Facebook Follies of Friends and Families

[The Minsky Moment]

Very unwise decision by the French king.

How so?

Precipitated the financial crisis that destabilized the regime. 

[Berkut]

Very unwise decision by the French king.

How so?

I don't think it paid off like they'd hoped, except for a temporary weakening and humiliation for Britain.  Cost a ton of moneys.

The hope was that it would lead to Britain, at that time France's sworn enemy, to lose their most valuable colonies, and open those colonies up to trade with France.

It did cost them a ton of money, but they could afford it, had they made some necessary reforms to their financial system. Absent those reforms, they piled about a third more debt on top of an already unsustainable debt. 

What followed was going to happen regardless of France's involvement in the Revolutionary War. Indeed, from France's perspective, the war against Britain was really just an extension of the ongoing conflict that they had lost so badly 20 years earlier. It was a chance to strike back at a moment when their enemy was weakest and vulnerable, and they took it.

It didn't fix the systemic problems within France, but I don't think anyone thought it would. I don't see it as "very unwise" really, except insofar that France at that time doing anything at all other then desperately trying to reform their own political and economic system was "very unwise". But that was not going to happen. 

In the context of the geo political system in place, I think helping the Americans was a very smart move. It was taken with pretty significant deliberation and consideration - it wasn't jumped into hastily or with any kind of silly ideas about what would be possible, I don't think.

Even in hindsight, I don't think a scenario where the Americans do not receive as much French help has a better outcome for France and the King. They are still fucked. Maybe even more fucked - maybe that prestige and public good will at the victory over the dastardly Brits held off the French Revolution a little longer. 

[Berkut]

Very unwise decision by the French king.

How so?

Precipitated the financial crisis that destabilized the regime. 

That financial crisis was coming whether or not they took on another billion Livre in debt or not.

Going from 2.2 billion in debt to 3.1 billion in debt certainly did not help, but absent that extra billion, they were still fucked.

[Berkut]

What I mean by "they could afford it" is that a country of their size should have been able to afford that expenditure without it leading to a crisis.

Great Britain, for example, spent a hell of a lot more in that losing war, and their entire political and economic system did not disintegrate. And Great Britain was smaller then France.

The problem was not the amount spent, the problem was their fucked up political and economic system that didn't allow the government to manage its expenses or raise money properly. And that problem was going to have severe consequences regardless of taking on yet some more debt they would never manage to repay.

[The Minsky Moment]

1)  There is a very significant difference between 2.2 billion and 3.1 billion - that is nearly a 50% increase.
2)   Your comments above seem be analyzing whether it was good for France.  It may have been but that is not the same as saying it was good for the King.

[Berkut]

1)  There is a very significant difference between 2.2 billion and 3.1 billion - that is nearly a 50% increase.
2)  Your comments above seem be analyzing whether it was good for France.  It may have been but that is not the same as saying it was good for the King.

1) I don't think there was any significant difference between the two, in that both numbers were unsustainable entirely under their economic/political system, and both were perfectly sustainable had they managed to reform that system. The problem was not the number, the problem was the system.

2) The king is harder to evaluate. His position is based on a lot of different variables, and its easy to look at the economic variable in isolation, note that it got worse, and conclude that this was a mistake. What about the other variables that go into his position? His prestige, and the prestige of his nation? It was in desperate need of some kind of win, and the Revolutionary War and Treaty of Paris gave him some much needed domestic and international credibility. Was that worth the billion livre? 

Hell, I don't know. But I don't think it is obviously the case that it was not worth it, and I don't think the decision to help the Americans was clearly unwise.

If we don't use hindsight, then it made pretty obvious sense.

If we DO use hindsight, then that total hindsight tells us that Louis was fucked regardless of that decision, and it isn't entirely clear to me that it took days away from his life - it may very well have added days to his life. I think he was going to be deposed and probably executed in a revolution either way.

[grumbler]

France's financial system, designed as it was around horrific mercantilist thinking, was in terrible shape in 1777, but still (barely) viable.  Entering the American Revolutionary War far worsened her situation, for two reasons:
1.  It pushed the debt so high that money had to be borrowed just to pay interest on the existing debt (an obviously unsustainable situation), and
2.  It exposed a lot of soldiers and officers to a completely different and apparently much more successful idea of how to organize a nation.  That made them much more likely to support major reforms, even in the face of royal vetoes.

France was actually getting to a better place in 1777.  Promotion to the noblesse de robe was giving distinguished middle-class members of the Third Estate a way to gain political power and disproved the concept that noble service to the crown came only through military service and governorships.  When it came time to swear the Tennis Court Oath, a considerable majority of the First and Second Estates were there.  The nobility wanted reform, too. 

The financial crisis caused by the explosion of the French debt after 1778 made a gradual reform inadequate and fostered a sense of crisis throughout the French government.  Had the revolution been delayed a decade or so, it might well have taken a very different form, less susceptible to the radical hijacking that historically took place.

