In addition, the very ideology behind monarchies before the French Revolution almost seemed to assist in the ruin of the economy since with the concept of divine right to rule, many rulers took the throne and saw little problem with spending vast amounts of resources on personal pleasure, grand palaces, and other examples of excess. Furthermore, being despots, these rulers (most notably the Sun King) did not have a group of legislators or advisors that had any real power and thus the finances of France were left to the decisions of the monarchs and nobility. In the wake of the Thirty Years’ War the economic crisis in France was reaching new heights. Population growth was slowing down, less goods were being produced and as a result, recession occurred. Furthermore, agricultural yields were also declining while taxes were growing steadily higher.

Along with massive unchecked spending on the part of the monarchs themselves before the French Revolution, there were a number of other issues that had a dramatic impact on the French financial situation. For one thing, the national debt was quite large in the years before the French Revolution. In addition to the fact that there were several bad decisions made by officials and advisors as they tried to improve the financial situation after the Seven Years’ War and the American Revolution, both of which almost decimated the treasury because of the size of the armies required. Besides the costs of the wars, King Louis XVI built a giant palace called Versailles which was a testament to unchecked spending with vast amounts of gold decorating the interior. Estimates suggest that over 7 to 10 percent of the national treasury was spent on the palace. “By 1685, the effort engaged 36,000 workers, not including the thousands of troops who diverted a river to supply water for fountains and pools. Royal workshops produced tapestries, carpets, mirrors, and porcelains” The King (and those before him as well) also had large courts and there was a large amount of money spent on entertainment and courtly expenses.

          Aside from the debt issues plaguing France in the years prior to the French Revolution, there was also the issue of provincial corruption which had a devastating effect on the financial situation of the already floundering French economy. Throughout the succession of rulers during the Bourbon reign, corruption among minor and regional authorities was a rampant problem, especially considering that the tax system wrung money out of the peasantry (which was a majority of the French population under the monarchial system) and went into the hands of nobles rather than back into state funds. Like many other revolutions with similar motivations, these financial issues were at the forefront. Although the Sun King held the reins of power, he was very dependent on the nobles and advisors surrounding him. Prior to the French Revolution, these people had a great deal of economic power and influenced the financial problems that were to grow even worse before the eventual revolution. Being a very large country, it would have been completely impossible for Louis to run the country himself and as a result there were hundreds of small provinces, each of which was watched over by noble officials. These officials had the power to collect taxes, enforce the laws set forth, the ability to make loans and collect interest, for example and this led to corruption. Without organized oversight and along with the courtly lifestyle which stressed extravagance, funds that might have been made available to the state were sucked out of the treasury. This was a double-fold problem; first of all, it drained needed resources from the country and made a number of aristocrats very rich. Secondly, this did little to improve the opinion peasants had toward nobles and the common people, who saw themselves as well as their country in general growing poorer, were beginning to mobilize. This mobilization of the common people in France would lead to a large-scale revolution and overthrow eventually.

Between corruption, excessive spending, depletion of the treasury after two large and expensive wars, it became clear that something had to be done before France was completely broke and before the people would (and did) engage in the French Revolution. In response to the mounting crisis and all-to-clear lead up to the French Revolution, Louis XIV appointed Charles de Calonne as the controller general of the France’s finances. Calonne had a very difficult decision to make. On the one hand, he knew that raising and creating new taxes was the only way to save the economy but also was aware that if he attempted to get the money from nobles or peasants, there would be a huge backlash either way. Seeing the possibility of a French Revolution, he also tried to obtain loans from banks throughout Western Europe but by the time this occurred, it was well known that France was in an economic freefall. To make matters more complex, Calonne found that the very system the economy was based on was flawed and open to corruption by even the most minor accountants. With such a grim situation, all that could be done was the institution of more and far higher taxes on the already poor peasantry.

In order to institute the changes prior to the French Revolution, Calonne organized a conference so that he could announce the dire financial state of France to the assembly. This gathering was called the Assembly of Notables and these “notables” were all people of the nobility who did not want to have to pay taxes themselves (especially since they had all enjoyed tax-exempt status simply because their titles). During this meeting Calonne told these nobles that either they would have to agree to much higher taxes on the peasantry or else they would have to give up their status as non-taxpayers. The nobles had no desire to do either, especially since there was already growing turmoil among the peasantry, and the one chance France might have had at greater financial stability disappeared as Calonne was let go as the advisor. Without the release of Calonne, the French Revolution might not have taken place as he was advocating more sound policies and fiscal responsibility.

Other articles in the History Archives related to this topic include :   A Comparison and Analysis of the French Versus Russian Revolutions   •   War and the Downfall of the Monarchies in France and Russia   •  A Comparison of the French Revolution and American Revolution  •  The Historical and Societal Functions of World Revolutions

Sources

Sewell, Wailliam Hamilton. Work and Revolution in France: The Language of Labor from the Old Regime to 1848. Cambridge; Cambridge University Press. 1980. p.68

Pinkey, David H. The French Revolution of 1830. Princeton University Press. 1972.

