Is France ordoliberal?

It is difficult to establish with precision whether France is an Ordoliberal country or not in the practical sense used by Jim Kemeny. The French idea that the state can and should control the market is older than Ordoliberalism. There must be some kind of relationship between the “dirigiste” or managerial policies of France from Louis XIV (1638-1715), and later Odoliberal thinking in central and northern Europe.  France was an early starter in thinking about this kind of problem but a late starter for mass production of housing after the devastation of two World Wars.  Construction is now something that France does now with alacrity and in higher volumes than the UK.

For a lawyer, the historical trail of the idea of Ordungsliberalism is hard to follow here. In the nearly 400 years of war and economic rivalry, nation states habitually re-name or re-formulate foreign ideas when enacting legislation. At times of tension and war, diehard nationalists would prefer to be dead in a ditch rather than be seen to be copying the good ideas of an enemy. Comparative lawyers avoid this problem by comparing functionally similar laws (Watson 1974, Zweigert and Kötz 1998) or considering the “law job” of legislation – what it does (Llewellyn 1940). In a similar way, Jim Kemeny’s (1995) analysis of the symptoms of a unitary and dualist markets is functional and could help identifying the French relationship with Ordnungsliberalism.

The effect of this kind of theory can in part be traced, because the French “dirigiste” approach has a great deal in common with Ordoliberalism.  Both do the same law job of seeking to manage housing markets. To look at it properly you would have to serially compare tenures, social landlords and their allocation policies, political power balances and the managerial techniques of government. In a blog, I can only start by trying to look at dirigisme, its origins and how this affects tenures and the public management of these. I can say a little about linguistic connections, power balances in tenures where property ownership plays a prominent part. Europe is deeply interconnected, and France did blaze a trail.

Early French dirigisme

Under Louis XIV, Colbert, as dirigiste finance minister (1665-1683), bought France’s budget under control in years of strong state administration and centralization. Few areas of economic life escaped his attention and intervention, from the founding of industries in glass, cloth and tapestry, the founding of the Académie des sciences, and the tight organization of tax and subsidy. When Louis died he said “I depart but the State shall always remain.” Even after the trauma and upheaval of the 1789 French revolution, Napoleon I would slip into the shoes of previous monarchs in using some of their managerial approaches.

Napoleon supervised the 1804 Civil Code, bringing into order the revolutionary tenure changes. This consolidated a situation where many pre-revolutionary tenants had become owners-occupiers. The new proprietors had been relieved of most feudal financial burdens, but with key public interest exceptions found in Articles 544 and 545. ‘Tenure’ cannot be translated into French, since the French equivalent of the word “tenant” (tenancier) was abolished in the revolution, particularly in 1793 (Bart 2009). “Tenure” comes from the old French “tenir” in the sense of holding rights. Similar words for “tenures” and “tenements” were also abolished.

There was still a need for new rentals. Post 1804, new French tenants commonly have a special contract, where they are juridically hirees or “bailees” as if hiring a bicycle, in an extended sense. It is hard not to think of new tenants as worse off compared to their new landlords. Nonetheless, the measurement of security of tenure is about how far tenants’ rights are now reinforced by statute, not the principle on which this security of tenure is based.

It is still a matter of principle that each French plot of land should have only one land owner (or group), in a long-lasting aversion to the “feudal” fragmented land rights found in England, the enemy. This means that nineteenth century French proprietors would resist proprietary land rights for tenants. The “property myth” is not new nor necessarily English common law. There is a summarized account of the 19th century virulent oppositions between property and tenants in my book (Ball 2012).

This is the oppositional background to modern control of markets. The dirigiste tradition would continue and grow. The institutions founded or revived by Napoleon, particularly the highest administrative court the Conseil d’Etat would advise to government. By 1870, it would also provide recourse to individuals for breach of their constitutional and administrative rights and so State intervention could be popular. Cherished principles such equality were elaborated. In some periods, democratic governments changed frequently, particularly 1946-1958. Then stability and economic management was provided by the administration not by government (Bell 1998). Public administration would ultimately balance property rights compared to other French inhabitants, so far as this could be done.

“Order” and connections between France and Germany

Between France and Germany, who inspired who is rather a tricky question, since the actual content of laws may not disclose their influences. It is possible to see some connection in the “Ordnung” part of Ordungliberale, meaning “order”. In the midst of the Napoleonic Wars, Savigny (2003), a German Roman lawyer, argued for remarkably French definitions of tenures, justifying this by the idea of “public order”.  The Germans did not exactly follow this prescription but the French modernization of Roman law galvanized change in Germany, in southern Germany by both force and persuasion. There is continuing French and southern European enthusiasm for Savigny.

