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Abstract
Soon after WWII, France adopted a form of economic planning which became afterwards known as “indicative planning”. François Perroux paid great attention to French planning and linked his reflections on planning to both his criticism of neoclassical approach and his proposal of some new theoretical tools for economic analysis. Perroux’s critiques of neoclassical economics involved both the kind of assumptions adopted and the neglect of some aspects that for him were crucial to economic analysis: the differences and inequalities among agents, the presence of economic and social groups, the role of power, and state activity. To contrast and overcome those shortcomings, Perroux elaborated some conceptual tools that are the pillars of his economic analysis. Main aim of this paper is to inquire into Perroux’s contribution to the debate on economic planning that rose in the light of the French experience. The focus is especially on the Fourth Plan which Perroux took particularly into consideration and critically evaluated.
Acknowledgement
An early draft of this paper was presented at the workshop on “Coordination issues in historical perspectives” held in Nice, Université Côte d’Azur, in September 2022. I’m grateful to the participants of the workshop for their comments, and especially to Muriel Dal Pont Legrand and Hans-Michael Trautwein for their perceptive insights. I want to thank the two anonymous referees for their very helpful suggestions and constructive advice. The usual caveat applies.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 From the outset, French planning was the fruit and compromise of two different inspirations: dirigiste and liberal (Rousso Citation1986, 47) and had strong roots in the corporative experiences of the war period (Caldari Citation2021). With the progress of the European integration process, the dirigiste component increasingly had to give way to the liberal one. However, the first General Commissioners, up to Massé, tried to keep both components alive in French planning.
2 The Institut de Sciences Économiques Appliquées (ISEA) was founded by Perroux in 1944. J.M. Keynes “was one of its first protectors” (Perroux Citation1980, 151) along with Gaëtan Pirou and Charles Rist (Perrault Citation2014, 83). At its birth, in the directing committee there were: M. Byé (Professor at the Faculty of Law in Paris) M.F.L. Closon (general director of INSEE); P. Fromont (professor at the Faculty of Law in Paris), and M.C. Gruson (director of the Department of Economic and financial Research of the Ministry of Finance).
3 Le Revenu national (1947) published by Uri, Perroux (and Marczewski) and with a preface of Marjolin.
4 In 1943, in Algiers, Monnet – as member of the First French National Liberation Committee – formed a small group to reflect on the future of France. In this group there were E. Hirsch, R. Marjolin and P. Mendès France (see Dangel-Hagnauer and Raybaut Citation2007).
5 Especially by Marczewski (Citation1946a, Citation1946b, Citation1948a, Citation1948b, Citation1948c, Citation1949a, Citation1949b), Uri (Citation1946, Citation1948) and Perroux (Citation1946, Citation1948a, Citation1948b, Citation1949a) who also published the book Les Comptes de la Nation (Perroux,Citation1949b).
6 In 1952 Jean Monnet became President of the Haute Autorité of the ECSC (European Coal and Steel Community) and left the head of the GPC.
7 In 1958 President De Gaulle appointed Jaques Rueff and Antoine Pinay, Minister of Finance, to form a Commission of experts to find a solution to those two urgent problems. The president of this Committee of experts was Rueff and with him there were Jean Guyot, manager of the bank Lazard, friend of J. Rueff; Lorain, president of the Société Générale: Alexandre, president of the board of accountants, friend of Pinay; C.J. Gignoux, economist and ancient, manager of the GPCF - Confédération Générale du Patronat Français; Brasart, adviser of the Board of the state; Jean Saltes, vice-governor of the Bank of France; and Jean-Marcel Jeanneney, professor of economic sciences (see on this Chélini Citation2001) The solutions advanced in the so-called Pinay-Rueff Plan were rigorously restrictive with the devaluation of the franc and other measures in order to return the budget to balance. In fact, in 1959 the budget was in surplus. Following this success Rueff proposed to develop some structural reforms: De Gaulle then decided to create a (second) Committee of experts, whose president was the Prime minister M. Debré, and vice-presidents were J. Rueff and Louis Armand. In this “Second” Commission of experts, we find among the others A. Sauvy, R. Courtin, M. Demonque, and Pierre Massé.
8 However, Perroux was never asked to directly participate into the SEEF works, probably also for the difficult personal relations with Claude Gruson, the director of the centre (Dangel-Hagnauer and Raybaut Citation2007), who nonetheless suggested Perroux to the Minister of Finance for a more active role in the national accounting administration (Fourquet, Citation1980: 422-23). This event never materialized (Terray Citation2002).
9 The Institut National de la Statistique et des Études Économiques, created in 1946.
10 The Institut National d’Études Démographiques, created in 1945.
11 See below.
12 Hirsch left the Plan Commissariat in 1959 as he was appointed as head of Euroatom.
13 For the GDP from 27% to + 23.3%; for industry from +36% to 32%; for investment from 28% to 26,6%; for consumption from 24% to 17,6% (data from http://www.strategie.gouv.fr/actualites/troisieme-plan-de-modernisation-dequipement).
