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Dirigisme (from the French) (in English also "dirigism" although per the OED both spellings are used) is an economic term designating an economy where the government exerts strong directive influence.

While the term has been applied occasionally to centrally planned economies, where the government effectively controls production and allocation of resources (in particular, to certain socialist economies where the national government owns the means of production), it originally had neither of these meanings when applied to France, and generally designates a mainly capitalist economy with a strong economic participation by government. Most modern economies are dirigiste to some degree – for instance, governmental action may be exercised through subsidizing research and developing new technologies, or through government procurement, especially military.

France

Before the Second World War, France had a relatively fragmented capitalist economic system, which generally operated under traditional laissez-faire economic policies. The many small companies, often family-owned, were often not dynamic and efficient when compared to the large industrial groups of 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; the population lived with rationing for years. Some sections of the French business and political world compromised themselves by collaborating with the German occupiers. So the economy was in need of reconstruction on a sounder basis.

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 main French tool was indicative central planning, through plans designed by the Commissariat au plan ("Commission for the Plan"). Contrary to the governments of the Soviet Bloc, however, the French government never owned more than a minority of industry, and did not seek to enforce its economic directions in authoritarian ways; instead, it used various incentives. Also, France never ceased to be a mainly capitalist country.

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 government.

Two areas where the French government sought greater control were 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. Interestingly, 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 defense, nuclear and aerospace industries (Aérospatiale).

This development was marked by volontarisme, or the will to overcome all difficulties (War-related devastation, lack of natural resources...) 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. Voluntarism showed an obsession with the modernization of the country, resulting in a variety of ambitious plans imposed by the state. 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.

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 (4.5% on average) and a demographic boom, leading to the coinage of the term Trente Glorieuses ("Thirty Glorious ").

Dirigisme flourished under the center-right 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 even more state intervention in the economy; his government soon nationalized industries and banks. However, in 1983 the initial bad economic results forced the government to renounce dirigisme and start the era of rigueur ("rigour"). Subsequent governments never have considered economic dirigisme again, though some of its traits remain.

Bibliography

• Cohen, Élie. Le Colbertisme "high tech" : économie des Telecom et du Grand Projet (Paris : Hachette, 1992) ISBN 2010193431.

See also

Philosophic roots:

• Mercantilism
• Mixed economy
• Colbertism

Related systems:

• American System (USA)
• Japanese post-war economic miracle
• German post-war economic model
• National Policy of Canada (1876-1920)

• Political economy
• History of France