Jean Baptiste Colbert |
Under the rule of the Sun King – Louis
XIV – France embark into its ancient regime’s golden age. The King ruled France
with his divine absolutist power. From that, he went into a spending spree,
building palaces, waging wars, and funding expeditions. With such a manner, the
King needed an official that balanced his income with his spending. The duty
fell into one of his time’s well known economic manager – Jean Baptiste
Colbert.
Jean Baptiste Colbert, born on August
29, 1619, came from a Bourgeoisie family from Reims, France. His family became
successful in the fields of finance and international trade. His family
background earned him the mindset, knowledge, and skills of a manager, which
became useful when he assumed the job of Comptroller-General. With his family’s
wealth and connection, the Colberts managed to get Jean-Baptiste in the
government. His disciplined work ethics earned him the trust of two chief
councilors of King Louis XIII and XIV – Cardinal Richelieu and Cardinal
Mazarin. Under Mazarin’s tutelage, Colbert’s closeness to the Cardinal led to
him becoming close to the King as well. And so, when Mazarin passed away in
1661, Colbert became a chief adviser of the King in 1661 and formally became
the finance minister in 1665.
Colbert did not had any difficulty
gaining the King’s trust and confidence. The King trusted Colbert when he
revealed the enormous wealth of the former chief minister, Cardinal Mazarin. He
also had the king’s confidence when he and the Sun King had similarities in
their aims. As Louis XIV’s finance and economic minister, Colbert envisioned a
self-sufficient and a very powerful Kingdom of France. This what Louis XIV also
wanted, a France that dominate Europe politically and culturally. The rest of
the economics Louis left to Colbert.
Colbert, however, faced a daunting task
in order to realize his agenda and that of the King’s. Corruption,
inefficiency, and disorganization clouted France. The King’s absolute power
covered even the finances. The King had the power to levy taxes on his own
estate and on essential goods. The King may spend it all in his own discretion,
which meant either to luxury or war. In order to fill the coffers and
supplement taxation, the practice of selling offices became widely practiced.
It became effective way to raise money, so much so that higher officials sold
offices with the same duties to numerous individuals. As a result of the
selling of offices, abuses, corruption, and inefficiency rose tremendously.
Besides selling government offices, selling bonds became another means. The
King sell bonds during the times of huge revenue shortfalls. The previous Kings
and even Louis XIV himself borrowed heavily from wealthy government officials.
When the King borrowed, the lenders surely had a huge profit. Huge interest
payment followed the amount of the loans. The former chief minister Mazarin
himself became wealthy trough that way. But setting up tax farms proved to be
the most notorious way to collect money. Tax farms meant that the tax
collection of a region would be sold to a bourgeoisie or any wealthy
individual. The tax farmer would have the right to collect taxes within that
area ranging from excise taxes called aides
and gabelle or salt tax. They also
had the right to collect customs from any goods entering the region from
another place both locally and internationally. Abuses and excesses became
rampant. The economic system that Colbert inherited from Mazarin marred with
inefficiency and institutional problems.
Colbert wanted to change the economy
from a loosely governed economy, to a strong centralized mercantilist economy.
Mercantilist economic polices reflected similarly, if not preceded, the idea of
economic nationalism. Under mercantilism, the wealth of countries or kingdoms
became depended on the amount of metallic species, thus, the more gold and
silver the richer and powerful. This also meant that the country must gain an
upper hand when it came to trade balances. Countries had to rely on their own
resources and products rather than import; or better yet, more exports than
imports. Protective tariffs imposed in order to protect local industries and
also to discourage large amounts of imports. Strengthening local industries
became also a critical part of the mercantilist policies in order to increase
exports to increase income. Abut for Colbert, he aimed France to dominate the
export market.
At the start of his office, he began to
collect intelligence first. In 1666, he ordered a massive survey of the French
economy, including a comparison with the economies of its neighboring
countries. The survey resulted to the enquete.
The enquete revealed the financial problems and economic weakness of the French
economy. In addition, it showed that France was an underdog compared to the
economic might of the English and the Dutch. Even after the enquete,
statistics, figures, and government, economic, and financial documents played
key part of Colbert’s operation. Eventually, by the time he passed away in
office, he left about 50,000 books and 15,000 documents.
During the enquete, Colbert began also
to reform public finances. He started with the selling of offices. Under his
order, offices formed from the past 30 years had to be abolished, clearing out
possible inefficiencies and disorganization within the government. He also
stopped the selling of offices. Then, he also rooted out officials that amassed
huge wealth through lending to the King in enormous amount of interest. Among
those he investigated for amassing wealth through that way included his former
boss, Cardinal Mazarin, and his predecessor as finance minister, Nicolas
Fouquot. Colbert also began to investigate and act against abuses and
corruption within the tax farm system. An investigative body began to check all
tax farmers, both living and dead, for any signs of cheating and deceit.
Authorities punish those who failed to pay the due amount of tax revenues or
those who lied on the amount that they remitted. Descendants of tax farmers
proven to be guilty had to pay the fines or the dues. On the other hand, liars
and frauds with transactions to government, especially loans, faced defaults.
Families that impersonated as a nobility faced imprisonment, or payment of huge
fines. Colbert also began to impose new taxes on salt and also started the
implementation of the infamous land tax known as the taille. To tax the nobility, he also began to impose indirect
taxation to gain revenue from them. All in all, within 10 years in office,
Colbert succeeded in increasing government revenue, from 31 million livres to
75 million livres.
