The Bourbon Monarchy and State Intervention

As the French monarchy centralized power, it increasingly intervened in economic life. Jean-Baptiste Colbert, finance minister to Louis XIV, exemplified this dirigiste approach—the belief that the state should direct economic development. Colbert's regulations, issued in the 1660s and 1670s, specified in minute detail how various goods should be produced. The regulations for cloth manufacturing ran to hundreds of pages, dictating everything from the number of threads per inch to the approved dyeing methods.

While such micromanagement seems absurd today, it established precedents that persist in French economic culture. First, it assumed that the state had both the right and the competence to regulate private economic activity for the common good. Second, it prioritized quality and standardization over innovation and efficiency. Third, it created a vast bureaucracy of inspectors, controllers, and administrators whose modern descendants populate French regulatory agencies.

The Bourbon state also pioneered large-scale public works and state-owned enterprises. The royal manufactories—Gobelins for tapestries, Sèvres for porcelain—combined economic production with national prestige. These enterprises offered their workers unprecedented security and benefits, including housing, medical care, and pensions. The contemporary French comfort with state-owned companies and skepticism of privatization has deep historical roots.

Yet this system also created rigidities that would eventually contribute to revolution. The guilds' monopolies stifled innovation and prevented talented individuals from entering protected trades. State regulations couldn't adapt quickly to changing technologies or consumer preferences. Most critically, the system excluded the growing population of rural workers who flocked to cities seeking opportunity but found themselves locked out of guild-protected occupations.