par
Robert Cauneau
10 September 2025
Abstract
Economics lies at the crossroads of two approaches: on the one hand, a positive vision that reveals invariant accounting mechanisms, such as the link between public deficit and net private savings, and on the other, a normative dimension where fiscal rules, often presented as natural laws, are in reality institutional choices with profound consequences. Financial constraints, such as the Maastricht criteria or the ban on direct monetary financing, are not the result of economic necessity, but of a political framework that directly influences social justice. By naturalizing these rules, their moral impact is obscured: underfunded hospitals, struggling schools, or a delayed ecological transition—all sacrifices imposed in the name of balancing accounting. As Rawls and Sen emphasize, a just society is not judged by its fiscal ratios, but by its ability to guarantee decent living conditions for all. Thus, public debt and budgetary policies are not technical questions, but ethical issues: they question the type of society we choose to build, between financial discipline and the common good.
1. Introduction
We often hear this warning: « We must start with the world as it is, not with the world as we would like it to be. » In economic debates, this phrase recurs like a mantra to disqualify approaches deemed « too theoretical » or « idealistic. » It is sometimes used as a critical argument against Modern Monetary Theory (MMT). But what exactly does « the world as it is » mean in economics?
Is it the reality of immutable economic laws, comparable to the laws of physics, that science merely describes? Or is it the set of political and institutional rules that currently govern our economies, and which we choose to consider natural? Behind this seemingly technical question lies an epistemological, but also profoundly political and moral, issue: is economics a positive science, revealing invariant mechanisms, or a normative science, inseparable from ideology and societal choices?
This is the intersection of current debates surrounding public debt, currency, and fiscal policy. Depending on which conception of economics one favors, one ends up either naturalizing arbitrary rules such as the ban on direct financing of states, or challenging them in the name of social justice and democracy.
2. Positive Science: The Quest for Invariant Economic Laws
Since its inception, political economy has sought to draw closer to the natural sciences by uncovering general laws, supposedly independent of historical or institutional contexts. Adam Smith, David Ricardo, and Karl Marx all attempted, each in their own way, to identify fundamental regularities: value formation, profit dynamics, capital accumulation.
In the 20th century, Keynes took up this ambition again and applied it to macroeconomics. His General Theory highlights the regularities that are essential in any monetary economy: marginal propensity to consume, the role of effective demand, and the multiplier of public spending. These relationships are not mere theoretical constructs, but observable facts that allow us to understand why mass unemployment cannot be reduced without public intervention.
MMT is part of this tradition. Far from being a utopian dream, it advocates a strictly positive approach: it describes what contemporary accounting identities and monetary mechanisms show. Two observations in particular stand out:
- The state spends before levying taxes or issuing securities : public monetary creation logically precedes monetary destruction through taxes.
- The public deficit is the exact mirror image of the private sector surplus : any reduction in the deficit corresponds to a decrease in the net financial savings of households and businesses.
These regularities are accounting constants, observable in all modern monetary economies. In other words, they are not political « choices » or « preferences, » but structural properties of the system.
Ignoring these constants risks naturalizing artificial constraints. Presenting government financing through markets as an « economic » necessity is less a matter of positive science than of transposing an institutional choice into the realm of natural law.
3. Normative Science:
3.1 Economics as a Product of Institutions
Conversely, another tradition emphasizes the profoundly institutional and normative nature of economics. At the turn of the 20th century, Thorstein Veblen already emphasized that economic behavior is embedded in social rules and power relations. Karl Polanyi, in The Great Transformation, demonstrated that the « self-regulating » market is anything but natural: it is a political construct. More recently, Michel Foucault has reminded us that economics is not only descriptive, but also prescriptive: it contributes to the production of norms that govern behavior.
From this perspective, contemporary fiscal rules—the Maastricht criteria, Article 123 of the TFEU, and the Stability and Growth Pact—appear for what they are: political choices translated into accounting constraints. Treating them as universal economic laws amounts to erasing their ideological dimension.
Adopting this perspective does not mean denying the constraints of reality, but rather reminding us that this reality is always already shaped by collective decisions. « Austerity » is not the mechanical consequence of excessive debt: it is the product of an institutional framework that sanctifies certain balances (limiting the deficit) to the detriment of other objectives (full employment, ecological transition, social justice, etc.).
