As the companies to pay dividends to each other

Profits are on trial. This may seem strange at a time where scholarships collapse and where profits are eroding. But in a country where the market economy is still neither understood nor accepted, where the word of profit remain attached to that of "exploitative", show disorders of money exacerbates tensions and calls the ideas of redistribution.

After the Division of labour proposed as a solution to unemployment, here is the sharing of profits advanced as a solution to the fraction of purchasing power.

Should reduce the share of the profits to increase of salaries as the left and the unions had demanded The Government appointed the Director of the Insee to make proposals for the end of April. Should we share profits with employees The President of the Republic launched the idea and even posted an ambitious goal, "a third party for the investment, a third for dividends, a third party for the employees." None of these ideas withstand scrutiny.

First, they are based one and the other on the false assertion, long left without response, that the share of the capitalist profit in national wealth would have significantly increased in recent years over the share of wages. Thus, 10 points of GDP have transferred from labour to capital since 1982. This is a sham because it for reference a period oil price shocks and imprudent wage reminders that have generated high inflation and distorted the Division of the value added by weakening business by creating mass unemployment without enriching employees. In fact, there is over a long period a relatively greater stability on the part of the work in the added value (65-35). It is even somewhat France higher than the average for the OECD countries.

The issue of wages, if it deserves to be asked, is independent of that of the profits. More wages, is not less profits, but fundamentally more growth and productivity. And if you want to go further, it is also reviewing public levies which lowers net salary, or public policy of exemption from social charges which ceilings contribute to squeezing wages down (pending the implementation of the RSA, permanently subsidizing the low wages, will not only multiply).

Default to artificially alter this balance wages-profits, is the idea to share profits with employees. In fact, profits and wages are two separate and complementary worlds. The profit, variable nature, remunerates capital and risk and prepares the future investment. Salary, his contractual in nature, provides independent remuneration of the results of the company (and the fact that the employee to escape the vagaries of the company was long seen as a social conquest). Between these two worlds, to associate the employees to walk from the business and add to wage a variable share likely to play a role of damper in case of difficulties, the France implemented respectively in 1959 and in 1967 of the engagement and participation mechanisms unique to the world that have further advanced by law last year.

If it is open to the Government to invite companies to develop engagement and participation, nothing would justify a legal manipulation of profit. The three third party rule put forward by the President of the Republic is doubly a chimera.

First, of course, it cannot be applied to all businesses. The issues of wages and profits do not arise in the same way between a large group of highly capital-intensive and a small business of low value-added labour, an oil company and an automotive subcontractor, an international company and a local small business or a start-up.

It may not serve as a global reference. 218 Billion of profits in 2007, 132 were reallocated in the company to invest and prepare for the future, 71 have been distributed as dividends and 15 in engagement and participation. In other words the rule of the thirds would divide by two the share of investment, that is to weaken the companies in their capacity to prepare for the future, to make them more dependent on a credit which are scarce today, to reduce the profitability of capital in a France subject to international competition and finally to the employees. Amputate the share of the dividends would little or less the same result. As the companies to pay dividends to each other. Still, adding that a redistribution of profits that would artificially increase the variable part of the remuneration inevitably result in a downward pressure on wages, to the chagrin of unions.

In fact the authoritarian sharing of profits is indeed a more compulsory. There is no difference in effect between a levy on profits ordered by the State and distributed by companies to employees and a levy tax which would be distributed directly by the State to the same employees as credit tax or employment bonus. And this compulsory is size. Follow the rule of the thirds, it would be superior to the corporation tax or income tax. There is as a paradox to see such an idea by a Government which means also do not want to raise taxes!

In fact, if for all French to participate in the fruits of capitalism, the Government should focus on developing a popular capitalism by pension funds capitalized around the world ensure sharing of stock profits or equity savings plans. The crisis is an exceptional opportunity for this. Without the need to conduct hazardous natural equilibria changes or genetic manipulation of wages and profits to which the precautionary principle is required.