Economic Causes of the French Revolution

Economic Causes of the French Revolution:

The economic condition of France was very miserable. The extravagance of the ruling classes and the erratic taxation system were fully accountable for the economic crisis. Actually, the financial policy of the government was wrong. Prof. Hazen states, “Instead of monitoring the expenses in proportion to income, the government fixed the target of income in accordance with expenses.” The personal income of the king was not differentiated from the income of the state. Consequently, the king got an opportunity of spending money wilfully from the state treasury to meet his personal demands. There was no restriction on the grand, luxurious ways of life of the king. Expensive wars ruined the economic condition of the country. At the time of his death, Louis XIV advised his successor not to wage a war but Louis XV ignored his advice.

Louis XV worsened the economic condition of France by participating in Austria’s War of Succession and the Seven Years’ War. France took part against England in the Independence War of USA during the reign of Louis XV. Although France retaliated against its defeat by England, the economic condition of France sagged shockingly. Prior to the French Revolution, France sustained a loss of two million dollars every year which was compensated by borrowing money at exorbitant interest, and, half of the total national revenue was spent on paying interest on loans. In the end, traders began to shirk from lending money to the government.

The French taxation system was defective and disorganized. The practice of granting special rights to nobles exempted the richest class of society from taxes. The majority of the property of the society was shared by three lakh feudal lords and priests. Taxes were of two categories- direct and indirect. Feudal lords were exempted from paying taxes but they could impose taxes. Direct taxes comprised land tax, income tax, and property tax. The noblemen and the priests were exempted from certain direct taxes and rarely paid the other taxes. They used their influence to get an exemption from them. In fact, farmers and common men were burdened with many taxes. Indirect taxes were levied on certain commodities such as salt, wine, and tobacco. Tax on salt (Geibel) was most vexatious. A certain company was sanctioned monopoly over the business of salt and it was enjoined by law that every person above seven must purchase seven pounds of salt every year.

Salt was sold at exorbitant price by the company and anybody who did not purchase the fixed quantity of salt regularly was punished by the state. People who happened to be too poor to arrange their bread had to purchase salt. The purchase of salt was thoroughly investigated. It is estimated that 30000 people had to undergo imprisonment every year for violating the salt tax. Smugglers of salt were sentenced to death.

Common people particularly the farmers had to pay several taxes to feudal lords. A fixed amount had to be paid in case a farmer crossed the bridge of a landlord. The farmer had to pay to the Church one-tenth of his produce as a tithe. In addition to the payment of taxes, farmers were compelled to give them gifts from time to time. Farmers had to pay 80% of their produce by way of taxes.

The procedure for collecting taxes was also erroneous. As a rule, taxes were collected by contractors who recovered taxes at their will and misappropriated a part of the state revenue. The state got 60-65% of the total income recovered as taxes. Further, the system of tax recovery was expensive. 14% of the total income was incurred on tax recovery. The taxation system was also defective in the sense that the rate of taxes differed from one province to the other. The disparity in taxes was so much that the price of an article at one place was thirty times more than what it was at another place. Some provinces were exempted from taxes but other provinces had to compensate for it.

The economic crisis of the country could be averted by promoting trade and commerce but the commercial policy of the state was so defective and wayward that the development of business and production was not possible. Production of goods was still controlled by guilds which had come down since medieval times. Every province charged octroi on various produce that crossed its border. It increased their price.

In this way, the economic system of France was very expensive, disorderly, and unjust before the beginning of the Revolution. The proverb that “a feudal baron struggles, the priest worships and the common man pays taxes” became a truth. The common man was crushed under the burden of various taxes. The financial condition of the state sank into bankruptcy. The rulers’ lack of foresight pushed the French economy to the brink where it had become irredeemable. Financial causes triggered off the French Revolution. “A carrier loaded with thoughts was set off by economic crises.”