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The new mercantilism in international relations: The case of France's external monetary policy

Published online by Cambridge University Press:  22 May 2009

Henrik Schmiegelow  and
Michèle Schmiegelow
Henrik Schmiegelow
Affiliation:
Henrik Schmiegelow was a scholar of the German Office of Academic Exchange and of the Virginia Law School Graduate Program while doing his research for this article. He wishes to express his gratitude to these institutions for their grants. Michèle Schmiegelow is a consultant to the Centre d'Etudes Européennes of the University of Louvain, Belgium.
Michèle Schmiegelow
Affiliation:
Henrik Schmiegelow was a scholar of the German Office of Academic Exchange and of the Virginia Law School Graduate Program while doing his research for this article. He wishes to express his gratitude to these institutions for their grants. Michèle Schmiegelow is a consultant to the Centre d'Etudes Européennes of the University of Louvain, Belgium.
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Extract

We argue that mercantilism is not an anachronism, but a pattern of interaction between economies functioning analytically as subsystems both of nations and societies. The relation between theory and policy in France's post-war monetary history suggests two concepts of mercantilist rationalization of external economic policy. Although verbalized in terms of liberal economic theory, French monetary policy served nationalist diplomacy (diplomatic mercantilism) and/or the specific societal politics of the domestic economy (political mercantilism). Diplomatic and political mercantilism are indices of indeterminacy of international economics. Societal politics and international economics are thresholds of feasibility for diplomatic mercantilism. But cumulative rationalization of feasible external economic policy in terms of both political and diplomatic mercantilism is not excluded. As a function both of national system maintenance and societal integration, mercantilism is more easily explained in terms of sociological functionalism than in terms of either international functionalism or Realism alone.

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Articles
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International Organization , Volume 29 , Issue 2 , Spring 1975 , pp. 367 - 391
Copyright
Copyright © The IO Foundation 1975

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References

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43 Kesler, p. 248. That Mendesian reformism can have “nationalist” repercussions as well is, of course, the point which we try to make in this paper.

44 For details see Schmiegelow, “The Role of the State Elite in France,” pp. 20–22; 32–33; 92–106. As regards “European” socialization through interpenetration and secondment, see Lawrence Schemmann and Werner Feld, “The European Economic Community and National Civil Servants of the Member States,” International Organization 26 (Winter 1972), p. 132.

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55 Fabra, , “La dislocation,” Le Monde, 11 05, 1971, p. 1Google Scholar. See also Simonot, , “La France et le prix de l'or,” Le Monde. 29 04 1971. p. 1.Google Scholar

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57 For discussions of the diplomatic background see Robert, Gilpin, “The Politics of Transnational Economic Relations,” in Keohane, and Nye, , eds., pp. 414–15Google Scholar; and Hansen, Roger D., “European Integration: Forward March, Parade Rest, or Dismissed?”, International Organization 27 (Spring 1973), pp. 248–54.CrossRefGoogle Scholar

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60 Simonot, , “Les banques centrales pourront réévaluer leur or pour gager leurs emprunts et payer leur dettes,” Le Monde, 13 06 1974, p. 1Google Scholar. See also Peter, Jenkins, “Summit Talks Save Europe,” The Guardian Weekly (Manchester), 25 05 1974, p. 7Google Scholar. About Debré's most significant approval see André, Fontaine, “Every Man for Himself,” The Guardian Weekly/Le Monde, 2 02 1974, p. 13.Google Scholar

61 Gilbert, Mathieu, “Une révision du budget pour accompagner l'opération?,” Le Monde, 22 01 1974, p. 1Google Scholar; “Mehr französische Exporte gegen das drohende Defizit: Abwertung soll Preisvorteile im Ausland sichern,” Handelsblatt, 22 01 1974, p. 4Google Scholar. See also Mathieu, , “Une opération en deux temps,” Le Monde, 4 06 1974, p. 5Google Scholar. The term “snake” refers to the reduced fluctuations between the European currencies since March 1972. In a first step toward the creation of a single European currency, the Six at that time agreed to reduce, by one half, the 4.5 percent margin of fluctuation considered normal in a system of fixed exchange rates. See Hansen, p. 243. About the relation between French and German prices, see Mathieu, , “Une opération en deux temps,” p. 5.Google Scholar

62 See André, Laurens, “MM. Giscard d'Estaing et Mitterand contestent mutuellement leur capacité à maintenir la croissance tout eni répartissant plus équitablement ses fruits,” Le Monde, 12–13 05 1974, pp. 1, 8.Google Scholar

63 After having won the 1974 presidential elections, Giscard could, of course, consider taking unpopular anti-inflationary measures without too much immediate political risk. See Mathieu, , “Une opération en deux temps?,” p. 5Google Scholar. And the “Inflation Cooling Plan” adopted on the 12 June 1974 was even inspired, to a certain extent, by the German model of policy of price stability. But the scope of these measures is again limited by the particular conditions of France's political economy. See Mathieu, , “A l'écoute de Bonn,” Le Monde, 14 06 1974, pp. 1, 3.Google Scholar

