France was still largely a nation of small farms and family-owned businesses. After World War II (1939-1945) the French government nationalized several business enterprises—especially in energy, finance, and manufacturing—and it introduced a series of national development plans intended to modernize the economy. These reforms, along with European economic integration, helped secure a period of sustained economic growth in the quarter century following the war. Today, France is one of the world’s leading economic powers, ranking fourth within the Organization for Economic Cooperation and Development (OECD), behind the United States, Japan, and Germany. It is also the leading agricultural producer in western Europe. In 1999 France’s gross domestic product (GDP) was $1.43 trillion, and per capita income was $24,430.
France is one of the major economic powers of the world, ranking along with such countries as the United States, Japan, Germany, Italy, and the United Kingdom. Its financial position reflects an extended period of unprecedented growth that lasted for much of the postwar period until the mid-1970s; frequently this period was referred to as the trente glorieuses. Between 1960 and 1973 alone the increase in gross domestic product (GDP) averaged nearly 6 percent each year. In the aftermath of the oil crisis of the early 1970s, growth rates were moderated considerably and unemployment rose substantially. By the end of the 1980s, however, expansion was renewed, although at a slower rate than recorded 20 years earlier.
France is in the midst of transition, from an economy that featured extensive government ownership and intervention to one that relies more on market mechanisms. The government remains dominant in some sectors, particularly power, public transport, and defense industries, but it has been relaxing its control since the mid-1980s. The Socialist-led government has sold off part of its holdings in France Telecom, Air France, Thales, Thomson Multimedia, and the European Aerospace and Defense Company (EADS). The telecommunications sector is gradually being opened to competition. France's leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies, and social spending that reduce income disparity and the impact of free markets on public health and welfare. The government has done little to cut generous unemployment and retirement benefits which impose a heavy tax burden and discourage hiring. It has also shied from measures that would dramatically increase the use of stock options and retirement investment plans; such measures would boost the stock market and fast-growing IT firms as well as ease the burden on the pension system, but would disproportionately benefit the rich. In addition to the tax burden, the reduction of the work week to 35-hours has drawn criticism for lowering the competitiveness of French companies.
