WHY DID MONETARISM GAIN GROUND FROM KEYNESIANISM IN THE 1970S?

Between 1945 and the early 1970’s Britain observed relatively uninterrupted economic growth, providing both high employment and low inflation. Much of this was heralded by the use of Keynesian economic policy, where government would employ both monetary and fiscal policy to ‘fine tune’ the economy and make sure that there is neither too low growth, too low employment, whilst also ensuring that inflation is not too high. However, 1979 saw the election of a Conservative government which employed Monetarism to tear down the economic structure which had existed post-war. In order to explain why this occurred the essay shall examine the rise of Monetarism and how it was able to take advantage of the recent instability of contemporary Keynesian policy.

Keynes launched The General Theory Of Employment, Interest And Money in 1936 as a criticism to classical economics’ inability to deal with slow growth and high unemployment in the 1920s and 1930s. He argued that the only way to increase unemployment and rescue economies from deep recession, such as the one faced in the inter-war periods would be to increase aggregate demand, the sum of demand in the economy. This would be done either through the government lowering the rate of interest or the government spending more, or taxing less in order to encourage households and firms to consume more. This, it was argued would result in a return to economic growth and subsequently reduce unemployment. Classical economics had appeared to have failed. Previously it was argued that the only way to increase economic growth would be for workers to reduce their wages so that it would become profitable for firms to rehire them and sell goods again profitably and any other way would result in inflationary pressures. However, Keynes felt that as an economy would only be growing as a result from spare capacity any inflation would be negligible, especially given the social costs of unemployment on a mass scale.

British post-war government was highly different to the one which had existed previously. In 1944 a White Paper on Employment Policy pledged itself to maintain full employment through maintaining effective demand, something that Michael Stewart argued graphically would not have happened without the Second World War, which “acted on the nation’s values and attitudes like a microwave oven on a piece of steak”.[1] This was as a result of people having become used to employment in wartime feeling that jobs should be guaranteed to all those who demanded it. Stewart also asserts that it was almost inevitable that there would be a change in economic viewpoint given that 1939 was the nineteenth consecutive year that unemployment had averaged ten percent or more. Later, in 1959 The Radcliffe Committee concluded following extensive research that the monetarist ideas on the money supply was wrong and that it would be more effective to use interest rates to control the economy. David Smith felt that it was highly important for future policy, setting “the tone for monetary policy in the 1960s”.[2]

However, the policy was taken further by politicians so much that David Smith who claimed that “Keynes would have been unlikely to do it himself”.[3] In the 1960s and 1970s chancellors became confident about their abilities to control the economy, using forecasts to estimate how the economy will perform and use policy instruments to anticipate them. However, as Stewart noticed, “it was the forecasting of effective demand that was difficult…with such items as exports and private investment being tricky”.[4] However, the overconfidence of these chancellors resulted in what became known as the ‘Stop-Go Cycle’, where the government would constantly make very minor alterations to the economy in order to create the desired results.

However, there were problems in the data. It was very difficult to get accurate data on aspects of the economy quickly. Some data, such as unemployment could be collected relatively quickly. However, the problem was that it could easily be revised over time so that it would actually go against what was previously expected and acted upon. On the other hand, other data such as inflation could take ages to be collected. As a result of this dilemma chancellors would be constantly toying with the economy with possibly inaccurate data. Michael Stewart highlights this by commenting that, “as government forecasters put it, it is almost as difficult to forecast the past as to forecast the future”.[5]

Not only were there uncertainties in forecasting but the strength of policies and the time that it would take for it to happen were unknown and it quite possibly could have varied. Part of this is due to peoples expectations of how the economic policies would affect them. For example, a household is likely to raise its expenditure in reaction to a tax cut if it was felt that the tax cut was a one off. However, a tax cut in order to deal with an oncoming recession could signal to a household to reduce its expenditure.

The Barber Boom of the early 1970s highlights the aforementioned difficulties. In order to deal with the slowing economy and rising unemployment the Conservative Chancellor Mr Barber employed a mildly expansionary fiscal policy in 1971, which was followed in 1972 by both a looser monetary and fiscal policy in order to stimulate aggregate demand even further. The problem was that the 1971 measures had not taken effect by the 1972 Budget. By early 1973 imports had increased rapidly and industry was overheating, with expenditure on industry increasing by twelve percent in real terms, with only an eight percent increase in output, creating heavy inflation.

Despite the concerns of the Stop Go Cycle there was not too much criticism of Keynesian demand management policies, after all Britain had experiencing some of the highest periods of economic stability ever, with strong growth, low unemployment and relatively low inflation. There was always a perceived inverse relationship that there was a trade-off between unemployment and inflation, with Keynesians pointing to the Philips Curve in order to show this. It was seen that inflation experienced between the forties and sixties was adequate, as it was considered to be considerably lower than the much higher growth experienced. However, in the early seventies this appeared to be breaking down. Inflation appeared to be increasing constantly and there were fears that it would end up spiralling out of control. This was leading to stagflation, where both unemployment and inflation would increase at the same time. By the 1970s demand management policies were seen not only as being ineffective, but also dangerous. Part of this could be due to an expansion in the money supply, as a result of attempts to modernise the banking system, with an increase in the money supply of more than sixty percent in two years.

This situation was worsened in 1973 by the OPEC oil crisis where the cost of a barrel of oil increased from $1.80 to £11.60 in a year, raising the cost of world oil by $70 billion a year. Unlike other countries which had operated restrictive policies in order to pull down inflation Britain, in order to deal with slower growth attempted to inflate the economy. This backfired, whereas other countries experienced high inflation which decreased the next year Britain experienced one of the larger declines in GDP which also lasted longer. This seriously undermined Keynesianism and encouraged people to look towards alternative economic solutions.

