Figure 1.-- Here is a French 2015 New Year postcard. Notice that it is a family in a car. You do not see postcards like this in America. What you see in America is postcards back photographs of American families thanks to Henry Ford in cars that they actually bought and owned. This was no only the case in france, but throughour Europe unto after World War II, cars were beyond the reach of the average person. Thais had a huhe impact economically. American industry exploded to fill the mass market. Eiropean indudtry did not this did not expand like American industry. The impact was that at the time of World War, American industrial production was more than teice that of Germany and the Sivier Union and even greater than that of France and Britain.
France in the 20th century was an important economy even though it was superceeded by America, Britain, and Germany. Tsarist Russia was reaching French industrial levels. The Soviet Union would rise as an important industrial power, but did not compete in international markets. Japan recovered rapidly fronm the Wprld War II disaster and did compete. By the end of the century, China would become importantly economically. France's economic growth rate varied substantially in the 20th century. There were substantial spurts of economic growth in the post-war recovery decades of the 1920s and again in the 1950s, but understandably substandard performance in the 1910s and 40s war years. There were especially poor performances in the 1930s, and 1990s. The 1930s is understandabke as this was the Great Deression decade. The strong 1960s performancee resulted from the initial impact of European intehration (5 percent), but then France expeience three decades of declining growth. This included the still respestical 3.1 percent in the 1970s, but 2.0 percent in the 1980s, and disappointing 1.3 percent in the 1990s. [Dormois, p. 31.] French economic policy was high tariffs to protect industry, especially the iron and steel industry so vital to millitary power. Unlike the other major powers, there were few major industrial concerns. The economy in the 1900s grew at an average 2.3 percent. This was the economy with which France faced Germany in World War I. Germany had a much larger population and industry. France having learned its lesson in 1870, this time had major allies, at first Britain and Russia and eventually America. Even before America entered the War, loans from American banks helped finace the war effort. This was important, because Germany without such finacing experienced serious privations on the homefront which undermined the economy. In contast to Germany, decent standard of living was maintaine on the home front in both France and Britain, but tragically not Russia. The arrival of over a million American Doughboys would turn the tide in the Western Front. Labor shortages were alleviated by the use of volunteer workers from the colonies and China. The war damages has been estimated to over 10 percent of the pre-War GDP. All of this was located in the northeast along the Western Front. France's national debt rose from 65 percent of GDP in 1913 to 170 percent in 1919. The War was financed by domestic bond issues and American bank loans. his explain's France's insistance on reparations at Versailles. Inflation was rampant. The Franc lost over half its pre-War value. The French economy recovered strongly during the Roaring Twenties. The Wall Stret crash and American Goverment policy responses caused the world-wide Depression that dominated the 1930s. The decline in France became serious (1931). The American Smoot-Hawley Tariff exported the Depression. Compared to more industrailized Amrtica and Germany, the Depression was relatively mild, but still serious. Unemployment peaked under 5 percent. The decline in production was less than 20 percent. There was no banking crisis. The German victory had severe economic consequences. The NAZIs demanded huge reparations. Hitler's war plan was to run the NAZI war effort by exploiting the resources of the East. The failure of the Ostheer meant that it was the occupied West, especially France, that suported the NAZI war effort. The French economy was severely damages by the NAZI occupation, perhaps more so than actual war damage. The American Marshall Plan and the first steps toward European integration helped stimulate the French Economic Miracle. There was an extended period of unprecedented growth that lasted for much of the postwar period until the mid-1970s. Here recovery from the War aided by the United States and European integration were important factors. The loss of Empire as in the other colonial ppwers proved to be a non event. The French refer to this period as the 'trente glorieuses' (thirty years of glory). The period of most rapid growth was the 1960s and early 70s. The GDP growth rate from 1960-73 averaged nearly 6 percent annually. This ended with Oil Crisis of the 1970s. Growth rates moderated signiicantly and unemployment began to increase. The most imprtant industrail complex in the country, Renault, could only stay in buiness with generous Government grants. The French have not yet come to terms with the decling growth ratese, primarily because a substantial part of the slowing economy is the sacrosanct welfare system. Suggesting cuts is political suiside. France like the other European countries have retained a core capitalist economy, understanding that if you are going to have an expensive welfare system, something has to generrate the wealth to finance it. The problem is that the French economy does not generate the money to pay for the welfare system. And the Government has turned to borrowing the needed funds to pay for it. France has been aided by the United States covering most of the cost of defending Europe as well as important part of the health care system by finacing the cost of pharmecutical development. And the borrowing and resulting debt will only increase in the 20th century. It is undeniable that this has impacted growth. Another factor is surely the penchant of the European Union (EU) beaurecrtas for regulation -- the sane kind of regulation which hobbeled the economy of the Ancien Régime. Notably, few of the EU bereaucrats have any experience with productive enterprise like business or farming.
