The Birth of Modern Europe D-Band

Mr. Meyers

Dan Marks

2/27/04

Pre-Modern Paris: Economy

         Paris is the grandest city in the world with its wide boulevards and ornate buildings. Most of these magnificent monuments are relics of the Bourbon line of the 17 th and 18 th Centuries. How did this city become so stunning? How were these colossal structures paid for? The answer is: the monuments and palaces that the Bourbon family constructed to glorify themselves left France with an incredible deficit. In an attempt to pay for these expensive works, the king taxed the population, especially on imports because it was thought that having more exports than imports would help alleviate some of the burden of the expensive monuments . The king could impose these taxes by his own fiat without the permission of the aristocracy. These taxes and policies had many consequences that pushed France further into debt. This is a perfect example of government determining the policies of the economy. Government influence on the pre modern French economy is markedly visible because of the dramatic oscillations in government rule that occurred during this period from feudalism to absolute monarchy to a constitutional monarchy. This political upheaval caused the French economy to have a mercurial nature, changing from agriculture to mercantilism to laissez-faire capitalism, which distinguished it from the other major European cities .

From the Middle Ages until the Bourbon monarchy, the French economy was agricultural, and based on a feudal system, with power centralized in the feudal lords. Under a feudal system, large domains of land, owned by a single lord, are divided into fiefs granted to vassals. This system worked and lasted so long in France because ninety percent of the land is fertile. In 1328-1337, there was a power struggle for the throne of France, between Philip VI, and Edward III of England, which resulted in the Hundred Years War. England gained possession of much of France in this period, with the help of Burgundy. However, in 1435, an alliance made between Burgundy and France at the Treaty of Arras, helped the French retake power. In 1453, with the end of the Hundred Years War, Calais remained the only English possession in France. France was unified under the rule of Louis XI. Louis XI, of the Valois monarchy, destroyed the power of the feudal lords, thus consolidating rule in the monarchy. The French economy changed its base from agriculture to mercantilism. Mercantilism is based on the idea that a nation's wealth and power will grow when it increases exports and, in return, receives precious metals. Subsequently, the Valois monarchy was defeated during the bloody civil wars sparked by the Reformation. Out of this fray came Henry IV and the beginning of the Bourbon monarchy, and change in France's economy.

The Bourbon reign, with its consolidation of power in the monarch, allowed for the creation and enforcement of strict laws, regulations, and taxes. As a result, control of the economy rested to a large degree in the hands of the monarch. Henry IV, who was forced to recant his faith in Protestantism, issued the Edict of Nantes in 1598, which gave rights to the religious group the Huguenots, the French Protestants. The edict was enforced by Henry IV and established peace between the Catholics and Protestants in France. Without the disruptions caused by the enmity between Catholics and Protestants, the economy was able to flourish. However, when Henry was assassinated by a Catholic fanatic in 1610, the rights of the Huguenots once again began to suffer.

During the reign of Louis XIII (1610-1643), the French power was consolidated in the monarchy. Louis entered France into the Thirty Years War in 1635. While France was led to victory in that war, domestically, the Huguenots had much of their power destroyed by Cardinal Richelieu. While Cardinal Mazarin defeated the nobles and parliament, during the Fronde of 1648-1653, who wanted to limit the authority of the monarchy. The two Cardinals allowed the future kings to have even more power, power to control the economy in its entirety, which is what Louis XIV did.

  Louis XIV, who reigned from 1643-1715, instituted many economic policies under the advisory of Jean Baptiste Colbert. Colbert had a policy of mercantilist absolutism. Mercantilist absolutism could be seen as a manifestation of the power that Louis XIV possessed. Mercantilist absolutism was a French campaign led by Colbert to have French merchants control the entire flow of trade in Europe. This desire by the French to dominate European trade frightened other nations and led to conflicts between France and its neighbors. These wars which marked the reign of Louis XIV cost the French economy dearly. In addition, the building of Versailles used ten percent of France's annual income. Taxes were raised in 1667 and 1672 and higher import tariffs were imposed to stop the flow of Dutch and English products into France. After Colbert's death in 1683, Louis revoked the Edict of Nantes and thus stripped the Huguenots of all their rights. The revocation of the Edict of Nantes led to a mass exodus from France by Huguenot merchants and workers. These events along with random taxing led to a ballooning French deficit.

