Economic Development in Early Modern France is an intrepid and thought-provoking intervention into scholarly debates about European economic history from the era of Louis XIV through the French Revolution. Today, most scholars agree that France’s economy grew significantly, if unevenly, during the eighteenth century. Debates focus largely on questions of how economic development took place, in which sectors, and why. During this heyday of mercantilism, the royal government’s intensive oversight of manufacturing and trade has often been represented as hindering innovation, discouraging entrepreneurialism, and undermining competitiveness. This study by Jeff Horn turns this conventional wisdom on its head by casting the state as the engine behind French economic development through its strategic application of privilege.
Privilege, as Horn notes, was ubiquitous in Old Regime France, where it served as the legal basis for society. It structured economic life because the monarchy used privileges to grant certain individuals, groups, geographical entities, and chartered companies rights and capabilities that others did not enjoy. This book argues that royal privilege was a much more dynamic policy tool than scholars have previously recognized. Specifically, Horn focuses attention on what he terms the “privilege of liberty,” a privilege that offered entrepreneurs, manufacturers, and traders the right to operate relatively freely, unhindered by the taxes or guild regulations that the state had previously authorized. Horn argues that these grants of limited economic liberty constituted France’s “most effective means of encouraging more capitalistic entrepreneurial practice” (p. 19).
Drawing on archival evidence, Economic Development synthesizes an impressive array of scholarship concerning the ways that thickly layered royal privileges shaped local, regional, and national economies. It focuses on administrative practice rather than political economic discourse, using the introduction and seven chapters to trace patterns in the application of economic privileges over time. Although French Minister of Finance Jean-Baptiste Colbert used “traditional” privileges in the 1660s to bolster French production and trade by expanding the guild system and creating monopolistic chartered trading companies, by the 1720s royal administrators turned with growing frequency to privileges of liberty. In a seeming paradox, the royal government pursued a makeshift policy of reform, this book suggests, by issuing even more privileges, albeit privileges of a different nature.
Economic Development begins by evaluating the use of privilege in the creation of economic enclaves. These enclaves were areas of seigneurial justice, in which noble lords, sovereigns, and others exploited “loopholes in the realm’s tax, trade, toll, and guild rules” to foster innovation and competition (p. 51). Among the best known of these is the Faubourg Saint-Antoine, an area just to the east of Paris in which unregulated workers produced cheap wares that sold well, undercutting and infuriating the guild masters of Paris. Such islands of privileged exemption were widespread: Horn has found at least twelve enclaves in Paris and fourteen in Rouen. Others included the city of Avignon with its surrounding areas, and the entire Duchy of Lorraine. A second type of privileged enclave was created when the monarchy granted cities or individuals exemptions from tariffs or guild regulations within a defined geographic area.
This book examines the textile industry in Normandy as an exemplary case where “the state’s strategic use of the privilege of liberty speeded the province’s industrial growth and supported France’s international competitiveness” (p. 60). It did so by creating something akin to modern-day enterprise zones. Another chapter discusses the ways that privileges supported major ports through the creation of tax-shielded entrepôts, zones where colonial goods could be brought into France duty free as long as they were re-exported. It highlights the success of state intervention in increasing competitiveness in international trade by analyzing trade with the Ottoman Empire from Languedoc and Marseille. In Languedoc, royal inspectors angered local textile producers by enforcing strict quality controls to guarantee that France produced the exceptionally fine woolens coveted in the Levant. The Crown also lowered trade tariffs for Marseille, giving the city a de facto monopoly on Ottoman trade. Using privilege to control but also to entice, Horn argues, the monarchy successfully made France into the Ottoman Empire’s top trade partner, beating out the Dutch and the English.
Economic Development also explores the ways that the monarchy actively supported innovative entrepreneurs who were non-Catholics or foreigners. Privileges of liberty facilitated the integration of outsiders, including Jews such as the Gradis family and Protestants like the Van Robais and Oberkampf families, who were sufficiently valued for their economic contributions that their religious statuses were overlooked. “[R]aison d’économie,” Horn writes, “became synonymous with raison d’état” (p. 203).
In the wake of Anne-Robert-Jacques Turgot’s failed liberalization of the grain trade and unsuccessful attempt to abolish the powerful guilds in the 1770s, French administrators increasingly questioned the usefulness of privilege. The state continued to deploy the privilege of liberty, however, as a means to stimulate production and entrepreneurialism. Horn argues that policy makers’ movement toward liberalization accelerated too quickly, as evidenced by the disastrous Anglo-French commercial treaty of 1786, which helped to catalyze a deep manufacturing slump and widespread economic hardship in the late 1780s. Economic Development concludes by following the fate of government-sponsored economic reform through the Revolution that destroyed the regime of privilege and embraced uniformity as the new economic order.
Readers may not come away convinced by all the arguments presented here. Economic Development strongly asserts that the state engineered France’s striking eighteenth-century economic development through its skillful deployment of privilege. The book offers compelling examples of successful privileged industries, yet counterexamples—from languishing guilds to failed state-run monopoly trading companies—also abound. If development was indeed the “quid pro quo demanded by the state” for a privilege of liberty, it would be valuable to know more about how this was enforced and how often privileges were revoked (p. 22). Even as the royal bureaucracy took an increasingly technocratic turn, one wonders how often privileges were awarded as patronage and how many required payment.
Given that the vast majority of economic endeavors during the Old Regime required a privilege of some sort, when it comes to attributing credit for development, distinguishing correlation from causation is challenging. How much credit should go to the manufacturers, entrepreneurs, or traders who grew their businesses in new ways? This study does not assess other factors that contributed to economic growth, including an expanding population, the rapid development of France’s colonial sector, and increasing consumption by a widening sector of French society.
Economic Development, with its rich evidence and provocative argument, deserves discussion. At the very least, Colbert’s legacy of state intervention proved to be flexible enough that it actively supported economic development in a variety of ways. Myths of the laissez-faire aside, economic oversight—from tax breaks and subsidies to consumer protections and labor regulations—has been a necessary strategy of the modern nation-state. This book will surely spark fruitful debates among both students and scholars about the long history of economic regulation.
