France emerged as a winner from the American War of Independence ... initially. The French monarchy however turned out to be an even greater loser than its British rivals.
The French state had accumulated major war debt from its intervention in the conflict, which turned into a world war. Perhaps half of the state’s revenue was set aside to service that debt – a sum perhaps equal to Britain’s, but less deftly managed, leading to higher rates of debt repayment. Financial gains from the war had been limited and failed to include any lucrative colonies lost during the Seven Years War, but damages (not least the destroyed French fleet) also needed to be made good. The war had been financed by loans rather than taxation, which merely deferred the problem of payment to a later date. Large parts of society – predominantly the nobility and clergy - were exempt from key taxes, and clearly this skewed revenue and was deeply unpopular with the middle and lower classes. Attempts to sort this out were blocked in the 1780s.
That left the king no other option but to call the full Estates General in 1789, the first time this had been done in over a century and a half. The plebs got uppity, the stakes escalated, and the rest is history. Before anyone knew what was happening, the Black Fingernail was helping the Nobs escape to England (if we are to believe our Carry Ons).
Lesson from La Bastille: Countries that take debt management seriously, rather than try to hide it as a political issue, fare better in the long run.
From "A fate Worse than Debt" by Lee Rotherham
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