The important notion of “public order” in France and Germany is to do with the smooth running of society, not just law and order in the English sense. This requirement be extended to economic and social management or public health. Long after the Napoleonic upheavals, public order is still used in France and Germany as an administrative reason to house the roofless. Importantly, the French phrase “of public order” is used in hundreds of French statutes, every time a particular provision is compulsory, including contractual terms.  When the content of rental tenures is prescribed, this is d’ordre public. In this way, a historically justified fear of disorder from a time of war extends forward in time and changed in its uses and France and Germany. Ordre public here is an assertion of effect.

Extensive prescription of the terms of tenancies is a common feature of civil law countries (which includes pretty near all European continental traditions). Despite this linguistic connection, Jim Kemeny’s (2006) identification of Ordnungsliberal countries does not include all of the civil law countries. Most Ordoliberal countries are what comparative lawyers would call German Pandectist legal systems or those where this law was influential (Wood 2005). I have not been able to work out all of the connections to the Pandectist systems, this but it is likely to relate to different approaches to property in the structure of the later legal codes.

There are a lot of cross-linkages between European neighbours both in language and in state approaches to control of tenures. Tenures in Pandectist system vary, but the German Constitution and Civil Code include the direct and effective imposition of responsibilities on property owners, including social duties. This is not explicitly stated in the French constitution other than by the exceptions to property rights, often developed from the rather more social Preamble to the 1948 Constitution (still in force). Curiously, the idea that property has a social function was expounded by Duguit, a French lawyer in the early 20th century. This is influential everywhere, but more likely to be found in an explicit form connected to ownership in constitutions outside France.

The property objection to tenants’ rights

France, and for that matter southern European legal systems, could have a much more intractable property lobby than Germany, or even England. The privileged French constitutional position of the right to property (Article 17 of the 1789 Constitution) and enthusiastic localism could be a major constraint on managerial approaches.  Also Napoleon (like Margaret Thatcher and recent Eastern European governments) created large numbers of small property owners by legislative means, affecting the political balance of voting.

The late 18th century French and US rights to property were nearly contemporaneous and both pretty much proclaim the superiority of the rights of new property owners over anyone else on their land, in the face of unreasonable levies and high-handed treatment. The French went further to define property ownership as “the right to use and dispose of the asset in the most absolute way possible…” (Article 544, Civil Code). This right is closely associated with autonomy and freedom of the owner.

The problem is that the 1804 absolute right for French proprietors to dispose of their property would make tenants’ rights tricky, if that disposal meant showing them the door. This is still the case in the USA in principle, within the limits of the law. Despite this, French proprietors’ rights did not ultimately prevent rising tenant security around the Great War, in common with Germany and England.  Now, taken overall, France does have a unitary market insofar as this can be achieved within these historical structural constraints.

Public and social rights balancing property rights

Looking at tenants’ rights provides a snapshot of how conflicts between property and unitary markets are managed. French government willingness to manage the market and forms of tenure in the interests of equality should not be in doubt. Today as a dirigiste country it has techniques, institutions, and knowledge to do just that but it is not always easy, even now. A tolerance of managerial rights can be accompanied by traditional resistance to this.

Increased tenants’ rights could not be based in property law, which would offend both French property law and proprietors. Happily, the exceptions to absolute property rights for public utility meant increased tenants’ rights. These favour the state and indirectly other collective organizations. This means that French tenants’ rights are not based in property law, but instead in public or social law in the public interest and recently human dignity.  Tenants’ social rights under this special contract were reinforced by statute.

It is important not to judge a country by the legal theory in this area, but rather by the result. Like France, England reinforced tenants’ rights by statute but on different principles, English tenants have proprietary rights (although you would not notice this so much these days for some groups). This is the species of tenant right objected to in principle by many in France. In consolidating legislation in both England (1925) and Germany (1900) tenants would have the right to possession, an attribute of ownership. Again, the use of statute to reinforce tenants’ rights was important.

The records of England and France on tenants’ rights are very similar, despite the use of property principles in England to empower tenants. Both countries froze residential rents around the Great War which essentially stayed frozen until after World War II.   After World War II, both countries reduced security of tenure for tenants after World War II at variable times. Both countries lost a lot of rental stock when rents were extremely low. Both started to later recover or retain rental stock by lower levels of security for tenants, by tax relief or favourable conditions for financing for landlords.

So is France Ordoliberal?

