The value of money has something of an anchoring effect on the post-neolithic mind—and though it is one of the greatest challenges for historians—enables rough (sometimes very rough) comparisons across decades, centuries and millennia.
You can judge how much a loaf of bread cost an urban Parisian family in hours of labor necessary for its procurement, over multi-generational time frames. And why in countries where a large percentage of income goes to food or shelter, why increases in the price of those items leads to riots, civil war and revolution.*
When the anchor isn't holding firm people feel it and though they may not be able to articulate what they are feeling, know that it's real.
Here's Your Weekend Reading riffing on one aspect of this phenomena, we join them in mid-essay:
....It always starts the same way. Business is slow and the government is looking for a shortcut.EARLY in the year 1789 the French nation found itself in deep financial embarrassment: there was a heavy debt and a serious deficit.There was a general want of confidence in business circles; capi- tal had shown its proverbial timidity by retiring out of sight as far as possible; throughout the land was stagnation.
Statesmanlike measures, careful watching and wise management would, doubtless, have ere long led to a return of confidence, a reappearance of money and a resumption of business; but these involved patience and self-denial, and, thus far in human history, these are the rarest products of political wisdom. Few nations have ever been able to exercise these virtues; and France was not then one of these few.
There was a general search for some short road to prosperity: ere long the idea was set afloat that the great want of the country was more of the circulating medium; and this this was speedily followed by calls for an issue of paper money.
In the beginning there is resistance to large issuances of debt. It is seen as being financial imprudent. But, gradually the politicians and the people learn to crave it, and the debt increases exponentially. There is no more resistance.France was now fully committed to a policy of inflation; and, if there had been any question of this before, all doubts were removed now by various acts very significant as showing the exceeding difficulty of stopping a nation once in the full tide of a depreciating currency.The first inflation bills were passed with great difficulty, after very sturdy resistance and by a majority of a few score out of nearly a thousand votes; but we observe now that new inflation measures were passed more and more easily and we shall have occasion to see the working of this same law in a more striking degree as this history develops itself.
The economy rebounds after every stimulus, but the rebounds get shorter and shorter.The great majority of Frenchmen now became desperate optimists, declaring that inflation is prosperity. Throughout France there came temporary good feeling. The nation was becoming inebriated with paper money. The good feeling was that of a drunkard just after his draught; and it is to be noted as a simple historical fact, corresponding to a physiological fact, that, as draughts of paper money came faster the successive periods of good feeling grew shorter.Inflation starts to change the culture. There becomes an obsession with luxury and speculation.But these evils, though great, were small compared to those far more deep-seated signs of disease which now showed themselves throughout the country. One of these was the obliteration of thrift from the minds of the French people. The French are naturally thrifty; but, with such masses of money and with such uncertainty as to its future value, the ordinary motives for saving and care diminished, and a loose luxury spread throughout the country.There is an obsession with trading and speculation.A still worse outgrowth was the increase of speculation and gambling. With the plethora of paper currency in 1791 appeared the first evidences of that cancerous disease which always follows large issues of irredeemable currency,—a disease more permanently injurious to a nation than war, pestilence or famine.For at the great metropolitan centers grew a luxurious, speculative, stock-gambling body, which, like a malignant tumor, absorbed into itself the strength of the nation and sent out its cancerous fibres to the remotest hamlets. At these city centers abundant wealth seemed to be piled up: in the country at large there grew a dislike of steady labor and a contempt for moderate gains and simple living.
Now began to be seen more plainly some of the many ways in which an inflation policy robs the working class. As these knots of plotting schemers at the city centers were becoming bloated with sudden wealth, the producing classes of the country, though having in their possession more and more currency, grew lean. In the schemes and speculations put forth by stock-jobbers and stimulated by the printing of more currency, multitudes of small fortunes were absorbed and lost while a few swollen fortunes were rapidly aggregated in the larger cities.
Speculation and inflation lead to corruption.Nor was this reckless and corrupt spirit confined to business men; it began to break out in official circles, and public men who, a few years before, had been thought above all possibility of taint, became luxurious, reckless, cynical and finally corrupt. Mirabeau himself, who, not many months previous, had risked imprisonment and even death to establish constitutional government, was now at this very time—secretly receiving heavy bribes. When, at the downfall of the monarchy a few years later, the famous iron chest of the Tuileries was opened, there were found evidences that, in this carnival of inflation and corruption, he had been a regularly paid servant of the Royal court.The artful plundering of the people at large was bad enough, but worse still was this growing corruption in official and legislative circles. Out of the speculating and gambling of the inflation period grew luxury, and, out of this, corruption.
