In general academic sources, the origins of the French Revolution (1789-1799) are identified as

financial, intellectual, social and the governance of the ancient regime. However, the economic
or financial origins of the revolution are more efficient, abating others. The beginning of the end
of the ancient regime started on August 1786 when Controller-General of the finance, Calonne,
informed King Louis XVI that the royal finances needed immediate and radical reforms. Total
revenue of the fiscal year was 475 million livres while the annual deficit was 100m livres. 50% of
the total national income was allocated in the repayments of the existing loans.

A fact of consideration is that France in 1789 did not lack the resources to survive as a great
power among the European powers. In fact, the resources and the wealth of the ancient regime
was locked by the poor governance, social structure, corruption and the incapability of the
regime’s administrative units.

Louis XVI’s expansionist aims resulted in four major and highly costly wars with Spain, England
and Holland. These wars; War of Devolution (1667-1668), Duich War (1672-1678), War of
League of Augsburg (1688-1697) and the War of Spanish Succession (1701-1714) deprived
France of its great economic resources which were saved by the wise policies and ingenuity of
the Jean-Baptiste Colbert, Controller-General of finance from 1665-1683. According to
Desmaretz’s Compte Rendu, published after the death of Louis XIV, France was carrying a
national debt of 2 billion livres while the annual interest payments on this debt were 165 million
livres, more than government’s collection of taxes.

While Louis XIV was on his deathbed in 1715, he advised his successor Louis XV not to wage
more wars. But soon after his death, Frances’s power was being challenged by the three new
rising superpowers; Prussia, Russia and Great Britain. Britain was more bitter enemy and an
era of conflicts erupted between the two over the trade policies and the overseas colonies in
North America, the Caribbean and in the Southern India. French involvement in the War of
Austrian Succession (1740-1748) resulted in a French defeat with 2 million livres of addition in
the national debt. The Seven Years War (1756-1763) also ended with a humiliating French
defeat and the national debt was increased from 1.2 billion livres to 2.3 billion livres in 1763. In
1778, France decided to go to war with Britain during the American Revolutionary War (1775-
1783). At the end, France got nothing in territorial terms but only a satisfaction.

The royal finances were another problem. According to the Livre Rouge (Red Register),
published by French National Assembly in 1790, Louis XVI and Queen Marie Antionette spent
about 11423750 livres from the total government expenses of 227983716 livres. This
extravagance lifestyle and heavy loans with higher interest rates and decline in national income
resulted in a huge financial crisis which paved the way to the beginning of the French
Revolution.

1 | F i n a n c i a l O r i g i n s o f F r e n c h R e v o l u ti o n