Enjoying a successful career on Wall Street and having a passion for tackling inequality are not mutually exclusive. After working for Salomon Brothers and Citigroup for 25 years, Yann Coatanlem published Le capitalisme contre les inégalités (“Capitalism against Inequalities”) last year. The tome weighs in at 500 pages and was co-authored by Antonio de Lecea, a former advisor to European Commission president Romano Prodi. The book brings together history, philosophy, and data from countless economic studies to offer ideas for “combining equity and efficiency,” as implied by its subtitle. Published just before the French presidential election, a copy was spotted on Emmanuel Macron’s desk in a brief shot during the documentary A President, Europe and War, released in June 2022. In late March of this year, the two authors received the Prix Turgot, which recognizes the best French book in the field of financial economics.
“The starting point for the book was our desire to contribute to the widespread and growing conversation about inequality,” says Yann Coatanlem in the elegant living room of his apartment on Fifth Avenue opposite Central Park. “Brexit, the election of Donald Trump, and increasing tensions in countries such as France all reflect a form of social despair which leads to extreme reactions. Some people believe that, as politics has failed to solve today’s problems, we should get rid of either capitalism or democracy – or both. And that’s a scary idea.”
Avoiding hardline stances, this distinguished fifty-something who describes himself as “center-right” joined forces with a “center-left” economist to walk a balanced line between free-market liberalism and social justice. In contrast with French economist Thomas Piketty, whose bestseller Capital in the Twenty-First Century (2014) identifies capitalism as the cause of rising inequalities, the two authors suggest that it can help to reduce them. “The main idea behind the book is that inequality has a negative impact on growth,” says Yann Coatanlem. “And this negative impact is bigger when social mobility is reduced.”
The American Paradox
In France, “a rather unequal country before redistribution, and a rather equal one afterwards,” the current crisis of confidence is caused by a “breakdown in the social elevator,” according to the economist, originally from Reims, who is also an international trade advisor for France in the United States. “When a French person starts at the bottom of the income scale, it takes six generations to reach the median salary – but just two in Denmark.” The situation is even worse in the United States. “The somewhat romantic image of the American dream is over. Social immobility has set in, combined with other inequalities along racial lines, for example.” The result is what he refers to as the “American paradox,” a country home to the world’s strongest economy and the greatest inequalities.
Based in New York City since 2001 (he arrived just two weeks before 9/11), Yann Coatanlem worked there for six years before founding the think tank Club Praxis, which provides pro bono research and advice to French governments on both the left and the right. “It was originally a way to support Nicolas Sarkozy’s presidential campaign in 2007. Then, after he was elected, we began discreetly dialoguing with public authorities. This strategy gained speed under François Hollande, and has continued under Emmanuel Macron.”
This “idea lab” receives no subsidies and is a non-profit. What makes it unique is its analysis of France’s situation from the United States. This means it can “evaluate good and bad practices in America,” and draw on big data to develop recommendations. “Our first realization was that public authorities were not using private sector tools nearly enough – especially big data. Generally, governmental approaches are too focused on macroeconomics and not enough on microeconomics. But you need both!”
Toward a Universal Basic Income
In the Club Praxis reports, as well as in opinion pieces he regularly publishes in leading French dailies such as Le Monde, Les Echos, and Le Figaro, Yann Coatanlem is careful to offer recommendations along with analysis. His book follows the same approach, and even provides a radical solution for dealing with inequality: the introduction of a universal basic income. In theory, this would replace most social aid programs, which often fail to reach target populations due to their complexity or a fear of being stigmatized. In France, one third of people eligible for RSA welfare payments do not apply for them. Meanwhile, the authors also defend an overhaul of the tax system and suggest the use of a negative tax.
“We believe that universal basic income should create a safety net to assist with repeated crises,” says Yann Coatanlem. “By guaranteeing a consistent level of income, this mechanism allows people to plan for the future, which changes their attitude to risk. Not only would this benefit the economy, it would also have a political impact. If people are less scared about the future, they are more open to leaders discussing long-term projects such as pension reform and how to tackle climate change.” Another advantage of universal basic income is its ability to provide an answer to fears over job losses caused by massive advances in AI and robotization.
More than a year after it was published, and although it won the Prix Turgot and featured on the presidential desk, Yann Coatanlem and Antonio de Lecea’s book has failed to inspire public authorities to action. And while there have been widespread protests, the pension reform is also far from the “big bang” the authors dreamed about. Despite this context, the former banker has never seen himself in politics. “I prefer trying to influence things,” he says. He left Citibank in 2019 to launch a start-up, DataCore Innovations, which develops “antifragile” financial products designed to weather crises. Married to American entrepreneur James Brooks Jr., founder and CEO of GlassView, since 2018 , he also doesn’t think he will go back to France. “I have both passports, and I see myself as something of a citizen of the world. My life is in New York City, my husband is here, and we just had a son.” After clocking up “ten trips to France last year, mostly promoting the book,” he is already thinking about what to write next. “I think it will be about the current fracture in our democracies, but it will be much shorter!”
Le capitalisme contre les inégalités : Conjuguer équité et efficacité dans un monde instable by Yann Coatanlem and Antonio de Lecea, Presses universitaires de France, 2022.
Article published in the June 2023 issue of France-Amérique. Subscribe to the magazine.
