CHAPTER SIX
France, England and the Enigmatic Eighteenth Century
The expansiveness of the Dutch Golden Age created a context in which rulers and overseas merchant capitalists throughout Europe were lured by new opportunities and confronted new dangers. On one side lay the tantalizing fruits of internationalizing trade, at a level never before seen in Europe, heaped atop more traditional concerns with territorial gain. On the other side was the correlate, war, inevitable in an age of uncertain and competitive interstate and intercorporate relations. The wrenching Wars of the League of Augsburg (1689-97) and Spanish Succession (1701-13/15) that inaugurated Europe's bellicose eighteenth century strained the financial and political capacities of all states involved. The Dutch had developed novel ways of marrying economic dominance in Europe with forced accumulation abroad. Now their commercial and colonial innovations, and the state that sought to advance them, could be copied, tinkered with, combatted and transcended: they were prey to the late developers' advantage (Gerschenkron 1962).
Corporate bodies like the sovereign merchant companies could be crucial players in the triangular dynamic of primitive accumulation, war and state formation. Recall that corporations were also instrumentalized by rulers desperate for resources, sometimes to the extent that companies were gutted, killing the state's own progeny (as in seventeenth-century France), and at other times in ways that enabled them to survive and thrive, as in the Dutch Golden Age, when the VOC amassed enormous resources and exercized sovereign control over extended trading networks and territories. When they did well, patrimonial corporations became relatively autonomous actors. They were potential sites of innovation in their home states as well as abroad, but also arenas of elite entrenchment and reaction. Their activities could create international openings and by the same token threaten the integrity of metropolitan politico-economic systems. In the Netherlands, as we have seen, such challenges proved too daunting, and ultimately contributed to decline and the erosion of state power in the eighteenth century. Similar challenges arose in England, which not only weathered them but became the next hegemonic power.
This chapter also explores the dimension of macro-social life foregrounded throughout the book: the family monopolies of political privilege, especially those that shaped and were shaped by overseas trade, in this era inevitably linked to military capacity. That family principles were part and parcel of relations among the crowned heads of Europe is clear, and one theme is the resilient role of royal dynasticism in overseas projects and the positions from which opponents bitterly contested it. But family had a broader sociological role, or so I have contended. Coalitions of elite patriarchs came to occupy and identify with sites of intergenerational political privilege in the Netherlands, France and England, collectively and consciously taking in hand parts of state apparatuses and their colonial projections. This family grab rebounded on metropolitan development. In the Dutch case, it helped entrench a kind of fractious localism, ultimately undercutting the capacity of Dutch elite to discipline the workings of the colonial machine without rationalizing away their own prized position at the controls. This chapter charts the upshot of the collective responses of state elites in France and England in the face of similar institutional opportunities and conundrums.
In general, family mechanisms of rule with great staying power played a cardinal role in forming states and commercial-colonial projects, which then in turn shaped elite patrimonial monopolies. The changing practices and publicly-articulated dynastic principles of male elites were implicated in their investments in male-defined lineages; in their links with specific class practices and especially forms of property in politics, and in relationships with monarchs and crypto-monarchs like the Dutch stadholders. Observing Dutch dynamics suggests that the relative rigidity of these mechanisms could make it harder for elites to hang onto desirable niches in the changing global political economy. But was that always the case, and if not, why not? For E. P. Thompson, England’s eighteenth century was “enigmatic”; John Kenyon called it "mysterious" because of the conjunction of what he took to be social sclerosis at home and enhanced power abroad. They are right -- there is an enigma to be unraveled. For comparative insights, this chapter first looks to the organization of patrimonial rule and especially to the nodal relationship among rulers, commercial companies and merchant capitalists in eighteenth-century England and France, whose rulers were laying claim to the position that the Dutch had created but could no longer sustain. The final section of the chapter examines how these competing projects of empire-building became increasingly significant for elite patrimonial monopolies at home, fundamentally challenging familist state structures. These interconnected crises of empire and patriarchal authority roiled the early modern world.