14 Most notably, exports and investments were much more favoured rather than private consumption. See also Gruson, (Citation1968, 174-219).
15 For GDP 23.4%, for industry 34%; for investment 28,1%; for consumption 19%.
16 Pierre Uri recalls that the GPC was at that time a sort of “command” which dealt with all the crucial aspects: reconstruction, industrialization, stabilization, social policy. “The Governments – he stresses – did what the GPC suggested” (interviewed in Fourquet Citation1980, 87).
17 In his efforts to introduce a form of economic planning in the post war France, Jean Monnet often stressed that he wanted to implement a “concerted economy”. The term “concert” was indeed due to Étienne Hirsch, as Monnet recalled (Monnet Citation1976, 373) and Hirsch himself emphasized: “C’est moi qui a inventé la formule d’économie concertée, car je considère que dans le monde modern il est indispensable que les différents acteurs de l’économie, étant donnée leur interdépendance, se connaissent et discutent entre eux” (quoted in Fourquet Citation1980, 56).
18 The Second Plan was submitted to the Parliament six months after it had begun to operate and was voted in March 1956. Differently, the Fourth Plan was discussed in Parliament, according to the idea of developing a truly “democratic plan”. See below.
19 Thus, for instance, a “proliferation of different plans took place” (A.Berger, on Témoinage Chrétien, 23 April 1954; Folder 80AJ/21) and in 1954 three plans were proposed almost simultaneously: the Plan Louvel, the Plan Faure and the Second GPC Plan: The Minister of Industry and Trade Louvel presented on February 3 a four years plan to restore the French industrial structure and make it competitive; on February 4, Edgar Faure, Minister of Finance, presented his 18 months plan to increase national production and national revenue of 10% (see on this “Trois plans Français 1954, in Nouvelle Revue de l’Economie Contemporaine, July 1954, Folder 80AJ/21). Even if Faure’s “18 months plan” was only “a set of measures for a partial realization of certain goals of the Second Plan (Pierre Le Brun Citation1954), and especially “decisions about the level of wages” (Gruson Citation1968, 109), it was symptomatic of how planning was no longer the exclusive sphere of the GPC. This does not mean that in this period the GPC did not have an important role; on the contrary, it gave a crucial spur to the progress of national accounting and statistics and remained a central crossroad for developing the necessary information for the government’s economic choices.
20 See above footnote 7.
21 As recalled by Massé (Citation1984, 182), in the 1961 address President De Gaulle would have wanted to use the phrase “the state must direct the economy”. Massé dissuaded him by noting that the term “to direct” would have evoked imperative planning and arisen opposition in France and abroad. He then advised De Gaulle to use the more moderate term “to lead”. This episode is rather symptomatic of the difficulties connected with the implementation of planning in that period and the difficult compromise between the dirigiste and liberal perspectives that since the beginning characterized French planning. It is important to note, however, that on several occasions Massè underlined that, for him, “indicative” meant “active” planning and implied therefore an active presence on the part of the government.
22 It worked in strict contact with the SEEF and had among its chief aims: the application of the European Coal and Steel Community’s model of experts to France; the projection of external exchanges, technique progress and investment in the growth models (Chatriot and Duclert Citation2005).
23 Its work was directed towards “the application to the Plan of mathematical computable models” (Hackett and Hackett Citation1963, 110–111).
24 Two other important institutions were created between the end of the Fourth and the beginning of the Fifth Republic: the Centre d’Études des Programmes Économiques (CEPE) created in 1957, under the direction of the economist Malinvaud, for the formation of civil servants and public executives in economic theory, statistics and econometrics (Desrosières Citation2008); the Bureau d’Information et de Prévisions Economiques (BIPE) created in 1958 by Bloch-Lainé and the SEEF in association with some large firms in order to establish a closer bond between the enterprises’ and national accountings (Bloch-Lainé quoted on Le Monde 19 September 2018); its first general director was the economist Henry Aujac, from the SEEF.
25 The Fourth Plan attracted a high degree of interest in France and abroad, where the so-called indicative or soft planning “à la française” became rather popular particularly in Great Britain and in the United States, where President Kennedy praised the success of French economy connected with planning (Shonfield, Citation1965). But also in Italy, which, after the experience of fascist corporatism, was largely inspired by French planning (see on this Di Finizio Citation1965). It was widely discussed: see for instance, Hackett and Hackett, Citation1963; Shonfield, Citation1965; Kindleberger, Citation1967; Lutz, Citation1969; McArthur and Scott, Citation1969).
26 On the the neglect of power in the economic literature see Pantaleoni (Citation1898); Galbraith (Citation1967); Mosca Citation2018.
27 Domination effect depends on the degree of power that an economic unit has and can exert on others; it is the result of two main factors: units’ bargaining power and size. An economy can be defined as “dominant” when it exerts more influence and power on other economies than it is subjected from them.