 Neal, Lary. 1991. A Tale of Two Revolutions: International Capital Flows 1789-1819. Bulletin of Economic Research 43, no. 1:57-92.

Revolutions are distinguished from wars by the fact that the latter are acts of resistance against external enemies and conditions, while the former are acts of resistance that originate within a country and are directed against internal enemies and conditions that prevent the country from developing and asserting a cohesive national identity (Trotsky, 1957). When the voice of the people has not been an effective means of securing political and social change, revolutions have been staged as an impetus for the facilitation of desired change. In some of the largest and most powerful countries of the world, revolutions have redefined the national identity of a society and have worked towards the “abolition of [its] more shameful national limitations” (Trotsky, 1957, p. 39). “The fundamental premise of a revolution,” writes Trotsky (1957), “is that the existing social structure has become incapable of solving the urgent problems of development of the nation,” and that an alternative system is not only possible, but necessary (p. 173).

In the most successful revolutions, there has been a congruence between the “inner readiness” for such an act and the capability of the people to bring it to fruition (Trotsky, 1957, p. 177). Walt (1996) contends that “a revolution is more than just a rearrangement of the administrative apparatus or the replacement of one set of rulers by [another” (p. 12). He continues by explaining that the outcome of a successful revolution is the creation of a “fundamentally new state based on different values, myths, social classes, political institutions, and conceptions of the political community” (Walt, 1996, p. 12). In fact, the power of the revolutionary paradigm is that it “establishes the basic nature of a polity” by redefining national identity through the implementation of new goals, systems, and means of achieving objectives (p. 12). Revolutions are typically spearheaded and carried out by the revolutionary lower classes, the members of which have been marginalized and “disinherited” by the country’s dominant system, which has “no intention of dying” or being dismantled without a fight (Trotsky, 1957, p. 240; 133).

The lower classes take “all phenomena and all relations [and address them] in concentrated form” through the appropriation of existing systems and ideologies and infusing them with new symbolic meanings (Trotsky, 1957, p. 160). What defines contemporary western society beyond shared geography is its history of revolutionary activity. Beyond the obvious physical activity of a revolution, Goldstone (1994) contends that the true power of a revolution has always been that it fosters “revolutions…in the way people think, how they view their world, and what they aspire to achieve” (p. 239). This consequence of a revolution is not true just for the country in which the revolution occurred. As Walt (1996) points out, “revolutions are more than just critical events in the history of individual nations; they are usually watershed events in international politics” (p. i), not the least reason being that they often precipitate shifts in thought within other societies by virtue of their example.

Despite the obstacles that would be confronted on the path to the unification of the member countries of the European continent, Churchill’s vision was appealing because of the possibilities that it suggested. Emerging from deep and devastating  involvement in World War I and World War II, Churchill reflected upon the lessons of war, and proposed that a unified Europe would have a far greater chance for effective military operations than individual countries in an “to each his own” strategy (Ellwood, 1992). In fact, the current state of European unity can be directly related to many of the initial ideas and efforts of Winston Churchill and his insights regarding the need for the formation of such a unified Europe are among the most important ideas when reflecting on the course of events leading to the eventual European Union.

In addition to the benefits of unification during times of conflict, Churchill suggested that European unity would bring countless advantages during times of peace and stability, too (Ellwood, 1992). In particular, Churchill envisioned the possibilities of economic advancement for the entire continent, and even the world, that he believed would result from unification (Ellwood, 1992). It was this idea, perhaps more than any of the other arguments proposed to support unification, that piqued the interest of Britain’s neighbors in the consideration of unification, and which would also ultimately compel those countries that would become European Union members to set aside other preoccupations and concerns in order to enjoy economic stability and improvement. It is no coincidence that the idea of European unification gained both adherents and momentum following the termination of the second World War.

Europe was devastated by the Second World war, and it seemed fairly obvious to most countries that their prospects of repairing the damages and reconstituting their losses would require more labor, more energy, and, of course, more money, than any one country could muster on its own. Churchill’s “grandiloquent call for European unity” was even supported by the United States, which had its own vested interests in a unified Europe (Ellwood, 1992, p. 57). First, a self-sufficient Europe would relieve the United States of any responsibility to aid or otherwise bail out European countries during the post-war recovery era as the war drained so many resources in a relatively short amount of time. Second, after the war, a recovered and economically prosperous European continent that was unified could represent a political, military, and economic alliance with the United States that would be formidable to the rest of the world. Third, such an alliance would have significant positive economic outcomes, as trade barriers would be either eliminated or tempered, and fair and favorable trade, industry, and economic accords would be negotiated and honored (Ellwood, 1992).

