De Gaulle and the economy : the vision of the economy of General de Gaulle
The economy is often considered a secondary aspect of General de Gaulle's achievements. The famous expression "The commissariat will take care of itself" attributed to him has fixed in everyone's mind the image of a man preoccupied above all with the greatness of France, not with her economy.
For de Gaulle, however, economic success was, if not an end in itself, a means vital to the nation's power: "Progress is the sole condition of our independence," asserted the President in 1964. An economically fragile France could not make her mark upon the world. The General believed in three means to a strong economy: France must have a sound currency, a balanced budget and a positive balance of trade.
These fundamental principles were something the General derived from his education. He added to them from other sources, such as the theories developed in the 1930s by certain economists, or his own observation of the policies of Raymond Poincaré under the Third Republic.
Once in power, de Gaulle put his cherished economic theories into application. As the economic climate evolved, however, he would be obliged to modify his ideas and incorporate new elements.
- 1942-1946 : during the war and the Liberation, de Gaulle accepted and implemented the concept of a fairly dirigiste state; only government intervention in the economy could ensure the reconstruction of a country devastated by war. The measures taken at the Liberation, already announced in the NCR programme of 1944 and supported by Resistance members with socialist leanings, were as follows: nationalisation of the banks, insurance companies and certain industrial concerns – especially those, like Renault, that had collaborated with the occupier – but also of certain large enterprises such as the electricity supplier, EDF; introduction of the Plan (3 January 1946) which set out the country's economic objectives for several years ahead.
These ground-breaking reforms introduced by Pleven, whom de Gaulle preferred to Mendès-France, an advocate of rigour, made the reconstruction of France possible, but also created a climate of inflation; they attracted little attention from the French people, who were more concerned at that time by the problems of rationing and rising prices.
- 1947-1952 : in opposition, de Gaulle proved to be fairly critical of the state's role in the economy. He questioned the justification for the nationalisation of Renault, now that the requirements of reconstruction were a thing of the past and criticised the Fourth Republic for maintaining protectionism and exchange control. He called for greater liberalism.
- 1958-1969 : the Fourth Republic left behind a disastrous economic situation. Not only was inflation high and the budget in deficit, but each month the government was forced to apply for American aid to meet its foreign currency commitments.
The General had one overall design: to re-establish a strong and independent France. It was therefore necessary, on the one hand, to balance the budget and, on the other, to make the economy more efficient. One was inseparable from the other. Both as war leader and as statesman, de Gaulle would take a broad overview of the problems facing the nation, as they applied to his central objective, and would act pragmatically.
At the end of 1958, after six months of preparation, he took his inspiration from the ideas of Jacques Rueff and his working group to introduce the financial reforms that would be adopted by a government of national unity and that his Finance Minister, Antoine Pinay, would faithfully put into action despite his initial reservations. The General accepted full political responsibility for his reforms.
The originality of this policy lay in its juxtaposition of dirigiste elements – the state controlled spending, devalued the franc in 1958 and then introduced the "new franc", equivalent to 100 old francs – and liberal ideas: the state developed free trade, dropped foreign exchange controls and reduced Customs duties by 10%. These measures were mandatory under the Treaty of Rome signed in 1957, whereby France had opted to become a member of the European Common Market as from 1 January 1958.
The positive results were soon apparent: the budget was once again balanced and exports rose. Under the impetus of a favourable economic climate internationally, the French economy recovered in the course of the 3rd Plan (1958-1961), fully justifying the President's optimism.
At the same time, a thorough reform of national structures was under way. The task was enormous and often little understood or appreciated. Examples include the reform of agriculture, carried through against virtually unanimous opposition and yet ultimately a success, the creation of a nuclear industry and a space industry, the development of scientific research (creation of the national centre for space studies - CNES – and the national agency for the exploitation of research - ANVAR -), planning and development (land law, the building of new towns), the law of 1966 on vocational training… In every domain, the impetus of the General and his support made itself felt.
1963 saw the beginnings of a downturn, however. The miners' strike in March coupled with a return to rising prices forced the new Minister for Finance and Economic Affairs, Valéry Giscard d'Estaing, to introduce a Stabilisation Plan in September, in response to pressure from the General. The government cut borrowing, blocked prices and reduced its spending. This enforced rigour certainly had the merit of bringing the budget back into balance, but it was a far cry from the liberalism of 1959-1960. At the same time, dissatisfaction was on the rise among the general public: in the March 1967 general election, the Gaullists won only a narrow majority.
The continuation of the Stabilisation Plan was one of the causes – but by no means the only or the principal cause – of the events of May 1968. The impact of the students' and workers' protests on the economy were substantial: quite apart from the flight of capital it provoked, the May crisis and the accompanying strikes paralysed economic production. Pompidou's government was forced into negotiations and hurriedly conceded the Grenelle agreements of 27 May 1968: workers' wages rose by an overall 10%.
When de Gaulle stepped down on 27 April 1969, he nonetheless left behind the impression of having by and large handled the nation's economy well. Certainly, the success had been more impressive in the early years. Yet the "de Gaulle years" are still and will always remain the years of the "Trente Glorieuses", the thirty years of unparalleled growth in prosperity, during which purchasing power increased – in 1969, French consumption was 56% higher than in 1958 – and the country acquired sound infrastructure, a modern agricultural sector, major groups in industry, commerce, banking and insurance, and leading-edge firms in the nuclear and aerospace fields. France had also experimented with a controlled opening up to international markets and had recovered its economic and financial independence.
If the President received little support for his economic policy from the public, it is perhaps because the public at the time had failed to perceive this reality. In hindsight, the years from 1958 to 1969, with annual GDP growth running and between 5 and 6% and 400 000 unemployed, now look like a time of economic miracle.