The success of Keynesianism in the 1950s and 1960s resulted in economists who argued for Classical and Monetarist policies being shouted down for being out of date and ineffective. Neo-Classicalism was a rebirth of Classical economics, which slowly emerged from the 1950s onwards and eventually came to prominence in the 1970s. Friedman led this assault, coming up with the Quantity Theory Of Money in 1956 to help describe the relationship with the money supply and inflation and The Natural Rate Of Unemployment in 1967 which turned the Phillip’s curve on its head. It was asserted that at any point there is only one rate of employment and to be below it would be to create increasingly higher inflation because wage demands would spiral out of control out of uncertainty in the labour market.

This was quite a break with convention. Like Keynes work in the 1930s Friedman’s predictions were increasingly seen as a way to deal with something that had not occurred previously. Monetarism gained support among academics such as Harry Johnson who ran the LSE and helped to mould a generation of economists’ thinking.

In the 1970s there was nervousness by politicians. Governments toyed and abandoned income policies in attempts to deal with spiralling wages. David Smith described Callahan’s speech to the Labour Party Conference in 1976 as sounding “the death knell for post-war Keynesian policies and ushered in the new era of monetarism”.[6] The Monetarist IMF also became more involved in British economic policy as a result of a $3.9 billion loan in order to help stabilise the pound.

In the Conservative Party failure of the Barber Boom resulted in weaker support for more central policies, such as the ones exercised in the Heath Government. The result was an increase in right wing support, headed by the then leader Margaret Thatcher who set about putting across the case for Monetarism. The election on 1979 was excellent timing for the Conservatives. Callaghan had to convince the electorate to be re-elected in the middle of the Winter Of Discontent, a strike of public service workers, which resulted in press reports of rubbish filled streets and children unable to receive medical attention. Thatcher was able to compare on one hand how Callaghan’s government attempted monetary reforms but backed down, whilst the Conservatives were going to go all the way and deal effectively with the high levels of inflation, something which their manifesto claimed “has come near to destroying our political stability”. Thatcher was elected with the largest political swing since Clement Atlee’s Labour party in 1945 and encouraged the government to go ahead with their policies, with the inherited inflation of ten percent giving them the perfect excuse to experiment with Monetary ideas and give the death knell to Keynesianism.

Monetarism gained support in the 1970s as a result of new theories by people such as Friedman who gave a possible solution to high inflation. Whilst this was happening confidence in Keynesianism was rocked by hyperinflation brought on by politicians intervening too much in the economy and not exercising enough control over wages, coupled by the oil crisis. This dissatisfaction with current policies allowed for the emergence of a political shift to the right, with a fresh looking Thatcher led Conservative Party which introduced far reaching Monetary ideas.

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[1] Stewart, Michael Keynes And After (Pelican, 1986). p141

[2] Smith, David The Rise And Fall Of Monetarism (Pelican, 1988). p10, p19

[3] Ibid. p19

[4] Stewart, Michael Keynes And After (Pelican, 1986). p171, p172

[5] Ibid. p172

[6] Smith, David The Rise And Fall Of Monetarism (Pelican, 1988). p65

Consider A Market For A Homogenous Good With Two Firms. Making The Appropriate Assumptions About Market Demand...

Consider A Market For A Homogenous Good With Two Firms. Making The Appropriate Assumptions About Market Demand,

b) Now suppose that one of the firms behaves as the Stackelberg quantity leader. Compare the equilibrium outcomes of Cournot verses Stackelberg

Stackelberg equilibriums act differently to Cournot equilibriums as Stackelberg equilibriums are asymmetrical. This creates a situation whereby the first firm makes a decision about output or price and the second firm has to react. Consequentially it creates different levels of income between the firms, unlike the Cournot equilibrium where profits are shared equally. Also, Stackelberg firms are less Pareto-inefficient, as they earn less net abnormal profits.

Unlike Cournot markets Stackelberg markets are not simultaneous but sequential, with one firm not making decisions based upon another firm’s future actions. Referring back to the example in part A consider that IBM is the first member if the computer industry. This enables it to be the quantity leader and set the level of output not based upon but inspite of Dell the new entrant. As a new entrant to the industry Dell is in no position to influence the market too significantly and has to react to the output decisions of IBM. This is because if Dell attempted to increase its output to match IBM’s levels it would risk lowering the unit price of computers too severely to justify entering the market. As a result, in a perfect Stackelberg model IBM would produce 50 units (based on there being 100 potential units in the market) and Dell 25 units, with both companies earning 25 abnormal profits per unit. This is different to the Cournot equilibrium where both firms would produce 33 1/3 units each, and earn 33 1/3 per unit as Game Theory requires a more even distribution of profits between companies.

Nash’s Game Theory explains how each firm has the ability to have high output or low output to influence profitability. We are taught that in order to maximise profits each firm will have to anticipate the other firms move. Both firms want to be in a position where they have high output but their rival produces a very low output, which would create 3 units of abnormal profits for the firm with the larger output but 0 for the firm with the lower output (see table below). If both firms happened to produce at low levels of output then they would earn the largest combined amounts of abnormal profits (4 units in the right table), as the price level would be driven up. However, if both firms attempted to produce at the highest level of output then they would create the lowest level of abnormal profits (2 in the right table), as the price level would be driven down.

