The Road from Mont Pelerin: France in the Neoliberal Age
Raymond Barre following the announcement of his retirement, September 1980
If the first two decades of the postwar era had seen French politics dominated by questions of civil rights and the constitutional future of the French Union, the subsequent quarter-century saw the focus move to economics. The upshot of Pompidou’s decision to attempt to fight Vietnamese separatists following the beginning of the Second Indochina War in 1963 was the splitting of the Union of Democrats (“UD”), with the anti-war faction moving to the Radicals and the pro-war faction joining the Republicans. Pierre Mendes-France won the presidential elections in 1965 and immediately went to Indochina, ordering the army to stand down and return to barracks.
Mendes-France de-escalated the war and offered Vietnam, Laos and Cambodia (but not Cochinchina) self-determination in 1966. A settler revolt in those territories (not so subtly cheered on by the Republicans) in 1967 failed, as did an attempted coup by disgruntled members of the French military in 1968. A referendum was held in France to approve Indochinese self-determination in January 1968, followed by the signing of the Saigon Accords in March 1969. A referendum in Vietnam, Laos and Cambodia a month later saw an overwhelming vote to leave the FU. A subsequent civil war in those three countries was settled in 1974 by a Chinese invasion, which installed a quasi-democratic constitutional federal monarchy under the name of the United Kingdoms of Indochina. (Bringing to reality Ho Chi Minh’s biggest fear in 1945.)
Mendes-France lost the 1970 presidential election to the Republican candidate Jean Sassi, a former general who was associated with the failed putsch of ‘68. At the same time, the Republicans kept their iron grip on the National Assembly, with electoral victories in 1968 and 1972. Despite the bellicose rhetoric from some of Sassi’s more excitable supporters and allies, upon assuming the presidency he did not attempt anything as severe as a reconquest of Indochina (although plans were drawn up) and instead focused on cementing the current power structures in the FU. To this end, strongmen in the African member states - such as Felix Houphouet-Boigny in the Ivory Coast, Gnassingbe Eyadema in Togoland and Mamadou Dia in Senegal - were propped up with French development money and, where needed, military aid. Although France’s former African colonies would all experience substantial economic development, problems of endemic corruption, inequality and autocracy remained, as did the fundamentally extractive and developing nature of their economies.
With the collapse of the UD in 1965, French politics once again reorientated itself. The Republicans kept their hardline views about the maintenance of the social structure of the FU but allied that to an increased interest in laissez faire economics. Over the 1970s, this ideology increasingly came to be known as ‘neoliberalism’ and was intellectually derived from the activities of the Mont Pelerin Society, founded by Friedrich Hayek, Ludwig von Mises and others in 1947. In response, the Radical Party attempted to become a big tent organisation but this foundered on its own internal contradictions. In 1970 the Radicals would split once more: left wing elements combined with the SFIO and other assorted, smaller, parties to form the Socialist Party, while the remaining more centrist individuals (rather ironically) retained the ‘Radical’ name.
In the legislative elections of 1964, the Republicans once again gained a majority, this time under Edmond Jouhaud. Jouhaud was a respected former general and pied-noir, a fairly standard CV for a senior Republican. But with the role of Premier becoming increasingly analogous to that of finance minister (his main duty being to negotiate and pass the annual state budget), he quit the role in 1968 and handed over to the comparatively unknown economist Raymond Barre. Although he would occasionally have to cohabit with non-Republican presidents (the Radical Mendes-France until 1970 and the Socialist Francois Mitterrand from 1975 to 1980), Barre dominated the French government until the Socialists regained control of the Legislature in 1980.
Barre's economic policy was influenced by monetarist thinking, turning France into the so-called ‘cockpit of neoliberalism.’ The otherwise-obscure American economist Milton Friedman was brought in as an economic advisor and from 1974 to 1984 would serve as the first (and so far only) non-French Governor of the Banque de France. Starting with the budget of 1966, direct taxes on income were lowered and indirect taxes raised, aiming to slow the growth of the money supply and cut inflation. Cash limits were introduced on public spending and real terms cuts were introduced to education and housing. (These policies would later be copied by the Thatcher ministry in the UK.) Cuts to higher education led to an attempt by the Sorbonne to revoke Barre's degree there. By 1968, the Republicans won re-election on the back of strong economic growth, even as unemployment remained high.
Following Jean Sassi’s victory in the presidential election of 1970, the party embarked on the privatisation of the previously state-run utilities, with gas, water and electricity all being privatised by 1975. In addition, the government passed a great deal of anti-trades union reforms and privatised struggling heavy industries such as mining. The Socialist Francois Mitterrand won the 1975 presidential election, returning to a policy of cohabitation. However, this period proved to be productive from Barre's point of view, with a series of 1977 reforms known colloquially as the ‘Big Bang’ removing many restrictions on the French finance industries and turning Paris into a major financial hub.
1980 was a year in which there were both presidential and legislative elections and the results were a dramatic split decision, with the Republican Michel Joubert winning the presidency but the Socialists, under Jacques Delors, eking out a narrow legislative victory in coalition with the Radicals. However, as Barre would later say, Delors’ premiership in many ways epitomised the success of his legislative agenda. Under Delors and Presidents Michel Jobert (1980-85) and Mitterrand again (1985-90), a number of progressive measures were enacted, including a minimum wage (albeit not at a level a great deal higher than the market at the time) and an expansion of social security benefits cut under Barre. However, the fundamentals of the neoliberal economic settlement were left untouched.
This inability of the political left to provide a coherent challenge to this political settlement had produced severe divides in the Socialists. The two presidencies of Francois Mitterrand were judged to have been a failure. Even though he had introduced a number of leftist politicians into his cabinet, the control over the budgetary process held by the Premier had stymied all but the most technocratic tinkering around the edges. With the Socialists looking divided, the Republicans regained control of the legislature in 1988 and the Republican candidate Edouard Balladur won the presidential elections in 1990.
Presidents of the Fourth Republic
- Charles de Gaulle; Union of Democrats; December 1945 - November 1946
- Georges Bonnet; Union of Democrats; November 1946 - December 1950
- Philippe Leclerc; Union of Democrats; December 1950 - December 1960
- Georges Pompidou; Union of Democrats; December 1960 - December 1965
- Pierre Mendes France; Radical; December 1965 - December 1970
- Jean Sassi; Republican; December 1970 - December 1975
- Francois Mitterrand; Socialist; December 1975 - December 1980
- Michel Jobert; Republican; December 1980 - December 1985
- Francois Mitterrand; Socialist; December 1985 - December 1990
- Edouard Balladur; Republican; December 1990 - present
Premiers of the Fourth Republic
- Charles de Gaulle; Union of Democrats; August 1944 - December 1945
- Robert Schuman; Union of Democrats; December 1945 - November 1948
- Pierre Mendes France; Radical; November 1948 - November 1952
- Robert Schuman; Union of Democrats; November 1952 - November 1956
- Raoul Salan; Union of Independent Republicans; November 1956 - April 1962
- Maurice Faure; Radical; April 1962 - November 1964
- Edmond Jouhaud; Republican; November 1964 - September 1968
- Raymond Barre; Republican; September 1968 - November 1980
- Jacques Delors; Socialist; November 1980 - November 1988
- Pascal Salin; Republican; November 1988 - present