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DAVOS 2021: French president Emmanuel Macron says modern capitalism 'can no longer work'

Tom Belger
·Finance and policy reporter
·3-min read
French President Emmanuel Macron delivers a speech at the opening session of the Choose France video-conference meeting at the Elysee Palace in Paris, Monday, Jan. 25, 2021. The video-conference gathers a hundred leaders of major foreign groups who were due to attend the Choose France Summit, which has been postponed because of the COVID-19 pandemic. (Ludovic Marin / POOL via AP)
French president Emmanuel Macron. Photo: Ludovic Marin / POOL via AP

French president Emmanuel Macron has warned modern capitalism “can no longer work,” urging global leaders to focus on tackling inequality and climate change.

“We will get out of this pandemic only with an economy that thinks more about fighting inequalities,” he said on Tuesday.

Macron made the comments in a Q&A session at the virtual Davos Agenda 2021 summit of global leaders.

Macron is often seen as a pro-business liberal abroad, but struck a more leftist tone in criticising capitalism and market economies over the past few decades.

He acknowledged they had lifted millions of people out of poverty, and given consumers goods and services previously unavailable to them.

But he said there had been a “deep moral and economic crisis” in which many workers lost their jobs through economic shocks. “Hundreds and thousands of people throughout the world had this feeling of losing their usefulness,” he said.

He said previously there had been opportunities for “progression” for the middle class, but the system had “broken.”

READ MORE: DAVOS 2021: Santander CEO says vaccines are the most effective economic policy

Meanwhile a disconnect was allowed to grow between “value creation and profit,” according to Macron. He said the financialisation of capitalism had positives, but had led to “profits that are not linked to innovation or work.” This in turn had fuelled inequality, he added.

Macron said there were “two kings in this system—shareholders and consumers,” with workers and the planet paying a price.

The French president highlighted the need to “move beyond” de-regulation and hostility to state intervention, as well as reforms to ensure companies take into account the social, environmental and democratic impact of their. He stopped short of any more detailed prescriptions, however.

“The capitalist model together with this open economy can no longer work in this environment,” he said.

He highlighted efforts to build “what we immodestly called the Paris consensus” at the Paris Peace Forum for global leaders last year. “The idea was basically that we needed to move beyond the Washington consensus,” he added.

READ MORE: DAVOS 2021: Merkel criticises China's COVID 'transparency'

The ‘Washington consensus’ refers to a set of free-market ideas and policies promoted around the world by the International Monetary Fund (IMF), World Bank and US government in the late 20th century.

Macron has previously dubbed such ideas, from privatisation and small government to liberalising trade, a “dogma” that have shaped political and intellectual life in recent decades.

He has previously linked his reform agenda to measures such as EU rules penalising investment in fossil fuels and incentivising green investment.

The comments may raise eyebrows given he was addressing a virtual Davos Agenda summit, a warm-up event for the World Economic Forum’s (WEF) annual, in-person Davos event scheduled in May.

Many critics see the gathering as a talking shop big on lofty rhetoric, and a symbol of capitalism and the global elite.

But organisers say it offers a unique opportunity for discussion and collaboration at one of the biggest meetings of political, business and civil society leaders in the world.

The summit usually takes place in the Swiss ski resort of Davos, though it has been moved to Singapore this year.

Watch: Vaccine concerns divide nations at Davos