From Empire to Europe: The Decline and Revival of British Industry Since the Second World War. Geoffrey Owen

affected civil servants as well as businessmen. The old administrative élite – products of the Ecole Polytechnique and the other grandes écoles – had played little part in the reforms that followed liberation; many of these officials had served in the Vichy administration, and they were widely blamed for contributing to the stagnation of the inter-war years. But de Gaulle believed that his plans for restoring the grandeur of France depended on a cadre of highly trained administrators dedicated to the service of the state. To combat the narrow-minded conservatism of the older schools, a new graduate school of public administration, the Ecole Nationale d’Administration (ENA), was set up in 1945. All senior civil servants were recruited through ENA; its curriculum was broader and less technical than that of the older schools. Although ENA did not democratise civil service recruitment in the way that some of its architects had hoped – its students continued to come mainly from the Parisian middle and upper classes – it helped to propagate a technocratic view of the state as a promoter of modernisation.²⁴ The technocrats were in command, too, in the newly nationalised enterprises. The spirit of the times was personified by the flamboyant head of Renault, Pierre Lefaucheux, a businessman who had played an active part in the resistance. Although he had socialist sympathies, he saw the company as ‘une entreprise-pilote’, setting an example of dynamism and innovativeness for the rest of the motor industry.²⁵

      The first Monnet Plan had an important international dimension.²⁶ What was at stake was France’s place in Europe and, above all, its relationship with Germany. If France could take advantage of Germany’s defeat to build up its industrial strength, the balance of power on the Continent might be permanently altered in France’s favour. In this context the steel industry had a special significance. The French steel mills, concentrated mainly in Lorraine, had always obtained most of their coking coal from the Ruhr. The expansion of steel-making capacity envisaged in the Monnet Plan was based on the assumption that German steel production would be held well below its pre-war level. This would ensure that adequate supplies of coal would be available to France and that the enlarged French steel industry would take over from Germany as the principal supplier to Continental markets. In the aftermath of the war, when Allied policy towards Germany was in its punitive phase, these ambitions seemed realistic. But after the announcement of the Marshall Plan France had to accept that West Germany would soon be created as a sovereign state and reintegrated into the European economy. While the Americans recognised French sensitivities over the Ruhr, they were not willing to contemplate permanent curbs on German steel production. France had to find alternative means of fulfilling its industrial ambitions while protecting itself against German domination.

      The outcome of this reappraisal came in 1950 with the proposal for a European Coal and Steel Community (ECSC), presented to the world by Robert Schuman, the foreign minister, but largely devised by Jean Monnet. The primary motive was political. It was a way of dealing with one of the most contentious issues in Franco-German relations and establishing a new partnership between the two countries. It was also an imaginative approach to European integration, and for that reason attracted the immediate support of the Americans. John Foster Dulles, Secretary of State, saw the Schuman Plan as ‘brilliantly creative’, while President Truman described it as ‘an act of constructive statesmanship’.²⁷ But Monnet also saw the plan as a way of shaking up a conservative and cartel-minded steel industry, he regarded the Treaty of Paris, which established the Community, as Europe’s first antitrust law. In the event, the impact of the Community on competition was more limited than Monnet had hoped. Although intra-European trade in steel increased, national governments continued to intervene in the industry for political and social reasons. Yet the treaty marked a shift away from the privately regulated cartels of the past and established a concept of European interdependence which could be applied to other sectors.

      For the shift to go further, a transformation would have to take place in the attitudes of French businessmen. France was a highly protected country, and in the early 1950s some 40 per cent of its overseas trade was with the colonies. Monnet and his colleagues knew that intra-European trade offered far greater possibilities for industrial modernisation than trade with the Empire. A possible way forward was to continue the sectoral approach, extending to other industries the same principle which had been applied to coal and steel. But the Beyen Plan, which proposed the elimination of tariffs on all industrial goods among the six member countries of the ECSC, involved a much bigger leap in the direction of free trade.²⁸ The initial French reaction was hesitant, partly because of the weakness of the balance of payments, but by 1955, when the foreign ministers of the six ECSC countries met in Messina to consider the Beyen Plan, France’s trade position had improved and the advocates of free trade were in a stronger position to argue their case. As they saw it, sectoral arrangements along the lines of the Coal and Steel Community had serious limitations. ‘The French renaissance had to be completed by pushing the whole of French manufacturing into a competitive common market … Either France renounced liberalisation, modernisation and its hopes for the future, or it took the economic risk.’²⁹ That risk was taken when France signed the Treaty of Rome in 1957, and the next decade saw a rapid reorientation of French exports towards its Common Market partners (TABLE 3.2).

      For France, as for Germany, intra-European trade was crucial to the high rate of economic growth which was achieved in the 1960s. But France’s approach to economic policy was more erratic than that of the Federal Republic. The most glaring failure was persistent inflation; successive governments were unable either to control public spending or to impose a German-style monetary policy. Consistency in economic management was not helped by the fragmentation of the political parties, leading to a series of short-lived coalitions. While the withdrawal of the Communists in 1947 had removed the risk of a swing to the left, none of the conservative parties commanded the same solid national support as the Christian Democrats in West Germany. General de Gaulle formed his own party, the Rassemblement du Peuple Français (RPF), rather than accept the leadership of the MRP. Political and social divisions were exacerbated by the colonial wars in Indo-China and Algeria, culminating in 1958 in a political crisis, the return of General de Gaulle to power and the inauguration of the Fifth Republic. The new constitution provided for a stronger presidency, and economic policy became more coherent.

       TABLE 3.2 Destination of French exports 1952–73 (per centage of total)

      The reform process in France differed from Germany in two other respects. First, the French government did little to promote internal competition. Although a law against price-fixing was passed in 1952, enforcement was lax, and cartels continued much as they had done in the 1930s. Second, there was no overhaul of labour relations. Like their German counterparts, most French employers before the war had been hostile to trade unions, and resented the concessions which had been forced on them at the time of the Popular Front government in 1936. After liberation in 1944 there were hopes that relations between capital and labour could be put on a new footing. One of the first acts of the provisional government was to require all firms with more than 100 employees to establish comités d’entreprises, or plant committees, through which managers and employees could work together to increase production. These committees were helpful in coping with the short-term problems of reconstruction, but there was no fundamental change in the labour relations system. The comités d’entreprises left behind ‘a residue of mundane achievement and a sense of unfulfilment’.³⁰

      Thus the impetus for reform in France after the war was more limited than in Germany, and left some old institutions and attitudes intact. The biggest changes were the national consensus in favour of industrial modernisation and the recognition that a new relationship with Germany had to be forged. One of Monnet’s most valuable contributions, according to his biographer, was to promote a shift in attitudes among France’s ruling élite ‘from the pretensions of a moth-eaten great power to the realism of a medium-sized but ambitious economic one’.³¹ It was the weakness of France’s position after the war which encouraged bold and imaginative solutions to its problems, and in this context the Schuman Plan was crucial.³² The European Coal and Steel Community allowed France to assume a position of leadership in building post-war Europe, and pointed the way to the fuller exposure