Firm B
Output High Low
Firm A High (1,1) (3,0)
Low (0,3) (2,2)

Cournot equilibriums are more Pareto-inefficient than Stackelberg equilibriums. In Cournot equilibriums although both firms are choosing their second best options their abnormal profits combined are larger than Stackelberg equations. The Cournot example resembles that of both firms producing at lower levels, creating 4 units of abnormal profits. The Stackelberg equilibrium on the other hand would resemble the example of firm A (IBM) producing 3 units of abnormal profits but firm B (Dell) producing no units of abnormal profits. Consequently there would be one less unit of abnormal profits under Stackelberg than Cournot and therefore would be more Pareto efficient. The figures used in the second paragraph on the amount of abnormal profits per unit and the amount of units produced in each equilibrium show the Cournot equilibrium to create the value of 2222 2/9 abnormal profits, whereas the Stackelberg equilibrium would create the value of 1875, therefore the has been a greater loss of utility to the consumers under the Cournot equilibrium.

At equilibrium Stackelberg leaders produce more than Stackelberg followers, whereas in a Cournot duopoly both firms would produce and charge the same amount. However, a Cournot market is able to extract the most abnormal profits and is therefore the more Pareto-inefficient.

This piece was written by Jonathan McHugh in December 2004

“Karl Popper Showed Conclusively That Science Can Proceed Without Induction.” Discuss

Popper’s criticism of the scientific practice of using induction was different to critics such as Hume. He argued that the inductive method of relying on past observations is not enough, feeling that induction created dogmatism, which encouraged the pseudo-sciences to hide behind their intellectual opaqueness. His solution of using a different test which was deductive rather than inductive helped to open up a new way of approaching the sciences. However, his methods did have flaws. For example, his rules did not allow for problems with the experiments and he failed to comprehend that dogmatism exists in science and that it can actually allow for more dynamic ideas.

Deductive arguments are conclusions based on set premises. If all of the premises were true then the conclusion would be deductively valid. However, if one of the premises was wrong, the conclusion would break down and be an invalid deductive argument. For example, if John was a man (premise one) and all men are mortals, (premise two) then as a result we can assume that John is a mortal (conclusion). Similarly, in this conclusion (that John is a mortal) would break down if one of the premises (say, John is a woman) is wrong.

Inductive reasoning is different. It does not have the logical crutch that deductive reasoning can offer. It is not principally based on logic, with most ideas being based upon past observations. This method is popular in science, as scientists can use records of data to get conclusions for hypotheses, although the data may not even be one hundred percent accurate. An example of inductive reasoning may be that if John lives in Exeter (premise one) and people who live in Exeter were born in Exeter, (premise two) then we can assume that John was born in Exeter (conclusion). However, this is merely based on observation, so it can easily be wrong. For example, I (Jonny) live in Exeter but I was not born there, so the conclusion would be wrong. This is one of the greatest problems of induction, false results can be unchecked and create contrary conclusions.

Hume, a critic of induction believed it was irrational for these reasons but still essential. He argued that “observed realities will continue to hold in the future because we believe in the principle that nature is uniform.” (The Principle of the Uniformity of Nature). He goes onto how people, despite no rational belief that nature will remain the same hold onto facts, labelling it a matter of irrational habit. Like Hume, Popper wrestled with how to deal with sciences perceived overdependence on the inductive method and how he could test the different sciences. Whilst Hume was arguing against induction on a psychological point and from repetition Popper was arguing from a philosophical level that only science can be rational and that it was non inductive.

He was concerned that many theories were created falsely but carried on past their logical point, as people would see confirming circumstances everywhere, based on a possibly shaky logic. He referred to these concerns as the problem of demarcation. Popper concluded that this lead towards dogmatic thinking, as people feel the need to justify themselves. For example, Marxists don’t even consider the Soviet revolution as Communist, as the revolution was agrarian. Part of this response, he argues is to create situations that are untestable to defend the theory, which has often lead to more unscientific theories such as Marxism and Freudianism that can not be proven or disproven effectively. For him this is even worse, as the dogmatic attitude creates the tendency to verify laws and attempt to apply them elsewhere in future observations. This could lead to scientific ideas being carried on for far too long, as people would end up seeing confirmations of their false ideas everywhere. As Popper wanted to work out how to create a dividing line between what was true (and therefore testable) and what was not true (what was seemingly untestable). For Popper, it was felt that we impose regularities on the world through discovering similarities and then jumping to conclusions and then science proceeds from observation to theory.

Popper concluded that induction is merely a myth, being neither a psychological fact, one of ordinary life nor one of scientific procedure. He argued that conjecture and refutations were at the heart of science using falsification. To him empiricism is accepted only so long as it is fully preserved. If the tests confirms it then the theory stays, if they doesn’t it goes. He found that the method of trial and error is a method of eliminating false theories by observational statements. His solution was to strengthen the critical attitude which would help to separate true from false policies. He wanted to extend deductive logic from the mathematical and logical to the scientific sphere. He felt that this intellectual survival of the fittest is important, as testing a theory allows for weaker theories to be eventually replaced for stronger ones and prevents false logic from going unchecked.

Popper’s deductive method did have holes, however. The problem was that his dividing line between a verified and falsified hypothesis was very narrow. He never took into account that the failure of a test may not have been as a result of the hypothesis but from a fault in the experiment itself. For example, it is commonly held that water boils at 100ºC. However, if in an experiment the water did not boil at 100ºC we would, under Popper’s theory reject it and the hypothesis would be falsified. However, this could easily be as a result of the apparatus involved in the experiment and not theory itself. For example, how can we be guaranteed that the water is pure, or that the thermometer is inaccurate? This was pointed out by Duhem, who rejected his theory twenty eight years earlier before Popper wrote.

