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Economic Patriotism, the Clash of Capitalisms, and State Aid in the European Union

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Abstract

This article analyses the political economy of state aid in the European Union (EU) using the concepts of economic patriotism and models of capitalism. State aid is analysed as a form of economic patriotism, which is conceived here as economic interventions which seek, by a number of means, to advance the perceived economic self-interest of particular groups and actors (firms, workforces, or sectors) defined according to their territorial status. The article argues that the paradox of neo-liberal democracy generated by liberal international markets, overlapping economic governance regimes (such as the EU and the World Trade Organisation), and nationally delimited political mandates presents new problems for policy-makers attempting economic interventions like state aid. Forms of economic patriotism are partly shaped by national institutional and social configurations and state traditions. Within EU economic governance, this generates a ‘clash of capitalisms’ whereby liberal EU anti-trust and competition policy norms proscribe certain state aid and industrial policy measures favoured by some European states. As traditional industrial policy becomes decreasingly viable, new modes of economic patriotic interventionism are enacted within contemporary processes of market-making, and the re-regulatory activity framing European markets. The paper focuses on French state aid responses to the global economic crisis, noting how the retreat of neo-liberal ebullience within the EU provides a conducive environment for resurgent French dirigiste approaches to state aid, indicating that the politics of economic patriotism and state aid will continue to be important features of the European political economic landscape in the years ahead.

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Notes

  1. The concept of “economic patriotism”, as deployed here, was developed jointly by the author and Cornelia Woll in the context of the Warwick/Sciences Po Paris “Economic Patriotism: The Limits of the Liberal Market” Project which we co-organise. Findings from the project were published in “Economic patriotism: political intervention in open economies”, a special issue of the Journal of European Public Policy, (Clift and Woll 2012).

  2. Dominique de Villepin argued against a possible hostile take-over of the French company Danone by PepsiCo on 27 July 2005. The notion had previously been employed in France but became central to national and international debates in the aftermath of de Villepin’s speech. See Christophe Jakubyszyn, “Dominique de Villepin en appelle au patriotisme économique,” Le Monde, 29 July 2005.

  3. I owe this expression to Colin Crouch and would like to thank him for a very helpful discussion of these points.

  4. Traditions of state direction of, and intervention in, economic activity in France have a long heritage, traceable at least as far back as Jean-Baptiste Colbert, minister under Louis XIV between 1661 and 1683. Colbert’s bent for state interventionism in economic affairs reached a zenith when, in 1666, he issued a règlement to the effect that the fabrics of Dijon and Selangey were to contain 1,408 threads (no more, no less), and those of Auxerre and Avalon 1, 376 (Heilbroner 1992: 24)

  5. This discussion draws on the paper “Economic Patriotism and National Traditions of Economic Thought”, presented by Matthew Watson at the economic patriotism workshop at the University of Warwick, February 2008.

  6. The “little republics” quote is from Hunt 1936: 135).

  7. http://europa.eu/rapid/pressReleasesAction.do?reference=IP/09/332

  8. “L’Etat débloque 7,8 milliards d’euros pour le secteur automobile”, Le Monde, 09.02.09

  9. “Brussels blocks French bank bail-out” Financial Times 28-Nov-2008

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  1. Department of Politics and International Studies, University of Warwick, Coventry, CV4 7AL, UK

    Ben Clift

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Clift, B. Economic Patriotism, the Clash of Capitalisms, and State Aid in the European Union. J Ind Compet Trade 13, 101–117 (2013). https://doi.org/10.1007/s10842-012-0138-5

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