With the collapse of the ancien régime following a fiscal crisis, the Revolutionaries of the 1790s sought to design a more equitable tax system, based on direct taxes; most indirect taxes were abolished. These new taxes, though, proved insufficient to meet France’s needs, particularly given the collapse of public credit due to political instability. Committed to honouring the debt incurred by the ancien régime, and facing the mounting expenses of a major European war after 1792, the Revolutionary governments failed to stabilise the fiscal situation. Instead, they were pushed to compensate for insufficient tax receipts by levying forced loans, imposing price controls and printing money, which produced hyperinflation by the mid-1790s. These drastic measures, and their failure to resolve the fiscal problems of the 1790s, did much to discredit the Revolutionary regimes, and consequently facilitated the emergence of post-revolutionary politics under Napoleon.

France was at the centre of a transnational process of nineteenth-century European state formation. Since states have often reformed themselves as a result of interaction with one another, the book begins by taking a wide angle on the development of the French case, situating it within the context of state formation in Europe and the Americas. Not only were the French influenced by the progress of rival states, they also shaped the way in which other European and American states were formed. Under Napoleon, for instance, the French exported their tax system across Europe, shaping the subsequent development of taxation in large parts of Germany, Italy and the Low Countries. Also discussed here is the historiography of the French state, and its emphasis on the Revolutionary and Napoleonic period of 1789–1815 as the formative years of the nineteenth-century French state. This book, by contrast, demonstrates the importance of the post-Napoleonic period in state formation, and the opening chapter outlines this argument.

The mid-1850s were years of economic boom, which gave way to a slump at the end of the decade. To maintain railway construction, the ongoing rebuilding of French cities and to counter economic malaise, government spending on public works rose. The regime also sought to stimulate the economy through fiscal reform; a trade treaty with Britain in 1860 formed part of a programme intended to reduce taxes and streamline the state. Affairs abroad, though, complicated this agenda. Profiting from the destabilisation of the international order that followed the Crimean War, France intervened militarily in support of Italian unification, while simultaneously seeking greater prestige through a policy of all-out global interventionism in the Middle and Far East and Mexico. The costs of interventionism abroad, combined with ongoing expenses in Algeria and on public works, eroded the regime’s latitude to lower taxes, straining the legitimacy of the fiscal system. Meanwhile, defeat in Mexico added to this discontent, producing a crisis of the fiscal-military system, which weakened the regime, easing its collapse in 1870 during the Franco-Prussian War.

Restored at the allies’ behest in 1814 and 1815, the Bourbons felt considerable pressure to bolster their legitimacy by asserting their nationalist credentials. Consequently, in the 1820s the French exploited the possibilities of public credit to finance a highly aggressive foreign policy, intervening in Spain in 1823, Greece in 1827–9 and Algeria in 1830. Thus, Restoration France became a quintessential fiscal-military state on the model of eighteenth-century Britain. Moreover, the growing French reliance on public credit stimulated the rise of the Paris Bourse as a major international financial centre. French governments thereby gained a new diplomatic tool that facilitated foreign government loans in Paris. The restored Bourbons also sought to use public credit to reinforce the regime by ‘closing the last wound of the Revolution’, compensating those who had lost property following the Revolution through the proceeds of a debt conversion. However, his idea proved highly controversial – though less because it would compensate formerly exiled aristocrats than because it would reduce the income of small rentiers and civic institutions with endowments invested in rentes.

The limits of the Bourbons’ attempt to assert their legitimacy became apparent in the late 1820s, particularly as the economy slumped after 1825. The downturn fuelled the rise of economic liberalism, invoked by a vocal group of the government’s opponents in their quest for a smaller state and cheaper government – ‘un gouvernement à bon marché’. Though many of these people found themselves in power after the overthrow of the Bourbons in 1830, the new July Monarchy did little to reduce the size of the state. Rather, it largely upheld the existing fiscal system, doing little to reduce taxes and resorting to public credit to cover shortfalls in public finance that arose in the immediate aftermath of the Revolution of 1830. Borrowing therefore facilitated the survival of the fiscal system, which only incurred minor changes to direct taxes, alcohol duties and customs. While the Revolution changed little and thus demonstrated the continuities that affected French politics and economics during the ‘Age of Revolution’, it produced new pressures to reform the fiscal system, many of which encouraged the development of the French state’s economic interventionism from the late 1830s onwards.