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Political Events and Economic Ideas

Political Events and Economic Ideas

Edited by Ingo Barens, Volker Caspari and Bertram Schefold

The influence of political developments on the evolution of economic thought is the main theme behind this book. As the authors reveal throughout the book, history has shown many times that political events can trigger the formulation of new economic conceptions that in turn influence the future economic development of a country.



Subjects: economics and finance, economic psychology, history of economic thought, political economy, politics and public policy, political economy


There was an explosion of interest in political economy in mid-eighteenth century France. Many were disappointed and puzzled that while Paris was the intellectual capital of Europe, and France had exercised great military power in the reign of Louis XIV, she was finding it difficult to finance the elementary needs of government without debts which threatened to become unsustainable. The French state had to pay higher interest rates than the governments of Britain and Holland, and higher even than those paid by private borrowers in France itself, because of fear that escalating government debt might become unfinanceable. Equally critically, French towns and the countryside suffered from repeated scarcity despite France’s exceptional fertility. There was extraordinary distress, and the poor lived on the borderline of subsistence while the wealthy displayed ostentatious luxury. A poor state, a peasantry with many close to starvation and conspicuous consumption by an often idle nobility produced internal contradictions which many were beginning to regard as unsustainable. The paradox of a rich country and a near-bankrupt government was weakening the nation. The resolution of these difficulties concerned every thinking Frenchman who cared for his country. The anomaly of French economic weakness in comparison with Great Britain, France’s principal competitor for European and world influence, also attracted attention. It has been widely suggested that Britain and France fought what was in effect a ‘Second Hundred Years War’ from 1688 to 1815 for European and world influence. Britain mostly enjoyed naval superiority...

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