A revised version of this paper was presented to the French, the State and Capitalism, and the Parties, Elections, and Representation Study Groups at the Center for European Studies on December 17, 1987. In this paper, Professor Cameron examines and explains the ambiguous economic record of French socialism under the 1981-1986 Mitterrand government. Why did the first socialist government of the Fifth Republic fail to live up to its ambitious promise and the high expectations of its supporters? Cameron traces the detailed trajectory of policy from 1981 to argue that the organizational history of the Parti Socialiste accounts for the distinctiveness of the government's first year in office, and a particular set of exchange rate policies explain its subsequent tum towards conservatism. This is a highly insightful and informative account of the performance of French socialism that should interest all who are concerned with the future of social democracy in Europe.