Before the
Second World War, France had a relatively fragmented
capitalist economic system. The many small companies, often family-owned, were often not dynamic and efficient in comparison to the large industrial groups in
Germany or the
United States. The Second World War laid waste to France. Railroads and industries were destroyed by aerial
bombardment and
sabotage; industries were seized by Nazi Germany; in the immediate postwar years loomed the spectre of long years of
rationing (such as the system enforced in that period in the
United Kingdom). Some sections of the French business and political world lost authority after
collaborating with the German occupiers. Post-war French governments, from whichever political side, generally sought rational, efficient economic development, with the long-term goal of matching the highly developed and technologically advanced economy of the
United States. The development of French
dirigisme coincided with the development of
meritocratic technocracy: the
École Nationale d'Administration supplied the state with high-level administrators, while leadership positions in industry were staffed with
Corps of Mines state engineers and other personnel trained at the
École Polytechnique. During the 1945–1975 period, France experienced unprecedented
economic growth (5.1% on average) and a
demographic boom, leading to the coinage of the term
Trente Glorieuses (the "Glorious Thirty [years]").
Dirigisme flourished under the conservative governments of
Charles de Gaulle and
Georges Pompidou. In those times, the policy was viewed as a middle way between the American policy of little state involvement and the Soviet policy of total state control. In 1981,
Socialist president
François Mitterrand was elected, promising greater
state enterprise in the economy; his government soon
nationalised industries and banks. However, in 1983 the initial bad economic results forced the government to renounce
dirigisme and start the era of
rigueur ("rigour"). This was primarily due to the Inflation of the French
Franc and the
Keynesian policies taken by
François Mitterrand.
Dirigisme has remained out of favour with subsequent governments, though some of its traits remain.
Indicative planning The main French tool under
dirigisme was
indicative planning through plans designed by the
Commissariat général du plan ("Commission for the Plan"). Indicative planning used various incentives to induce public and private actors to behave in an optimal fashion, with the plan serving as a general guideline for optimal investment. During this period France never ceased to be a capitalist economy directed by the
accumulation of capital, profit-maximizing enterprise and
market-based allocation of producer goods. In contrast to
Soviet-type central planning practiced in the former
Soviet bloc, where economic planning substituted private
profit incentivized investment and operated the factors of production according to a binding plan, the French state never owned more than a minority of industry and did not seek to replace private profit with central planning. The idea of
dirigisme is to complement and improve the efficiency of the market through indirect planning intended to provide better information to market participants. This concept is held in contrast to a planned economy, which aims to replace market-based allocation of production and investment with a binding plan of production expressed in units of physical quantities.
State ownership Because French industry prior to the Second World War was weak due to fragmentation, the French government encouraged mergers and the formation of "
national champions": large industry groups backed by the state. Two areas where the French government sought greater control were in
infrastructure and the transportation system. The French government owned the national railway company
SNCF, the national electricity utility
EDF, the national natural gas utility
GDF, the national airline
Air France;
phone and
postal services were operated as the
PTT administration. The government chose to devolve the construction of most
autoroutes (freeways) to semi-private companies rather than to administer them itself. Other areas where the French government directly intervened were defence, nuclear and aerospace industries (
Aérospatiale). This development was marked by
volontarisme, the belief that difficulties (e.g. postwar devastation, lack of natural resources) could be overcome through willpower and ingenuity. For instance, following the
1973 energy crisis, the saying "In France we don't have oil, but we have ideas" was coined. Volontarisme emphasized
modernization, resulting in a variety of ambitious state plans. Examples of this trend include the extensive use of
nuclear energy (close to 80% of French electrical consumption), the
Minitel, an early online system for the masses, and the
TGV, a
high-speed rail network. == India ==