Tuesday, November 8, 2016

Economic Ideas: Inflation, Price Controls and Collectivism in the French Revolution

Richard Ebeling emails:

Dear Bob,

I have a new article on the Future of Freedom Foundation (FFF) website on, “Economic Ideas: Inflation, Price Controls and Collectivism in the French Revolution.”

Royal France under Louis XVI placed the country under immense financial strain due to the costs of the King’s court, favors and privileges for those close to the throne, and expensive foreign adventures in the name of national greatness.

This all came to a head in 1789 with the French Revolution. But soon the revolutionary government was following its own path of fiscal madness with huge public works, income transfers to “the people,” and finally a national war in the name of defending the revolution and "democracy."

It was paid for with a new paper money – the “Assignats” – which were created in such large quantities that it brought in its wake a price inflation that ruined especially the “lower” and middle classes. Continuing rising prices brought a demand by “the people” for the government to do something, with the result that price and wage controls rapidly covered the French economy. A vast bureaucratic network was set to work making sure that buyers and sellers obeyed the revolutionary government’s regulatory and planning edicts.

All the economic controls followed logically from the ideology of the revolutionary Jacobins, who insisted that the individual existed only to serve “the people” and “the nation” as defined and dictated by those who asserted the right to rule the country in the name of the “general will.”

The French revolutionary experience served as a model and an example for all the experiments with revolutionary collectivism and nationalism that has plagued humanity for well over two hundred years, now.



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