France and Varieties of Capitalism

1. France and Varieties of Capitalism Jan. 19

2. Changing Role of the French State • French Empire • Development of the French State • Political Instability and Economic Conservatism • Postwar dirigiste state • Crisis of the dirigiste model • The contemporary French state

3. French Empire • From the 16th to 18th century, France competed with Britain for control over North America. • Haiti became independent in 1804 (for info related to the recent disaster in Haiti, see the course website under Resources). • However, in the 19th and early 20th century, France would aggressively rebuild and extend its empire in Africa, Southeast Asia and the Pacific.

4. Development of the French State • Louis XIV (1643-1715) sponsored the creation of a relatively efficient state bureaucracy, separate from the Crown’s personal domain. • For most of the period from the mid-17th to the mid-18th century, France was at war with its neighbours.

5. Development of the French State • France was the most powerful nation in Europe in the 17th century, but in the 18th century Britain challenged France’s pre-eminence. • The attempt to raise taxes to cover state expenses and debts was one of the factors that led to the French Revolution in 1789. • The First Republic was proclaimed in 1792.

6. Political instability and relative (to Britain, Germany) lack of economic development • Napoleon 1799-1814 • Restoration 1814-1830 • July Monarchy 1830-1848 • Second Republic 1848-1851 • Second Empire 1852-1870 • Paris Commune 1871 • Third Republic 1871-1940 • Vichy Regime 1940-1944

7. Postwar dirigiste state • In the period following WWII, the French pioneered in developing methods to steer and strengthen the economy. • From guardian of the established order, the French state became the sponsor of social and economic progress.

8. Crisis of the dirigiste model • Slowdown in economic growth in 70s. • The massive shift of workers from agriculture to urban areas ran out of steam. • Impact of energy crisis, oil shocks. • New competition from new emerging industrializing countries

9. Crisis of the dirigiste model • 1981 Mitterrand and Socialists win elections. • Facing business and international opposition, amid significant recession. • Demand stimulus simply meant French consumers consumed more imported goods. • Socialists make u-turn.

10. Varieties of Capitalism

11. Hall and Soskice • liberal market economies (LMEs) US, UK, Canada, Australia, New Zealand, Ireland • coordinated market economies (CMEs) Japan, most of continental Europe • More ambiguous cases include France, Italy, Spain, Portugal, Greece, Turkey. a ‘Mediterranean’ model?

12. David Coates • market-led capitalisms (US) • state-led capitalisms (Japan) • negotiated or consensual social capitalisms (Sweden, Germany)