Economic Planning in France
This is a book of the utmost importance for the United States—a book whose relevance and potential educational influence can hardly be overstressed. On the face of it a scholarly analysis of the French planning system, the Hacketts’ book is, in fact, a treatise on the compatibility of planning and capitalism. The book is reticent about drawing conclusions from the French experience and applying them to other nations, yet one conclusion forces itself irresistibly on this reader: that the experience of the French economy makes it no longer possible for the government of the United States, or for the spokesmen of American business, to excuse the increasing malfunction of this economy on the grounds of the incompatibility between planning and “free enterprise.” On the contrary it is now possible to state on the evidence presented in this book what could before only be advanced on faith—that a conservative nation dominated by large corporate enterprises can plan with reasonable effectiveness, and that the failure to do so is a national disgrace.
It is extraordinary how little is known in this country about French economic planning. For the past fifteen years we have been so absorbed in watching the permutations of French political policy that we have almost entirely lost sight of the remarkable progress that France has made in economic policy. Most of all we have been unaware that France has become, in the Hacketts’ words, the most “advanced” example of planning in the capitalist world. Not only has the planning structure become inextricably integrated into both public and private economic life, but what is more important, the idea of planning is no longer even a controversial question. What Pierre Massé, who is at present the head of the General Planning Commission, calls “the French style of planning” is now regarded, like many other styles of France, as a national asset.
What is that style? The Hacketts say it “is a way of providing permanent arrangements for a collective and systematic reflection on the problems and prospects of the economy with a view to action.” That is surely a considered definition but it is hardly an enlightening one. I should rather say that the French style is an attempt to work out a framework of future economic development which is precise enough to appear to many enterprises as a concrete business objective, yet general enough not to demand specific performance from any single enterprise; binding enough to evoke from the private sector of the economy those responses necessary to insure success, yet open enough to permit deviation and shortfall without penalty; subject to sufficient control from the public sector of the economy to offset the normal disturbances of growth, and yet so deeply based on the voluntary cooperation of the private sector that it becomes not merely a governmental but a truly national undertaking.
But this is rhetoric, and what is remarkable about the French style is its avoidance of rhetoric and its insistence on practicality. Hence let us try to follow the process by which a Plan is formulated and then given official sanction.
Planning in France begins in the offices of the General Planning Commission (the French word Commissariat which the Hacketts use has, I fear, an altogether too Russian flavor for Americans), a small bureau of twenty-five economists, engineers, top civil servants, etc., attached to the Prime Minister’s office. Here the all-important first “options” are tentatively formulated—the over-all rate of national growth, the balance between consumption and investment, the relative encouragment to be given to different geographic regions, the main social objectives to be grafted onto the economic plan. Various specialized agencies, such as the National Institute, are called on for advice, and various Ministries and advisory bodies also participate in the initial selection of broad goals. This first draft thus represents a political-administrative judgment of what is possible and desirable for the French economy to achieve within the limited “time horizon” of the Plan.
This is, however, only the beginning of the process, and were the Plan to stop here it would be no more than a declaration of good intentions floating above the French economy. What ultimately ties it to the economy is the next step in the process, when the first draft is scrutinized and amended by a series of Planning Commissions. Some of these Commissions, comprising mainly academic or professional personnel, now subject the Plan to a “horizontal” analysis—that is, they review its objectives in the light of the availability of manpower, or productivity, or the compatibility of various objectives with one another. Other Commissions, composed of representatives of business, trade unionists, delegates from artisan or agricultural or professional groups, meanwhile review the Plan “vertically”—that is, they examine the effects of the Plan on the various sectors or subsections of French industry and agriculture. For example, the Commission concerned with general manufacturing is organized into sixty working parties with over a thousand participants who examine the potential effects of the plan for 240 distinct branches of activity. In this way, perhaps 3,000 to 4,000 people actively take part in the planning process.
It is here, of course, that the Plan gets into the bloodstream of the French economy, for as the various Commissions examine the general objectives of the Plan as they apply to their own branch of activity, they also recast their own business prospects in the light of the Plan’s “targets”—which now become the probable business realities of the future.
Discussion is thus at the very heart of the French planning system, and the secret of its style. The Hacketts report a senior rapporteur to one of the Vertical Commissions saying: “From time to time this leads to explosions of ill-temper directed at the Government, but the exercise is really one of getting things off one’s chest. Drawing up a Plan for the industrialist is like going to see a psychiatrist. Once he has said all that is wrong, he tells himself that perhaps, after all, there are some things that are not as bad as all that….”
