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Dirigisme is an economy in which the government exerts strong directive influence. While the term has occasionally been applied to centrally planned economies, where the state effectively controls both production and allocation of resources (in particular, to certain socialist economies where the means of production are assets of the state), it originally had neither of these meanings when applied to France, and generally designates a mainly capitalist economy with strong economic participation by government.

Most modern economies can be characterized as dirigiste to some degree – for instance, state economic action may be exercised through subsidizing research and developing new technologies, or through government procurement, especially military (i.e. a form of mixed economy). China is the clearest example to date.

Dirigisme is from the French. In English it is also "dirigism", although both spellings are used by the OED.

Dirigisme in France

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 one enforced 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 main French tool was indicative central planning, through plans designed by the Commissariat général du plan ("Commission for the Plan"). Unlike 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, 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.

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 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"). Dirigisme has remained out of favour with subsequent governments, though some of its traits remain.

Dirigisme in other economic systems

Dirigisme has been brought up as a politico-economic scheme at odds with laissez-faire capitalism in the context of French overseas holdings. Countries such as Lebanon and Syria have been influenced by this motif, in varying degrees throughout the post-colonial period.

See also

Philosophic roots:

• Mercantilism
• Mixed economy
• Colbertism

Related systems:

• American School
• Japanese post-war economic miracle
• German post-war economic model
• National Policy of Canada (1876-1920)
• Economic interventionism
• State Capitalism

References

1. The Daily Star - 'Youssef Chaitani's 'Post-Colonial Syria and Lebanon' chronicles the history of division between the neighbors', 17 October 2007

Further reading

• Cohen, Élie (1992). Le Colbertisme "high tech" : économie des Telecom et du Grand Projet. Paris: Hachette. ISBN 2-01-019343-1.

• Political economy
• 20th century in France
• Economic ideologies
• 20th century in economics