The dynamics of the relationships between state and economy examined in Chapter 1 concern to some extent all the advanced industrial democracies. Therefore, Italy has also seen the growth and decline of the Keynesian welfare state. However, in both scientific and political debate, one notes a certain reticence, almost discomfiture, in applying this analytical category to Italy -so much so that it is frequently accompanied by stress on the country's ‘peculiarity’.

Whereas ‘American exceptionalism’ and the Modell Deutschland – to cite two examples of categories equally widespread in analysis of these two national cases, respectively – assume the status of real conceptual tools, rather than being treated as national variants of a general pattern, the ‘Italian case (Cavazza and Graubard 1974; Lange and Tarrow 1980; Lange and Regini 1989) has come to symbolize the difficulty of applying any analytical category developed for the purposes of comparison. In fact, with respect to the models used in comparative analysis, interpretation of the Italian case and of its evolution consists mainly in highlighting a series of ‘shifts’ within a context considered, for reasons that are rather unclear, to be more multiform and complex than that of other countries and which therefore cannot be captured by oversimplified concepts.

HAS THERE EVER BEEN A KEYNESIAN WELFARE STATE IN ITALY?

First of all, there is the widely held opinion (Amato 1976; Cassese 1987) that, in Italy, public intervention in the economy is both more extensive than in other Western countries and extremely inefficient, in that it is unable to produce a coherent and comprehensive economic policy.

In Part I we saw how the model of the concerted and centralized political regulation of the economy, after functioning with conspicuous success for almost fifty years, entered a phase of decline. This is by no means a novel finding – indeed, it is taken for granted by that strand of debate in the social sciences which, by paraphrasing the title of an article by Panitch (1980), we could call ‘the crisis industry’ – but it should be viewed in a new light when set in relation to the tendencies that I shall now examine in Part II.

To begin with, the emphasis should be placed on these three adjectives -political, concerted and centralized – as applied to the model of economic regulation described in preceding chapters. The fact that three distinct adjectives are required to specify this type of regulation demonstrates that there is not just a single nonmarket institution by which the economy can be regulated, or a single way in which nonmarket institutions work. This was the principal error of the many analyses conducted during the 1980s of the deregulation of Western economies, analyses which often did nothing more than simplistically echo what, for business people and neo-laissez-faire politicians, was a slogan from the realm of wishful thinking. But, on closer examination, even considerably more sophisticated analyses of the advent of ‘disorganized capitalism’ (Offe 1985; Lash and Urry 1987) were based on a similar premise: that the crisis of a historically specific form of regulation signalled the decline tout court in the capacity of social and political institutions to structure economic behaviour.

In contemporary Western economies, the principal institution regulating economic activities is the market. According to the traditional view, the liberal state should refrain from intervening in the economy. Consequently, a sharp distinction should be drawn between the tasks and spheres of action pertaining to the market (chief institution of the economic system) and those pertaining to the state (the paramount institution of the political system). Nevertheless, the history of this century has been marked by constant shifts, spillovers and blurring of this traditional distinction, mainly because of two enduring phenomena.

On the one hand, increasing intervention by the state in the economy (which I examine in Chapter 1) has led to a marked expansion of political regulation and a corresponding decline in regulation by the market, an expansion which has only recently come to a halt, to differing extents in different countries. On the other, there has been a manifest tendency for the distribution of the resources produced or allocated by the state to take place according to criteria of exchange and private appropriation, and not according to administrative rationality geared to the public interest. The development of large interest organizations and political exchange (which I examine in Chapters 2 and 3) is an integral part of this process.

This redrawing of the boundaries between economy, politics and society has to some extent been the unintended outcome of multiple small shifts in the roles traditionally performed by state, market and organized social interests.

This chapter concentrates on the roughly fifty-year period from the mid-1930s to the early 1980s. This is not to imply, however, that before this period the state performed no function in the market economies.

THE TRADITIONAL ECONOMIC FUNCTIONS OF THE STATE

Economic historians have identified three major traditional functions of the state – functions performed even during the phase of the so-called liberal state which adhered to the doctrines of laissez-faire – in capitalist systems. The first of these is the creation and enforcement of a legal code which guarantees and reproduces existing relations of production and which makes exchange possible. The right to private ownership, the enforcement of contracts, the regulation of free competition – without these legal institutions the free market as we know it today could not have developed.

