The European history of the 18th century was largely determined by the availability of capital and the art of state financing. While some nations expanded their global supremacy through innovative monetary systems, rigid structures led to financial ruin elsewhere. These economic imbalances formed the actual breeding ground for politicalShocks that ultimately irrevocably swept away the old order. At the center of these developments was a dazzling figure who mastered the interplay of religion, politics and money like no other and took personal advantage of their country’s greatest crisis.
The survivalist in the service of changing powers
Anyone who was described by a famous general as an evil creature in noble clothing must have had numerous enemies around him. Charles-Maurice de Talleyrand-Périgord was exactly such a phenomenon, because he united the offices of a bishop, politician and diplomat. Despite a physical impairment in the leg, he could not be stopped and survived theReign of the king as well as the reign of terror of the revolutionaries. He served as foreign minister, betrayed his master at the decisive moment and saved himself beyond the borders of the country to later act as chief negotiator for the defeated fatherland. This constant adjustment required extraordinary cunning in order to acquire, at the same time, a personal fortune, numerousMistresses and huge estates.
The Contrast of European Financial Systems
After the collapse of a certain Scottish monetary system in 1720, innovations in the monetary system were considered absolutely frowned upon by the French. The British nemesis, on the other hand, learned from his speculative mistakes and created larger markets, which provided an enormous boost to the economic momentum there. The mastery of capital was the decisive factor for theindustrial revolution, because factories and canals required enormous sums of money. UK bond markets and insurance companies mitigated risks and lured savings into productive investments. London took on the role of the global money centre of Amsterdam and refined the techniques of the Dutch, which was further facilitated by three naval wars won.
The rigidification of the French monetary system
While the British remained innovative, the French turned away from any monetary creativity, so that new money houses even had to rename themselves in order not to appear suspicious. The country suffered from a primitive monetary system, which is why the Crown had to borrow from foreign lenders at extremely high interest rates. Excessive levies covered the constant deficits, whereby theThe art of taxation was to deprive the broad masses of as much wealth as possible without them complaining loudly. Such an approach made the country a cumbersome giant, easily outsmarted by financially savvy competitors. Despite the largest population in Europe, there was financial instability caused by the desire for war and the luxuriousLifestyle of the rulers was aggravated.
The intertwining of church and state
The constant pressure on the public coffers was exacerbated by the fact that in France the clergy and the monarchy were closely linked. Kings were anointed by high clergy, and in noble families the second son often ended up as a priest at the church. One of these budding clergymen was later to become the monetary mastermind of the great upheaval, as thiswas a rebellion over taxes. The system was so clumsy that the monarch simply burdened the poor with a lack of money until the thread of patience tore them. But the subversives also needed enormous sums of money, because behind all the rhetoric of freedom, the rebels were always concerned with the distribution of wealth.
The financial hardship of the new rulers
After the victory on the streets, the new rulers had to face the everyday question of how to finance the state. The first act of the newly founded parliament in June 1789 was the declaration of all previous taxes as unlawful, but without taxes the state lacked the money. As capital left the country, only the printing of paper money or theHyperinflation, if resources were tied by wars. Money is a social contract in which citizens only accept the currency as long as the government covers its value with real values. The paper currencies always go through the same path from initial mistrust to habit to self-evidence.
The Bishop’s Journey into Politics
To prop up the new currency, the subversives needed a tangible asset, which struck the limping bishop’s hour. Although he was born into the nobility as a firstborn, a weak leg forced him into the spiritual career, skillfully manipulating his ailing mother and the king to gain the office in Autun. By 1789, he hadGeneral Plenipotentiary of the clergy and accurately balances the assets of the Church. In this capacity, he worked closely with the Minister of Finance, who introduced him to the secrets of banking and fine cuisine. Talleyrand quickly realized that sumptuous dinners with exquisite food did far more than long negotiations, and maintained his contacts accordingly.
The Secret School of Economics
Between the festive feasts, the clergyman acquired a comprehensive knowledge of the economy and came across new ideas of the free market economy. These teachings were part of a larger philosophical movement that demanded political freedom and saw business as an ally of freedom. Since such thoughts were suspicious of the conservative church, the shrewdBishop with these thinkers in a secret brotherhood. There he associated with leading economists who designed liberal concepts for the country’s future. This interaction in the lodges gave him an enormous knowledge advantage and a network that would later provide him with irreplaceable services.
The Radical Cut with Church Ownership
In May 1789, the bishop took his place in parliament and immediately realized that the old order was doomed. He presented himself as a consensus candidate and developed a plan to save the state, which provided for the confiscation of all church property. This move relieved the monarch, reassured the nobility and appeared radical enough to the people to beIt was essentially a debt settlement, because the proceeds from the forced sale were supposed to pay off the huge national debt. Once the debt burden had decreased, the government could have taken out new loans and issued bonds again, which would have restored market confidence.
The creation of the Revolutionary Bond
He cleverly attacked the institution of the church, but spared the simple pastors, to whom he promised a fixed salary and free accommodation. His proposal to return the nation’s property was approved by the House of Representatives in November 1789, with the support of a powerful speaker. The instrument of financing was a monetary innovation that allowed the holder to acquireChurch land as soon as it was sold. By December 1789, the nationalization of the land covered the issue of 400 million livres of these new papers, which bore interest at five percent. These papers brought the hoarded gold and silver of the citizens back into circulation and functioned as promissory notes of the state.
The shift to an uncovered paper flood
Huge chunks of land moved into the private sector, automatically turning new owners into supporters of the upheaval. In the initial phase, wealthy citizens in particular benefited from this plan, which made the revolution appear as a bourgeois reform movement. But when the civil war and the threat of foreign powers escalated the situation,the attitude of those in power towards money. Radical forces took the helm and used the printing presses to cover the daily needs of the state and the costs of the war. The former instrument of sound debt management turned into unchecked money creation, which paved the way for hyperinflation.
Screenshot youtube.com
