The article studies the development of the long-term marginal cost pricing of electricity in France, in the 1950s and 1960s. The engineers who managed the public monopoly for the production, transport, and distribution of electricity promoted a distinctive version of the economics and engineering nexus. Costs calculations were developed to design a nationwide integrated machine. Hydropower in the south was to be interconnected with thermal power in the north, in order to support a massive increase in consumption in the Paris basin, saving on coal and on the scarce funding of the Marshall Plan. Prices acted as administrative instructions, passing on costs to subscribers and shaping their present and future behavior according to the planned development of the system. This was a technocratic intervention: the engineer-economists made crucial and lasting decisions on land-use planning for the sake of the rapid growth of the system. This engineering and economics nexus was a far cry from the prewar liberal order made of multiple small and loosely regulated competitors, and from contemporary forms of economic engineering, more narrowly focused on the informational properties of prices, abandoning the calculated nationwide decisions on the growth of processes of production and uses. It is also slightly neglected in the discussion over the so-called indicative planning in postwar France.
Building a National Machine: The Pricing of Electricity in Postwar France
Guillaume Yon is a LSE fellow at the Department of Economic History, London School of Economics and Political Science. His book on the implications of optimization in the electricity sector for the theory, practice, and politics of economic planning in postwar France is in preparation.
Guillaume Yon; Building a National Machine: The Pricing of Electricity in Postwar France. History of Political Economy 1 December 2020; 52 (S1): 245–269. doi: https://doi.org/10.1215/00182702-8718035
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