Popper was a strong critic of dogmatism but his critics highlight how there may actually be advantages to holding onto unpopular ideas. For Kuhn dogmatism existed in science as well as the pseudo-sciences. He argued that instead of people abandoning a theory at the first sight of problems intellectually it will be the more committed people who are prepared to revise and amend some of the assumptions of a theory. Kuhn, who claimed that there would be no scientific advances, as scientific theories would have been rejected before they had been given a chance. Lakatos put a dynamic element into Poppers work, who talked about the decline and progress of intellectual ideas over time. However, even he had weaknesses, as it required great historic perspective to judge whether or not a hypothesis was true.

Despite his best intentions to separate science and pseudo-science using falsification as the defining test Poppers ideas have too many holes. Falsification was born falsified, as the range of assumptions that could have distorted an experiment make it almost impossible to distinguish whether it was the experiment or the hypothesis from a negative result. However, Popper’s ideas were important, catalysing the debate over how to deal with the newer, untestable sciences such as Marxism and Freudianism through philosophers such as Lakatos.

This article was written by Jonathan McHugh in May 2004

A Comparison Between the Political Executives of France and Germany

France and Germany’s differing constitutions have resulted in their executives holding different emphasis on the role of the president and the prime minister and the power that they hold over the parliament. For example, Germany has a greater separation of powers, where the president is confined to state matters and the prime minister (chancellor) maintaining domestic policy. In France however, the president has significantly greater control, being both Head of State and with the most domestic control. Their relationships between the executive and parliament reflect how the leaders and cabinet are able to act. While both the French President and German Chancellor are able to choose the members of the cabinet, the German Chancellor has less control and has to keep one eye on parliament. Being elected by popular mandate, the French President does not have this problem and has the added influence of being able to choose the prime minister as well. On the other hand, similarities do exist. Both presidents have similar roles as Heads of State and they are looked to as spiritual leaders, or guardians of a national ideal. Constitutional checks can still reign in the French President.

The Fourth Republic of France was held hostage by a leaderless parliament. The executive and the National Assembly’s ability to get bogged down by petty squabbles left it both weak and unrepresentative. For example, in the twelve years of the Fourth Republic there were 25 different governments, as political infighting made it impossible to meter out any stable coalition, with the president spending much of his time trying to hold together the parliament. Wright claims the difficulty in parliament choosing a president meant that “they were seen as the creatures and prisoners of the members of parliament who had elected them and who, when choosing the president, had sought to avoid the election of a strong personality – a man who might prove a danger both to the privileges and prerogatives of parliament and to the republic itself”[1]. For example, it took Rene Cote, the last president of the Fourth Republic thirteen ballots in order to get elected, a waste of time and a battering to any political leader’s prestige. It is also put across that any “presidential power was exercised only so long as it was tolerated by parliament and the government”.[2]

The Weimar government of the 1920s and 1930s was Germany’s first attempt at democracy. There were a great deal of flaws which made it a highly unstable political environment. For example, majorities of opponents frequently combined their votes to remove an incumbent chancellor, creating the instability which eventually paved the way for extremist groups like the Nazis to gain support. In 1934 Hitler similarly took advantage of President von Hindenburg’s death to assert himself as Head of State. Hogwood backs up these claims, asserting that these experiences “served as a warning against the concentration of state power under a single leader.”[3]

The French solution to this political instability was to strengthen the presidency, resulting in an example of ‘semi presidential’ government, in which a “president with some executive powers”[4] works extensively with the prime minister to guide government policy. Hogwood feels that in the Fifth Republic electoral politics “came to be dominated by presidential rather than parliamentary election.”[5] The main reason for this level of control is because the president is directly elected by the people. This gives the leader a personal mandate, as “a direct election confers legitimacy on the president, giving the incumbent a sound basis of office.”[6] This is particularly so as the electoral process requires up to two rounds of elections, until a candidate receives a majority of the vote.

Germany’s constitution drafters were at pains to create both an assertive parliament and an assertive government. Their solution was to create Chancellor Democracy. Unlike France, both the President and the Chancellor are indirectly elected. The president is chosen by Electoral College, whilst the chancellor was picked from a majority coalition in the Bundestag. This is in order to “create a balanced and stable system of government in which the executive could not act arbitrarily as it had during the Third Reich.”[7] Although the chancellor was previously elected in that manner there were a number of important changes. Firstly, it was only possible to remove the chancellor if there was a majority agreeing his successor. What Hogwood describes as a ‘constructive vote of no confidence’ helps to avoid the possibility of a power vacuum. The cap on the German President being only allowed two terms of office has proved to be a leash on any politician from exerting his influence for too long. Similarly, another important development was the “clear demarcation of the executive”,[8] as the president has been confined to a merely ceremonial role as head of state.

Both the French and German President’s roles as Head of State are fairly similar and have had successes, both internationally and domestically. For example, the French and German Presidents have been vocal recently in their opposition to the Iraqi war. Domestically, they have similar success representing some form of ideal of the national spirit.

Wright claims that the French President is the “guardian of national interest, the leader of the nation, the physical embodiment of its traditions and its continuity and the guide to its future actions.” [9] For example, the French President, Jacques Chirac has been very vocal in removing religious clothing in the workplace.

Having to deal with the ghosts of Nazism and the unification of Germany in the 90s the German President has an even more critical task. Hogwood highlights this, claiming that “West German presidents took on the role of the guardian of the country’s conscious and morale, working particularly for the people’s moral rehabilitation from war guilt”.[10] Ironically though, she goes on to point out how this created friction with the East Germans. This is because the East Germans were taught that they were working class, and consequentially they were victims. West Germans’ demands for a similar process is often interpreted as “western triumphalism over the fall of the former GDR”,[11] causing great friction in the country.

