"Are Americans Ready to 'Storm the Bastille'?"
by Brian Maher
"Today is July 14 - Bastille Day - Fête Nationale as the French style it. That is when the Paris rabble besieged the Bastille fortress-prison… in quest of arms against King Louis XVI. Why did furious revolutionary tantrums seize France in 1789? And do they afford us a possible glimpse of the American future? Today we glance backward… in hope of looking forward.
We commence with our co-founder Bill Bonner: "By the 18th century, France had become the greatest power in Europe, the richest and most populous country in the Western world and the clear leader in art, science, philosophy, education, cuisine, fashion, architecture… and, of course, viticulture. It had the richest people in the world, the prettiest women and the best booze. It also had the most enlightened economists - the physiocrats - from whom Adam Smith was boosting some of his best ideas.
A poll taken in the early 1780s might have shown the French to be extremely optimistic and confident. And why shouldn't they be? The last major financial crisis - caused by
John Law's Mississippi Bubble - blew up over 60 years before. And had the world ever seen anything approaching the splendor of Versailles?
Then came 1789 and its revolutionary deliriums: But in 1789, Paris mobs came to the crossroads of history and veered left. They replaced an absolute monarch who had very limited power with a people's republic restrained neither by common sense nor common decency."
Adds Austrian political scientist and journalist Erik von Kuehnelt-Leddihn (1909–1999): "Much of what may appear positive to us today - liberality, intellectuality, humanitarianism - had all been already brought to us by the liberal, courtly absolutism, while the French Revolution which used all these words in reality did nothing more than brutally extinguish them."
Revolutionary Sparks: What spark - or sparks - set the revolutionary fires raging? Let us first issue an advisory: You do not hold a history book in your hands. You hold what passes as a financial newsletter… and a disreputable one at that. Its editor is not a historian at a lectern. He is instead a popinjay in an armchair. He is given to the simplifications, half-truths, errors and pomposities of the type. We nonetheless proceed in the spirit of scholarly inquiry...
First, there was the Estates System: a feudal hierarchy, a social pyramid. At the pinnacle was the First Estate - the church and its officiating clergy. Wedged in the middle, in the Second Estate, was the nobility. Below the nobility squatted the remaining 98% of France, the massive base of the pyramid - the Third Estate - merchants, tradesmen, lawyers, peasants, etc.
The government squeezed the majority of its tax revenues from this Third Estate. That is, the lower 98% hauled the bulk of the freight. The 98% kept the 2% bouncing along in a sort of opulence. Naturally the 98% bristled and bridled under the burden. But they had been accustomed to the business for generations. Why finally raise a rumpus in 1789?
The Hungry Times: An army marches on its stomach, it has been said. A people too marches on its stomach. And in the 1780s, the people of France were falling out of formation. France was the most populous nation in Europe. Thus it required the most foodstuffs.
A fantastic volcanic eruption in 1783 - in present Iceland - threw out so much soot it screened the sun. Winter was grim. And the 1784 harvest yielded lean, lean pickings. The following summers witnessed drought, botched harvests… and famine. 1787 and 1788 brought more hungry times. Accompanying them, inflation. That is because slender harvests raised the price of flour - hence, the price of bread.
Hunger plus inflation is a dreadful combination (as the pitiful residents of Sri Lanka can presently attest). A shrinking belly twinned with a shrinking currency equals an expanding crisis. It means a heart filling with resentment - and often a head filling with ideas. It meant, in this instance, revolution. It meant the slaughter of civilization. It meant rivers, lakes, seas of blood. It meant war… ultimately.
It meant two centuries of ideological mischief of one sort or other. Lenin, Mao, Pol Pot, Castro and other 20th-century hellcats took their examples from the French revolutionists and their catastrophic theories.
The Alan Greenspan of the 18th Century: But we have neglected the crucial role of a critical actor, “the Alan Greenspan of the 18th century” - Monsieur Jacques Necker - to whom we now turn. As Mr. Bonner explains: "None of this might have happened, however, except for the efforts of the Alan Greenspan of the late 18th century - Jacques Necker. It was Necker who replaced laissez-faire economist Jacques Turgot as French finance minister in 1776.