System or Anti-System? Law's Company and the French State
Prospects looked bleak for France's overseas commercial and colonial ambitions at the outset of the eighteenth century. In the wake of the ruinously expensive War of Spanish Succession and the death of Louis XIV, the Compagnie des Indes Orientales was commercially and militarily defunct. What a contrast with the active Dutch East Indies Company, a sovereign trading body that was strong enough to refuse independent merchants the right to operate in Asia until the 1740s! The embattled French Company fell into the hands of one of the crown's largest financiers, the renowned Antoine Crozat, who assumed the rights of the organization in 1712 in exchange for a 10% cut of its net income (Dermigny 1970: 463). Crozat, Samuel Bernard, the Paris Brothers and other major financiers held 85% of the value of farms on indirect taxes, the source of the bulk of the crown's 204 million livres in annual revenue in the 1720s (Dessert 1984: 210-36). The Compagnie des Indes retained the right to grant independent merchants trading permits, for a fee. It survived as a mechanism by which the crown's patrimonial dependents squeezed out rent.
Commercial/colonial enterprise continued to be constrained by the crown and state elite, with their history of treating merchants as competitors of company formation rather than as an organic part of mercantilist projects as in the Netherlands and England. Nor did merchants have a berth in the patrimonial state. But precisely because of its estrangement from vested interests, commerce came to seem one of the crown's best hopes for escape from the constraints imposed by its own patrimonial group. The crown had emerged from the war and into the regency of Louis XV freighted with a huge debt of 600 million livres, mortgaged to its dependents, unable to pay up and desperate for solutions. Tactic number one involved deeper patrimonialization. The crown converted existing corporations like provincial Estates, city governments, and the Hotel de Ville de Paris into revenue farms, as well as selling thousands of new offices in the guilds, judiciary and state administration. These offices carried the usual fiscal exemptions, monopolies over production or distribution, noble titles or other patrimonial prerogatives (Bossenga 1987: 117-18). They also continued to lure takers because they promised their families intergenerational elevation of status, frequently tied to those future prerogatives, as Chapter Four showed. Once committed, the elite tenants of these corporate bodies could then be compelled to advance loans to the crown, though the bitter pill was sweetened because they were often awarded commissions and interest (Lachmann and Adams 1988: 157-58; Matthews 1958: 81). In the early eighteenth century, as David Bien shows (1987: 93), the crown was still adding to the numbers of corporate revenue farmers and lower-level venal officers.
Tactic number two was contradictory, and raised a forthright challenge to the ascendancy of venal interests over the state. This involved the expansion of central state bureaucracies, including the secretariat of foreign affairs and, even more radically, a direct attempt to bypass venal finance.[1] The crown secured a "hired gun," a Scottish financier named John Law, and Law and the Regent tried to sever patrimonial officers' and revenue farmers' investments in their privileges from their control over revenue sources, and to convert their holdings into public debt. If this ploy had worked, it would have helped the crown dig itself out without amassing more semi-private debt, and preserved it from creeping intergenerational colonization by venal and quasi-venal office-holding families. The ambitious scheme failed, but is no less important for that. Its failure was symptomatic, first of all: it reveals the familial state structure, and corresponding limits to development. Law's System and the Anti-System rigged up in response also had their own impact on patrimonial state formation in France.
The key to the scheme was the Compagnie des Indes, in yet another dizzying incarnation. Law's remodeled Company, founded in 1719, united the inactive Compagnie des Indes Orientales and the more recent Compagnie d'Occident, dating from 1717.[2] Besides merging the colonial monopolies, the vast new organization was to be responsible for the tax collection and coinage of the realm, and for reimbursing the crippling state debt. At its peak the Company embraced various eastern colonial initiatives, the rights to all trade in Louisiana and Canada, control over Paris rentes, and the first effort in France at a public bank (Giraud 1961; Harsin 1970: 227-28). "What I have been calling a Bank up to now should be seen as a company like those famous companies that we see flourishing in England and Holland, but with this difference," Law remarked, stressing the gigantism of the enterprise: "that this bank or company will have no other frontier for its commerce than that of the commerce of France, all of which will be in its hands" (Girard 1908: 12 [my translation]). This wildly ambitious initiative infused France's militarized colonial trade with new energy. The Company sent ships bearing over 6,700,000 livres to buy Indian goods in 1720, and established a Bengal entrepot in Pondichery. It developed far-reaching projects to expand trade in pepper and to colonize Mauritius (Furber 1976: 136-37). But Law also opened colonial commerce to wider participation by independent traders, for example in the tobacco and beaver trades, in collaboration with the Company. This was a clear break with the state's previous mercantile projects, which had typically envisioned overseas merchants as competitors to be eliminated by the crown. Also prospering under the new order were slave merchants exploiting the West Indies, such as those based in the city of Nantes (Bertin 1962: 471; Martin 1924: 9-12; 1926-27: 435-46). When it came to combining commerce and coercion, Law's System was no prettier than any of its patrimonial predecessors in France. It simply bid fair to be more successful.
