Five hundred years of French economic stagnation: from Philippe Le Bel to the Revolution, 1280-1789

by Leonardo Ridolfi (IMT School for Advanced Studies Lucca)

In 2008, output per capita in France amounted to around $22,000 dollars per year. After the Second World War, in 1950, annual average income per capita reached $5,000 dollars, while in 1820, at the beginning of the first official national statistics, GDP per capita averaged $1,100 (Maddison, 2010). Nevertheless, precise knowledge of economic growth in France stops when we get back as far as 1820; before this date, the quantitative reconstruction of economic development is shrouded in mystery.

That mystery lies in the difficulty of uncovering sufficient resource material, devising adequate measures of economic performance in the past, and ultimately interpreting the complexity of the dynamics involved. These dynamics stretch far beyond just the mere economic sphere and concern the way a society is itself organised and structured. Nevertheless, several questions spring to mind.

What was the level of material living standards between the thirteenth and the late eighteenth century, from the early stages of state formation to the French Revolution? How did per capita incomes evolve over time? And were French workers richer or poorer than their European counterparts during the pre-industrial period?

This research provides answers to these questions by estimating the first long-run series of output per capita for France from 1280 to 1789.

The study reveals one important conclusion: the dominant pattern was stagnation in levels of output per capita. For the first time indeed, these estimates document quantitatively and in the aggregate what was previously known only qualitatively or for some regions by the classic works of French historiography (Goubert, 1960; Le Roy Ladurie, 1966): the French economy was an inherently stagnating growthless system, a ‘société immobile’, which at the beginning of the eighteenth century was not much different than five centuries earlier.

At the time of the death of King Philip the Fair in 1314, France was a leading economy in Europe and output per capita averaged $900 per year. Almost five centuries later, this threshold was largely unchanged, but the France of King Louis XVI now belonged to the group of the least developed countries in Western Europe. In the 1780s, per capita income was slightly above $1,000, about half the level registered in England and the Low Countries.

Nevertheless, stagnation was not the same as stability. The French economy was highly volatile and experienced multiple peaks and troughs. In addition, these results reject the argument that there was no long-run improvement in living standards before the Industrial Revolution, demonstrating that GDP per capita rose more than 30% between the 1280s and the 1780s.

Yet most of the rise was explained by a single episode of economic growth that took place prior to the Black Death between the 1280s and the 1340s and which shifted the trajectory of growth onto a higher path.

Overall, these estimates suggest that the evolution of the French economy can be suitably interpreted as an intermediate case between the successful example of England and the Low Countries and the declining patterns of Italy and Spain. Being neither a southern country nor a northern one, the growth experience of France seems to reflect this geographical heterogeneity.

 

References

Goubert, Pierre (1960) École pratique des hautes etudes, Laboratoire cartographique, Beauvais et le Beauvaisis de 1600 à 1730: contribution a l’histoire sociale de la France du 17e siècle, Sevpen.

Ladurie, Emmanuel Le Roy (1966) Les paysans de Languedoc Vol. 1. Mouton.

Maddison, Angus (2010) Historical Statistics of the World Economy: 1-2008 AD, Paris.

France’s Nineteenth Century Wine Crisis: the impact on crime rates

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Street Wine Merchant, France 19th century. From Wikimedia Commons

 

The phylloxera crisis in nineteenth century France destroyed 40% of the country’s vineyards, devastating local economies. According to research by Vincent Bignon, Eve Caroli, and Roberto Galbiati, the negative shock to wine production led to a substantial increase in property crime in the affected regions. But their study, published in the February 2017 issue of the Economic Journal, also finds that there was a significant fall in violent crimes because of the reduction in alcohol consumption.

It has long been debated whether crime responds to economic conditions. In particular, do crime rates increase because of financial crises or major downsizing events in regions heavily specialised in some industries?

Casual observation and statistical evidence suggest that property crimes are more frequent during economic crises. For example, the United Nations Office on Drugs and Crime has claimed that in a sample of 15 countries, theft has sharply increased during the last economic crisis.[1]

These issues are important because crime is also known to have a damaging impact on economic growth by discouraging business and talented workers from settling in regions with high rates of crime. If an economic downturn triggers an increase in the crime rate, it could have long-lasting effects by discouraging recovery.

But since multiple factors can simultaneously affect economic conditions and the propensity to commit crime, identifying a causal effect of economic conditions on crime rates is challenging.

The new research addresses the issue by examining how crime rates were affected by a major economic crisis that massively hit wine production, France’s most iconic industry, in the nineteenth century.

The crisis was triggered by the near microscopic insect named phylloxera vastatrix. It originally lived in North America and did not reach Europe in the era of sailing ships since the transatlantic journey took so long that it had died on arrival.

Steam power provided the greater speed needed for phylloxera to survive the trip and it arrived in France in 1863 on imported US vines. Innocuous in its original ecology, phylloxera proved very destructive for French vineyards by sucking the sap of the vines. Between 1863 and 1890, it destroyed about 40% of them, thus causing a significant loss of GDP.

Because phylloxera took time to spread, not all districts started being hit at the same moment, and because districts differed widely in their ability to grow wines, not all districts were hit equally. The phylloxera crisis is therefore an ideal natural experiment to identify the impact of an economic crisis on crime because it generated exogenous variation in economic activity in 75 French districts.

To show the effect quantitatively, the researchers have collected local administrative data on the evolution of property and violent crime rates, as well as minor offences. They use these data to study whether crime increased significantly after the arrival of phylloxera and the ensuing destruction of the vineyards that it entailed.

The results suggest that the phylloxera crisis caused a substantial increase in property crime rates and a significant decrease in violent crimes. The effect on property crime was driven by the negative income shock induced by the crisis. People coped with the negative income shock by engaging in property crimes. At the same time, the reduction in alcohol consumption induced by the phylloxera crisis had a positive effect on the reduction of violent crimes.

From a policy point of view, these results suggest that crises and downsizing events can have long lasting effects. By showing that the near-disappearance of an industry (in this case only a temporary phenomenon) can trigger long-run negative consequences on local districts through an increasing crime rate, this study underlines that this issue must be high on the policy agenda at times of crises.

 

Summary of the article ‘Stealing to Survive? Crime and Income Shocks in Nineteenth Century France’ by Vincent Bignon, Eve Caroli and Roberto Galbiati. Published in Economic Journal on February 2017

[1] ‘Monitoring the impact of economic crisis on crime’, United Nations Office on Drugs and Crime, 2012. This effect was also noted by the French ‘Observatoire national de la délinquance et des réponses pénales’, when it underlines that burglaries sharply increased in France in the period 2007 to 2012.