The French President has significant control over parliamentary process. He has control over patronage, choosing both the prime minister and the members of the cabinet, effectively controlling the direction of the executive. The President also has powers to dissolve the National Assembly and oversee the calling of referendums. Hogwood feels that “as long as the president had a sympathetic majority in parliament, he could in practice appoint and dismiss parliament.”[12] This is backed up by Wright, who asserts that “prime ministers and ministers have been appointed and dismissed without consultation and prime ministerial advice and objections ignored.”[13] This is because he is elected by the people and does not hold any loyalties to parliament, which enables the president to avoid or break parliamentary deadlock more effectively. On the other hand, the French President still does have constitutional checks. For example, the ability to dissolve the National Assembly is only allowed once a year. Similarly, the constitutional checks which have increasingly been ignored by the presidents could easily be returned at any point from an aggressive parliament. The prime minister merely works for the president, attempting to negotiate his policies with the National Assembly.

The German Chancellor has the constitutional right to “determine the general lines of the government’s policy programme”.[14] Like the French President the German Chancellor is able to choose his cabinet and although he is unable to interfere with the ministers’ departments they can “have the upper hand in this balance of responsibilities, because they can reshuffle the cabinet to get their own way.”[15] Also, the executive can bypass the Bundestag’s scrutiny by using committees and the federal system. However, unlike France, Germany’s executive power comes from lower levels upwards. The chancellor is chosen from the majority coalition of parties, taking into account a wide array of German regions (many political parties are regional), and social and economic differences. He is also most likely to have a more conciliatory and encompassing position to have got elected as prime minister in the first place. As a result, unlike the French President when choosing the cabinet the German Chancellor has to keep one eye on the coalition, as his coalition may fall apart if he upsets even minor parties. Hogwood extends the chancellor’s situation, pointing out that when there are many parties involved in a coalition the chancellor “is more likely to take on the character of a co-ordinator rather than the director of government policy.”[16]

Historical events have resulted in the French and German executives appearing so different. As a result France’s executive is more dynamic, as the president is able to make decisions without the need to appease parliament. Germany’s executive is more considered, with most actions being done with the general support of the Bundestag. Consequentially, whereas France’s President leads government policy, Germany’s Chancellor, despite his great level of control can only merely guide it.

This essay was written by Jonathan McHugh in April 2004

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[1] Wright, Vincent The Government And Politics Of France (Hutchinson, 1984) p20-23

[2] Ibid. p22

[3] Hogwood, Patricia; Roberts, Geoffrey European Politics Today: Second Edition (Manchester University Press, 2003) p128

[4] Hogwood, Patricia; Roberts, Geoffrey European Politics Today: Second Edition (Manchester University Press, 2003) p127

[5] Ibid. p132

[6] Ibid. p134

[7] Ibid. p168

[8] Hogwood, Patricia; Roberts, Geoffrey European Politics Today: Second Edition (Manchester University Press, 2003) p127

[9] Wright, Vincent The Government And Politics Of France (Hutchinson, 1984) p28

[10] Hogwood, Patricia; Roberts, Geoffrey European Politics Today: Second Edition (Manchester University Press, 2003) p128

[11] Hogwood, Patricia; Roberts, Geoffrey European Politics Today: Second Edition (Manchester University Press, 2003) p129

[12] Ibid. p132

[13] Wright, Vincent The Government And Politics Of France (Hutchinson, 1984) p28

[14] Hogwood, Patricia; Roberts, Geoffrey European Politics Today: Second Edition (Manchester University Press, 2003) p137

[15] Hogwood, Patricia; Roberts, Geoffrey European Politics Today: Second Edition (Manchester University Press, 2003) p137

[16] Ibid. p141

How Do Their Attitudes Towards Founding And History Affect Different Democracies?

This essay aims to compare how democracies are affected from a revolutionary aspect, such as when democracies were founded and then from an evolutionary aspect, where events result in a shift in democratic structure. It will focus on France and the United States of America, two of the earliest modern democracies, which were created in the eighteenth century and greatly informed by their differing histories of political upheaval and revolution. In order to make these cases the nature of the uprisings in the eighteenth century, their alternative effects shall be looked at, as well an analysis of more recent events in the nineteenth and twentieth century.

The result of the French Revolution of 1789 has been a flitting between constitutional monarchy,[1] dictatorship[2] and various republics[3], as well as German occupation during the Second World War. The French Revolution was unique in that it, as Hague, Harrop and Breslin argue “swept away medieval structures of power and accelerated the creation of modern nation-states which dominate the contemporary world”. [4] It also helped to speed up major economic and political growth through removing the control that the aristocracy and church held over the peasantry, which in turn laid the groundwork for more representative, democratic government. However, France’s revolution was not a stable one. They also point out that “once the common enemy has been removed, the glue dissolves”[5], which helps to explain why the revolution didn’t result in stability and why France’s political system seems to swing between various forms of democracy, and authoritarian rule.

