Jean Tirole - Economie du bien commun

Published in France in spring 2016, Jean Tirole’s Économie du bien commun has proved a huge popular success. Even Paris Match, a periodical aimed at a general readership, reviewed the book and noted that it had sold over 45,000 copies in a month and a half. Jean Tirole has a long list of accolades and titles to his name. Winner of the Nobel Prize for Economics in 2014, he received the French CNRS Gold Medal in 2007. He is Chairman of the Toulouse School of Economics (TSE), and a founding member and Chairman of the Executive Committee of the Institute of Advanced Studies of Toulouse (IAST) and scientific director of the Institute of Industrial Economics (IDEI). Initially trained as an engineer, he is also director of the École des Hautes Etudes en Sciences Sociales (EHESS) and a visiting professor at the Massachusetts Institute of Technology (MIT), as well as a member of the French Council of Economic Advisors and the Académie des Sciences Morales et Politiques.  As the Swedish Academy recognised, Tirole is one of the most influential economists of our time. The Économie du bien commun discusses four key topics in 17 chapters (each of which, as the author tells us, can be read independently of one another). 

Tirole begins by exploring the relationship between economic knowledge and society, and what role economists should play. In the second part, entitled “The institutional framework of the economy”, he includes two chapters dealing with the State (in particular, its relationship with the market) and business (in terms of its governance and its social responsibility). The five chapters of the third part deal with a number of issues ranging from climate challenge, unemployment, and the European project to the role of finance and the financial crisis of 2008. In part four, the last five chapters deal with industrial issues, looking in particular at competition, industrial policy, the digital economy, the application of digital technologies and their social consequences, innovation and intellectual property, and finally sectoral regulation. The central theme of the book is: how can competition be made to function efficiently and what role of the State should play in this, especially against corporate interests? Competition – on which the author believes limits should be put – could, nonetheless, serve as a driver for the advancement of knowledge and the quality of education of future generations. Meanwhile the innovative issue of the “common good”, as something to which we aspire in terms of equality, purchasing power, the environment, the importance of work-life balance, is to be found in an array of practical applications throughout the book: in the regulation of private interests, in corporate social responsibility, in climate change, in unemployment, in the European project, in the financial markets, in industrial policy, in electricity production and distribution, in the regulation of transport, in the digital economy, in technological innovation, and in intellectual property, to name but a few. Finally, in this fascinating book, Jean Tirole, gives us an overview of economic instruments - from game theory to information theory (of which there is a very clear exposition) – which can enable us to respond in an effective and practical way to the key challenges of our time, even suggesting what the best solutions may be.