Does the Man at the Top Get the Blame for Bankruptcy? French Nobles Found Out the Hard Way

On Wednesday night, the House passed legislation to raise the debt ceiling and cap some federal spending. It now moves on to the Senate, where the biggest question seems to be when — not if — it passes.

During the fraught discussions over the past few weeks that produced this legislation, the GOP clearly believed that it had the upper hand in negotiating with the White House, in large part because a significant number of House Republicans are willing to risk the worldwide financial disaster that breaching the debt limit and defaulting on our obligations would ensure. They were willing to gamble that if a crisis were the result, voters would blame the president for the ensuing economic collapse rather than Republicans’ hardball tactics. This helped shape the legislation that emerged from the negotiations.

Yet this calculation may have been misguided. Even if Americans would hold the president responsible for going over the fiscal cliff, history suggests that Republicans would not escape their wrath either. We know this from the case of the French government’s bankruptcy in 1788. The financial problems set into motion forces that would destroy the monarchy — but also took down others responsible as well.

By the 1780s, the French government under King Louis XVI (reigned 1774—1792, executed 1793) was facing financial chaos. The Seven Years War (1756—1763) and assistance to the American colonies in their fight against the British in the late 1770s had increased the French debt to staggering levels. The irrational and decentralized financial system meant that the government found it difficult to control its own financial processes.

And, more than ever before, people paid attention. The growth of a robust and educated public sphere that characterized 18th-century Enlightenment culture meant that the public was aware of and willing to vigorously debate the causes of and solutions to the country’s financial problems in unprecedented fashion.

The impending financial collapse in the late 1780s encouraged the French elite — who had long wanted changes to the absolutist political system — to try to extract political concessions from the monarchy. The king himself was not necessarily opposed to structural changes; after all, he had promised enlightened policies when he came to power in 1774. Unfortunately, the economic and fiscal policies that Louis XVI’s ministers, such as Anne-Robert-Jacques Turgot, tried to impose required sacrifices and were consequently unpopular with both the court nobility and the French public more broadly.