Dirigisme

Dirigisme or dirigism (from French diriger, meaning "to direct") is an economic system where the state exerts a strong directive influence over investment. It designates a capitalist economy in which the state plays a strong directive role, as opposed to a merely regulatory one.

The term emerged in the post-war era to describe the economic policies of the French economy, which included substantial state-directed investment, the use of indicative economic planning to supplement the market system, and the establishment of state enterprises in strategic sectors of the French economy. It resulted in an unprecedented economic and demographic growth, leading to the coinage of the term Trente Glorieuses ("Thirty Glorious [years]").

The term has subsequently been used to classify other economies that pursued similar policies, most notably the East Asian tiger economies, and more recently the economy of the People's Republic of China. A related concept is state capitalism.

Most modern economies can be characterized as dirigiste to some degree – for instance, the state may exercise directive action by performing or subsidizing research and development of new technologies, through government procurement (especially military) or through state-run research institutes.

Before the Second World War, France had a relatively fragmented capitalist economic system. The many small companies, often family-owned, were often not dynamic and efficient in comparison to the large industrial groups in Germany or the United States. The Second World War laid waste to France. Railroads and industries were destroyed by aerial bombardment and sabotage; industries were seized by Nazi Germany; in the immediate postwar years loomed the spectre of long years of rationing (such as the one enforced in the United Kingdom). Some sections of the French business and political world lost authority after collaborating with the German occupiers.

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