Economic Strain and Fiscal Crisis

The costs of Louis XIV's wars and magnificence ultimately overwhelmed Colbert's careful financial management, creating fiscal crises that persisted until the Revolution. The contrast between Versailles's splendor and popular misery became increasingly stark as the reign progressed. Financial expedients adopted to sustain royal policies undermined long-term economic health while storing social resentments.

War expenses dominated royal budgets, consuming over 80% of revenues during major conflicts. The standing army's maintenance, fortress construction, and naval expansion required enormous continuing expenditures even during peace. Subsidies to allies, increasingly necessary as French isolation grew, drained treasure abroad. The Spanish Succession War's costs exceeded total annual revenues, requiring desperate expedients that mortgaged future income.

Traditional revenues proved inadequate for expanded expenses. The taille's yield stagnated as exemptions proliferated and collection resistance increased. Indirect taxes, farmed to financier syndicates, generated corruption that limited royal receipts. New taxes—the capitation (1695) and dixième (1710)—theoretically applied to all subjects but faced noble resistance and administrative difficulties. The sale of offices reached absurd levels, creating thousands of useless positions that complicated administration.

Borrowing mechanisms grew increasingly sophisticated and expensive. Rentes proliferated, creating debt service obligations that consumed growing revenue shares. Short-term borrowing from financiers at usurious rates addressed immediate needs while creating future problems. Currency manipulation through recoinage provided temporary relief at credibility's cost. By reign's end, debt service consumed over half of revenues, creating structural deficits that would plague Louis's successors.