Louis XIV: Reforming the financial system post Colbert (1683-1715)

He was the son of Michael le tellier so he had already had good decision making and planning domination in the military. However he was not very radical he ensured the continuity of Colbert's reforms.

For example: He wanted to centralise financial control and planning, regulate trade to a greater extent and he did succeed in increasing the effectiveness and quality of the wool industry, AND he employed the intendants as 'snoopers' to ensure central orders were being followed.

He was for the persecution of the huguenots (unlike Colbert). 1 to 3 million huguenots left France, 200,000 of them left the Silk industry in Lyon which disrupted trade and commerce in provinces.

Free trade: Idea that trade would take place between natons without any taxes being paid. It would of boosted France's empire and allowed greater trade in the export market. 

Counseil de Commerce: (Brainchild of Colbert) By 1700 the instritution realised that France needed to catch up with the Dutch and the English so they invested more money to build up manufacturing.

Give credit for introducing a fairer system of tax. More radical than Colbert and Louvois.

Vauban (a military general and engineer) advocated for a 7% income tax: this did not happen as it was so radical.

Instead the Capitation was introduced. A short term messure to alleviate the impact of the 9 years war. Each person in a household was to pay it and everyone paid the same amount.

He reduced the taille and payment of rentes in 1697 which reduced the financial burden on the poorest people in the 3rd estate. 

The problem with the Capitation was that it was only meant to be a short term measure during the 9 years war. Therefore there was major corruption and ineffectiveness in collecting it.

Had to finance the War of Spanish Succession. He intorduced the Dixieme, Europe's first ever direct income tax: based solely on what you earn... the more you are worth = the more you pay.   

With the Dixieme the Tax yeild doubled. 

Problems with the Dixieme: there was mass evasion and corruption in collection. 

Continued problems in France...

War Louis kept going to war and trying to (at the same time) afford the cost of court and the privileges at Versailles. 

Historiography Campbell says the end of Louis' reign was a financial failure - debasement of the coinage meant money was worth less which led to mass inflation. 

The famine was so bad that Louis had to personally ask the people to stay supporting him.

By 1715 the debt was 2300 million livres.