Charles De Gaulle’s Fifth Republic (1958 onwards) was an attempt to correct the weaknesses of the Third and Fourth Republics, as the executive and the National Assembly’s ability to get bogged down by petty squabbles left it both weak and unrepresentative. For example, in the twelve years of the Fourth Republic there were 25 different governments, as political infighting made it impossible to meter out any stable coalition, with the president spending much of his time trying to hold together the parliament. Wright claims the difficulty in parliament choosing a president meant that “they were seen as the creatures and prisoners of the members of parliament who had elected them and who, when choosing the president, had sought to avoid the election of a strong personality – a man who might prove a danger both to the privileges and prerogatives of parliament and to the republic itself”[6]. For example, it took Rene Cote, the last president of the Fourth Republic thirteen ballots in order to get elected, a waste of time and a battering to any political leader’s prestige. It is also put across that any “presidential power was exercised only so long as it was tolerated by parliament and the government”.[7]

These factors resulted in France’s inability to deal effectively with any major events, such as uprisings in Indochina (1954) and Algeria (1956). This is highlighted by Roskin who points out that people saw the Fourth Republic as “unable to settle the ghastly Algerian War”[8] and views that “if a premier was too effective, other politicians sometimes vote against him out of resentment”[9]. To prove this he cites Pierre Mendes’ dismissal from the National Assembly as being an example of jealousy over his success at dealing with the Indochina uprising. Williams proposes that as a result of all this infighting government even became unrepresentative, operating “with no reference to the general public”.[10]

On the other hand, Wright does highlight how the Fourth Republic Presidents did exercise more authority than their predecessors in the Third Republic, asserting that “both were always intimately involved in the delicate negotiations which preceded the formation of any new government and marshalling parliamentary support for that government once it presented itself to the Assembly for investiture.”[11] He also highlights that “a determined president could try to block proposals and wait for the ineluctable collapse of the ministry: the succeeding prime minister might prove more sympathetic or more pliable”,[12] but of course the time it would take to achieve this would be extremely detrimental.

America initially existed as a loose collection of colonies, principally in New England, in the North and the Southern states, with different rules and freedoms handed by the “motherland”, England. The United States formed following the War of Independence was a response to England taxing the colonies without any form of representation. It had difficulties trying to maintain the confederation, as these governments had previously existed alongside and independently of each other, with Alex De Tocqueville noticing that “each of them, having always had a separate existence and a government within its control, had created peculiar interests”. [13] The constitution had to recognise that the states individual control was the greatest priority, which De Tocqueville agreed with, noting that “social resources would be more wisely and judiciously employed, if the administration of the whole country were concentrated in one pair of hands. But the political advantages derived by the Americans from a system of decentralisation would make me prefer that to the opposite system”.[14] He also felt that America is right to allow states to rule but leave administering to a central authority.

On the other hand, the writers of the revised American Constitution in 1787 had to include a backbone of central government or the states would be paralysed. The peace resulting from independence highlighted the defects in the original 1781 legislation. The united state had disintegrated, leaving each colony to become an independent state, which left America not able to find “resources sufficient to stand up to the Indian tribes or to pay the interest on debts contracted during the War of Independence”.[15] As a result of these flaws the Union was given the exclusive rights of making war and peace, concluding commercial treaties, levying armies and equipping fleets, as well as maintaining currency and the post office.

The President of America is restricted domestically by congress. Hague, Harrop, and Breslin feel that “the president seeks to influence Congress but cannot dictate to it, Presidential power is in essence the power to persuade.” As mentioned earlier, in the Fourth Republic of France the president had similar difficulties, but to an even greater extent. On the other hand, Wright saw that the Fifth Republic allowed Charles Gaulle (and his successors) “to be above politics and politicians”[16] and control domestic policy. The president is seen as being more represented and because of the weakened position of the French Parliament, backed up by Roskin’s claim that ministers were “reduced to messenger boys”.[17] Although the American President is the most representative member of government he is weaker than France because of the strength of congress and the federal structure which exists in America.

The American constitution unlike the French one which has been revised frequently, has been almost set in stone, Roskin feels that “the Americans regard their Constitution with an almost religious awe, not to be touched in its basic provisions, the French…have seen constitutions come and go and are not adverse to rewriting the basic rules of their political game every few decades.”[18] However, there have been some minor changes, “from the New Deal onwards, the American public looked to the White House rather than Congress for political leadership.”[19] asserts Hague, Harrop, and Breslin, also pointing out how there was a change back towards Congress from the 1970s, a “reaction to the so-called ‘imperial’ presidency”[20] .

In many ways the democracies of America and France are similar, with both presidents being universally elected and them being able to choose the cabinet. However, there are marked differences partly as a result of their democratic founding, such as whether it was through uprising against and internal or external enemy and events which led to either a movement or shift in presidential influence, such as the Algerian crisis or the New Deal. On the other hand, there are other factors which could have as strong a bearing on how these democracies have existed, such as geography. The size of the nation could quite easily help to explain why federalism exists in the United States and not France. Similarly, America’s ability to stay politically stable may be because it has not been in such proximity with aggressive nations as France.

This essay was written by Jonathan McHugh in April 2004

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[1] Louis XVI (1791-49) and the Bourbon Restoration (1815-71)

[2] Napoleon (1804-15) and Napoleon III (1852-71)

[3] First Republic (1792-1804), Second Republic (1848), Third Republic (1871-1940), Fourth Republic (1944-58), and Fifth Republic (from 1958)

[4] Hague, Rod; Harrop, Martin and Breslin, Shaun Comparative Government And Politics: An Introduction (Third Edition) (Macmillan, 1992), p76-7, p316

[5] Hague, Rod; Harrop, Martin and Breslin, Shaun Comparative Government And Politics: An Introduction (Third Edition) (Macmillan, 1992), p76-7

[6] Wright, Vincent The Government And Politics Of France (Hutchinson, 1984) p20-23

[7] Ibid. p22

[8] Roskin, Michael J Countries And Concepts: An Introduction To Comparative Government (Prentice-Hall, 1982), p91.

