Michael
Stephen Smith, The Emergence of
Modern Business Enterprise in France,
1800-1930. Cambridge (Mass.) and London: Harvard University
Press, 2006.
x + 575 pp. ISBN : 0-674-01939-3.
Compte rendu par Pierre-Cyrille
Hautcoeur,
Ecole des Hautes Etudes en Sciences Sociales et PSE (Paris-Jourdan Sciences
Economiques, unité mixte de recherche CNRS-EHESS-ENPC-ENS). A
paraître dans Eh.Net.
Michael S.
Smith, associate professor or history at the University of North
Carolina,
proposes a synthesis on the emergence of big business in France in the
tradition of Alfred Chandler. The book « seeks to
explain how and why
France acquired the roster of large corporate enterprises that would
come to
dominate France’s domestic economy and project French economic
influence
throughout Europe and the world over the course of the twentieth
century »
(p. 1). It « argues that the same forces that were giving
rise to a new
kind of very large, very complex business organization in the United
States,
Germany, and Great Britain between 1880 and 1930 were also at work in
France » (p.2), contrary to the idea of a special or a
backward path for
French economic development.
The book is
well written and structured, revealing an exceptional knowledge of a
large
historiography and a capacity to organize it along a simple and mostly
convincing narrative. It is also well presented, with minor
typographical
errors (usually in references to French names or publications, e.g.
note 6 p.
501). The index includes all personal and firms names mentioned in the
main
text (not including the notes), as well as some analytical categories.
The book
divides into three parts and 16 chapters, plus an introduction and a
conclusion. Part one deals in less than 100 pages with commerce,
banking and
transportation, in three chronological chapters (1800-1840s;
1850s-1870s;
1870s-1900s), with no discussion of the twentieth century.
Part 2
deals in 200 pages with « the flowering of industrial
capitalism ».
It starts with 7 chapters on particular industries (textiles, coal,
iron and
steel, « hardware, machinery and construction, consumer
goods »,
chemicals, « glass, paper and print »). It ends
with a transversal
chapter on « the new world of industrial
capitalism » that deals with
problems common to many industries and not dealt with elsewhere.
Part 3
analyses in 160 pages the second industrial revolution and the
beginnings of
managerial capitalism, from 1880 onward. It includes four
« industry
based » chapters on the steel, electrical, automobiles and
« chemicals and materials » industries, and ends
with a transversal
chapter on « the new world of managerial
capitalism ».
In order to
make visible the method followed by the author, I will discuss a few
chapters
in more detail. After an
Chapter two
describes the interrelated revolutions in banking and transportation
grounded
in Saint-Simonian ideas and networks during the second empire. It
clearly shows
the role of the relations between the government and these networks in
these
revolutions. It does neither discuss that conventional wisdom, nor look
at the
organizational consequences it may have had (government administrations
were
structured, not only business ones). Actually, even the organization of
the
railroads is not really discussed here, except for these
« grande
politique » dimensions. Concerning banks, internal
organization is not
discussed either, and the concept of a financial system, which may be
of
concern, is not introduced.
Chapter
eight presents the chemicals industry. As most industry based chapters,
it is
mostly organized as a succession of firms’ histories in relation with
the
invention of new products and processes, but says almost nothing of
firm or
market organization. Technological innovation seems the only important
way to
success, and its origins are not much discussed.
One
important question is whether the reasons for the smaller size of
French firms
had an impact on their efficiency and their ability to develop all the
economies
of scale and scope favored by chandlerian business historians. These
reasons
certainly included market sharing (in iron and steel), interlocking
directorates and participations, and family firms preoccupation for
secret and
family control, all elements discussed mentioned by the author but
without a
providing a satisfactory answer to the above question.
Like
chapter 11, chapter 16 has a crucial role and could well have more than
its 20
pages. It discusses the creation of complex organizational structures,
the
growing role of professional managers and the new challenges in
corporate
policies that made them necessary. After a rapid presentation of the
railroad’s
pioneering role in organization, it presents the changes in management
in
industrial firms. It describes examples of divisional organization as
early as
the late nineteenth century, and emphasizes rightly the importance of
holding
structures from the 1920s onwards. It mostly insists on the rise of
engineers
as the main managers of French industrial firms, but discusses little
their
education, their efficiency, or the importance for their management
style of
their links with public administration. Overall, it suggests that new
techniques of management or organization (including assembly lines)
were
already well developed in France prior to World War two.
The
conclusion describes briefly the evolution of French big business in
the second
half of the twentieth century.
As a whole,
the book gives a quite complete picture of French big (mostly
manufacturing)
firms in the nineteenth and early twentieth centuries. It reflects the
many and
important developments in the recent historiography of French industry,
and
also its shortcomings, which explain most of the quibbles mentioned
above.
Nevertheless,
the reader (mostly if he is an economic and not a business historian)
could
have expected something more. Although in the prologue, the author
presents a
short survey of (English-speaking) macroeconomic interpretations of
French
development, he is not really in a position to have a discussion with
the views
expressed at the macroeconomic level. Some assertions such as
« firm-level
research demonstrated that French industry was more expansive and
technologically advanced (…) that once thought » (p.4), or
« by the
end of the 19th century, the activities [of the big firms] had become
the focal
point of economic life in France » (p.324), suffer from a
methodological
bias, since the overall importance of big business in the economy is
not
discussed or compared to that in other countries. The book remains one
on
firms, not economic development, with an ambiguity since the only
reason to
discuss separately French firms is their link with French economic
development.
Bringing in some more data comparing big firms with macroeconomic data
(which
exist at the industry level at least for the period after 1890) could
have
helped solving that problem. A short discussion of industries where big
firms
did not develop – and why – would also have been useful.
Second and
related quibble: the international position of French firms is
mentioned but little
discussed, although some of them had major international operations. If
« it is with an eye to France’s eventual success in the late
twentieth
century that this book tells the story of the modernization of French
business » (p. 5), one cannot but recall the author that
today’s big firms
make most of their business abroad (not only by exports, but also by
producing
abroad), so much that their impact on the French economy is sometimes
questioned.
Third
point, related to the two previous ones: the book is very little
quantitative.
It deals with a great number of firms, but provides little quantified
comparisons among them (which could give way to typologies for example)
or
between them and the rest of the economy or their foreign equivalents.
The few
tables (8 for the entire book, no figures) list the biggest firms in a
given
industry at a particular date; only the two last ones giving some
international
comparison, and they provide little elements of comparison (total
assets in
general).
Fourth
point: the relationship between French firms and the State are
discussed in the
very first chapters for the early nineteenth century, and something in
chapter
11, but almost not thereafter, while discussions of nationalization
(and early
practice) was widespread in the interwar period at least. The
relationships
between government and big business people or organizational practices
are
worth more discussion. The role of governments regulations (major in
the 1930s)
but also of semi-public bodies such as the chambers of commerce
(important
during the all period) is under-appreciated (actually neither the Code
de
commerce, nor the chambers of commerce, the commercial courts, the
commerce
minister appear in the index, even if some of them sometimes appear in
the
text).
As a
conclusion, the book is a very useful synthesis for American students
or
scholars (French people will find strange a discussion only centered on
English-language historiographical debates, even if mostly based on
French
scholarship), more than an original contribution to our knowledge.