Evening star., 1951-03-25


pursued by successive French &C
sistency and considerable success
industries has been as big as
priority access to all kinds of
public funds. including practically
the whole European Recovery
Program counterpart funds, could
make it. The resulting increase
in the productivity of Frances
nationalized coal mines. power
stations and transport system, as
well as in her privately-owned but
closely controlled steel industry.
has been most gratifying and the
mechanization of her perennially
backward agriculture has at last
begun in a big way.
During the same period the
franc was stabilized after years Of
imitation and foreign trade i'm
proved to the point where France
became the biggest creditor in the
European Payments Union and
achieved approximate balance in
her overall accounts. Yet, with
all that. French industrial pro-
duction, while in the last two
years an average of 20 per cent
above the immediate prewar
period, has still barely reached the
1929 level after an interval of TWO
decades,
Wage Level Low
AS the favored "key sectors
of production now enjoy an output
and productivity considerably
above that of the 1929 peak, this
means that there are large other
sectors. chiefly in the consumer
goods industries, which even now
have not fully recovered from the
creeping repression that overlook
the French economy in the last
prewar decade. Worse still, there
are indications that what recovery
there was in these backward
sectors" took place chiefly in the
inflationary postwar period and
stopped with the end of the inf1a-
ton. The same years have also
brought a mushroom growth OF
unproductive retail trade not JUS
titled by any comparable increase
in the turnover of consumer goods
Finally, the dark side of the
picture still includes the French
workers real wage. which, though
improved for some of the lower
paid groups and above all fol
large families owing to the high
family allowances, is still below
prewar on the national average
1t would be lower still but fol
the incredibly low controlled
rents, a wage subsidy dearl!
bought with the almost completl
standstill Of housing activit.
outside the reconstruction of tn,
war-damaged towns. The house
building industry has been decay
ing ever since 1918. and it is still
not regarded as good politics tt
devote much public money to low
cost housing in general as distinc
from locally concentrated recon
struction; the penalty of miser!
or extortionate rents is paid b.
the-thinly spread and therefore
overwhelmingly of those WHIT
own no prewar apartments.
Much Controversy
Few Frenchmen are aware O.
the extent of these contrasts, bu
the existence of go-ahead ane
stick -in-the-mud industries i!
known. and as the former largel.
coincide with the planned and tn,
latter with the unplanned sector
lit gives rise to much controversy
The advocates Of free enterprise
complain, in fact. that the smaller
industries outside the scope oi
the Monnet plan, are starved o1
capital by the concentration oi
public funds on the "key indus.
tries" and claim that private en-.
terprise could do equally well with
less money if only it had access
to it. It is true that the French
capital market is rather narrow
with prevailing interest rate oi
z per cent, but it is also a fact
that the smaller industries, con.
sisting largely of family firms
have always Stunned the oper
market and tended to rely or
the ploughing back of profits;
and there is no sign that these
profits have lately been insult.
Ificient for any investment desired
The French economy has beer
fully employed since the war, anc
the expansion of the key sectors
has tended as much as in Britain
to expand the home market fol
consumer goods. What has beer
lacking were not the funds to IN.
vest, but the initiative to expanc
and improve. In fact, there il
'fstill considerable boarding of gold
as well as considerable flight o1
capital which escapes the rather
wide meshes of the foreign ex.
change control by the simple de.
vice of "underdeclared" expor
prices.
Tax Burden Heavy
The reason for this stagnatior
of the French "unplanned" sector
so strikingly in contrast with the
behavior of similar industries say
in Britain or Sweden, must be
Sought in factors which were
already operative during the
French repression in the '30s; ir
the virtual absence of genuine COM
petition, favored by a tradition