[9] Ibid., p91

[10] Williams Philip M The French Parliament (George Allen And Unwin, 1968) p114

[11] Wright, Vincent The Government And Politics Of France (Hutchinson, 1984) p22

[12] Ibid. p22

[13] Alexis De Tocqueville Democracy In America (Translated By Lawrence, George Edited By Mayer, J.P. Doubleday Anchor (originally 1840), 1969). P82, p93, p112, p113

[14] Roskin, Michael J Countries And Concepts: An Introduction To Comparative Government (Prentice-Hall, 1982). p93

[15] Ibid. p113

[16] Wright, Vincent The Government And Politics Of France (Hutchinson, 1984). p23

[17] Roskin, Michael J Countries And Concepts: An Introduction To Comparative Government (Prentice-Hall, 1982), p91, p93

[18] Ibid. p91

[19] Hague, Rod; Harrop, Martin and Breslin, Shaun Comparative Government And Politics: An Introduction (Third Edition) (Macmillan, 1992), p300

[20] Ibid. p300

Assess the Relative Merits of the French and American Presidential Systems

The French and American Presidency both hold similar positions and roles. For example, both are Head of State, Chief of Executive, Chief Diplomat, as well as Commander in Chief of the Army and Navy. In order to evaluate the relative merits of these Presidential systems we are going to evaluate how much each president is able to employ for each position and how effective they are at doing so. To do this the differences in their constitutions have to be examined. For example, the American Constitution attempts to restrict the President in order to encourage stability and prevent abuses of control. On the other hand, in France the Fifth Republic’s Constitution reinforces the authority of the President so that policies can be put through effectively in the National Assembly.

The Fourth Republic was dogged by a weak executive, with the National Assembly constantly getting bogged down by petty squabbles, leaving it both weak and unrepresentative. For example, in the twelve years of the Fourth Republic there were 25 different governments, as political infighting made it impossible to meter out any stable coalition, with the president spending much of his time trying to hold together the parliament. Wright claims the difficulty in parliament choosing a president meant that “they were seen as the creatures and prisoners of the members of parliament who had elected them and who, when choosing the president, had sought to avoid the election of a strong personality – a man who might prove a danger both to the privileges and prerogatives of parliament and to the republic itself”[1]. For example, it took Rene Cote, the last president of the Fourth Republic thirteen ballots in order to get elected, a waste of time and a battering to any political leader’s prestige. It is also put across that any “presidential power was exercised only so long as it was tolerated by parliament and the government”.[2]

These factors resulted in France’s inability to deal effectively with any major events, such as the uprisings in Indochina (1954) and Algeria (1956). This is highlighted by Roskin who points out that people saw the Fourth Republic as “unable to settle the ghastly Algerian War”[3] and views that “if a premier was too effective, other politicians sometimes vote against him out of resentment”[4]. To prove this he cites Pierre Mendes’ dismissal from the National Assembly as being an example of jealousy over his success at dealing with the Indochina uprising. Williams proposes that as a result of all this infighting government even became unrepresentative, operating “with no reference to the general public”.[5]

The 1958 Constitution of the Fifth Republic was created in order to readdress these major flaws in French politics. Charles de Gaulle, the first President of the Fifth Republic was given new powers which enabled him to appoint and dismiss the prime minister and ministers without consultation. Similarly, the President was solely responsible for the Council of Ministers, the backbone of French bureaucracy and the key positions in the Judiciary. Successive Presidents have been able to exploit their influence, described by some observers as an “elected monarch”, with Wright suggesting that the office has “been much more powerful, more interventionist and more political than the constitutional texts appear to imply…in order to increase the scope of each of their functions”.[6]

The constitutional reforms appear to have succeeded in their aims. France is no longer the subject of international derision that she was in 1958 and the public is content, with Wright asserting that there is “a high level of satisfaction with the regime.”[7] However, the most important success of the Presidential reforms has been its stability. Prime ministers now enjoy longer periods of office and parliament is now prepared to work with the President. Even the army, something once described as “the state within the state”[8] during the previous regime has now been “reduced to silent obedience to the civil authorities.”[9] The President, unlike before is now the major political focus within France. Actions such as de Gaulle’s devaluation of the Franc in 1968 or Pompidou’s extensive industrial policy could not have happened without these new powers.

These reforms are not perfect however. For example, even though the President is able to dissolve the National Assembly constitutional checks result in him being only able to do it for only a couple months and only once a year. The French President is constantly constrained by time because of the high level of public ceremonies and political management. For example, if the French President attempted to get involved in every detail of legislation he would end up failing to guide sufficient policy. If for whatever reason the President was engaged, in the absence of the leadership the unguided ministers would most likely display “the sense of and purpose of freshly decapitated chickens”,[10] as Wright puts it. On the contrary, a President who failed to get involved in the bureaucracy would be held hostage to the “overloaded, defective and inefficient”[11] civil service, resulting in the President’s requests not fully being implemented.

There are other restrictions that have a more significant ability to influence the President and his action. Wright argues that France has “different ‘unofficial’ types of power”.[12] For instance, it was a small group of communist-led workers, grouped in closed shops, who shut down the port of Le Havre for many weeks and who, on several occasions between 1975 and 1977 brought the Paris press to a standstill. Increasing EU integration over political, economic and even cultural matters is decreasing the President’s a scope of autonomy. For instance, the President has relatively little influence over the Euro compared to what he did with the Franc.

