The French Revolution is best known for the Regin of Terror and many wars, but it had profound economic consequences. The Revolutionaries abolished many of the constraints on the economy that had been erected over time by the Ancien Régime. These restions began with the medieval guilds and continued by the decrees issued by sucessive momarchs pursuing mercantilist policies. Much of this was swept away by the Revolution. The guild system was abolished as a worthless remnant of medieval feudalism. The Revolutionaries also did away with the inefficient and harmful system of tax farming which meant that private individuals would collect taxes for of course a substantial fee, increasing the buden on productive enterprises. The Revolutionaries seized the revenue stram for hospitals, poor relief, and education, but did not continue funding so most of the country's charitable and educational systems were disrupted. The economy plummeted with the disruptions in public life (1790-96).
Both industrial and agricultural output plummted as well as foreign trade. Prices as a result of inflation soared. The Revolutionaries from an early point decided not to repudiate the debts of the Ancien Régime. Instead their approcah was to print vast amounts of paper currency -- the Aassignat. This was backed by the lands sized from the arististocracy which was being guillotined. The result was to fuel inflation. The Revolutiinary Government resonded by imposing price controls. The police were ordered to arrest speculators merchants selling in black market. People resisted paying taxes. The government deficit spiraled out of control. It was 10 percent of gross domestic product (GDP) (1789), but raeched 64 percent (1793). After the poor harvest of 1794 and the removal of price controls, inflation becgan to reach Zimbabewan/Venezuelan 3,500 percent (1795). The Government cancelled the assignats (1796), but the taxes which repaced it caused furher inflation. The rampid inflation was finally ended by Napoleon with the creation of a new cirrency--the Franc (1803). The inflation had mamy adverse consequences, but it did have the impact of rendering the debts of the Ancien Régime meaningless. Agriculture more than any other sector was transformed by the Revolution--primarily because it trmasformed ownership of the land. Many of the most important nobels owning vast estates lost their heads and estates. The Revolutionary Government abolished tithes owed to the Churc which was amajor landoner. They also abolished the feudal dues owed to the great nobel landlords. The result at first hurt the tenant farmers who paid both higher rents and higher taxes, but left the tennants in possession of the land they would eventually own. The Revolutionary Government nationalized all church lands as well as lands belonging to royalist enemies who went into exile--saving their heads if not their land. The initial plan was to use the income from the seized lands to finance the government by through assignats. The breakup of the large estates owned by the Church and the nobility and worked by hired hands and tenant farmers tansformed rural France where most of the population lived. Rural France became a land of small independent farmers. There was no place like it except America. The rural proletariat was transformed in to small commercial farmer. This mean that the revolutinary minded rural peantry was transforned into the most conservativce sector of society -- the rural and now land-owning peasantry. One important Engish expert on French historian writes succintly that the Revolution 'bequeathed to the nation a ruling class of landowners.' [Cobban] Despite the political instability and infation, small scale entrepreneurship flourished in the cities as all the restrictive monopolies, privileges, barriers, rules, taxes and guilds of the Ancien Régime were removed. The Royal Navy blockade, however, damaged overseas trade. And the Haitian Revolution weakened French finances. The income from Caribbean sugar plantations had been enormous. The Revolution did not, however,
fundamentally change the country's French business system. It basically froze French industry in place. The French businesses sector was primarily small shop owners or operators of local mulls with family help and a small number of wage emolotees. Large industrail concerns were less common than in France than in other industrializing countries. This would have little impact on the Wars of tf the French Revolution and Napoleon, but would significantly affect France's place in Europe in the 19th century.
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