The second traditional function of the state is to manage international economic relationships in such a way that national capital is defended and augmented on world markets. Historically, such management has taken forms ranging from the aggressive behaviour associated with colonialism and imperialism to others more defensive in character, such as protectionism and currency devaluation, in order to enhance the competitiveness of the country's products.

The third function is to guarantee the ‘material conditions of production’, that is, the supply of at least some of the inputs that the productive process needs: labour, capital, technology and infrastructures. Although the importance of each of these inputs has varied from one period to another, the role of the state, in its various forms, has almost invariably been decisive in ensuring their supply.

The history of the development of capitalism in the West, and of the organization of the economic system consequent upon it, evidences the progressive predominance of the market over other institutions. As well as being the chief mechanism for the regulation of economic activity, the market is conventionally regarded as an institution whose laws have come to permeate broad areas of social life, supplanting the norms produced by the state and the community. In short, when we think of the growth of capitalism, we often think of the penetration of the market – and of the principles of competition and exchange on which it is based – into economic and social relationships which were previously governed by other principles, notably solidarity and hierarchy or authority.

The founders of the social sciences based various of the themes most central to their thought on this vision of the market. Suffice it to mention Weber, who ascribed great importance to the principle of rationality, which arose from the necessity for calculation and predictability imposed by the market, and which also came to dominate social life and the political system by embodying itself in the bureaucracy. Or Durkheim, for whom the demise of ‘mechanical solidarity’ and the rise of ‘organic solidarity’ was based on the division of labour, and hence on exchange – the predominant criterion for the allocation of resources in the market. Or Marx, for whom capitalism reduced the relationships among individuals to market relationships tout court and labour to a commodity, to a ‘labour force’ which was demanded and supplied on a market, the labour market.

In order to analyse the conflicts which affected the French Socialist Party in the first six months of 1938, we need to understand the context of tradition and custom within which they occurred. This chapter is intended to establish this context in three stages: first, it discusses the history of the party (the SFIO, Section Française de l'Internationale Ouvrière) from its origins to 1937, identifying the main problems of doctrine and strategy which it encountered in the 1920s and 1930s; secondly, it reviews the ideas which formed the background to the party's internal discussions in these two decades; and thirdly, it describes the organizational, social and geographical factors which influenced the competition for power between the party's internal groups.

The Origins and History of the SFIO, to 1937

The SFIO was formed in 1905 as a result of a merger of several existing groups, including the Parti Socialiste de France, headed by Jules Guesde (1845–1922), and the Parti Socialiste Français, led by Jean Jaurès (1859–1914). The new organization was expected to co-operate with other parties belonging to the Second Socialist International with the aim of solving the problem of how social and political revolution could be achieved in the existing system of capitalist states.

The origins of this book lie in the study of the French Socialist Party which I undertook as a postgraduate student at St Antony's College, Oxford, under the able direction of Mr Philip Williams. It was also my good fortune to have as a neighbour in Winchester Road Dr Saul Rose, Fellow of St Antony's, who had previously been the International Secretary of the Labour Party and whose work with the French Socialists had given him a sensitive understanding of their outlook and their characteristics as a party. Both then and later he was unfailingly generous with help and advice and he remained an intellectual stimulus and good friend until his untimely death in 1992.

My initial research was carried out between 1958 and 1962, first at St Antony's College and then as a member of the Cycle Supérieur d'Etudes Politiques at the Fondation Nationale des Sciences Politiques in Paris, where I received invaluable advice from Professor René Rémond, M. Serge Hurtig and M. Jean Touchard. At the time I was mainly concerned with the Socialist Party's involvement in tripartisme at the levels of parliament and government, but I became increasingly aware of the readiness of the Socialists of the post-war period to compare the internal difficulties which they were experiencing with those which had beset the party in 1938.

Although not altered beyond recognition, the SFIO which re-emerged after the liberation of France differed in many ways from its pre-war counterpart. Having been badly divided over questions of foreign policy between September 1938 and May 1939, it had remained on the margins of the French political scene during the first nine months of the Second World War and had virtually ceased to exist as a political force by the summer of 1940. Then, having re-established itself as an underground organization during the years of the German occupation and the Vichy regime, it had re-entered politics in 1944 as a more centralized party, determined to impose strict standards of discipline on its membership. The changes which had taken place over this period form the background to that phase of internal conflict which cast its shadow over the party between June 1945 and August 1946 and led to the appointment of Guy Mollet as General Secretary, and it is to them that we must now turn our attention.