3.2 Economics as a Societal Choice
While positive science seeks to describe invariant mechanisms, normative science consists of prescribing rules or institutions based on political objectives. MMT theory reminds us that budgetary constraints often presented as economic laws (prohibition of direct monetary financing, deficit limits) are in reality political choices. These rules, far from being neutral, reflect specific priorities—such as the fight against inflation or market discipline—to the detriment of other collective objectives.
This is what is at stake with regard to public debt and government financing. Rules prohibiting direct financing by central banks or imposing recourse to bond markets do not stem from any economic necessity: they result from political decisions, such as those enshrined in European treaties. Yet they are often presented as natural, and therefore untouchable, constraints.
Some economists justify these rules by the fear that the government, free from any budgetary limits, will « spend haphazardly, » especially during election periods. This argument reveals a shift from science to ideology: it is not an empirical observation, but a normative prescription, based on a distrust of democracy and a preference for market discipline. The independence of central banks illustrates this logic: presented as a technical safeguard, it actually aims to limit the ability of governments to direct public spending, in the name of monetary stability, which often takes priority over other social issues.
4. From Epistemology to Morality
The distinction between positive and normative science is not just an academic question: in my view, it has profound moral implications. Reducing economics to supposedly natural constraints obscures the ethical dimension of collective choices and their impact on the lives of citizens.
John Rawls, in his A Theory of Justice, reminds us that the organization of institutions must be evaluated according to principles of equity and distributive justice. Economic rules are therefore not neutral: they structure the distribution of resources and determine access to public goods. Presenting these rules as « unavoidable » or « natural » amounts to legitimizing social injustice.
Amartya Sen, for his part, expands on this reflection by emphasizing the real capabilities of individuals. A just society is not measured solely by available resources or income, but by what each individual can actually do or be: their health, their education, their freedom to participate in social and economic life. From this perspective, the budgetary constraints that limit public action not only affect figures on a balance sheet, but also directly affect the ability of every citizen to lead a dignified and fulfilling life.
Thus, austerity is not only an economic error: it is also a moral issue. It sacrifices real collective needs – health, education, climate – to artificial constraints and the logic of financial markets. The real question, therefore, is not only « how does the economy work? » but « what rules do we want to steer this process toward the common good and social justice? »
Recognizing the ideological dimension of current rules does not mean confusing the world as it is with the world as we would like it to be: it means refusing to naturalize arbitrary choices that produce injustice and reminding us that the economy, far from being a neutral mechanism, is a tool serving the social project we want to build.
5. Conclusion
Self-imposed budgetary and monetary constraints are often justified by a simple idea: without them, the state would spend « without limits. » But this seemingly pragmatic argument is itself ideological: it is based on a distrust of democracy and the belief that monetary scarcity is the only way to discipline public action.
However, the true limit is not financial but real: labor force, resources, productive capacity, ecological constraints. It is within this tangible framework that political decisions should be made, not within that of arbitrary ratios.
In this sense, public debt is not a technical problem that accounting rules would suffice to resolve: it is a political and moral issue. A just society is not defined by the rigor of its budget, but by its ability to guarantee basic goods to its members.
Recognizing the ideological dimension of current rules does not mean confusing the world as it is with the world as we would like it to be: it means refusing to naturalize arbitrary choices that produce injustice. It means remembering that the economy, far from being a neutral mechanism, is a tool at the service of the social project we want to build.
References
Foucault, M. (1978-1979). The Birth of Biopolitics: Lectures at the Collège de France, 1978-1979. Palgrave Macmillan. (Originalement publié en français : Naissance de la biopolitique, Gallimard/Seuil)
Keynes, J. M. (1936). The General Theory of Employment, Interest and Money. Macmillan.
Mitchell, W. F., Wray, L. R., & Watts, M. J. (2019). Macroeconomics. Red Globe Press.
Mosler, W. (1995). Soft Currency Economics. Valance Co.
Polanyi, K. (1944). The Great Transformation: The Political and Economic Origins of Our Time. Beacon Press.
Rawls, J. (1971). A Theory of Justice. Harvard University Press.
Sen, A. (2009). The Idea of Justice. Harvard University Press.
Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. W. Strahan and T. Cadell.
Veblen, T. (1899). The Theory of the Leisure Class: An Economic Study of Institutions. Macmillan.
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