Conversations on Europe. "Economic Liberalism and the Weakness of the State: Monetary Lessons from the French Revolution."

Rebecca Spang, associate professor, University of Indiana.

Historians tend to think of the French Revolution as a key episode in the creation of a strong central state—in this, Tocqueville argued long ago, it may have continued the work begun under Louis XIV. But attention to monetary questions suggests a different story.

The revolutionaries’ creation of the assignats (paper currency backed by nationalized Church lands) and that currency’s demise six years later remains one of the most famous historical instances of monetary innovation. While most scholarship has followed classical and neo-classical economists in arguing that the problem was chiefly one of quantity (too much paper was printed and inflation “inevitably” resulted), Professor Spang wants instead to consider what this episode tells us about the French state. Throughout most of the early-modern and modern era, states have monopolized the legal production of money (as they have the legitimate use of force). She argues that the revolutionaries of 1789-1793 and 1795-1799 did not intend to subvert this monopoly but they did so nonetheless, through their economic policies and practices. Their commitment to an extreme version of liberalism—one in which even the trade in money was more or less “free”—was intended to strengthen the economy. Instead, by encouraging locally produced small change and refusing to enforce the circulation of paper on par with metal, revolutionaries undermined the assignats and weakened the credibility of the nation-state that had issued them. In their attempt to strengthen the economy by freeing it, revolutionaries weakened the state.

Rebecca Spang studied at Harvard and Cornell and was a member of the Michigan Society of Fellows. Her first book, The Invention of the Restaurant: Paris and Modern Gastronomic Culture won several prizes and has been translated into five languages. Her Stuff and Money in the Time of the French Revolution is forthcoming from Harvard University Press.