Economic problems and royal finance Flashcards
the nature of the French economy (strengths and weaknesses) royal finances, including taxation the impact of war (7 Years’ War and the AWI) the attempt to improve royal finances under Turgot the attempt to improve royal finances under Necker the attempt to improve royal finances under Calonne
What were the strengths of the French economy?
-Large population of 27 million (3x GB) would mean a large workforce
- Between 1715 and 1771, commerce had increased x8 which made France 2nd to GB
-industrial production doubled between 1715-1771
-Therefore the early to mid 18th Century was a time of economic prosperity
-Could trade with overseas territories such as West Indies suagr Islands: Saint-Domingue and Haiti
What were the weaknesses of the French economy?
-french methods were still backwards due to seigneurial dues and there was still a reliance on outdated methods
-yield of French farms was low which was exacerbated by the period of bad harvests due to adverse weather conditions from 1785-1789
-This led to a trade slump which led to unemployment and the raising of bread prices which was the economic index
-French economy was too reliant on agriculture and therefore economy would crumble in moments of hardship
-France faced significant industrial opposition from Britain- in 1789 France had 8 cotton mills to Britain’s 200
What adverse weather condition occurred in July 1788 which led to the worst harvest in 40 years?
-Hailstorm which meant peasants incomes plummeted and food prices rose
What percentage of wages would go on bread by 1788-1789?
-88%
How much did the price of bread increase (%) between August 1788 and March 1789?
50%
What are Direct taxes and what were the examples of direct taxes in the Ancien regime?
-Direct taxes are taxes placed on a persons income
Examples of direct taxes are:
-Taille (property tax)
-Capitation (poll tax)
-Vingtieme (income tax)
Who had to pay the taille and who was excluded?
-The taille was paid by the 3rd estate
-The 1st and 2nd estate were not liable to pay the taille
a) What percentage of state revenue was generated from taxation on land directly and b)what is the significance of this?
a) 16% of state revenue was brought in by taxes on land
b) Therefore taxation often hit those who were not landowners- poorer members of the third estate
Who was excluded from paying the Capitation?
-The clergy paid don gratuit instead of paying the Capitation
-The members of the 2nd estate also paid varying amounts of tax through the capitation due to differences in status and position
How a) many different tax classes for the capitation and b) what is the significance of this
a) 22 different tax classes
b) Significance = illustrates the divisions in those who paid tax which shows it is not an equal and fair system
What is the don Gratuit?
-It is a self-calculated lump sum of money that the church decides to pay to the state to avoid taxation every 5 years
-it amounts to approximately 2% of church revenue
What percentage of earnings did the vingtieme tax?
-5% of earnings and was not proportional
Who was excluded from paying the vingtieme?
-Clergy won exemption
-Pays d’etats achieved reduced rates
-parlements resisted new assessments of income
What are indirect taxes and what is an example?
-Taxes placed on goods and services
-One example of an indirect tax is the gabelle (salt tax)
Who collected indirect taxes?
-Farmers general who paid the crown an annual fee and gained their income through taking some of the taxed amounts
-the general tax farm were the 2nd largest employer in France
What percentage of state revenue was generated from indirect taxes collected by tax farmers
-55% of state income
By the end of 1764, a) how much debt was France in and b) why?
a)2.3 billion livres
b) Due to the losses in the war of Austrian succession (1740-48) and 7 years war (1756-63)
How much debt was France in after the AWI?
-3.3 billion livres
Why did the AWI contribute so much to the debt in France?
-France was offered little reward in the Treaty of Paris 1783
-Sent aid and troops to America to fight
What was the balance of payments in 1786?
-State revenue = 476m livres
-State expenditure = 633m livres
How much of state expenditure was used on paying off the debts in a) 1780 and b) 1788?
a) 1780 = 43%
b)1788 = 50.5&
Did Marie Antoinette deserve the term “Madame Deficit”?
YES:
- 1783: extremely out of touch with French Pop. had a little Hamlet built where she could ‘play’ at being a farmer.
- 1776: spent large sums on a diamond necklace (600,000 livres) and earrings (400,000 livres) during economic hardship which made her unpopular with French masses.
- was naive
-Historians argue she prevented the emergence of a new constitutional order based on hope and progress in 1790-1791 (However Louis was removed to Paris in 1789 so could no longer fix any problems)
NO:
-She was hated due to Austria’s win against France in the Austrian war of succession (1740-1748) which earned her the title “Austrian Bitch”
-She was victim to rumors of her having sex orgies and scandals with were not true
-Rumors stirred that she said “let them eat cake” which was not true and therefore not her fault
-She was a scapegoat and was not the actual problem
Why was Marie Antoinette(MA) nicknamed “Madame Deficit”
-To illicit the notion of MA lavish and uncontrollable spending habits especially during a period of economic hardship in France
What is the role of “Controller-General” in France?
-The person who handles finances in France