Nevertheless, problems remained. For
instance, the nobility and clergy remained untouchable when it came to
taxation. The taille fell as an additional burden to the peasantry and to the
poor, which became one of the reasons of the French Revolution more than a
century later. In addition, tax farms remained. Although he saw them as a
problem in centralizing economic control and increasing domestic trade, but
because of huge opposition from nobility and the bourgeoisie, abolishing of the
tax farm never materialize until a century later.
Colbert became very active in making
France gain an advantage in trade balances. He began to enforce protective
tariffs to discourage and deter any importation. In 1664, France enacted the
first round of protective tariffs. Then, when it failed to make major changes
in the balance sheets, Colbert amended it and increased the rate in 1667. A
trade war with the Netherlands followed. The economic war then escalated into a
real military war in 1672 when the Franco-Dutch War raged for about 6 years. In
the end, stalemate brought the belligerent to the negotiating table, resulting
to the signing of treaties in Nijmegen. The peace made France to abandon the
1667 rates and returning it to the rate of 1664.
Besides advantageous trade balances,
Colbert also sought to increase France’s presence in international trade. He
saw that the Dutch dominated world trade with its large merchant marine fleet.
And in order to beat the Dutch in trade, Colbert saw fit to increase France’s merchant
marine, equal and even surpass the size of the Dutch. Because of this, it
stimulated the French shipbuilding industry. In order to increase trade of
France with its colonies In Canada, West Indies, and India, he and the King
founded joint-stock companies like the French East India Company and French
West India Company both established in 1664. However, the companies did not
follow the system of the English and the Dutch. Instead being run by private
consortium, French joint-stock company became also a part of the absolute rule
of the King. Members of the royal family or closest companions of the king
managed the company. Most of them however, were incompetent, leading to some of
the joint-stock companies to fail after a decade or so.
In order for France to make a mark in
world trade, Colbert aimed in making France an exporter country of high end
goods. He viewed that high end market meant less volatility in prices and less
problems during times of economic crisis.
And so, he began to rule French industries
with discipline, standards, and stringency. His overall policy aimed in
creating product standards across France. He used those who worked in the
enquete to become his eyes and hands as inspectors and judges in factories.
They made sure that Colbert’s standards remain in place. In addition to an army
of judges and inspectors, Colbert also supported trade guilds, which he viewed
as allies to maintain standards.
Colbert also gave various support
towards industries. He granted tax breaks, easy loans, monopolies. He also
handed out hundreds of instruction for the manufacturing of many products. He
also initiated the Ordinance of Trade in 1673, that codified commercial law,
and made industries and domestic trade organized. The greatest form of support
by Colbert, however, appeared in form of being designated as a royal factory. Gobelin
Works and Manufactory became one of Colbert’s successful Royal Factories. He
placed the famous artist, Charles Le Brun, in charge. Gobelin became a supplier
of artistic goods to the royals, ranging from paintings, tapestries, and
furniture. It supplied many of the decoration found in the Palace of Versailles
and in the famous Hall of Mirrors.
Colbet’s policies only achieved limited
success. His strict standards led to few room for innovation and product
development. Brain drain settled when in 1685 Louis XIV expelled the Huguenots,
most of which worked in industries.
Colbert also founded school to create
new creative minds in the arts. In 1666, he founded the Academy of Science,
followed by the Academy of Architecture in 1671. He also founded an art school
in Rome, whose greatest product was Charles Le Brun.
Colbert stimulate the economy and
created jobs with his public works. He ordered the construction of road and
canal systems to increase domestic trade. He also renovated Paris into a
premier and grand city, with a renovated Lourve and wide boulevards. But
Colbert showed his disagreement towards King Louis XIV’s greatest monument –
the Palace of Versailles. It created demand for Colbert’s royal factories, but
the expense of the construction worth enormous and drained a lot from coffers. Nevertheless,
Colbert’s excellent skill as a financier allowed France to survive the long
period of construction of Versailles.
Colbert continued to serve as Finance
Minister of Louis XIV for about two decades. He ruled with discipline and
strictness. He hated inefficiencies and punish those who came in late. The
famous letter writer of Louis XIV’s reign, Madame de Sevigne, described Colbert
as a Man of Marble, because of his attitude and his incorruptibility.
Nevertheless, Colbert did accumulated a huge personal wealth during his time as
Finance Minister. Colbert served as finance minister of King Louis XIV until
his demise in 1683.
Colbert left an economically and
financially strong France. Although with limitations, he did bring in reforms
that allowed France to survive the extravagance of its majestic King. However,
after he passed away, his successor failed to manage the finances well. And so,
with Louis’ Wars, France succumbed to financial decline, which lasted for
decades and ending with the French Revolution. Jean Baptiste Collbert embodied
the mercantilist ideas of his time, leading to the creation of the word
Colbertisme that defined his policies.
See also:
Bibliography:
Cameron, Rondo. A Concise Economic
History of the World: From Paleolithic Times to the Present. New York: Oxford
University Press, Inc, 1993.
Chappell, william. "Colbert, Jean
Baptiste." in Economic Thinkers: A Biographical Encyclopedia. Edited by
David Dieterie. Santa Barbara: ABC-CLIO, LLC, 2013.
Davidson, Marshall. France: A History. New
Word City.
Rosner, Lisa & John Theibault. A
Short History of Europe, 1600 - 1915: Search fora Reasonable World. Armonk, New
York: M.E. Sharpe, Inc., 2000.
Vittoria, Antonio. An Economic History
of Europe: From Expansion to Development. New York, New York: Routledge, 2006.
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