Turgot's free-trade policies had the fatal flaw of all sensible rules - they benefited everybody to the advantage of nobody in particular. Turgot dissolved the guild system, eliminated the corvée (the forced labor of the peasants), imposed a simple property tax and opposed all forms of economic privilege at the expense of the common good. He even set himself against Marie Antoinette, by refusing to grant favors to her cronies. Since everybody in France in the 18th century as well as every American in the 21st wanted the privilege of picking someone else's pocket, Turgot eventually made enemies of nearly every class. Louis XVI, though responsible for the well-being of the entire nation, had not the strength to stand up to the special interests.
Turgot even had a prophetic intuition and a view of history similar to our own. Periods of civilized progress are followed, he noted, by periods of barbarism and madness…Necker made enemies of no one. His program was the opposite of Turgot's; he favored particular privileges at the expense of everybody else. Rather than tax people to pay for state expenses, Necker borrowed - taking short-term, high-interest loans that brought the government close to bankruptcy. Then Necker turned to accounting tricks to show that the government was actually running a surplus! The patsies loved it.
Pushed out for the first time in 1781, Necker was called back on the eve of revolution in 1788 for another dose of his financial magic. But it was too late. The old miracle elixirs - heavier debt and cooked books - wouldn't work any longer; bankruptcy was unavoidable. The aristocrats got rid of him again - on July 14, 1789. The mob, which still had faith, was so disappointed… it headed for the Bastille."
History Doesn’t Repeat, but It Rhymes: History does not repeat. But it does rhyme, as said the great scalawag Mark Twain. No volcanic eruption menaces crop production in 2022. Yet a geopolitical eruption does. Ukraine is referred to, widely, as the world’s “breadbasket.” Yet the basket is largely empty due to the war raging therein. Mass hunger - possibly global famine - lies in prospect.
Inflation is amok. The United States inflation rate runs to 9.1%, officially. Yet the true inflation rate likely approaches twice the official rate. Meantime, citizens of even the most “advanced” nations fume and rage against a corrupt, cancerous and cancel-cultured elite. Many believe they are languishing at the base of the economic pyramid while the pyramid’s tip lives grandly - almost royally. If you seek a present-day Necker you will find him in the chairman of the Federal Reserve - a post presently held by Jerome H. Powell.
Will Americans head for their own Bastille? Perhaps they already have in one sense... Substitute July 14, 1789, for Jan. 6, 2021. Substitute the Bastille for the United States Capitol. Here you may have yourself a rhyme. The cadence is a bit off, of course.
The only blood at the Capitol came spilling out of a 35-year-old Air Force veteran’s neck, shot through by a Capitol policeman. No heads went up on spikes at the Capitol - feet merely went up on Nancy Pelosi’s desk. And the marauders walked out not long after they walked in… and went home. Nor were they famished. By the appearance of many, rather the opposite.
The Church is punchless, American nobility is a contradiction, no king beleaguers us. In brief, 2021 and 2022 America is not 1789 France. Yet certain rhymes are echoing.
Rhymes: Are Americans prepared to truly storm the Bastille in the manner of 1789? Perhaps not yet. Too much faith in the institutions remains, too much faith in America remains. It will take a good deal more privation, a good deal more disillusionment, to shake the faith. But are we ready for the man upon the white horse? Many Americans believe, rightly or wrongly, that a man with white hair was fraudulently elected over a man with orange hair in 2020.
You likewise have a frustrated population sat upon by elites. Many wallow economically and believe the financial system is arrayed against them. Many have lost faith in the democratic process itself. Now set an inflationary fire into the bargain… And history’s rhyme might just be an awful clang.
A prediction? No, of course not. Merely a possibility. And perhaps an unlikely one at that. Yet as history demonstrates amply, the impossible may become the possible… and the possible may become the inevitable…"
