I asked the same question to a lecturer of mine in college. She was very nice and suggested a few books for me to read... I did not have time to be reading extra material in college. But she was the type who will point you in the right direction but not spoon feed her students. Admirable but in this context annoying as hell.
I love the Revolution and have read a bit for my own pleasure. Every history that I read of the Revolution centres on the national debt as being the greatest element in causing it. This begs the question why did Louis XVI not simply renege on the loans?
In the same vein why could he not push forward with the various tax reforms advocated by Turgot and Necker? I understand that the nobility resented paying tax on account of tradition etc etc But was there really a risk of open rebellion if the king had used a lit de justice to force the reforms through the parlements?
Why Louis why?
Thanks in advance guys.
Effectively, Louis XVI couldn't have done that because of the nature of both the Crown, economics, and state power.
First and foremost, the loans that were taken by Louis the XIV, XV, and XVI were taken out by wealthy individuals, both noble and non noble. As a result, Louis XVI can't say "I'm not going to pay" to someone within his own Kingdom, and worse if it is a noble, who's power was taken away by Louis XIV in order to have control over France.
The French state held power from a combination of intrigue and fealty. Louis XIV was scarred by the Fronde, a semi-civil war between nobles and the French crown. As a result, he acted to pull the nobility towards Versailles in order to have them play against each other for power. It was a rickety foundation that only Louis XIV could maintain. Louis XV could maintain it but not at the same level, and Louis XVI was never an absolutist king. As a result, the nobility would want anything to help peel power away from the State and possibly push for more rights, which would result from Louis rejecting and negging on his loans.
Second, what would happen to French Power if Louis declared bankruptcy? It would make the absolute king look weak, weaker than he already was. This is a dangerous thing to do for a king who's kingdom is already on the edge. Possibly it might even ruin French credit and turn the economy worse.
Third, who owes the loans? The French Crown (Louis) or the state (France as a whole)? Louis was an absolute monarch who held near absolute power. This is more of a problem of dynastic politics rather than economics. The King and the State are one and the same and this complicates the issue.
So, could France declare bankruptcy? I'd dare say no.
Now, as for why reforms didn't happen, they didn't happen because they were unpopular. The reason for the assembly of the Estates General (which is the closest thing France had to a legislative body) was to find a way to enact the reforms. There is no parliament to push reform through since there isn't a proper legislative body. However, it is both risky for Louis to have pushed reforms but it was also due to his indecisive nature, he didn't know what to do since he didn't know how to do it while keeping the peace.