ECONOMIC CAUSES OF THE FRENCH REVOLUTION
Although French Revolution was an extremely complex period in French history, we will focus on the economic effects that the revolutions had.
The tax system was still a problem, and the efforts of Louis XV to raise taxes have been thwarted. In addition, the government was forced to finance all of its enormous expenditure during the American war in 1776.
FYI: By 1780s, half of France’s budget went to interest payments on the debt. Less than one-fifth of the entire national budget was available for the productive functions of the state.
“One way out would be to declare partial bankruptcy. Yet the French debt was held by an army of aristocratic creditors, and the French monarchy was far too weak for such drastic and unpopular action.”
The king or the ministers could not print more money and cover deficits through inflation. France had no central bank, paper currency or means of creating credit. The government had no alternative but to increase taxes, and since France’s tax system was unfair, the population grew steadily angrier day by day.
In 1788 harvest was extremely poor.
“Grain was the basis of the diet of ordinary people. I warned you that there wouldn’t be enough food to feed the population of the country.”
The poor could scarcely afford bread, even with government subsidies.
“Harvest failure and high bread prices unleashed a classic economic depression of the pre-industrial age.”
NAPOLEONIC ERA: THE HEIGHT OF THE EMPIRE
In 1799, a young general Napoleon Bonaparte seized power. His rule took France to its new heights in the field of economics and prosperity.
Figure 3. This gold coin was used during the Napoleonic era.
One of the most important contributions of Napoleon was he and leading bankers of Paris establishing a privately owned Bank of France, which loyally served the interests of both the state and the financial oligarchy. Napoleon’s defense of the economic status quo also appealed to the peasants, who had bought some of the lands confiscated from the church and nobility.
Napoleon was a great military man. He tried to restrict British trade, and ended up going to war with Great Britain. However, his fleet was annihilated by Lord Nelson at the Battle of Trafalgar on October 21, 1805.
Figure 4. Nelson’s victory at sea marked the end of major wars for a century. Britain was the dominant power, and the defeat of Napoleon removed French aspirations to rule the world.
In the 1810, Napoleon’s Grand Empire was at its height.
Although Napoleon was unable to invade Britain, he decreed an economic blockade against British goods.
“This, so called, ‘Continental System’, made to force the nation of shopkeepers to its knees, was a failure. France suffered more from Britain’s counter-blockade, which created hard time for French artisans and middle classes.”
While Britain’s production was booming due to the industrial revolution, France was lagging behind. There was no burst in French mechanization and no acceleration in the growth of overall industrial output that may accurately be called revolutionary. The French Revolution disrupted trade, created runaway inflation, and fostered social anxiety. The War severely handicapped continental efforts to use new British technology. All in all, the French Revolution and Napoleonic era meant that France and the rest of Europe was further behind Britain in 1815 than in 1789 economically and industrially.
Figure 5. Although the industrial expansion was slowed, France still progressed ahead. In 1889, an Eiffel Tower, constructed for the Universal Exhibition, was and still remains the symbol for the French industrial progress.
France managed to be one of the earliest countries to progress from feudalism into the ear of the nation state. Its monarchs surrounded themselves with capable ministers, and French armies were among the most innovative and professional of their day.
During the reign of Louis XIV, France became the dominant power in Europe, and, though its economic power and prestige declined over the years due to a series of wars, incapable rulers, and economy mismanagement, the French economy is still very strong.
Today, France is the fourth-largest Western industrialized economy. It has substantial agricultural resources, a large industrial base and a highly skilled work force.
Figure 6. Although French franc was a strong currency on the world markets, Euro is supposed to me much stronger. Recently, France joined other European countries in adopting the euro as its currency.
France is also the second-largest trading nation in Western Europe.
Figure 7. Paris is still the booming center of commerce and developing technology to this day.
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