[The Minsky Moment]

France had about 2 billion livres in debt when Louis XIV died.  That was a serious problem at the time, but the debt had been significantly reduced by the eve of the Seven Years War despite the intervening wars and Louis XV's less than frugal habits.  So there was precedent that France could manage - if only barely - a debt of that size.  Piling on another billion in a short period of time was a risky move, especially since Louis XVI was averse to partial defaults, an expediency his predecessor engaged in.

[Oexmelin]

apparently much more successful idea of how to organize a nation. 

The "success" of the United States in the early years was very much up for debate - including for many Americans themselves. If the United States had any influence, it was in providing vocabulary and expand on concepts - not political models for nation building, which, for an overwhelming majority of French political activists, was moot - because the situation between a colony and a millenial monarchy was so alien to one another. 

[Berkut]

apparently much more successful idea of how to organize a nation. 

The "success" of the United States in the early years was very much up for debate - including for many Americans themselves. If the United States had any influence, it was in providing vocabulary and expand on concepts - not political models for nation building, which, for an overwhelming majority of French political activists, was moot - because the situation between a colony and a millenial monarchy was so alien to one another. 

"more successful" is in comparison to France.

I don't think there could be much debate, even at the time, that France in the years immediately prior to the revolution, was a disaster of an idea on "how to organize a nation".

The bar is low, but easily surpassed.

[The Minsky Moment]

The most significant payoff for French foreign policy came in 1812 when an enlarged US (courtesy of Napoleon's canny sale of Louisiana) drew some British resources and attention from the continent during the critical moment of the Russia invasion; however, it ultimately made no difference in the outcome.  By the early 1820s the common British-US interests in Latin America led to what turned out to be a permanent British rapprochement, though one that didn't particularly harm France, given that the Anglo-French rivalry ended around the same time.

So the creation of the US brought no real tangible benefit to France other than bragging rights and a convenient recipient for the offloading of its remaining American continental claims.

The fall of Louis XVI is a historical fact, as are the fiscal troubles that destabilized the regime.  One could argue counterfactually he would have fallen anyways and that may be true. Contrary to Justice Alito and his draft, 18th century historical analysis is not an exact science permitting irrefutable proofs. But it's hard to argue with what did happen.  That Louis XVI may have been going over the cliff anyways doesn't mean tying extra weights to himself was a good idea.

[Berkut]

My contention is that it is hard to know if they were extra weights. They might have been balloons, that just didn't matter because the weight he had already was too great to overcome regardless.

You are correct that there is no exact science, but it's just as hard to attribute what did happen correctly. Generally, I think the mistake is made that when something happens, the assumption is that whatever happened before attributed to the outcome. But there is nothing magic about preceding events that make them pre-disposed towards contributing to the outcome - after all, the outcome we know DID happen is that the King was NOT murdered before he was murdered. Maybe part of the reason he lasted as long as he did (rather then the reason of him not lasting longer) was that he helped the Americans win their war.

Finally, the claim is that the decision to help the Americans was "unwise". That, IMO, is only true if it was clear at the time of the decision that it was the wrong move. 

It's like saying it is unwise to bet $10 on a flip of the coin where I win $20 if I guess right, and then I guess wrong. It is "unwise" in hindsight, since I lost my $10, but in reality, it was a very wise bet, and I should take it again if offered - indeed, it would be unwise to not take the bet.

But fundamentally, you are right - it is almost impossible to really come to any conclusions. Certainly France (and the King) went to shit shortly afterwards.

On the other hand....hell, can't we imagine that without French help, the US fails, and the people of France do not have that "Libertie!" example, and hence do not revolt, perpetuating even longer a terribly unjust system that saw French peasants dying in droves to starvation? 

Would a France better able to survive the debt crisis actually have been better off?

[Josquius]

Wait. Why is a 50-50 win 20 or lose 10 wise?

[alfred russel]

My contention is that it is hard to know if they were extra weights. They might have been balloons, that just didn't matter because the weight he had already was too great to overcome regardless.

The american revolution ended in 1783. The french revolution was in 1789. So even with the ~50% increase in debt the state was able to avoid reckoning for 6 more years. It seems rather counterintuitive to think that France was doomed in 1777 considering how much longer they persisted with additional debt.

Also, the "prestige" of generated for the monarchy in France through the american revolution in no way was going to offset the budget pressures. "Sure we are now insolvent and taxes will have to go way up but the king helped some of the territories of the UK break away" doesn't seem like a winning trade.

[DGuller]

Wait. Why is a 50-50 win 20 or lose 10 wise?

That's the whole point, it's wise to take a bet on a coin flip when you either win 20 or lose 10.  That said, to be pedantic, it's not necessarily wise once you factor in your utility function.  If losing 10 hurts you much more than winning 20 benefits you, then it's not a wise bet.