For the most part, according to the editor’s introduction essay to the translation of Das Kapital, much of Marx’s observations of the thirty-year period were in England, which were at once the center of the industrial revolution (with all of its glory) as well as the epicenter of the urban degradation caused by rapid and massive industrialization. While these theories about the nature of the worker, the work day, the capitalist, and economies in general were influential after their first publication, the same ideas still persist in general conversations about our modern economy—especially in terms of capitalism. In order to present the most succinct overview, analysis, and interpretation of Das Kapital ,it seems necessary to chronologically go through Das Kapital for this essay and examine some key points and themes, examine them within Marx’s context, and finally present them as templates for looking at modern capitalism society, industry, and economy.

Without any fanfare, Marx begins the first chapter of Das Kapital with a statement concerning commodities. He defines a commodity as “an object outside us, a thing that by its properties satisfies human wants of sort or another” (125). It is interesting that Marx begins the text with a discussion and definition of a commodity and after several successive chapters, it is clear to see that the commodity is one of the main driving forces behind capitalism. The commodity itself, however, is only valued according to demand or other more ethereal conditions and thus it is a perfect item for the capitalist as it presents no fixed “price” in itself, but its value is rather determined by desire and the potential for profit. To backtrack for a moment, however, a more concise definition of commodity is contained within the idea of “use value.”

This refers to a commodity’s value in how it will be used and how it is desired but this value, according to Marx, has little to do with the actual labor that went into the production of the item. Again, while it is not immediately clear at this early point in the text, the use value versus the idea of labor are important issues because there is more distinction between the two than one might initially think. For instance, something might have a very high use-value and be greatly desired. This desire leads the capitalist to make it expensive and the laborer who made the desired commodity is not paid what the desired commodity is worth, but rather is paid living wages while the surplus profits go directly to the capitalist since he owns the means of production. While that was a very brief, concise, but altogether limited description of the process behind commodities and use value, it is useful background information to frame the discussion as this analysis continues.

After this introduction to commodities and use values in Das Kapital , the idea of exchange value becomes of equal importance. As Marx puts it in one of the important quotations from “Das Kapital”, “As use values, commodities are, above all, of different qualities, but as exchange values they are merely different quantities, and consequently do not contain an atom of use value” (127). In other words, it is the proportion by which use values of one kind exchange for use values of another kind. This is a vital and fluctuating relationship and has less to do with the commodity than it might initially seem. For example, to put this into a modern context, let us assume that an iPod and a particular brand of cell phone equal x. In this case let’s make “x” stand for an inexpensive computer. In short, both the iPod and the cell phone must come out to be equivalent to another item. While this may be a confusing analogy, it is important to remember that the common item cannot be part of the initial commodity but rather must be subtracted from its use-value.

Once those use values are taken care of, the only commodity left is the work that went into the production of the item. In short, the common element in a commodity’s exchange-value is simply the “value” of it. This means that it all comes down to labor. This is a common tactic Marx employs, at first there a number of daunting methods for scientifically extracting a conception of value but in the end, it all boils down to questions about work and laborer. What has not yet been mentioned, however, is that labor is not an issue when it comes to the natural resources that went into the final commodity since they did not require labor.

Marx makes a strange shift in tone at the beginning of Chapter 2 of Das Kapital that should be noted and analyzed. He states, “persons exist for one another merely as representatives of, and, therefore, as owners of, commodities. In the course of our investigation we shall find, in general, that the characters who appear on the economic stage are but the personifications of the economic relationships that exist between them” (178). This is slightly disconcerting because this is one of the few moments in Das Kapital when Marx seems to be offering an explicit social as well as economic critique about the nature of capitalist interactions. What he is suggesting, in essence, is akin to saying that this system of capital and commodities has reduced everyone to acting based on economic decisions. There is not a hint of emotion, ethics, or other moral guidance at play here. Instead, human interactions are thus reduced to exchange and more importantly, capital itself. In the same section of Das Kapital  he goes on to remark upon the commodity that, “the bodily form of this commodity becomes the form of the socially recognized universal equivalent.

To be the universal equivalent, becomes, by this social process, the specific function of the commodity thus excluded by the rest. Thus it becomes—money” (180). Although in this latter section essay from Das Kapital presented here it is less clear, this is an indeed a moral judgment Marx is passing along about the nature of capitalism. He does not suggest at any other point throughout the text where capitalism and the ideological basis for it comes from, nor does he explore the ethics or morals to an great degree (at least overtly) but this is one clear case in which he is examining the way society is changed as a result of capital and commodities. We are no longer simply working together to form a society, but we are all individuals with varying amounts of capital, thus we are reduced to having human interactions that are limited and impersonal as we are all “characters” and as such we appear only as the economic relationships that define us. While some might argue that this is an overly literal way of reading the beginning of Chapter 2 of Das Kapital , it is important because it lets the reader into the morality as well as the scientific deconstruction of capitalism.