This concept was born in the United States and is starting to appear in Europe thanks to several articles in the Financial Times. What is it about? A new economic model where, structurally, its components would evolve in a divergent way. In the letter K, one branch is facing upwards and the other facing downwards. In the K-economy, part of the population sees its income and wealth increase while those of the rest of the population decrease continuously, hence a structural increase in inequality.

In the United States, in recent years, it has become much more difficult for a large part of the population to escape poverty and join the well-to-do social categories, except for the prodigious fortunes born from the exploitation of new technologies. Before, the American dream was open to everyone, as long as they mobilized their forces to become rich. This is no longer the case due to the evolution of the economic model. This is what this new concept highlights, but it generates criticism and begins to prompt measures to correct its effects. California is planning to introduce a tax on billionaires and the chairman of the semiconductor giant, Nvidia, whose capitalization exceeds $4000 billion, Mr. Huang, has nothing to complain about.

Are Europe, and especially France, concerned by what must be called a major transformation within the economies of developed countries? Yes, but the social models are completely different. The reduction of inequalities is not based on the possibility given to each person by his or her work and personal qualities to raise his or her standard of living and to enrich himself, but on redistribution based on taxes that finance transfers that make it possible in part to make up for inequalities.

The question that is then asked is simple: faced with a rise in inequality and persistent obstacles to access a higher standard of living, the need for redistribution will increase. But as the level of taxes has already reached a ceiling everywhere and public debt is breaking records, this model will very quickly find its limits, especially in France. The challenge in the coming years will therefore be to find ways to slow down the advent of the K-economy by making people admit that the increase in wealth production is not incompatible with a better distribution of it.

The figures speak for themselves. The wealth of French households continues to grow and by the end of 2024 it reached nearly 15,000 billion euros, about three times the level recorded in 2001 by INSEE. Financial assets are now the most dynamic part of this development, taking over from real estate. Their financial savings rate is at a record level in 2025, approaching 10% of gross disposable income. The explanation commonly given, uncertainty about the international environment and political instability, is not convincing. The real reason is the sharp increase in inequality. A growing number of households benefit from increasingly higher incomes, higher than their consumption needs.

Large companies, banks and all the service activities related to them have agreed to a surge in the remuneration of senior managers and their external advisors at a time when, in the name of competitiveness, it was necessary to reduce the cost of labour for the vast majority of employees. This reduction was accompanied by a reduction in social security contributions financed by the State. But since this aid is reserved for salaries below a ceiling, it has generated what has been called the "smicardization" of the economy. Companies have been discouraged from granting salary increases at the risk of no longer benefiting from these tax reductions. This has contributed to further aggravating inequalities in a lasting way.

Between 2002 and 2022, according to a study by the Ministry of Finance, the income of households representing 90% of the population grew by 39%, that of 9% by 61%, that of 0.9% by 79% and that of 0.1% by 119%. The figures for the last two years should show a further increase in the gaps because financial income plays an increasing role and they benefit from a cap on their tax rate at 30%.

The supply-side policy launched in 2012 is often criticised, which aimed to restore their competitiveness by reducing the burden on companies, which was supposed to be favourable to external accounts, growth and employment. The results have not lived up to expectations, but there has been little analysis and therefore little debate on the use of the new resources made available to these companies. Investment in France has not rebounded to match these resources, unlike investments abroad and especially acquisitions that have often proved disastrous (Alstom with ABB, Alcatel with Lucent or Lafarge with cement plants in the Middle East). On the other hand, the shareholders, and therefore the managers of these companies, have benefited. Dividends paid by CAC 40 companies have increased from €51 billion in 2018 to more than €70 billion on average over the period 2022-2024.

The supply-side policy has therefore played a significant role in the increase in inequality, since studies have shown that it is the growth in financial income that is the main factor in the increase in household income, without supporting consumption since this income is much higher than what is needed, and the balance therefore goes to savings. France is therefore becoming a K-economy with all its consequences, the rise of extremist parties and a deep discontent with the political leaders who are accused of being at the origin of this rise in inequality.

But that's not all, because the social model of redistribution has not been abandoned. Considerable but insufficient sums of public money are being spent to mitigate the effects of these growing inequalities. The State is therefore suffering a triple penalty. He has reduced corporate tax and financial income tax. He had reduced the charges on companies without finding new resources to compensate for these reductions and reliefs. Finally, it must face a growing, and therefore costly, demand for redistributive measures to mitigate the feeling of injustice born of the unprecedented rise in inequality.

The state of France's public finances is therefore not surprising, and the difficulties encountered by successive governments are the result of this major contradiction between the adoption of the rules of the K-economy favouring the accumulation of wealth within a small minority of the population and the attachment to the social model adopted in the aftermath of the war.

It is not a question of stigmatising successes that generate enrichment, quite the contrary, because without successes, there are no jobs or salaries. We need to rebuild a model of shared wealth and prosperity, the opposite of the K-economy. Everyone will win, companies, their managers and their shareholders because they will have more and more customers, in increasingly diverse sectors. This will be good for their results and therefore for their managers and shareholders. Customers, and therefore the French, will regain a certain optimism in the face of the evolution of their personal and family situations. France would then avoid falling under the control of extremists.