The French Revolution, which started in 1789, had a variety of different causes. The social structures of France along with the changing demographics are one of these causes. Lack of power to act by the king along with new “Enlightened” ideas were also causes of the French Revolution. Alone, these causes would not have led to revolution. The underlying cause of this revolution was the financial system and debts the French government held to. In the end the French government had too many problems with its financial system to continue to follow it. This is shown by looking at how debts were incurred, why the current system couldn’t pay them and why the system couldn’t make changes so they could pay the debt.
First, the vast majority of the debts held by the French were from wars. The Seven Years war which started in 1756 took place in both Europe and North America. It had the French fighting the English for naval and commercial superiority. The French lost this war. As a result, the French lost their North American colonies which were a good source of revenue for the country. This war also decimated the French army and navy. The French government responded by spending more money and taking on more debt to quickly rebuild the army and navy. The French were also involved in the American Revolution. They pledged a large land and naval force to the American cause. All together this war cost the French 1,066 million livres and resulted in the French main fleet being sunk. On top of that, all the money spent was from new loans taken out by the crown at high interest rates. For this, the French only received the two colonies of Tobago and Senegal.
The cost of court expenses and of interest on loans also played a role in incurring France’s enormous debt. The greatest court expense was building the Palace of Versailles some 100 years before in 1682. The Palace required a large amount of money for it to be kept up to royal standards. The king hosted a large court at Versailles too which required food and to be waited upon. These costs continued to add to the debt while the people did not receive much of anything from this court. In addition to the cost of wars and the court, the cost of paying interest on loans had started to become very significant. By 1753, interest payments totaled to about 85 million livres a year. That was equivalent to 20% of the annual budget. By the end of the seven years’ war, interest payments were up to 160 million livres, this is nearly half of the annual budget for the country. At this point, it is clear that France’s debts are putting a huge burden on its economy that will be hard to overcome.
Now why the current system couldn’t handle the debts will be examined. At this time, French society was broken into three estates. The first was the clergy, the second the nobles and the third the commoners. Under France’s financial system, the first two estates were taxed little to none. This caused great financial disparity because the first two estates already owned much of the land and money in the country. Also, Frances government started to sell noble offices to raise money. Although it was successful in raising money, the newly made nobles were now tax exempt, so France was shrinking its tax base by selling nobility. Almost the entire tax burden fell upon the third estate, which had the fewest means to pay these taxes. These taxes included the tithe, a 10% of production tax paid to the church, and the taille, a land tax on all commoners. On top of these annual taxes, peasants also had to pay a salt tax and other excise taxes. Local lords also required peasants to pay seigniorial dues, either in money, labor or crops. This system of taxation took essentially all that it could possibly could from the farmers of the third estate. Jacques Necker argued that the country as a whole could not be taxed anymore; the only thing that could change is making fewer exemptions for...