Although the French Republic was headed by self-identified socialists in 1936–1938, it would be more accurate to categorise them as social democrats; Prime Minister Léon Blum denounced the R.S.F.S.R. as a ‘dictatorship over the proletariat’ and refused to have communists participate in his cabinet. (That did not stop the Fascist press from attacking him, of course.) His deputy Édouard Daladier collaborated with Conservative Prime Minister Neville Chamberlain in appeasing the Third Reich, and his Minister of Foreign Affairs signed a declaration with Ribbentrop.

Bafflingly, Léon Blum permitted all of this despite taking pride in his Jewish heritage. It is shocking that a Jewish adult with his amount of political power would appease the Third Reich at all, but it feels less shocking after learning that he was a Herzlian.

Let us now examine this dictatorship of the bourgeoisie’s economic relations with the Third Reich:

The two governments tried to stabilize trade by a convention of July 28, 1934, which established a clearing mechanism to pay for commercial exchanges. As a result, in 1934, for the only year in the interwar period, [the Third Reich] ranked as France’s top overall customer and supplier.²⁴

Relations deteriorated, however, in the next year. In June 1935 [Reich] officials demanded [that] the replacement of the clearing mechanism with a less restrictive payment accord. A French delegation in Berlin agreed to discuss replacing the clearing accord only on the condition that [the Third Reich] make good on its commercial payments in arrears, which totaled 300 million francs.

The French and German governments, however, found it impossible to negotiate on these terms, and the French and German negotiating teams in Paris in July received orders from their governments simply to liquidate the clearing mechanism.

As a result of the termination of the clearing system, the value of German exports to France rose slightly from 124.1 million marks in the first half of 1935 to 125.4 million marks in the first half of 1936, while the value of German imports from France fell dramatically from 104.1 million marks in the first half of 1935 to 43 million marks in the first half of 1936.²⁵

By the time [that] negotiations resumed in January 1937, France and [the Third Reich] had been without a commercial accord for a year and a half, to the detriment of French exporters.

The Blum government, which took office on June 4, 1936, made the first steps toward closer economic ties to [the Third Reich] through the governors of the central banks of [the Third Reich] and France. It was evident in these steps that the government had on its agenda a general reconciliation with [the Third Reich] through economic cooperation. On June 24, 1936, the French financial attaché in Berlin, Marcel Berthelot, discussed the possibility of an arms limitation pact with Schacht, who declared that he favored the idea.²⁶

[…]

Schacht’s propositions were political as well as economic and must have appealed to the French ministers’ principle that through economic collaboration political tensions and conflict could be reduced. He proposed that [the Third Reich] participate in a system of international security, provided that it was not based on the Treaty of Versailles, and in a disarmament agreement in return for French economic cooperation and the reconstitution of a German colonial domain.

In his meeting with Schacht on August 28, Blum replied that it would be possible to open conversations along these lines from the French government’s point of view.²⁸

[…]

Besides liberalizing the system of commercial payments, facilitating trade between [the Third Reich] and the French empire, and providing for the payment of German debts to France, the commercial accords of July 10, 1937, adopted Schacht’s proposal for exchanging French iron for German coke. In fact, before the definitive accord, the director of commercial accords in the ministry of commerce, Hervé Alphand, arrived at a temporary arrangement with [Fascist] officials at the end of February 1937.

Alphand agreed, with the approval of the ministry of public works, to an increase in the monthly exports of French iron ore to [the Third Reich] from 515,000 tons in January 1937 to 620,000 tons for March and April in return for the maintenance by [the Third Reich] of its monthly coke shipments at their January 1937 level of 271,000 tons.

The SICAP handled these exchanges of coke and iron, which [Fascist] officials insisted on treating in pounds sterling. The volume of exchanges between March and June was such that the SICAP had accumulated over 800,000 pounds from them by July 8, 1937.

A confidential protocol to the commercial accord of July 10, 1937, fixed the level of French iron ore exports to [the Third Reich] at 601,000 tons per month in exchange for 275,000 tons of monthly German coke exports to France. This level of French iron ore exports to [the Third Reich], over 7.2 million tons per year, represented an increase of one million tons over the level of French iron ore exports to [the Third Reich] for 1935.

The new level of German coke exports to France represented almost the entirety of France’s needs in coke. Thus, the French government tightened the link between French and German heavy industry, to the detriment of Belgium, Great Britain, Czechoslovakia, and the USSR, each of which had coke to offer for iron at the time of a world iron shortage.⁵⁰

[…]

For the most part, the accords of July 10, 1937, yielded happy results for trade between France and [the Third Reich]. The monthly value of French exports to [the Third Reich] increased dramatically from 8 million marks in 1936 to 15 million marks in the last months of 1937, while that of [Reich] exports to France rose from 22 to 26 million marks. For 1938 the value of French exports to [the Third Reich] rose another 435 million francs over 1937 to 1.9 billion francs—almost triple the level of 1936—while [Reich] exports to France fell slightly. The trade balance, then, became less detrimental to France, and what was left of it paid off German debts owed to France. Moreover, the backlog of commercial payments owed to France disappeared by the beginning of 1939.⁶¹

(Emphasis added. Click here for more.)

Why would the members of the Paris Chamber of Commerce have found the idea of economic collaboration or even a political settlement with [the Third Reich] attractive? A primary reason was their admiration for [Fascist] corporatist labor policy.

[…]

This romanticized vision of the harmonious integration of political and economic power and of labor and capital [under Fascism] that predominated in the Paris chamber contrasted starkly with the French Republic, where [social democrats] might head governments that rewarded workers for strikes. This romanticization probably tells more about how these business leaders hoped France would look than about how [the Third Reich] did look.

In the lively and lengthy discussions in the chamber on October 19 and December 21, 1938, which touched on the desirability of trade and of a political accord with [the Third Reich] and on the merits and weaknesses of [German Fascism], no one mentioned the persecution of Jews or the restriction of political and civil liberties in [the Third Reich].

The objections of the dissidents in the chamber to economic collaboration with [the Third Reich] were practical and nationalistic. It was not that there was anything wrong with trading raw materials for war industries with a power bent on racial persecution and international aggression, but that [the Third Reich] and France might soon be at war. The position of the majority, however, was also practical: it was better that France take a position of junior partner than try to play top competitor to [Fascist] might.

Needless to say, France’s capitalists were alive and well throughout this era, and continued exerting a powerful influence on politics:

Although business leaders were not solely responsible for the accords, it is significant that the government under the Popular Front, which had pledged to reduce the influence of business on government, allowed business organizations access to trade policy as previous governments had. It allowed the Paris Chamber of Commerce to continue its crucial rôle in the formulation and implementation of trade policy; it allowed the SICAP to continue its monopoly over the handling of coal imports and to exercise decisive influence over the approval of specific barter operations between [the Third Reich] and the French empire; and it allowed the Association Nationale des Porteurs Français des Valeurs Mobilières to negotiate the implementation of the transfer accord with [the Third Reich], despite this organization’s resistance to the government’s directions.

So much for the Popular Front’s ‘socialism’.