An Economic History of Modern France

Francois Caron, Barbara Bray

• Publisher: Taylor & Francis
• Year: 2014
• Print ISBN: 9780415616355
• eBook ISBN: 9781317829270
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

First published in 1979, this richly documented study of French development from the early nineteenth century to the present day is of particular importance to students both of history and economics. Francis Caron moves as confidently through the fields of current economic policy and modern economics as he does through the traditional subject matter of French nineteenth-century economic history. His book incorporates the mass of research that has appeared in monograph and periodical form in recent years, making it accessible for the first time to the English-speaking reader.

Part One: The Nineteenth Century(1815–1914)

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Introduction

THE NINETEENTH CENTURY in France was a subtle and ambiguous period. Some recent books, especially those concerned with social attitudes, have shown the pitfalls that may lie in wait for anyone taking too apriorist an approach. Intellectuals tend to reconstruct some imaginary nineteenth century and then project their own fantasies onto it. But it is a century that needs to be approached from within, and looked at in the first instance through contemporary eyes. True, the dangers of apriorism are less in economic than in social history; but they are nonetheless real. The view that emerges from some works on the subject is of an upper middle class of bosses meanly running the French economy by exploiting the labor of the workers and making use of the savings of the lower middle classes, both the latter sections of society allowing themselves to be manipulated in this way because they were “alienated” by a press dependent on the power of money. The upper-middle-class oppressors did not even have the excuse of efficiency, for they were only the representatives of an exhausted capitalism which preferred guaranteed profit to risk. An eminent American sociologist has even maintained that under the Third Republic there was a kind of tacit alliance between the Malthusian upper middle class and the conservative peasantry, opting for slow growth in order to limit the development of the working class and keep it within a “social ghetto.” Such constructions may seem to present a daunting internal coherence, but though certain individual bricks may be sound, the building as a whole is precarious. To describe France’s economy in the nineteenth century as a frozen economy is to extract certain elements, magnify them, and reject the overall complexity of a reality which can never be properly seized by a historian who is in too much of a hurry, or unduly preoccupied with ideology. Far be it from me to overlook the failings and horrors of the period; but it is not as easy as all that to understand. The nineteenth century was something else besides: above all a sustained and sincere effort to free people from the material constraints which weighed upon them. In this sense it was what P. Léon, speaking specifically of Lyons, has called a “glorious century.” As I have said, it was ambiguous: liberal, but maintaining a tradition of bureaucratic interventionism; industrialist, but pursuing, and partly realizing, its dream of industrialization within a context of small units of production; centralist, but achieving prodigies in the area of local plants; production-oriented, but the preserver of France’s forests; scientific, but empiricist, making use of technical know-how.

It seems to me that French growth in the nineteenth century is distinguished by four main features: (1) the population slump, (2) the special nature of its technical progress, (3) the peculiarities of its structure of production and finance, and (4) its agrarian structures.

1. By a process which began quite slowly but accelerated after 1870, the nineteenth century arrived in its last decade at zero population growth. This demographic slump produced a marked decrease in France’s power in the world, and did much to help slow down the per capita growth rate by reducing the size of the market and by limiting the mobility of the factors of production (whereas stronger demographic pressure would have made greater mobility inevitable). So long as demographic pressure remained high and the mass of unemployed constituted a permanent threat to social order, the élites were bound to wish for rapid changes of economic structure: this attitude prevailed under the Second Empire, after the slump of 1848–52, which had revealed what many authors have called the “over-loading” of the rural areas. But as soon as this pressure was relaxed, there were visions of a future based on a search for stability, and France saw itself as the country of equilibrium and the happy medium.

2. But another factor—technical progress—steadily undermined this longed-for equilibrium. France, which at the beginning of the nineteenth century had been obsessed by its “backwardness” vis-à-vis England, had learned and adopted British techniques and made them its own, developing, in terms of its own material circumstances (lack of sources of energy; high quality and, for a long time, abundant supply of labor; etc.), and also in terms of different technical traditions and scientific influences, an original technical system peculiar to France itself. This system produced a series of remarkable discoveries in various essential sectors of industry: very high quality textiles; the utilization of water power, leading to hydroelectricity; electrochemicals; the metallurgy of aluminum; automobile manufacture. The link between science and industry was certainly less “established” in France at the end of the nineteenth century than it was in Germany or the United States, but France’s contributions to this new stage of the industrial revolution were not negligible.

