Instead of debating what the outcome of Brexit negotiations or a Trump presidency could be, each country should be focusing on why these events happened and what can be done to address the underlying issues.
That was the message from Michel Paris, CEO of French buyout house PAI Partners, when he sat down for an exclusive interview with Private Equity International at the end of 2016.
“The big thing is not about what could happen, it’s about, ‘Why did it happen?’ Same question about the election of [US president-elect] Mr Trump,” he told PEI.
“It’s about the consequences of globalisation, it’s about immigration, it’s about how to limit unemployment etc. And on that I think the politicians have to find new solutions. People have been given the opportunity to vote and they have been basically saying, ‘We are not happy’. We have to take that into account.”
Paris said politicians should be thinking about new ways to manage countries to address some of these concerns.
“When thinking about inequality and all the rest, the capitalist system is good, but it has to be regulated, because from time to time the value creation is not well spread or shared between the employees, the retirees, the investors etc. I think we should try to think about some ways to regulate the capitalist system.”
One way to do that is to impose more stringent regulations to make sure large corporations cannot exploit loopholes to drastically lower their tax payments.
“For me the current system in which some guys are paying quasi no taxes, it is not acceptable. It’s a good example of what has to be regulated and what has to be changed,” Paris said.
“I’m a pretty big tax payer in France, and I would like to see the other guys doing the same. It’s as simple as that: everybody has to pay his fair share. I’m against all the schemes where you are trying to make zero your taxation.”
Inequality and the effects of globalisation have been key talking points at the World Economic Forum in Davos this week.
In his last major speech as vice president of the US yesterday, Joe Biden said that globalisation “has not been an unalloyed good” and that “it has deepened the rift between those racing ahead at the top and those struggling to hang on in the middle, or falling to the bottom”.
As part of his speech Biden called for the implementation of “a progressive, equitable tax system where everyone pays their fair share”.
Look out for our exclusive interview with Michel Paris in the February issue of Private Equity International