France after Hegemony: International Change and Financial Reform

332 Pages·1991·6.466 MB·English

by  Michael Loriaux

FRANCE AFTER
HEGEMONY
1n ternational Change
and Financial Reform
Michael Loriaux
FRANCE AFTER HEGEMONY
International Change and Fi nan cial Reform
Michael Loriaux
"France after Hegemony is a careful blend of
technical virtuosity and political acuity, a
major theoretical contribution to the
studies of international and comparative
political economy and an important case
study. Loriaux's analysis shows both the
political reasons for economie choices and
the impact of th ose choices on the French
political economy."
-Harvey Feigenbaum,
George Washington University
How does the decline of the hegemon, the
dominant, rule-making power of the
international system, affect middle-leve!
nations? By examining monetary and credit
policy in postwar France, Michael Loriaux
illuminates this question, tracing the
relationship of domestic economie reform
to specifie changes in the international
political economy which have resulted from
U.S. hegemonie decline.
Because the development and reform of
France's overdraft economy was closely
linked to the evolution of the international
monetary system, Loriaux argues that the
history of the French political economy
closely parallels th at of the U .S. hegemonie
order. By enabling the French to pursue
credit policies designed to hasten industrial
modernization, U.S. monetary leadership
created a condition of moral hazard in the
French political economy which diminished
the capacity of officiais to define and
implement monetary policy. Moral hazard
rendered the French economy particularly
vulnerable to the post-Bretton Woods world
of floating currencies. In 1984 France' s
Socialist government introduced liberaliz
ing financial reforms that greatly curtailed
the state's capacity to influence the alloca
tion of credit to industry, one of the main-
( continued on back jlap)
France after
Hegemony
A VOLUME IN THE SERIES
Cornell Studies in Political Economy
j.
EDITED BY PETER KATZENSTEIN
A full list of titles in the series appears at the end of the book.
France after
Hegemony
INTERNATIONAL CHANGE
AND FINANCIAL REFORM
MICHAEL LORIAUX
CoRNELL UNIVERSITY PREss
Ithaca and London
Copyright© 1991 by Cornell University
All rights reserved. Except for brief quotations in a review, this book,
or parts thereof, must not be reproduced in any form without permis
sion in writing from the publisher. For information, address Cornell
University Press, 124 Roberts Place, Ithaca, New York 14850.
First published 1991 by Cornell University Press.
International Standard Book Number o-8014-2483-6
Library of Congress Catalog Card Number 90-55721
Printed in the United States of America
Librarians: Library of Congress cataloging information
appears on the last page of the book.
9 The paper in this book meets the minimum requirements
of the American National Standard for Information Sciences
Permanence of Paper for Printed Library Materials,
ANSI Z39.48-1984.
parentibus meis

Contents
Acknowledgments ix
Introduction
1
1. Dilemmas of the 1970s 18
2. The Overdraft Economy 55
3· U.S. Hegemony and Moral Hazard 76
4· The Birth of the Overdraft Economy 9 7
5· The Institutionalization of the Overdraft Economy under the
Fourth Republic 136
6. Reform and Resistance of the Overdraft Economy under
Charles de Gaulle 160
7· U.S. Hegemonic Decline and Crisis in France 183
8. Socialist Government and Capitalist Reform 214
g. France and the European Monetary System 241
Conclusion 2 66
Index 309
vii