During Louis XV's reign (1715-1774), groups seeking economic reform began to develop as a result of continued increases in taxes and tariffs which led to restricted trade and stifled mercantilism. The previously powerless French parliament began to gain some authority. Independent entrepreneurs and businessmen became a large part of the economy, and formed a middle class, the Bourgeoisie. The physiocrats, one group of reformists, were economists who favored a single tax on land only and the concept of laissez-faire government which would allow the economic process to run its natural course. Unfortunately, Louis XV not only ignored the physiocrats but plunged France into the Seven Years War which worsened France's debt and weakened the economy even further.

  The dissenting voices of the physiocrats were finally heard by Louis XVI. Louis XVI tried to reform the economy under Turgot, who proposed a taxation of all landowners. Turgot's reforms were considered too radical and he was dismissed in 1776. Louis XVI, in his ongoing rivalry against England, decided to retaliate by supporting the American Revolution. Despite the ultimate success of the revolution, it proved expensive for France. The weakened state of the French economy caused an uprising by the Bourgeoisie, which turned into the bloody French Revolution.

The post- Revolutionary economy is characterized by its use of the laissez-faire capitalist economic policy and other economic reforms, which were able to be instated because of the rise of the bourgeoisie to power, freeing the economy of many of the restrictions created under Bourbon rule. After the initial revolution and the overthrow of the monarchy, Robespierre took power in 1793 and began the Reign of Terror, a series of executions of alleged enemies of France. Robespierre's reign came to an end in 1794 with his execution and the Directory took power. The upheaval marked by this period kept the economy unchanged.  

In 1804 Napoleon named himself emperor . Under Napoleon, the aristocracy lost some of its power, and the peasants were given land tenure. This cleared the way for the Bourgeoisie to regain power. Napoleon's reign came to an end in 1815.   At the Congress of Vienna (1814-1815), Louis XVIII was recognized as the king of France. Louis XVIII and, to a greater extent, his successor, Charles X, tried to restore an absolute monarchy. When Charles X was overthrown in the July Revolution of 1830, the Bourgeoisie were put back into power. Louis Philippe was named king, and his administration centered on the upper-Bourgeoisie. The power of the aristocracy was weakened during the reign of Napoleon. During Louis Philippe's reign, the rights of the urban workers decreased with the revision of the charter of 1814. As a result, the Bourgeoisie ascended to power, and their belief in laissez-faire economy became the dominant policy in France. Louis Philippe's once liberal reign became more absolutist and showed once again the difficulty in survival of an alternate form of government.

         In essence, the Paris economy is interesting and different from London and Vienna because of its context within a country embattled with constant political upheaval. The relationship between government and economy is thus highlighted as seen in the various rulers and their subsequent economic policies. It is interesting to note that through all these political upheavals and different economic policies, when a well intentioned ruler took control, he could be corrupted because of this intertwining of government and economy.

BIBLIOGRAPHY

Aldcroft, Derek, and Sutcliffe, Anthony, (Eds.). Europe in the International Economy 1500 to 2000 .Northampton: Edward Elgar Publishing, Inc., 1999.

Hansen, E.D. European Economic History . Copenhagen: Copenhagen Business School
Press, 2001.

Musgrave, Peter. The Early Modern European Economy . New York: St. Martin's
Press, 1999.

Nef, John U. Industry and Government in France and England, 1540-1640 .
Philadelphia: The American Philosophical Society, 1940.

Rostow, W.W . The World Economy: History & Prospect . Austin: University of Texas Press, 1978.

Scoville, Warren C. The Persecution of the Huguenots and French Economic Development 1680 -1720 . Berkeley: University of California Press, 1960.