Out of the discussions of the “Vertical” and “Horizontal” Commissions come the recommendations for the final Plan, and these in turn are eventually reduced to a single document by the General Planning Commission. In the case of the present or Fourth Plan, now in mid-operation, the document was 250,000 words long. It was then submitted to Parliament and given the force of law—or almost. The Plan itself was not formally “passed” by Parliament but merely attached as a reference annex to a brief law which declared that the Plan was the “framework” for investment decisions and the “guiding document” for economic expansion and social progress.1
And that is all it is, for in fact the Plan is not a binding commitment. No industrialist has signed on any dotted line. Certainly no farmer has. No political party has risen to power on a pledge to “enforce” the options of the Plan. All that has happened is that a set of “coherent forecasts,” a kind of “generalized market research,” has been achieved. While the nationalized industries of the public sector are very likely to carry out their part of the Plan (barring the unforeseen), no such certainty exists for the private sector, where it is merely hoped that there will be sufficient belief in the Plan to carry it through. And indeed, that is what seems to have happened to date. By a process of exposure, engagement, education, and mutual interchange, a series of expectations are built up in the minds of the private actors in the economy that leads to their voluntarily performing the tasks which the Plan asks of them. To the extent that it works, the French style is nothing less than that ideal of the social scientists, the self-fulfilling prophecy.
Well, perhaps not quite. The French planners do not rely entirely on the invisible hand of enlightened self-interest, (or on “conviction and fervor founded on civic sense” in the words of the Fourth Plan itself), but keep in reserve the visible hand of government power. Some of this is implicit in the leverage available to any government by way of accelerating its expenditures, adjusting its general tax rate, and so on. But the government can also provide subsidies to stimulate specific flagging industries. And not least, lurking in the background is the formidable power of the government to achieve a necessary end “by provoking the entry into the branch of a newcomer from a neighboring branch, or finally by taking up a majority or a minority share, either temporarily or on a permanent basis, in the capital of a new constituted firm.”
All this is not to make the claim that the French style of planning has unequivocally demonstrated its worth. France’s rate of growth has been very high during the post-war years, averaging 4.5 per cent capita (or at least double the U.S. rate), but it is impossible to credit this performance to the Plan alone. Indeed, a glance at the table below shows that in numerous areas the French economy has diverged considerably from its indicated objectives:
It is clear enough from these figures where the Achilles heel of the Plan lies: in the inability to forecast, or to control adequately, the level of foreign trade. And whereas the domestic indices show a fair degree of success, it would be wrong to conclude that in a “closed economy” the French style of planning would therefore be assured of success. Many forces have urged the French economy on to its record performance, and one might well argue that even in the absence of planning the rate of expansion would have been high. Then, too, looking ahead, it is clear that many problems have yet to be solved, including, above all, the explosive one of income control—that is, of controlling the rate of advance of wages or prices.
Yet, as the Hacketts make clear, to attempt to measure the success of the French planning effort by a comparison with what might have been is a futile exercise. Rather they ask us to consider the fact that not only has a high rate of economic growth been achieved, but that this growth has been channeled into certain avenues where it would not have gone in an unplanned system, no matter how vigorous. Among these, the most important is surely the deliberate encouragement of public consumption—housing, education, cultural, and recreational facilities—so that France’s growing affluence has been directed toward the common as well as the private good. But what is of still greater significance is something else. It is that France is trying—in a way which is still experimental and tentative—to find a route between economic chaos and economic coercion. It is this effort which counts and will endure. As the Hacketts say,
Tomorrow, of course, another Plan could set different objectives which would call for changes in the existing character of the Plan. But it is unlikely that these changes would mean a reversal of the present preference for decentralized decision-making which seems, not only in France, to correspond to deep-seated tendencies in the evolution of industrial societies.
It is impossible to do justice to this important book by presenting a mere rehash of its conclusions. The book must be read through to appreciate both the problems it raises and those it leaves unresolved. This is not, unfortunately, an easy assignment. The Hacketts, writing as scholars and technicians (he is an economist with the Organization for Economic Cooperation and Development; she is Conseiller Référendaire at the French Cour des Comptes), have not presented a popular introduction to planning. Detailed and meticulous, the book does not present the French planning structure in bold or general terms, but uncovers it bit by bit, piecemeal, forcing the reader to assemble the fragments in his mind as he goes along (a task not made simpler by a wholly inadequate index). The effect, when the pieces finally come together, is all the more impressive, but alas, I suspect that few congressmen and public officials, to say nothing of businessmen, will muster the time and patience the book requires.
Thus for the moment we must hope that the message of this book will percolate down from the academic slopes on which it will initially come to rest. We may perhaps hope that in the distant future the United States will humbly send planning teams to France to learn from them, just as the French once humbly sent productivity teams to America to learn from us. But one suspects that this will not happen quickly. It may be that we shall have to recognize that just as we had certain natural and social advantages which gave us the edge in productivity, so the French have certain historic and social advantages that give them the edge in planning. A larger public sector, a heritage from the nineteenth century of strategic nationalized industries (transportation and energy, above all), a certain mercantilist predisposition to subordinate bourgeois beliefs to those of the state, and a close entente between the civil service and the business community—these attributes of France, so often deplored as handicaps for her untrammeled economic growth, may now become assets for her economic self-control.
But this brings us far beyond the confines of the Hacketts’ book. We shall have to wait to see how well the French style of planning works over the years ahead. More important, we shall have to wait to see whether our own country, now probably the most laggard in the industrial world, by way of economic responsibility, can learn from the example of France that the price of conservatism does not have to be economic backwardness.
It is now contemplated that in the future, the Parliament will participate directly at the earlier and crucial option-making stage itself.↩
It is now contemplated that in the future, the Parliament will participate directly at the earlier and crucial option-making stage itself.↩