Overview
France in the 20th century was an important economy even though it was superceeded by America, Britain, and Germany. Tsarist Russia was reaching French industrial levels. The Soviet Union would rise as an important industrial power, but did not compete in international markets. Japan recovered rapidly fronm the Wprld War II disaster and did compete. By the end of the century, China would become importantly economically. France's economic growth rate varied substantially in the 20th century. There were substantial spurts of economic growth in the post-war recovery decades of the 1920s and again in the 1950s, but understandably substandard performance in the 1910s and 40s war years. There were especially poor performances in the 1930s, and 1990s. The 1930s is understandable as this was the Great Deression decade. The strong 1960s performance resulted from the initial impact of European intehration (5 percent), but then France expeience three decades of declining growth. This included the still respestical 3.1 percent in the 1970s, but 2.0 percent in the 1980s, and disappointing 1.3 percent in the 1990s. [Dormois, p. 31.]
The 1900s
French economic policy was high tariffs to protect industry, especially the iron and steel industry so vital to millitary power. Unlike the other major powers, there were few major industrial concerns. The economy in the 1900s grew at an average 2.3 percent. This was the econonmy with which France faced Germany in World War I.
The 1910s
Germany had a much larger population and industry than France. France having learned its lesson in the Franco-Russian War (1870), this time had allies, at first Britain and Russia and eventually America. Even before America entered the War, loans from American banks helped finanace the war effort. This was imortant, because Germany without such finacing experienced serious privations on the homefront which undermined the economy. In contast to Germany, decent standard of living was maintaine on the home front in both France and Britain, but tragically not Russia, The arrival of over a million American Doughboys would turn the tide on the Western Front. Labor shortages were alleviated by the use of volunteer workers from the colonies and China. The War damages hae been estimated amounted to over 10percent of the GDP of the pre-War GDP. All of this was located in the Northeast along the Western Front. France's national debt rose from 65 percent of GDP in 1913 to 170 percent in 1919. The War was finaced by domestic bond issues and American bank loans. This explain's Premier Clemenceau's insistance on reparations at Versilles (1919). Inflation was rampant. The Franc lost over half its pre-War value.
The 1920s
The United States was not the only country to experience the Roaring Twenties. The French economy recovered strongly during the Roaring Twenties.
The 1930s
The New York Wall Stret crash and American Goverment policy responses caused the world-wide Depression that dominated the 1930s. The decline in France became serious (1931). The American Smoot-Hawley Tariff exported the Depression. Compared to more industrailized America and Germany, the Depression was relatively mild, but mild only in comproison to other countries. France was more self-sufficent, producing much of its food and less exposed to foreign trade. It was serious enoogh, however, for the workers those who had lost their jobs. still serious. Unemployment peaked under 5 percent. The decline in production was less than 20 percent. There was no banking crisis. There was serios political turmoil and demand for reforms.