The roles and power are far more complicated for the American President. The Constitution of 1787 was created in order to ensure that no man or state had too much control over the Federation, whilst simultaneously ensuring that the President had enough power to defend the country in times of war. Consequentially the President and Congress are constantly at odds with each other. Wilson summarises it by mentioning that “no policy, domestic or foreign, can be maintained effectively by a President without the approval of Congress in the form of laws and money; and second, that there is no way under our Constitution for a President to force Congress to pass a law or spend money against its will”.[13] The complexities of the Constitution mean that no single centre of power can act alone in restraining the President. They form a close network which can be very strong against unruly Presidential actions. However, as Rossiter points out, these rules are not designed to paralyse him, merely to reinforce his boundaries, “if he cannot judge the limits of his power, he cannot call upon its strength. If he cannot sense the possible, he will exhaust himself attempting the impossible”.[14] In the example Rossiter gave the public was in uproar arising from the seizure of the steel mills, eventually forcing Truman to back down in 1952. In order to balance all these pressure groups the President is most likely to “dissipate all his time, energy, and capacity for leadership”,[15] to an even greater extent than the French Presidency, as he has to deal with many aforementioned groups.

The President does still hold some significant control. For instance, Wilson highlights how Carter and Reagan selected most of the federal judges now on the bench, stamping their political philosophies on the courts. Rossiter raises an interesting point when it comes to the President’s role as representative of the people. He highlights how despite lacking a Congressional majority, a President with popular support is “expected by the country, and therefore by Congress, to turn his politics into law”.[16] However, as he points out later it is “only if he uses it in ways they understand and approve, which generally means ways that are fair, dignified, traditional, and familiar. He can lead public opinion, but only as far as public opinion is willing to go”.[17]

The Constitution gives significant powers to the President in terms of international affairs. Congress relaxes its bite in times of war, believing that any conflicts would be distracting and counterproductive. Truman went far enough to suggest that in terms of foreign policy the Presidency forms “an aggregate of power that would have made Caesar or Genghis Khan or Napoleon bite his nails with envy”,[18] reiterating it by claiming that “no man or combination of men in the United States can muster up so quickly and authoritatively the troops, experts, food, money, loans, equipment, medical supplies, and moral support that may be needed in a disaster”.[19] Wilson even went so far as to call it an “Imperial Presidency”.[20] In order to highlight the President’s strength he shows how Kennedy and Johnson were able to send American troops to intervene in Vietnam. Hamilton argues that as Chief Diplomat the President has great authority, suggesting in regard to Eisenhower “the President has repeatedly committed the nation to decisive attitudes and actions abroad, more than to war itself…a stubborn President is hard to budge, a crusading President is hard to thwart”.[21] Even though Congress is required to rubber stamp any wars, the President’s position is paramount with foreign policy. This is, as Rossiter puts it, partly because the President’s short-term actions create long-range consequences.

As Commander in Chief of the Army and Navy the President has control of maintaining the forces and making key decisions, such as whether or not to deploy nuclear missiles. Rossiter cites how this role can create a lot of flexibility in periods of war through ginger reinterpretations of the role, such as Roosevelt’s evacuation of Japanese citizens during WWII. Infact, he even goes so far as to claim that Congress is “more likely to needle the President for inactivity and timidity than to accuse him of acting too swiftly.”[22]

However, the Presidency does still have problems associated with this degree of power abroad. As Commander In Chief he supervises the forces and is “accountable to the people, Congress and history for the nation’s readiness to meet an enemy assault”.[23] The President still has to make treaties with the Senate and they have stood up to the President on major issues. For example, Carter’s anti-arms limitation treaty with the Soviets was blocked by the Senate and Reagan was never allowed to test anti-satellite weapons.

Both nations constitutions have succeed in their respective roles. The French have a strong Presidency which maintains order, whereas the American model favours stability and independence to perfect efficiency but still empowers the President on the world stage. Domestically, France’s President is far more powerful. America’s domestic political framework is generally too complex to implement bold policies that the French have previously initiated. However, France’s growing integration with Europe should clip the President’s wings both domestically and internationally, as he will have to follow a more conformist policy in the future. Internationally America is politically, militarily and economically superior. As a result it would have been impossible for France’s President to have (and have gotten away with) invading Iraq despite the international communities loud disapproval.

This article was written by Jonathan McHugh in March 2004

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[1] Wright, Vincent The Government And Politics Of France (Hutchinson, 1984) p20-23

[2] Ibid. p22

[3] Roskin, Michael J Countries and Concepts: An Introduction to Comparative Government (Prentice-Hall, 1982), p91.

[4] Ibid. p91

[5] Williams Philip M The French Parliament (George Allen And Unwin, 1968) p114

[6] Wright, Vincent The Government And Politics Of France (Hutchinson, 1984) p28

[7] Ibid. p293

[8] Ibid. p293

[9] Ibid. p293

[10] Wright, Vincent the Government and Politics of France (Hutchinson, 1984). p295

[11] Ibid. p295

[12] Ibid. p298

[13] Wilson, James American Government (DC Heath and Company, 1989) p36

[14] Rossiter, Clinton The American Presidency (Hamish Hamilton, 1957). p36

[15] Ibid. p41

[16] Ibid. p47

[17] Ibid. p48

[18] Rossiter, Clinton The American Presidency (Hamish Hamilton, 1957). p16

[19] Ibid. p20

[20] Wilson, James American Government (DC Heath and Company, 1989) p315

[21] Rossiter, Clinton The American Presidency (Hamish Hamilton, 1957). p10

[22] Rossiter, Clinton The American Presidency (Hamish Hamilton, 1957). p13

[23] Ibid. p11