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The Impact of Debt on the French Revolution
The French Revolution was fueled by the collapse of the French monarchy under the weight of its debts. Contrary to Hume's prediction, the French revolutionary regime assumed the king's debts in the name of the nation itself, leading to a sustainable path. The revolution highlighted that modern states can secure vast long-term borrowing by bureaucratizing debt and channeling it through the state machinery. Post the French Revolution, state debt transformed into a self-sustaining system, with the state acting as a debt servicing machine, ensuring continued stability despite fluctuations in debt.