There were serious riots (February 6, 1934). It led to the formation of the Popular Front. The French Section of the Workers' International (SFIO), socialist leader Léon Blum, won the parlinentary elections (1936). The Popular Front was a coalition of Socialists and Radicals, support by the Communists which often refused to cooperate with the democratic socilaist poarties. Léon Blum thus became became the first Socialist prime minister. After the election, there was a massive wave of strikes, involving some 2 million workers. The workers seized many factories and stores. The strikes were not organized by the new socialist Popular Front government. They were spontaneous and unorganized. The business community panicked fearing a Red, Soviet type Revolution. They secretly with Prime-minister Blum. A comprehensive program of reforms was negotiated. The trade unions were given credit for what became known as the Matignon Accords. Many nof the ferforms are what are now seen as basic lanor collective baragainging rights like the right to strike. But the Matignon Accord went far beyond collective baragaining. There were provisions on wages, prices, management decisions, and taxes. The pay, allounces, and pensions of public sector was raised. The arms industry was nationalized.
The 1940s
The German victory had severe economic consequences. The NAZIs demanded huge financial reparations. And an ansurd excange rate also helped loot the French economy., Hitler's war plan was to run the NAZI war effort by exploiting the resources of the East. The failure of the Ostheer meant that it was the occupied West, especially France, that suported the NAZI war effort. The French economy was severely damages by the NAZI occupation and enthusiastic Vichy colaboration, perhaps more so than actual war damage. Life under the Gernas was harsh, although now wear nearly as harst as in the occupied East. An initial moderate period soon gave way to harsher and harsher measures, especially as the War began to go against the Germans in the East.
The Germans at first stripped France of food and consumer goods, but eventually wnt after workers. There were already some 2 million POWs in the Reich which were used a slkave labor. Then the Germans negan conscripting civlian workers to man war plants in the Reich. Food shipoments resulted in lower and lower ration allocations. Relatively few French people, except Jews, were tuched by NAZI brutalui. Every French persion were touched by the sjortages of food and consumer goods, food shortages being the greatest problem. Vichy basically coopeatred with the German looting of the economy.
The American Marshall Plan and the first steps toward European integration helped stimulate the French economy and recovery.
The 1950s
The French Economic Miracle dominated the 1950s. There was an extended period of unprecedented growth that lasted for much of the postwar period until the mid-1970s. Here recovery from the War aided by the United States and European integration were important factors.
The 1960s
The loss of Empire as in the other colonial ppwers proved to be a non event. The French refer to this period as the 'trente glorieuses' (thirty years of glory). The period of most rapid growth was the 1960s and early 70s. The GDP growth rate from 1960-73 averaged nearly 6 percent annually.
The 1970s
Rapid economic expansion ended with Oil Crisis of the 1970s. France like most of the restbof Euroope was alost entirely dependent on imports. And after the the Arab oil boycott ended, the French were left paying mucg more for oil imports. Growth rates moderated signiicantly and unemployment began to increase. The most imprtant industrail complex in the country, Renault, could only stay in buiness with generous Government grants.
The 1990s
The French have not yet come to terms with the decling growth rates, primarily because a substantial part of the slowing economy is the sacrosanct welfare system. Suggesting cuts is political suiside. France like the other European countries have retained a core capitalist econoomy, understanding that if you are going to have an expensive welfare system, something has to generate the wealth to finance it. The problem is that the French economy does not generate the monyy to pay for the welfare system. And the Government has turned to borrowing the needed funds to pay for it. France has been aided by the United States covering most of the cost of defending Europe as well as important part of the health care system by finacing the cost of pharmecutical development. New drugs are very expensive to develop. Price contols established by state health care systems do not major reserach and development programs. European drug comoanies finance the coist of develooing new drugs with American marketing program. The Govern=ment borrowing and resulting debt will only increase in the 20th century. It is undeniable that this has impacted growth. Another factor is surely the penchant of the European Union (EU) beaurecrtas for regulation -- the sane kind of regulation which hobbeled the economy of the Ancien Régime. Notably, few of the EU bereaucrats have any experience with productive enterprise like business or farming.
Sources
Bernard, Philippe and Henri Dubief. The Decline of the Third Republic, 1914-1938. (Cambridge University Press, 1988).
Dormois, Jean-Pierre. The French Economy in the Twentieth Century (2004).
Jackson, Julian t. Popular Front in France: Defending Democracy 1934–1938 (1988).
