Fiat Money Inflation in France
Andrew Dickson White
In Fiat Money Inflation in France, Andrew Dickson White presents the still-largely-unknown story of a major factor behind the French Revolution. As John Mackay writes in the foreword,
It records the most gigantic attempt ever made in the history of the world by a government to create an inconvertible paper currency, and to maintain its circulation at various levels of value. It also records what is perhaps the greatest of all governmental efforts — with the possible exception of Diocletian's — to enact and enforce a legal limit of commodity prices. Every fetter that could hinder the will or thwart the wisdom of democracy had been shattered, and in consequence every device and expedient that untrammelled power and unrepressed optimism could conceive were brought to bear. But the attempts failed. They left behind them a legacy of moral and material desolation and woe, from which one of the most intellectual and spirited races of Europe has suffered for a century and a quarter, and will continue to suffer until the end of time. There are limitations to the powers of governments and of peoples that inhere in the constitution of things, and that neither despotisms nor democracies can overcome.
What's remarkable is how conventional histories of the period treat this huge economic reality as a mere footnote, and that's mostly because historians are not usually alert to the cause-and-effect relationships in economics. But this book is different. The author puts the monetary story right at the center of the action and compellingly shows how it led to a national catastrophe:
[Inflation] brought, as we have seen, commerce and manufactures, the mercantile interest, the agricultural interest, to ruin. It brought on these the same destruction which would come to a Hollander opening the dykes of the sea to irrigate his garden in a dry summer.
It ended in the complete financial, moral and political prostration of France — a prostration from which only a Napoleon could raise it.
This study was first written in 1896, and it has not been surpassed, and nor has its historiographical power been diminished.