Looking at the development of property and tenancies does suggest similar results between France and England. Other aspects of housing policy would produce a different result. French dirigisme is still different from Ordoliberalism, because the old French forms of bargaining have not passed away.  France is probably corporatist, balancing left and right. However, Esping-Andersen’s (1990) conception does not take into account negotiation with government mediation, which knits together deep historical divides as in France, unlike say Swedish corporatism which has been consensual for a long time.  It is not that French people do not get on, but the difference lies in the very oppositional forms of interaction.

The force of the French bargaining can be illustrated by looking slightly more widely at agricultural and business tenancies. English business and farming tenants have gradually lost security, which actually helps those not wishing to commit to long terms. However, French business and farming leases still have strong security of tenure relative to England and government alters this at its peril. This might be related to the need to raise finance, partly because the leases are part of a package of personal assets and rights (the fonds de commerce) used as security.

Recently French farmers announced the opening of hostilities against EU restrictions in agriculture by burning a bale of hay in the middle of Paris (le Monde 2014). This is symbolic of pre-revolutionary agricultural tactics against their seigneurs isolated in deep countryside, known as “the fire and the iron” (Bloch 1999). This does not of itself show a lack of French land management and negotiation which proceeds normally without outside involvement. This is why French corporatism is different. It would be quite wrong for a managerial EU to regard traditional French protests as untidy. Freedom to act in protest at something seen as unfair is just as important as good management and should compel negotiation for fear of meeting something worse.

Dirigisme predates Ordoliberalism, which might not have been so effective without the French developments : Profound legal changes to private law of tenures were sparked across Europe by the French revolution and the influence of the early French idea that strong and explicit state management is both benign to private individuals and competent. To look at tenures in general now, you would say that France has the technocratic ability and the expertise in administration to match any perceived desirable quality of any other legal system.

The scorecard between England and France varies from times to time in tenure creation, with social landlords still innovating on both sides of the channel. For residential tenures, both or neither may be Ordnungsliberal without looking at other parts of the system. The way in which tenures are managed differs. France is unlikely to be a card-carrying Ordoliberalism country firstly because of its strong and demanding lobbies, particularly of property owners, and because with dirigisme, public administrative activity is traditionally seen as different, even sometimes in opposition to the market. Whether things are actually similar is quite another question.

An analysis in Ordoliberalism can sidestep traditional arguments about the size of the public sector and the benefits of that by its suggestion that a well-organized private market is ultimately social. This levels out the public and the private to look at symptoms. Perhaps it would be fair to say that the primary symptom of a dualism in a market may be a property sector or property owners whose rights or influence over everyone else have got out of hand. In some cases in some countries, tenants or other groups might also be favoured more than is justified, a question of balance and negotiation. Working out what is justified is different circumstances is the hard part. Ordoliberal or managerial approaches are always limited by power balances between freedom and management.

Jane Ball

References

Ball, Jane, Housing Disadvantaged People? Insiders and Outsiders in French Social Housing Allocation (Routledge 2012).

Bart, Jean, Histoire du Droit Privé de la Chute de l’Empire Romain au XIX Siècle (2nd ed, 2009 Monchrestien).

Brown, L Neville and Bell, John S. (1998) French Administrative Law (Clarendon Press, 1990)

Bloch, Marc, Les Charactères Originaux de l’Histoire Rurale Française (1999, first published 1931, Armand Colin).  

Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism (Princeton University Press 1990).

Kemeny, Jim, From Public Housing to the Social Market – Rental Policy Strategies in Comparative Perspective (Routledge 1995).

Le Monde (AF avec FP), “Les agriculteurs mobilisés pour dénoncer les ‘contraintes’ sur la profession”(2014) Le Monde, 24 June 2014

Llewellyn, Karl, ‘The normative, the legal and the law job: The problem of juristic method,’ (1940) 49(8) Yale Law Journal 1355-400.

Savigny, Friedrich Carl von, Das Recht des Besitzes (1803)

Watson, Alan, Legal Transplants (R & R Clark Ltd 1974).

Wood, Philip R, Maps of World Financial Law (Sweet & Maxwell 2008).

Zweigert, Konrad and Kötz, Hein, An Introduction to Comparative Law (trans Tony Wier, 3rd edn, Clarendon Press 1998).

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About Jane Ball

Jane is a senior lecturer at the University of Newcastle upon Tyne. After a protracted period in English solicitors' practice she embarked on researching French housing law. Housing law disciplines do not match up internationally so to get the bottom of the problem of housing she ended up studying a rather large range of relevant English and French legal topics, with sociology, economics and history.
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