Friday, April 29, 2016

The Golden Age of Capitalism in France

A brief but serviceable enough overview:
“In the immediate post-war years France was in poor shape; wages remained at around half prewar levels, the winter of 1946–1947 did extensive damage to crops, leading to a reduction in the bread ration, hunger and disease remained rife and the black market continued to flourish. Germany was in an even worse position, but after 1948 things began to improve dramatically with the introduction of Marshall Aid—large scale American financial assistance given to help rebuild European economies and infrastructure. This laid the foundations of a meticulously planned program of investments in energy, transport and heavy industry, overseen by the government of Prime Minister Georges Pompidou.

In the context of a population boom unseen in France since the 18th century, the government intervened heavily in the economy, using dirigisme—a unique combination of free-market and state-directed economy—with indicative five-year plans as its main tool. This brought about a rapid transformation and expansion of the French economy.

High-profile projects, mostly but not always financially successful, were launched: the extension of Marseille's harbour (soon ranking third in Europe and first in the Mediterranean); the promotion of the Caravelle passenger jetliner (a predecessor of Airbus); the decision to start building the supersonic Franco-British Concorde airliner in Toulouse; the expansion of the French auto industry with state-owned Renault at its centre; and the building of the first motorways between Paris and the provinces.

Aided by these projects, the French economy recorded growth rates unrivalled since the 19th century. In 1964, for the first time in nearly 100 years France’s GDP overtook that of the United Kingdom. This period is still remembered in France with some nostalgia as the peak of the Trente Glorieuses (‘Thirty Glorious Years’ of economic growth between 1945 and 1974).

In 1967, de Gaulle decreed a law that obliged all firms over certain sizes to distribute a small portion of their profits to their employees. By 1974, as a result of this measure, French employees received an average of 700 francs per head, equivalent to 3.2% of their salary.”
One of the most important French political leaders who oversaw that was Charles de Gaulle, President of the French Republic from 8 January 1959 to 28 April 1969, who despite being conservative was clearly no free market fanatic, and this can be seen in de Gaulle’s memoirs, where he quite unashamedly and proudly defended that French dirigisme of the post-WWII years:
“For us, then, the task of the state was not to force the nation under a yoke, but to guide its progress. However, though freedom remained an essential lever in economic action, this action was nonetheless collective, since it directly controlled the nation’s destiny, and it continually involved social relations. It thus required an impetus, a harmonizing influence, a set of rules, which could only emanate from the state. In short, what was needed was State direction (dirigisme). I myself was resolved on it; and this was one of the reasons why I had wanted the Republic's institutions to be such that the government’s means matched its responsibilities.

In practical terms, what it primarily amounted to was drawing up a national plan, in other words deciding on the goals, the priorities, the rates of growth and the conditions that had to be observed by the national economy, and determining the fields of development in which the state must intervene, along with laws and budgets. It is within this framework that the state increases or reduces taxation, eases or restricts credit, regulates customs duties; that it develops the national infrastructure – roads, railways, waterways, harbors, airports, communications, new cities, housing, etc.; harnesses the sources of energy – electricity, gas, coal, oil, atomic power; initiates research in the public sector and fosters it in the private; that it encourages the rational distribution of economic activity over the whole country; and by means of social security, education, and vocational training, facilitates the changes of employment forced upon many Frenchmen by modernization. In order that our country’s structures should be remolded and its appearance rejuvenated, my government, fortified by the newfound stability of the state, was to engage in manifold and vigorous interventions.” (Gaulle 1971: 150–151).
They don’t (as far as I know) make sensible and pragmatic politicians like that in France any more – or, for that matter, in other Western countries in our foolish neoliberal era.

But times can change radically, just as they did between the early 1930s and the 1940s, and hopefully they can change again.

Gaulle, Charles de. 1971. Memoirs of Hope: Renewal and Endeavour (trans. Terence Kilmartin). Simon and Schuster, New York.


  1. i hope our politicians will change before another great depression.

    but sadly i am skeptical about that.

  2. Ver y good article. As "moitié français" I'm a fan of De Gaulle, mainly for his design of a political constitution that has lived up today.
    A thing that "malheureusement" we, spaniards, have been no capable of making.