The conflict between Blumistes and Fauristes, September 1938–May 1939

The Czech crisis of September 1938, which developed with frightening rapidity, forced political observers in the western democracies to face the fact that their efforts to restrain Germany might well involve them in a European war.

National Council and National Congress Divisions

The research for this book has entailed an analysis of many of the divisions by mandate at meetings of the National Congress and the National Council of the SFIO between June 1937 and September 1946. During that period the results of these divisions were recorded both as aggregate votes and as lists of the distribution of mandates by federation and were presented in the party's journal (La Vie du Parti until 1940 and the Bulletin Intérieur du Parti Socialiste (S.F.I.O.) after 1945) and for the 34th (1937) and 35th (1938) National Congresses in the published Comptes rendus sténographiques.

In order to obtain reliable and comparable division lists, the records of votes by federation were checked for any errors of transcription and addition which might have been made when the original data were prepared and printed. Two basic checking techniques were employed: first, the addition of the mandates attaching to each federal delegation, to make sure that the total matched the number of national mandates allocated to that federation, and, secondly, the addition of the mandates recorded under the different headings of a division in order to compare the results with the official returns published in the party journal.

The SFIO's 35th National Congress, held in the town of Royan between 4 and 7 June 1938, marked the conclusion of a brief period of bitter feuding between the Gauche Révolutionnaire and its opponents. At this meeting, the delegates decided to uphold the disciplinary action which had been taken against the Seine Federation in April and approved a policy resolution which confirmed the cautious strategy which the leadership had followed in the months preceding the congress, whereupon Marceau Pivert and his close supporters left the party to form an entirely new organization.

In this chapter we shall trace the stages by which this happened, dealing first with the period extending from mid-March to mid-April 1938, which saw the imposition of sanctions on the Seine Federation and the fall of Blum's second government; then with the attempt by Pivert and his group to challenge the dissolution of the Seine Federation, and with the various policy motions produced during the preparations for the Royan Congress; and finally, with the debates at this meeting, assessing the factors which enabled the leadership to gain the upper hand in its struggle with the tendances.

During the immediate post-war period the SFIO found itself under increasing stress as the combined task of restoring the national economy and constructing a constitutional settlement imposed heavy demands on successive governments. All of these rested on the alliance of three parties, the Communists, the Socialists and the Christian Democrats (the Mouvement Républicain Populaire, MRP), and as the Socialist Party possessed the greatest degree of internal democracy of the three, its rank-and-file members were the first to express their discontent at the disadvantages of being part of a governing coalition. By degrees their sense of grievance brought them to the verge of revolt and the task of this chapter is to describe this change of mood within the SFIO and to analyze the organizational crisis which it brought about at the party's 38th National Congress of August 1946.

The 37th National Congress of August 1945

Early in May 1945 as the war in Europe drew to its close, the French authorities were trying to locate and free those public figures who still remained in German hands. Prominent amongst these was Léon Blum and on 4 May Jules Moch, who was still serving in the navy, was given the task of searching for him.

By the end of 1937, the Popular Front was no more than a ghost of its former self, and each of its constituent parties was coming to accept that the balance of forces within the party system might alter drastically and suddenly, with only the briefest of warnings. This uncertainty weakened the internal cohesion of the SFIO and worked to the advantage of its dissident tendances, whose prescriptions for changes of strategy could now be recommended to the membership with much more urgency than in the past. In this chapter, we shall examine how both the Bataille Socialiste and the Gauche Révolutionnaire responded to this opportunity, and how the latter group greatly improved its organizational and moral position within the party. Its first gains were made at the National Council meeting of 17 January 1938, where the central leaders maintained their authority only by agreeing that the party should not be represented in the government which Camille Chautemps was then trying to form. Shortly afterwards, the Gauche Révolutionnaire took charge of the Seine Federation, one of the most powerful administrative units within the party's organization, and immediately launched a drive to force a change of strategy upon the next regular meeting of the National Council, which was expected to take place on 27 March.