64 This has repeatedly been a theme of OECD recommendations to Germany. They stressed that Germany could contribute to international payments equilibrium in permitting domestic inflation to develop according to international standards. See Kindleberger, , “Germany's Persistent Balance of Payments Disequilibrium,” in Baldwin, Robert E. ed., Trade, Growth and the Balance of Payments (Chicago: Rand, McNally, 1966), p. 231Google Scholar. As far as “world patterns” of inflation are concerned, see Henry, “La statue du commandeur,” p. 44. That these world patterns are far from being so harmonious as to achieve international payments equilibrium is a point made by Myrdal, Economic Nationalism and Internationalism, p. 14; Einzig, , The Destiny of the Dollar, pp. 142–3Google Scholar; and, as regards the situation of 1974, Jenkins, , “Survival of the Fittest,” The Guardian Weekly, 8 06 1974, p. 15.Google Scholar

65 Mathieu, , “Une operation en deux temps,” p. 5Google Scholar; and “Währungsschlange prähistorisch”, Handelsblatt, 4 05 1974, p. 2.Google Scholar

66 Hoffmann, , “The European Process at Atlantic Cross Purposes,” Journal of Common Market Studies 3 (1965), p. 89Google Scholar. To be sure, Hoffmann seemed to use the discontinuity concept mainly to contend Haas' and Schmitter's neo-functionalist concept of a continuum from economics to politics. In his comments to this paper he stresses that a discontinuity in the ideal types of “low” and “high” politics does not mean a complete dichotomy in practice. Thus he qualified the discontinuity concept in his “Weighing the Balance of Power,” p. 632. Yet his proposition that mercantilism is an anachronism is certainly related to this concept.

67 See, for example, Gilpin, “The Politics of Transnational Economic Relations”; Waltz, “The Myth of National Interdependence” in , Kindleberger, The International Corporation: A Symposium, (Cambridge, Mass.: The M.I.T. Press, 1970), pp. 205–26Google Scholar. For policy-oriented studies, see Cohen, Benjamin, American Foreign Economic PolicyGoogle Scholar; and Cooper, Richard N., “Trade Policy is Foreign Policy,” Foreign Policy 8 (Winter 1972–1973), p. 18.CrossRefGoogle Scholar

68 See Rosenau, James N., “Pre-theories and Theories of Foreign Policy,” in Farrell, R. Barry ed., Approaches to Comparative and International Politics, (Evanston: Northwestern University Press, 1966), p. 53Google Scholar; and Hanrieder, pp. 256–64. Indeed, the emergence of the new mercantilism countervails, in the issue areas of international economics, the emergence of what Rosenau calls the “penetrated” system.

69 Benjamin, Cohen, “American Foreign Economic Policy: Some General Principles of Analysis,” p. 16.Google Scholar

70 Haas, , Beyond the Nation State, p. 50.Google Scholar

71 Parsons and Smelser, pp. 19, 39–51, 102. We wish to state, though, that our propositions are without any implications as regards the specific positions taken by Parsons and Smelser in terms of economic theory. A particular analytical dimension is opened to sociological functionalism by Lowe's methodology for a “political economics.” See Lowe, pp. 4, 143; and Heilbroner, pp. 165–92.

72 Haas, , Beyond the Nation State, p. 47Google Scholar. See also idem, “The Study of Regional Integration: Reflections on the Joy and Anguish of Pre-theorizing,” in Leon N.Lindberg and Stuart A.Scheingold eds., “Regional Integration: Theory and Research,” International Organization 24 (Autumn 1970), p. 627; Lasswell, Harold D., Politics: Who Gets What, When, How (New York: McGraw Hill, 1936)Google Scholar; and Keohane, and Nye, , Eds., “Transnational Relations and World Politics,” p. 346.Google Scholar

73 The argument, here, is methodologically analogous to the one which Modelski has used to describe concrete international systems in terms of two analytical systems. See George, Modelski, “Agraria and Industria: Two Models of the International System,” World Politics 14 (1961), p. 120.Google Scholar

74 For discussion of the problem of content in functionalist paradigms, see Kaiser, Ronn D., “Toward the Copernican Phase of Regional Integration Theory,” Journal of Common Market Studies 10 (03 1973), pp. 208–15.Google Scholar

75 See Gerhard, Niemeyer, Law without Force: The Function of Politics in International Law, (Princeton: Princeton University Press, 1941)Google Scholar; and Haas, , Beyond the Nation State, pp. 42–6.Google Scholar

76 Popper, , Conjectures and Refutations: The Growth of Scientific Knowledge (New York and Evanston: Harper and Row, 1965), p. 37Google Scholar, and idem, The Poverty of Historicism (New York and Evanston: Harper and Row, 1964), p. 3.