28 In case of a private macro-unit (a group of firms) the use of constraint may imply the creation of compulsory complementarities for the purchasers; the imposition of its product by means of advertising and marketing expenses; pressure on public powers to obtain some monopolistic position or to change the rules of the games at its advantage (1961, 255). When the macro-unit is public (the state) the constraint may be exercised through the imposition of taxes, fixation and/or change of the rules of the game, public sector activities, fixation of prices and quantities (1961, 92 and 265–68).
29 For instance, a trade-union confederation may exercise its domination effect and constraint on the plans of several trade-unions to fix a certain amount of labour supply at a certain nominal wage; or an entrepreneurs’ association may exercise a domination effect on the different plans of several firms to determine a global quantity of product to be sold at a certain price. For the importance given to groups and their coordination see below, especially notes 34, 35, and 36.
30 That is a form of externality due to the presence of inequalities among the units considered. Following Perroux’s definition, a spill-over effect occurs when for instance the increase in the product (or productivity) growth rate of a simple or complex unit A causes an increase in the product (or productivity) growth rate of another simple or complex unit B (Perroux Citation1965, 118).
31 See below.
32 Perroux links the meanings of “active” and “passive” to the possibility or not to exercise a certain degree of power (see Perroux Citation1961, Citation1973).
33 In this position we find a clear echo of the concept of “Community of labour”, developed by Perroux in the 1930s, see note below.
34 Community of labour was expression of an organized market economy as possible reform of the capitalist system (1938a, 194); for Perroux an organized economy was a true third way solution between the atomistic liberal capitalism and socialist planning (Perroux Citation1938b, 77). Community of labour was based on the collaboration among all the elements of the economic society, and it was a third solution between capitalism and socialism, where private property, market and prices continued to exist. But its functioning and organization were not any longer as in the capitalistic system: prices were fixed by groups of people for the wellbeing of the community; economy was not subjected to a blind mechanism but to the control of people; entrepreneurs could obtain profits within the limits established by the groups and under state control; firms were not the rulers of the market but the tool at the service of a community of people.
35 The question of the existence of different groups and interests, the features of their structures. and the problem of their coordination within an economic, political, and social system are central in Perroux’s reflections from the beginning of his career (see for example Perroux Citation1930, Citation1931, Citation1933, Citation1938a, Citation1938b, Citation1938c, Citation1939, Citation1942). These reflections lead him to the concepts of Community of labour first and then of macro-unit and macro-decision.
36 He was appointed among the experts charged of the project of the Constitution for the “Conseil National” created in January 1941 and as general secretary of the Carrel Foundation in 1942.
37 The main problem was related to the limited power of the Commissions of Modernization, their different and unequal composition; their incomplete representation of the social groups most notably labour; moreover, the mixing of powers at different levels (political, administrative and technique) resulted often into combinations and accords at advantage of particular rather than collective interests (Perroux Citation1962, 105-6). Here again we can easily see the great importance Perroux gave to the problem of groups’ coordination and their possible and fruitful cooperation.
38 As already stressed by Harrod, “the most basic law of economics” told us that “one cannot get something for nothing” (Harrod Citation1948, 36).
39 Clearly distinguished from “simple material growth”.
40 Active universalism entails the world organization by macro-units and world élites (dominant units), which clearly revokes his early corporations-communities reference frame (Caldari Citation2021, Citation2022).
41 As the result of the existence of power.
42 Perroux recognizes a central role to what he calls “gift economics” or “économie du don” (Perroux Citation1954, Citation1960). According to Perroux, along with the desire for power and aggressiveness, altruism and generosity characterize human nature; they explain the willingness to donate. A gift can be understood as a “free transfer without an apparent counterpart”; a “transfer to satisfy the desire to give” or a “transfer without counterpart which leads to attributions economically more rational than those of the market exchange” (Perroux Citation1960, 13). Gift is always a giving without compensation as for instance charity, love, and humanitarian aids. If the act of giving implies some form of compensation, then it is no longer a gift but rather a pseudo-gift (Perroux Citation1960, 47–48). Pseudo-gifts are typical of the current capitalistic system as for instance the gifts a company makes to its customers, the Marshall Plan, capital transfers on favorable terms (Perroux Citation1961, 322–325). In Perroux’s view gift and pseudo-gift have been largely excluded, from the traditional analysis which focuses mainly on onerous exchanges (Perroux Citation1961, 325) thus failing to understand much of the economic reality, especially the contemporary world economic reality and international relations.
43 “Confédération Générale du Travail”.
44 “Force ouvrière”.
45 “Conseil national du patronat français”.
46 This is well documented in the book by McArthur and Scott (Citation1969). There is, however, a further, more crucial, aspect. In that period there was a great change in the opinion concerning state’s activities and economic planning. In those years a neoliberal turn occurred in France (Gaïti Citation2014). Planning became less and less a tool of political strategy and increasingly an activity to be evaluated mainly for its administrative costs in the effort to optimize public spending (Bezes Citation2015, 107). The neoliberal turn resulted in a “conflict of expertise” between the different ministries which directly involved the GPC and its field of action.