Comparative Capitalisms, Ideational Political Economy and French Post-DirigisteResponses to the Global Financial Crisis

Abstract

This article advances the case for the more systematic incorporation of ideational factors into comparative capitalisms analysis as a corrective to the rational choice proclivities of the Varieties of Capitalism approach. It demonstrates the pay-off of such an ideationally attuned approach through analysis of French capitalist restructuring over the last 25 years, placing it in comparative context. A modus operandi for such ideational explanation is elaborated through delineating different national conceptions of the market, and setting out their impacts on practices of market-making. The claim made in this article is that understanding the evolution of French capitalism requires recognition of the ongoing market-making role of the French State, in combination with the French conception of the market and its embedding within a social context characterised by the interpenetration of public and private elitist networks of France's 'financial network economy' which remains substantially intact. The ideational dimension is crucial because French understandings of the market and competition, the ideational building blocks of market-making, inform French state interventions and leave footprints on French institutions and market structures, and the evolutionary trajectory of French capitalism. In charting this trajectory, this article deploys the concept of post-dirigisme. We map out the parameters and causes of the post-dirigiste condition in France through examination of French bond market development, privatisation, the shift from a government-to a market-dominated financial system, and French capitalism's internationalisation. It then uses postdirigisme to explain French state responses to the financial crisis and the banking bailout, noting how state actors, in concert with the banking elites, actively facilitated dominant market positions of French international champions.

Post-crisis social democratic policy capacity in France and the United Kingdom: A lesson from the globalisation and social democracy debate

“…As Hay and Rosamond (2002, p. 148) noted, 'whether the globalization thesis is "true" or not may matter far less than whether it is deemed to be true (or, quite possibly, just useful) by those employing it'. This point captures the salience of employing an ideational analysis (see Campbell, 1998;Hay and Rosamond, 2002;Hay, 2004a, b;Schmidt, 2008;Clift, 2012) to elucidate the significant implications that engaging with the economic globalisation theory has had for social democrats. In turn, this article then attempts to show how this framework of analysis offers a valuable new insight into the study of post-crisis European social democracy.…”

Introduction

“…The upshot, as Grossman and Sauger note, is that 'unpopularity and disappointment have been the usual fate of Presidents since the 1980s'. This is all part of the condition of post-dirigisme (Clift, 2012), wherein processes of Europeanisation, globalisation, liberalisation and deregulation, undertaken by successive French governments, have hemmed in the autonomy and policy capacity of French leaders in the habit of steering the tiller of the French economy in a directive and interventionist manner. While societal and elite expectations of such directive intervention endure, the reach of French leaders exceeds their grasp.…”

France and the International Financial Crisis: The Legacy of State‐Led Finance

“…The two large French commercial banks were similar to other EU commercial banks in this regard with rapidly rising foreign ownership in the 1990s and 2000s . Despite the decline in cross‐shareholding portfolios, important features of the “financial network economy” remained (Clift ; Dudouet and Grémont ), including shareholding pacts as between BNP Paribas and AXA. French mutual banks mostly did not open their capital, but Crédit Agricole—one of the largest retail banks in Europe—was partially opened to private shareholding in 2001.…”

“…However, the manner in which they did this was dictated by conditions in the French banking system established to a large extent deliberately by the French state. State efforts in actively prodding recently privatized banks to engage in derivatives trading and securitization also point to the relevance of work by scholars who highlight continued but more limited forms of state intervention to cope with contemporary challenges in global capitalism—in addition to Schmidt (, ), see Levy () and Ben Clift's (, ) elaboration on post‐dirigisme . French government efforts to facilitate financial innovation fit well with Chris Howell's () “paradox of French state intervention,” which suggests that the French state is engaged in new kinds of state activism—but that the upshot of this activism is a retreat from interventionism in the economy, and the increasing exposure of the institutions of the French economy to international market forces.…”