"We are being selfish towards future generations"

As Jean-Pierre Danthine retires from his position as professor in the College of Management of Technology at EPFL to take up an honorary position, he is not abandoning his hobbyhorse: raising awareness of the disastrous way in which we are managing our planet. "We're living in an emergency situation," he says in a calm but determined voice. "I have four grandchildren, and it worries me to see how we're not yet ready to make sacrifices. How selfish we are towards future generations." Today, the economist is calling for a fundamental change, which should lead to better supervision of the free market he studied and taught during a prestigious academic career.

Jean-Pierre Danthine, who was born in Belgium and became a Swiss citizen, did not choose to follow in the footsteps of his brothers, who became doctors like their father. While the idea of a career in politics briefly appealed to him - his mother had become involved in the local services of her native village after raising her children - economics quickly took over. In the USA, he studied macroeconomic models alongside Robert Lucas, who was awarded the Nobel Prize for his discoveries in the field in 1995. "Robert Lucas truly revolutionized macroeconomics, and working alongside him greatly influenced my research into the workings of the economy and the forces and limits of the market."

Appointed professor on the other side of the Atlantic, he joined the HEC faculty at the University of Lausanne in 1979 to teach macroeconomics, then finance, before taking up the post of vice-rector. But Jean-Pierre Danthine has always cultivated a federative approach, on the lookout for every opportunity to bring together knowledge under the same roof in order to share it more effectively. He was responsible, for example, for the creation of FAME (International Center for Financial Asset Management and Engineering) in 1996 and, 10 years later, of the Swiss Finance Institute.

Planetary limits exceeded

In 2009, an international team of scientists came up with the concept of planetary limits. These are thresholds that must not be exceeded to avoid endangering our planet's ecosystem. Many of these thresholds are already in the red in terms of global warming, biodiversity and water use. "At the time, I was not yet aware of this report, as I was about to take up my new position at the Swiss National Bank," he recalls. As vice-president of the SNB, all his attention and energy were then focused on the application and balance of the national monetary policy, which had been severely shaken by the international financial crisis of 2008. He imposed the floor rate against the euro, and managed a team of over 200 civil servants whose "incredible commitment to serving the best interests of the country" he still praises today.

Concerned about climate issues like any other citizen, the economist really took the time to reflect on the consequences of planetary limits when he retired from the SNB in 2015. For a year, he taught in the USA and Italy, studying the issue in greater depth from an economic perspective. "I was already aware of man's impact on the planet when I wrote my dissertation on how best to manage maritime pollution. But back then, there were fewer of us on this earth and we weren't as wealthy. That's all changed now. He adds: "The basis of a liberal economy is the market regulated by price, which makes possible a decentralized allocation of resources. But the resources we take from the planet don't belong to any one person, but to the whole of humanity. So the market can't solve the problem, because there is no market for these resources." His solution? "In this configuration, decentralization is not possible. It's a strong State, resisting the pressures of private interests, and putting the common good at the center of its attention that must be in command."

Thinking about a resilient economy

In front of the many economists and politicians who came to hear his honorary lecture at the Rolex Learning Center at the end of September, Jean-Pierre Danthine demonstrated methodically and with a touch of humor that the marriage between capitalism and the planet could be a happy one, like his own with his wife, which has lasted for over 50 years. But to get there, we all need a paradigm shift, because "business as usual is not an option," he stressed. With this in mind, back in 2018, the experienced federator committed to creating the Entreprise for Society Center (E4S), an entity bringing together EPFL, IMD and UNIL - HEC around engineering, finance and sustainability. "In addition to its teaching vocation, E4S explores all avenues to foster the transition to a resilient, inclusive economy that respects planetary limits," he concludes.