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Louis XIV revolutionized European government, economics, art, and military. For the first 19 years of Louis’ life, France was at war. When Louis left his minority behind and assumed the throne in 1661, He had already claimed victories over Spain and two Frondes. France shed feudalism with Louis. Louis continued to centralize even more power around himself, beginning with the French economy.
Years of war had severely strained the French. Louis’ keen sense of character made him realize personnel changes were needed. Louis’ current finance minister, Nicolas Fouquet had political ambitions. He had hoped, and even undertook plans, to succeed Mazarin’s high post. Fouquet’s arrogant plan doomed him. Louis was shamed when Fouquet had built an opulent mansion at Vaux-le-Vicomte, and invited Louis for entertainment. Louis felt poorer than Fouquet, which Louis was poorer at the time. Changes had to be made, because Louis, in his own pride, could not be poorer than one of his ministers. Embezzlement charges were fabricated to condemn Fouquet. French courts found Fouquet guilty, and sentenced him to exile. Louis lessened the sentence to life imprisonment, but the deed was done. No one could be greater than the King! Louis had already lined up Fouquet’s replacement, Jean-Baptiste Colbert.
As the new Comptroller General of Finances, Colbert created a wildly successful economy. He did continue much of Richelieu, Mazarin, and Fouquet’s taxation policies; however, Colbert’s mercantilism rapidly reduced French debt, while making the country immensely prosperous. After Henry IV solidified Protestant freedom with the Edict of Nantes, French Protestants established an extensive manufacturing system. Huguenots especially drove French industry to newer heights. Colbert encouraged newer trades, as well as invited foreigners to practice their crafts in France. Dutch, Swedish, Belgian, and Italian artisans flooded into France for new opportunities. Colbert was more than happy to accept immigrants, because those immigrants would create products within France. France could then boast of Dutch ships, Swedish iron, Belgian lace, etc…. But the key to this, the greatest of Colbert’s policies, was that he did not have to pay foreign tariffs. Instead, Colbert was competing with foreign trade by using foreign immigrants. Other nations would then pay France for Dutch ships created in France, instead of paying a higher price in the Netherlands for the same product. Tariffs were paid in gold (Adam Smith illustrated that banks only traded with gold. Silver was used for more common daily purchases). Gold was the key to Mercantilism. The more gold a nation had, the more wealthy and powerful – so the argument went. More nations buying from France, meant more gold for France. Fewer foreign imports meant that less gold left France. France was bound to become extravagantly rich, and it did.
Colbert’s domestic policy was outstanding, but he did not stop at the French borders. He oversaw the beginnings of French Colonialism. Colonialism was a vital aid to all mercantilist economies. Most mercantilist colonial programs were centered upon obtaining more precious metals. Spain, Portugal, and England notably used their early colonies as gold mines. The Dutch colonies, however, changed economic perception. The Netherlands did obtain precious metals from colonies; however, the creation of the VOC (East India Company – trust me, that’s what it stands for in Dutch) brought a flood of foreign gold into Dutch banks. This early stock market had a profound financial effect, as the Netherlands became the world’s banker. France tried its hand with stocks during the 18th century, which will be illustrated later. France, gleaning knowledge from the Dutch model, would begin to use its colonies less as gold mines per se, and more for natural resources. Fur trading especially dominated French colonial expeditions. Furs would come into France, which then established a monopoly of sorts. France marketed Fur as the style of the day. Because France had a monopoly, and other nations wanted fur, France traded that fur for…. Gold. Brilliant.
Though Colbert was a certain economic genius, he could not fund Louis’ ambitious desires. Louis wanted newer, grander palaces – Versailles for example. Louis wanted extravagant foods. Louis wanted, and did, to stimulate French arts. Above all Louis wanted more France, and he could only get more France through war. Colbert made France a gigantic wealth, but Louis spent all of it, and more. After Louis died in 1714, France was much worse economically than before Louis acceded to the throne, due in no part to Jean Baptiste Colbert. Louis’ single greatest contribution to French economic disaster was a religious decision, which will be discussed next.
armchaircapitalist 