1960s. He stood out particularly for his free-market positions, in open opposition to the Keynesian ideas that came increasingly under pressure in the economic crisis of the 1970s. In his major work, L’Ordre social [The Social Order] (1945), he develops an interesting analysis which, when reinserted into the contemporary context, remains highly relevant today –an analysis that consists in identifying “false entitlements” in the economic field.
Jacques Bichot has re-read Jacques Rueff and outlines his thinking on false entitlements for us here, with a definition, examples, the naming of the agents concerned (including states) and possible consequences. He shows, in substance, that this concept, developed at a time when (paper) money constituted the main framework of economies, remains highly relevant in a world of globalized economies in which banknotes and real coin represent barely 10% of the money supply –all the more so in the current situation, when many states are finding it difficult to honour their debts. “The distinction increasingly being made between healthy debts and deficits, incurred through investment that is capable of generating future fiscal returns sufficient to service the debt, and irresponsible debts and deficits, generated by operating costs or transfer payments –or unprofitable investments– corresponds to the concepts of true and false debts in Jacques Rueff’s work”, writes Jacques Bichot, and it is clear, as he sees it, that the false entitlements that ensue have proliferated greatly.