Read Online The Rise and Fall of the Great Powers by Paul Kennedy - Free Book Online

cost the French government at least a billion livres, virtually all of which was paid by floating loans at rates of interest at least double that available to the British government. In both countries, servicing the debt consumed half the state’s annual expenditures, but after 1783 the British immediately embarked upon a series of measures (the Sinking Fund, a consolidated revenue fund, improved public accounts) in order to stabilize that total and strengthen its credit—the greatest, perhaps, of the younger Pitt’s achievements. On the French side, by contrast, large new loans were floated each year, since “normal” revenues could never match even peacetime expenditures; and with yearly deficits growing, the government’s credit weakened still further.
    The startling statistical consequence was that by the late 1780s France’s national debt may have been almost the same as Britain’s—around £215 million—but the interest payments each year were nearly double, at £14 million. Still worse, the efforts of succeeding finance ministers to raise fresh taxes met with stiffening public resistance. It was, after all, Calonne’s proposed tax reforms, leading to the Assembly of Notables, the moves against the
parlements
, the suspension of payments by the treasury, and then (for the first since 1614) the calling of the States General in 1789 which triggered off the final collapse of the
ancien régime
in France. 20 The link between national bankruptcy and revolution was all too clear. In the desperate circumstances which followed, the government issued ever more notes (to the value of 100million livres in 1789, and 200 million in 1790), a device replaced by the Constituent Assembly’s own expedient of seizing church lands and issuing paper money on their estimated worth. All this led to further inflation, which the 1792 decision for war only exacerbated. And while it is true that later administrative reforms within the treasury itself and the revolutionary regime’s determination to know the true state of affairs steadily produced a unified, bureaucratic, revenue-collecting structure akin to those existing in Britain and elsewhere, the internal convulsions and external overextension that were to last until 1815 caused the French economy to fall even further behind that of its greatest rival.
    This problem of raising revenue to pay for current—and previous—wars preoccupied
all
regimes and their statesmen. Even in peacetime, the upkeep of the armed services consumed 40 or 50 percent of a country’s expenditures; in wartime, it could rise to 80 or even 90 percent of the far larger whole! Whatever their internal constitutions, therefore, autocratic empires, limited monarchies, and bourgeois republics throughout Europe faced the same difficulty. After each bout of fighting (and especially after 1714 and 1763), most countries desperately needed to draw breath, to recover from their economic exhaustion, and to grapple with the internal discontents which war and higher taxation had all too often provoked; but the competitive, egoistic nature of the European states system meant that
prolonged
peace was unusual and that within another few years preparations were being made for further campaigning. Yet if the financial burdens could hardly be carried by the French, Dutch, and British, the three richest peoples of Europe, how could they be borne by far poorer states?
    The simple answer to this question was that they couldn’t. Even Frederick the Great’s Prussia, which drew much of its revenues from the extensive, well-husbanded royal domains and monopolies, could not meet the vast demands of the war of the Austrian Succession and Seven Years War without recourse to three “extraordinary” sources of income: profits from debasement of the coinage; plunder from neighboring states such as Saxony and Mecklenburg; and, after 1757, considerable subsidies from its richer ally, Britain. For the less efficient and more