Recent Advances in Neo-Schumpeterian Economics

Recent Advances in Neo-Schumpeterian Economics

Essays in Honour of Horst Hanusch

Edited by Andreas Pyka, Uwe Cantner, Alfred Greiner and Thomas Kuhn

This judicious selection of recent essays demonstrates the applicability of the fundamental principles of neo-Schumpeterian economics, namely, innovation and uncertainty. The authors demonstrate how neo-Schumpeterian economics is developing into a comprehensive economic theory encompassing industry, the public sector and financial markets.

Chapter 11: French Industrial Policy

Alain Alcouffe and Christiane Alcouffe

Subjects: economics and finance, economics of innovation, evolutionary economics, innovation and technology, economics of innovation


Alain Alcouffe and Christiane Alcouffe HISTORICAL OVERVIEW The French claim precedence in inventing the concept of industrial policy, which can be traced back to Jean-Baptiste Colbert, Louis XIV’s famous minister. Henceforth national economics, the idea that ‘national economic strength is measured by productive capacity and that productive capacity can be increased by state aid,’ (Clough, 1939, p. 8) permeated French political and economic life. The ambition of ‘Colbertism’, as such policies went on to be labelled, was to attain full employment, to stave off mass poverty, and to strengthen national industrial champions necessary for national supremacy. FROM THE FIRST INDUSTRIAL REVOLUTION TO THE SECOND WORLD WAR In the nineteenth century, Colbert’s ambitions were revived by the SaintSimonian ideology adopted by Napoleon III in his effort to boost French industry. Unlike mercantilism, however, Saint-Simonianism advocated free trade and is usually credited with having sustained the major industrial spurt of the century. Later on, under the parliamentary regime established after the Franco-Prussian War of 1870–71, relations between industrialists and politicians became more intricate. The Depression of the 1890s reintroduced the claim for protection and tariffs, while the fear of socialism restrained the growth of firms and the concentration of workers. By the beginning of the twentieth century, all industries of the Second Industrial Revolution were in place: steel, electricity, petrol, railways, telegraph, chemistry, automobiles, aeronautics. These sectors innovated at a sustained rhythm between 1900 and 1930, with an average growth of 5 per cent per annum, which was triple that...

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