Financial Crisis and Failed Reforms

The monarchy's financial crisis, chronic since Louis XIV's wars, became acute under Louis XV. Expenses consistently exceeded revenues, with debt service consuming an ever-larger share of income. Each war created new debts that peacetime economies could not eliminate. The fiscal system's fundamental inequity—exempting the wealthy while burdening the poor—became increasingly unsustainable as financial needs grew.

Controller-General Machault's attempted reforms (1749-1754) illustrated both the necessity and impossibility of fiscal restructuring. His vingtième, a 5% tax on all income including noble and clerical, promised fiscal equity and increased revenue. The privileged orders' fierce resistance—the clergy offering a "free gift" to maintain tax immunity, the parlements refusing registration, nobles mobilizing court influence—forced the reform's abandonment. This failure demonstrated that those best able to pay would not accept fiscal responsibility.

The Seven Years' War's costs precipitated new reform attempts. Controller-General Bertin proposed taxes on luxury items consumed by the wealthy. The parlements blocked implementation, arguing that new taxes required national consent through the Estates-General, dormant since 1614. This constitutional argument, however dubious historically, gained public support by linking taxation with representation. The monarchy faced an impossible choice: abandon fiscal reform or convoke an assembly that might challenge royal authority.

Financial expedients increasingly replaced systematic reform. The crown borrowed at ruinous rates, sold new offices that complicated administration, and manipulated currency through recoinage. Tax farming to financier syndicates maximized immediate revenue while creating corruption and inefficiency. Partial bankruptcies through debt reductions destroyed crown credit. These short-term solutions worsened long-term problems, creating a fiscal crisis that would ultimately trigger revolution.