Postwar

widely held in its favour. What planning was really about was faith in the state. In many countries this reflected a well-founded awareness, enhanced by the experience of war, that in the absence of any other agency of regulation or distribution, only the state now stood between the individual and destitution. But contemporary enthusiasm for an interventionist state went beyond desperation or self-interest. The vision of Clement Attlee, the British Labour leader whose party defeated Churchill’s Conservatives in the dramatic election upset of 1945, nicely captured the contemporary mood: what was needed now were ‘well-planned, well-built cities and parks and playing fields, homes and schools, factories and shops.’

There was a great faith in the ability (and not just the duty) of government to solve large-scale problems by mobilizing and directing people and resources to collectively useful ends. Obviously this way of seeing things was particularly attractive to socialists; but the idea that a well-planned economy meant a richer, fairer and better- regulated society was taken up by a very broad constituency, including the Christian Democratic parties then rising to prominence all over Western Europe. The English historian A. J. P. Taylor told BBC listeners in November 1945 that ‘[n]obody in Europe believes in the American way of life—that is, private enterprise; or, rather, those who believe in it are a defeated party which seems to have no more future than the Jacobites in England after 1688’. Taylor exaggerated as always, he was wrong in the long run (but who isn’t?) and he might have been surprised to learn about the planist enthusiasms of many New Dealers prominent in the contemporary US administration of Germany. But at the time he was broadly correct.

What was ‘Planning’? The term is misleading. What all planners had in common was belief in an enhanced role for the state in social and economic affairs. Beyond this there was great variation, usually a consequence of distinctive national political traditions. In Britain, where very little actual planning ever took place, the real issue was control—of industries and social and economic services—through state ownership as an end in itself. Thus nationalization— notably of mines, railways, goods transportation and utilities—and the provision of medical services lay at the heart of the Labour Party programme after 1945. The ‘commanding heights’ of the economy, in short, were taken over. But that was all.

In Italy the Fascist institutional legacy—which had brought large tracts of the economy under state oversight—was left largely intact after the war. What changed was the political colour of the parties now benefiting from the industrial and financial power base afforded them by holding companies and state-owned agencies. In West Germany, after 1948, the economy would remain mostly in private hands but with detailed, publicly-approved arrangements for factory management, employer-employee relations and conditions of employment and distribution. In the Netherlands central planning entailed a variable mix of predictive and prescriptive edicts for the use of private enterprise.

Most countries of western Europe had rapidly growing public sectors, when measured by government expenditure or the number of public-sector employees. But only in France did rhetorical enthusiasm for state planning translate into the real thing. Like the British, post-war French governments nationalized: air transportation, banks, thirty two insurance companies, utilities, mines, munitions industries, aircraft manufacturing and the giant Renault concern (as punishment for its owner’s contribution to the German war effort). One fifth of France’s total industrial capacity was in state ownership by May 1946.

Meanwhile, on December 4th 1945, Jean Monnet presented President De Gaulle with his Plan de Modernisation et d’Equipement. A month later the Commissariat General du Plan was established, with Monnet at its head. In the course of the following months Monnet set up Modernization Commissions for various industries (mining, electricity, transportation, building materials, steel and agricultural machinery; oil, chemicals, fertilizers, shipping and synthetic fibres would later be added) and these in turn delivered proposals and sectoral plans. Exactly one year after its creation, in January 1947, the Commissariat saw its first national Plan approved by the French Cabinet—without discussion.

The Monnet Plan was unique. It was the work of an unusual man.[18] But above all it was the product of a political culture already favourably disposed to authoritarian decision-making and consensus building by governmental fiat. Under its auspices France became the first western country to commit itself wholeheartedly to economic growth and modernization as public policy. The Plan depended heavily on assumptions about French access to German raw materials and markets, and thus the story of its success is part of the narrative of France’s relations with Germany and the rest of Europe in the post-war decade: a story of many false starts, constraints and frustrations.

The first Monnet Plan was largely an emergency measure to address France’s post-war crisis. Only later was it extended and adapted to the terms of Marshall Aid. But the basic outline of post-war French economic strategy was present from the start. French planning was never more than ‘indicative’: it only ever set targets, not production quotas. In this respect it was quite unlike Soviet planning, whose characteristic feature (and prime defect) was its insistence upon arbitrary and rigid output figures by sector and by commodity. The Monnet Plan confined itself to providing government with a strategy and levers for actively fostering certain favoured objectives. At the time this was a strikingly original undertaking.

In Czechoslovakia a Central Planning Commission with some Monnet-like features and aspirations was established in June 1946 to guide and coordinate the sizeable public sector nationalized by President Benes in 1945. In the year before the Prague Communist coup of February 1948, 93 percent of all those employed in transport and 78 percent of those in industry already worked for the state. Banks, mines, insurance companies, major utilities, steel and chemical works, food processing industries and all large enterprises had been taken over: 2,119 firms comprising some 75 percent of all manufacturing output.

In the Czechoslovak case nationalization and state planning of the economy thus began well in advance of the Communist take-over and represented the policy preferences of a genuine majority of the electorate—only in February 1949, a year after the Communist coup, was the Planning Commission purged and renamed as the ‘State Planning Office’, with a very different remit. Elsewhere in the region large-scale nationalizations, like those mandated under Poland’s January 1946 Nationalization Law, were the work of coalition governments in which Communists dominated. But here, too, there were pre-Communist roots: back in 1936 the authoritarian government of the pre-war Polish Republic had inaugurated a ‘Four-Year Investment Plan’ with a rudimentary system of centralized directive planning.

The chief purpose of planning in post-war continental Europe was public investment. At a time of acute capital shortage and with huge demand for investment in every sector, government planning consisted of hard choices: where to place the limited resources of the state and at whose expense. In eastern Europe the emphasis was inevitably upon basic expenditure—on roads, railways, factories, utilities. But that left very little over for food and housing, much less medical, educational and other social services; and nothing at all for non-essential consumer goods. This was not a pattern of expenditure likely to endear itself to any electorate, especially in countries that had already suffered years of material deprivation, and it is not surprising that this sort of planning under conditions of dire shortage was almost always accompanied, sooner or later, by authoritarian rule and the police state.

But the situation in the West was not so very different. The British, as we shall see, were constrained to accept years of ‘austerity’ as the price for economic recovery. In France or Italy, where there was almost no long- term private capital market, all major investments had to be publicly funded—which was why the first Monnet Plan was skewed towards capital investment in major industries at the expense of domestic consumption, housing and services. The political consequences of this were predictable: by 1947 France, like Italy, was threatened with strikes, violent demonstrations and a steady increase in support for the Communist Party and its trade unions. Deliberate neglect of the consumer goods sector and the diversion of scarce national resources to a handful of key industrial sectors made long-term economic sense: but it was a high-risk strategy.

The economics of Planning drew directly upon the lessons of the 1930s—a successful strategy for post-war recovery must preclude any return to economic stagnation, depression, protectionism and above all unemployment. The same considerations lay behind the creation of the modern European welfare state. In the conventional wisdom of the 1940s, the political polarizations of the last inter-war decade were born directly of economic depression and its social costs. Both Fascism and Communism thrived on social despair, on the huge gulf separating rich and poor. If the democracies were to recover, the ‘condition of the people’ question must be addressed. In the words of Thomas Carlyle a hundred years earlier, ‘if something be not done, something will