Trust in politicians and the media declines.The artful plundering of the people at large was bad enough, but worse still was this growing corruption in official and legislative circles. Out of the speculating and gambling of the inflation period grew luxury, and, out of this, corruption. It grew as naturally as a fungus on a muck heap. It was first felt in business operations, but soon began to be seen in the legislative body and in journalism.Like in Zimbabwe the Speculators realise they should borrow to buy assets.As manufacturers had closed, wages had fallen, until all that kept them up seemed to be the fact that so many laborers were drafted off into the army. From this state of things came grievous wrong and gross fraud. Men who had foreseen these results and had gone into debt were of course jubilant. He who in 1790 had borrowed 10,000 francs could pay his debts in 1796 for about 35 francs.The rise of the Debtor Classthere appeared, as another outgrowth of this disease, what has always been seen under similar circumstances. It is a result of previous, and a cause of future evils. This outgrowth was a vast debtor class in the nation, directly interested in the depreciation of the currency in which they were to pay their debts.This body of debtors soon saw, of course, that their interest was to depreciate the currency in which their debts were to be paid; and these were speedily joined by a far more influential class; by that class whose speculative tendencies had been stimulated by the abundance of paper money, and who had gone largely into debt, looking for a rise in nominal values...
France: "How to make a revolutionary fortune? First survive the revolution…"
"Change of Climate and the French Revolution 1789"
From the Money Museum, Zürich (naturally)
For the earlier Mississippi Bubble there are so many we'll just link to the 'search blog' box results for John Law. Good times.
And this bit of scholarship first linked in October 2022's "France battles to avoid winter of discontent after fuel strike chaos":
If you've never studied mid/late 18th century French economic history it can be summarized as:
Food got expensive.
There were riots.
(oh, and Necker)
Pericles Press: France - The Economic History
—Chronology of Economic Events
1768
Riots over prices in Le Havre and Nantes. 1770
Riots in Rheims. 1774
Government efforts to deal with shortages lead to popular rumors of a 'famine pact' among the nobility to starve the people.
May 10 - Louis XVI ascends to throne of France. 1775
Poor harvest in the fall.
April 27-May - "Flour War" 1776
Bread prices in Paris increase by over 50%..
Rioting starts at Beaumont-sur-Oise, spreads to Paris..
Hundreds arrested, two executed, before order is restored.
June 11 - Coronation of Louis XVI.
October 22 - Necker appointed Director of the Treasury. 1777
Necker begins financing money for American War of Independence through governmental loans, rather than taxes. System will raise 520 million livres by May 1781. 1781
May 19 - Necker resigns. 1787
Successor Joly de Fleury implements tax increases. By December 1782 will raise 252 million livres.
February 22 - Assembly of Notables convenes. 1788
March - Notables balk at overhauling tax and administrative systems.
May 1 - Brienne appointed Chief of the Royal Council of Finances.
Government floats new loan.
May 25 - Assembly of Notables dissolved.
June - Government tries to implement overhaul of judicial system.
June 7 - Day of Tiles (Grenoble); Mob bombards troops with tiles.; 4 people killed in rioting, 40 injured.
July 13 - Severe hailstorm destroys crops in northern France.
August 8 - Announcement of convocation of Estates General.
Will formally meet on May 1, 1789.
August 16 - Government suspends treasury payments on loans due to lack of funds, causing panic in French stock market, as well as a bank run.
August 24 - Necker reappointed.
Reimposes price controls, in anticipation of shortages from poor harvest.
September - Restoration of Parlements.
Oct 5 - Dec 12 - Second Assembly of Notables meets.
Oct 24 - 26 - Necker reappointed Minister of Finance.
1789January 24 - Summoning of the Estates General.
January 26-29 - Crowd demanding lower bread prices is attacked by bands of students. Several killed in the fighting.
Winter-spring - Shortages lead to higher prices and rising unemployment.
April 27-28 - Reveillon riots. Acting on rumors of wage cuts, rioters destroy factory of wallpaper manufacturer; 25 killed when troops open fire.
May 5 - Estates General convene.
May - Bread riots occur throughout Flanders, Artois, Picardy, and Normandy.
June 17 - National Assembly proclaimed.
June 20 - Tennis Court Oath.
June 28-30 - Rioters protesting high prices destroy city's toll-gates.
Early July - Troops assigned to protect convoys of grain and flour.
July 11 - Necker dismissed.
July 14 - Rising grain prices and food shortages finally peak.
Fall of the Bastille.
July 22 - Foulon and Bertier, rumored to have been part of a plot to starve Paris, are murdered and decapitated by a mob.
July 20 - 31 - "Great Fear" - Fear that nobility intends to use force to reverse gains causes panic among peasantry throughout France.
Castles and abbeys sacked.
August 26 - Declaration of Rights of Man and the Citizen.
August - Government attempt to float two loans fails.
September - Grain prices increase. Grain riots occur around Paris and groups of women stop grain convoys. Guards placed around bakers' shops.
October 5-6 - Fueled by rumors of another starvation plot, crowd marches to Versailles. Lafayette escorts king back to Paris, followed by a procession of 60,000.
October 21 - Martial Law against Tumults passed. Allows local authorities to declare martial law to deal with disturbances.
....MUCH MORE
