What changed in the French economy between 1789 and 1792 that brought it from revolt-inciting misery to a position where it could sustain near constant warfare for the following two decades?

by sdc21

I have the general impression that two important factors in the onset of the Revolution were a massive crown debt incurred during the American Revolution and other wars along with hyperinflation, particularly in food prices. How was it that the chaos of the Revolution didn't cause it to collapse under the burden of war? Also, what happened to that debt when the regime fell? Did the debt belong to the French Crown or the French government?

govt_surveillance

The liquidation of Church property and implementation of more strict controls over Church financial practices certainly helped rebuild the French treasury. There was also a significant overhaul involved in aristocratic tax practices. A significant portion of Napoleon's campaigns were also funded by arguably "pillaging" conquered territory through strict economic controls and land grants for military officers.

This is a very brief explanation, Doyle's The Oxford History of the French Revolution goes into significant detail over economic reforms if you'd like to read more. It's a pretty dense read though. You can also get some good information from Napoleon and Europe by Dwyer.

jebei

One thing to keep in mind is that the French debt wasn't large compared to other countries. The prime example is the British who in 1788 had almost three times as much debt as a % of GDP as France. The big difference was the British paid about half as much in interest for their debt and taxed their people more to pay for the debt (though in a much more equitable fashion).

The French economy was the largest in Europe before the revolution but revenue came mostly from the Third Estate. In simple terms the crown couldn't tax the church and the nobility had to agree to be taxed. After the revolution this was no longer an issue.

After the revolution another source of revenue was Church property who owned about 6% of French land. The state sold off church land to retire debt. They also sold 'bonds' backed by future sales of these lands.

Making the First and Second Estates take a bigger role in state revenue didn't end the financial issues for France. The leaders tried various methods to increase revenue throughout the 1790s but continual war made resolving the issue impossible. In 1797, the Directory defaulted on France's debt, unilaterally stating that going forward they would pay 1/3 of the value to its existing debt holders. As you can imagine the credit markets were reluctant to loan France more money after this so the country instituted a policy of forced loans when needed. Napoleon partially resolved the issue when he created the Banque de France after he took power. Despite his reforms Napoleon's wars left the country deep in debt by Waterloo.

I got most of my information above from the book A Free Nation Deep in Debt which has an excellent section on French debt.

If you are interested about the French Revolution I highly recommend listening to the Revolutions podcast by Mike Duncan. It's a great listen and goes into great detail about the period you listed including the finances.

https://itunes.apple.com/us/podcast/revolutions/id703889772?mt=2