3. The original features of French innovation were merely one factor in a system of production which we cannot attempt to judge. Industrialization in France was at once ancient and limited. When the liberal Empire expired in 1871, after the disaster of the Franco-Prussian war, France was a great industrial country only very partially industrialized. During the first two-thirds of the century its entrepreneurs had built up a “dualist” system of production. C. E. Labrousse has expressed this by saying that the economic Ancien Régime in France lasted up to the great watershed of the 1847–52 crisis. Means of production that were scarcely capitalistic continued to develop at the same time that the “Industrial Revolution” was spreading, culminating in the building of large factories using steam engines. This dualism never entirely vanished.

French business in the nineteenth century was not the closed world too often described. In a society where it was difficult to rise, and success always remained precarious, men imbued with the spirit of enterprise came from the most varied social backgrounds. Whether one is concerned with the creators of the engineering industry in the first half of the century, or those of the automobile industry toward its end, one sees them emerging from social origins of every kind; and there was also a stratum of small entrepreneurs always on the alert for something new. The image of the French saver (rentier) as one looking out for “safe investments,” burying his savings in government bonds, then in railway stocks, then in foreign loans, is a true one; but it is not the only one. The French financial system, though modern from the outset in its monetary centralization and the power of a few big merchant banks, was also characterized by the survival of many pockets of anachronism. Their tardy but rapid disappearance facilitated the emergence in the 1860s of deposit banks, which was accompanied by a strengthening of the big merchant banks. All this made France the second greatest financial power in the world in the 1900s. Contemporaries all contrasted a Germany strong through its industries with a France strong through its banks. On the eve of the 1914–18 war, France was the second greatest exporter of capital in the world. But this power was not backed up by equivalent commercial successes. Up to the 1870s, France had followed world economic growth only with difficulty, and after that date had been left far behind. The income from France’s large exports of capital made up the deficit in the trade balance. It was as if the accumulation of capital abroad took place through reinvestment of income from previous investment.

On the whole, French capitalism was neither entirely successful nor entirely played out on the eve of the First World War. It was the product of the slow and difficult development, within an open and dynamic world economy, of a system in which it was difficult to justify the erection of the huge units of production suited to the needs of the world economy. Such expansion encountered considerable obstacles both natural and sociological, for the domestic market could act as a “mass market” for only a limited number of products.

4. For nineteenth-century France was fundamentally a peasant country. Economists such as J. Marczewski and M. Lévy-Leboyer have held French agriculture responsible for the deceleration of the economy in the second part of the nineteenth century. But this is to apply to the nineteenth century the a priori judgments of the twentieth. French agriculture in the nineteenth century developed rapidly within the framework of agrarian structures there could be no question of destroying. It makes no sense to compare the competition French agriculture had to meet from new countries after the 1870s with competition between industrial countries. France could not turn itself into the Far West or become another Denmark. Agricultural protectionism was unavoidable. But it was not absolute, and a certain level of competition was maintained. French agriculture’s undoing was not protectionism but the weakness of the domestic market.

The first chapter in this part attempts to define and measure growth. The second, third, and fourth chapters analyze the developments—institutional, financial, and physical (formation of capital)—which lent a rigid and incoherent system more unity and flexibility, for despite the continually heavy weight represented by the state, the nineteenth century wanted to be regarded as liberal, and the mobility of men, capital, and goods was generally accepted as a special instrument of economic progress. The fifth chapter deals with the development of domestic and foreign trade, the first being less well known than the second. It is only in the three final chapters in this section that an attempt is made to describe agricultural, productive, and industrial structures.

Chapter One: Economic Growth in France in the Nineteenth Century: Problems of Method and Results

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Population Growth and Growth of National Income

ECONOMIC GROWTH IN France in the nineteenth century took place against a demographic background which presented striking contrasts. In the first part of the century, although its dynamism as regards population was already less marked than that of other European countries, France, according to some observers, was on the brink of over...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Dedication
• Acknowledgments
• Table of Contents
• Part One The Nineteenth Century (1815-1914)
• Part Two The Twentieth Century
• Conclusion
• Index