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‘Capitalisme contre Capitalisme…’ (Albert 1991)

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Presentation on theme: "‘Capitalisme contre Capitalisme…’ (Albert 1991)"— Presentation transcript:

1 ‘Capitalisme contre Capitalisme…’ (Albert 1991)
… a tale in two parts …and four chapters

2 The two capitalisms… ‘mediated capitalism’ (‘… les guichets’):
state committees - central banks - family-led groups - worker participation - high levels of social protection - state savings schemes - national protection of major firms - state led investment… ‘market capitalism’ (…‘liberalisme’) direct finance - stock-exchange-led - ‘investuels’ - ‘institutional investors’ (‘les zinzins’) - international takeovers (‘les OPA’) - emphasis on capital gain - openness to the global market…

3 from State governance…
to nationalisation… to privatisaton… to internationalisation… AND BEYOND…?

4 1998 – France is back! ‘La France va mal mais les Francais vont bien…’
scale of biggest companies (Danone, Elf, Sodexho, Michelin…) high level of exports (6.1% of world imports – second highest in EU, behind Germany) slight fall in level of unemployment (but still near 3m > 2.8m) increased rate of growth (from 2% in 1996 to 4% – higher than Germany but lower than the UK)…

5 Back from where? the stagnation of the post-war ‘state model’ the oil crises of 73-4 and 82-3 the changes in direction under Mitterrand in the early 1980s recession and the collapse of the franc in 1993 resistance to pension reform in 1995

6 … in 1998, France undergoing a huge process of change – but still a largely state-run economy
Comparison with the UK in 1998 UK FR Public spending as a % of GNP Public sector employment as % of total employed (Ger ) Labour costs per hour against 1.0 in Ireland (Ger )

7 The French - anti-capitalist…? (Chapter 1)
a monarchic and republican tradition a triangular system - the family - the banks - the State

8 ‘Le capitalisme familial…’
‘Les 200 familles…’ ‘Les Henokiens…’ ‘La France se protege…’

9 Some of the best known French family firms…(‘mes fonds propres c’est mes propres fonds’)
Renault Michelin Citroen Peugeot Taittinger Danone Legrand Trigano Bic Servier Yves Rocher Leclerc Mulliez etc…

10 France 1950-1968 >>>1980: a state controlled model

11 The formation of the large groups in the 1970s
the banks: Suez, Paribas, Lazard… the industrial conglomerates: BSN, Saint-Gobain Pont-a-Mousson (SGPM), Pechiney-Ugine-Kuhlmann (PUK), L’Oreal, La Generale des Eaux…

12 The 1980s – from nationalisation to privatisation (Chapter 2)
1982: the major banks nationalised – the State takes control – demand-led policy… 1983: control of the money supply – downsizing -the promotion of enterprise… : the first major wave of privatisations under the new government of the Right: Paribas, La Societe Generale, Havas, TF1… ‘les noyaux durs’ : second wave of privatisations: BNP, Rhone-Poulenc, Elf-Aquitaine, UAP, SEITA, Usinor-Sacilor, Pechiney.

13 1983-1998… A major shift in the French economy
‘Le paysage du capitalisme francais au debut de 1999 confirme que le recul du secteur public aura ete l’un des phenomenes majeurs de la decennie.’ (N.Holcblat in L’Etat de la France , pp )

14 The consequences of privatisation
greater involvement by French people in the process of production – communication three types of investor: - the private individual (‘le petit porteur’) - the employee shareholder (‘l’actionnaire salarie’) - the institutional investor (‘le zinzin’)

15 The limitation on public engagement – the illusion of ‘popular capitalism’
‘Les petits porteurs ne sont que des epargnants, passifs ; ils ne sont pas, pour l’instant, des porteurs de capital.’ Erik Israelewicz Le Capitalisme Zinzin (1999) p.160

16 The employee shareholder
means of engaging state employees in the future of their own privatised company –in 1999, more than 50% of companies involved an alternative form of salary – merit award – sought after by 66% of salaried employees… but limited impact… (2% of total shares held; only 5% of employees in the private sector)

17 The reasons for non-engagement
The belief in security – savings, property (average of 14% in 1999) Taxation on capital gains Reliability of the State (‘treasury bonds’)

18 The rise and fall of the French institutional investor
greater involvement in the 1980s and 90s by banks and state-owned groups (‘les noyaux durs’) lack of French capital towards the end of the century to fund newly privatised companies…

19 From privatisation to internationalisation (Chapter 3)
the year of mergers and takeovers (‘les OPA’) - ‘pour vivre heureux, vivons couches’ (Israelewicz) Openness to greater participation from international investors – change in management culture – a loss of ownership

20 The main changes… A reduction in the power of the CEO (PDG)
The internationalisation of Boards Rule by shareholders Short-termism - quarterly accounting Emphasis on short-term capital gain rather than on investment – economic value added (EVA) – return on investment (ROI)… by takeover and cost-reduction The power of the fund-manager (‘les Mickey’)

21 And what now? (Chapter 4) three major events…
- the introduction of the Euro - the reduction in work time (RTT/les 35 heures) - 11th September 2001

22 The consequences of the reduced power of the State
Greater dependency on the Central European Bank Reduce public deficit…but unemployment? Address the pension crisis Maintain France’s representation on Company Boards Promote the development of small and medium enterprises

23 Most recent policy objectives… (June 2005)
Reduce State deficit to below 3%; Increase productivity and the size of the labour force…; Continue to promote the growth of PMEs; Create infrastructural projects and accelerate privatisation in order to reduce state expenditure by 20,000 m EUROS; Reduce the number of state employees (fonctionnaires) – notably in Education…

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