Economic Transformation and Crisis

France's economy emerged from war fundamentally transformed but precariously balanced. War production had modernized industry—assembly lines, scientific management, and female workers had revolutionized manufacturing. Yet peace brought immediate crisis as military orders ceased and international competition resumed.

Inflation ravaged fixed incomes. The franc, stable for a century, had lost 80% of its value. Small rentiers, living on prewar investments, faced poverty. Government bonds, purchased patriotically during war, became nearly worthless. The middle class, France's social backbone, found its savings evaporated. A lycée professor wrote: "My salary that supported comfortable life in 1914 barely feeds my family in 1919."

Industrial conversion proved traumatic. The Renault factory, producing 1,000 military vehicles monthly, struggled to find civilian markets. Munitions plants closed, throwing hundreds of thousands out of work. Women workers, dismissed first, received no unemployment support. Colonial workers faced deportation. Only gradual conversion to civilian production—automobiles, agricultural machinery, consumer goods—absorbed some unemployment.

Financial challenges seemed insurmountable. War had cost France 150 billion francs—six times annual prewar national income. Foreign loans, primarily from America and Britain, demanded repayment. Domestic reconstruction required massive investment. The solution seemed obvious: "L'Allemagne paiera" (Germany will pay). This dependence on German reparations would poison international relations and French economic planning.

Labor unrest exploded as wartime unity dissolved. May 1919 saw general strikes in Paris. Railway workers, metalworkers, and miners demanded the eight-hour day promised during war. Revolutionary rhetoric appeared—red flags flew in working-class districts. The government, terrified of Bolshevism, combined concessions with repression. The eight-hour law passed, but strike leaders faced arrest.