Two-and-a-half years ago in The New Statesman, I attempted to answer the question: Is French planning a miracle or a myth? At that time comparatively little was known in this country about the details or achievements of the French planning experiment—for the very good reason that planning was still in Britain a dirty political word. But with the Tories’ conversion to planning as the only means of securing sustained growth, all that has changed. The political argument in Britain now centres round the question: can planning for growth be made to work without creating its own inflationary pressures and, if so how farreaching must it be? How far can it be imposed on a dominantly capitalist economy without undermining the incentives which make it work?
In trying to answer these questions, the relevance of France’s experience has been obvious. The growing interest here in that experience has been met by a succession of publications on the French plan of which the Hatchetts’ massive volumefootnote1 is the latest and most comprehensive.
But in the meantime, intensive argument about and criticism of French planning has been going on inside France itself. The planners themselves have taken part in it. They are—as M. Massé, planner-in-chief, points out in a foreword to the Hatchetts’ book—‘acutely conscious at one and the same time of what has been achieved already and of the considerable distance which still separates us from a more rational and democratic system of planning’. In recent lectures in this country, M. Massé has opened his heart about his problems to British audiences, encouraged by Britain’s belated entry into this field to hope that we can find answers where he has failed. But he has plenty of advice on his own doorstep. The defects which have been revealed in the French system have stimulated discussions both on the causes of past failure and of possible remedies. Both the Christian and Force Ouvrière trade unions have taken an active part in these heart-searchings, as have left-wing politicians, and their ideas were drawn together at a conference on democratic planning in March, 1962. But a wider circle of people has also been joining in the debate through the medium of the Club Jean Moulin—a confidential grouping on Fabian Society lines of senior civil servants, university teachers, trade unionists, representatives of the professions, private business and the armed forces. In January 1962, the Club published an important study of ‘La Planification Démocratique’. From this turmoil of ideas, Pierre Mendès-France, financial expert and at various times Minister of Finance, of National Economy and Prime Minister, has evolved his own concept of effective planning and how it can be made relevant in the context of French politics and he has now embodied it in a blueprint for the fundamental reform of French life, both politically and economically. His bookfootnote2, read in conjunction with the Hatchetts’ detailed progress report on French planning (for whose factual reliability M. Massé himself has vouched), is invaluable for British Socialists now brought face to face with the need to examine what they, too, mean by planning in the light of the Tories’ suspicious conversion to it. If Socialism means a planned society, does not a planned society need Socialism to make it work?
Superficially France’s experience might seem to prove the opposite. The ‘economic miracle’ she achieved from 1951–62—when the increase in her industrial production was more than twice as great as ours and her exports rose by 63 per cent compared with our 18 per cent—seemed to indicate that a bureaucratic system of planning by consent, almost behind the back of parliament, could achieve the sustained rate of growth at which we in Britain are now aiming. But if we probe deeper, as the Hatchett’s book enables us to do, we find the position is much more complicated. It is true that the mere dedication to planning for expansion which inspired the programme of the resistance movement and has dominated French thinking ever since, has been a powerful factor in stimulating growth. But it has not prevented a series of fluctuations and temporary setbacks from time to time. France has had her own ‘Stop-Go’ policy which has not so much checked growth as ensured its achievement at the expense of other socially and economically
The first plan (1947–52) was little more than a crash programme for the reconstruction of the basic sectors of the economy to which all other considerations were sub-ordinated. After liberation, a left-wing government seized the opportunity both to create the necessary technical planning body—the General Planning Commissariat—and to launch a drive to modernize basic industries. This was achieved partly by the extension of public ownership to key sectors (gas, coal, electricity, transport, banks, insurance and a few industrial enterprises like Renault works) and partly by the vigorous use of a mixture of physical and financial controls to rejuvenate backward private industries. By means of building permits, import licences and state controlled credit, selected key private industries were successfully reconstructed (notably steel, cement, fertilizers, agricultural machinery and some chemicals). But, as in Britain, expansionist plans were soon be-devilled by inflationary pressures and the growing deficit in the balance of payments led to the devaluation of the franc in 1949. The advantage gained was soon swallowed up by the effects of the Korean war and of rearmament. However, owing to the purposive use of Marshall Aid funds to finance the plan, industrial investment continued at a high rate. Nonetheless, with the decline in counterpart funds in that year, and the alarming rise in the external deficit, deflation became the order of the day, and the balance of payments position was only restored by a deliberate policy of checking growth.
Up till 1953, therefore, France’s experience closely paralleled that of Britain—with this difference that, with the fall of the Labour government in 1951, Britain proceeded to dismantle her machinery of controls while in France the planners set out to improve their techniques. The second plan (1954–57) had as its primary aim an increase in productivity rather than mere production, in order to deal with the still alarming problem of the trade deficit. To this end greater emphasis was laid on the development of scientific and technical research and the encouragement of industrial efficiency. Moreover a special effort was made to stimulate the manufacturing industries, particularly with a view to saving on imports and to catch up with the arrears of house-building. However, once again, the planning weapons proved unable to supply the stimulus selectively. Output of the consumer goods industries skyrocketed above their targets while essential capital goods industries, particularly machine tools, lagged behind and the gap had to be closed by imports. This fact, coupled with a rise in prices of nearly 40 per cent—which the Mollet government sought to offset by an increase in wages and civil service salaries in 1956—led to an alarming widening of the trade gap and the determination to make equilibrium in the trade balance of payments one of the ‘imperative tasks’ of the Third Plan (1958–61). Unlike the Tories in Britain, however, the planners still battled to maintain growth by an increase in investment directed even more sternly to the production at home of import substitutes while allowing private consumption to rise moderately. But before the efficacy of this policy could be tested the politicians took control. Seizing the opportunity created by France’s imminent entry into the
The result was a spectacular rise in exports. Private investment fell but, once again, owing to the fact that public investment in transport, energy, education, urban development and housing continued at the high levels set by the plan, there was no serious setback to the overall growth rate. Moreover, with the arrival of M. Massé at the head of the Commissariat, an Intermediate Plan, aimed at reviving the rate of private investment, and so of catching up on the Third Plan’s goals, was introduced in 1960. France’s second economic crisis, therefore, was surmounted without the prolonged stagnation experienced in Britain. ‘The choice between private consumption and investment was made resolutely in favour of investment, ‘say the Hatchetts. And they add: ‘Looking back over the economic history of those years, it would be difficult to deny that this order of priorities was the right one.’ Nonetheless, the burden of financing this investment had fallen exclusively on the workers’ shoulders and the value of real wages had not been restored even by 1961. The process of disenchantment with France’s planning methods had begun. Trade union discontent was rising and the planners began to pay serious attention to the complaints of the advocates of ‘la planification démocratique’.