By the same token, it awakened the hostility of the elites whose organizational turf it threatened. Crown financiers, such as the Paris Brothers, who had been strongly linked with the regime in the waning days of Louis XIV, authored a so-called Anti-System, a canny attempt to topple Law that offered the public shares in a tax farm and then tried to bankrupt Law's Company bank by presenting the notes they had collected for conversion into gold.[3] But the coup de grace was administered by corporate revenue farmers and venal officers. Law's attempt to reimburse and eliminate many offices blocking the expansion of trade damned the System in the eyes of provincial aspirants to privilege, and Company revenues seemed inadequate to support the remaining officials (Matthews 1958: 69; Weber 1904: 315-18). Shares plunged, the System crashed in 1720-21, and John Law fled the country. The Company was reorganized in 1723 and 1729-31 and confirmed as a traditional royal revenue farm, jointly administered by a series of General Controllers and Ministers of the Marine. It received from the crown the revenues from the rights to the western domain and the Louisiana tobacco farm, which were promptly subleased, again at the behest of the crown, to sixty members of the resurgent and consolidated state elite who styled themselves the Company of General Farmers. The Compagnie des Indes had once again become a colonial corporation whose profits mainly derived from reinvesting its capital in noncolonial outlets (Boulle 1981: 113). It was an intermediary corporate form by which rentiers extracted resources from other ventures.[4] This may not have been the optimal path to commercial development or colonial exploitation, but this state of affairs was not necessarily an insuperable obstacle. What mattered was whether metropolitan rulers and their patrimonial dependents left independent merchants and, through them, producers the resources to reproduce themselves and expand, and whether they backed them up militarily and accorded them legitimacy on their home European ground. The first of these conditions was met, at least for a time, we shall see, but the other two were not.
The Law interlude had important unintended consequences. First, it unshackled foreign and especially colonial trade. The average annual value of foreign trade virtually quintupled from 215 million livres in 1716-20 to 1,062 million in 1784-88. This was a startling leap forward, even after the 60% inflation from 1730-80 is taken into account. In 1716-10, the value of French foreign trade was about one-half of England's; just before the Revolution it had reached virtually the same level (Butel 1990: 162-63). France had become the largest supplier of manufactured goods for Spain and its American empire, and dominated the Levant and Italian markets. Signs of relative underdevelopment remained. Re-exports were largely controlled by foreign merchants resident in France and were almost entirely carried in foreign ships. In 1713-80, for example, an average of ten French ships a year were registered eastbound on the Sound, whereas the Dutch averaged eight hundred a year, and the British over five hundred during the same period (Bamford 1954: 207). But overall, it was a miraculous result. The leading sector was colonial trade, which grew twice as fast as other international trade in the eighteenth century. While exports of French products tripled, colonial re-exports rose eight-fold (Butel 1990: 163). Most of the increased traffic was due to the links between merchant communities of the Atlantic ports and the major colonies of Saint Domingue (Haiti), Martinique, Guadeloup and Guiana. Bordeaux, which dealt in slaves, sugar, indigo and coffee, registered imports of 163 million livres in 1771, up from 9 million in 1724-35, accounting for some 25-30% of the external trade of France as a whole (Charpentier 1937: 33-6). Nantes was the major base for the infamous slave trade that surged after Law's System opened up the monopoly.[5] Relative to the West Indies, the East Indies trade was a less important component of the economy than it was in the Netherlands -- a result of the competitive disadvantage bequeathed by prior French Pacific company projects. After the post-Law era reconstruction, however, the Compagnie des Indes was commercially active as a state enterprise, though on a smaller scale than the Dutch company.[6]