Why did England have such powerful economic growth in the 17th and 18th century, while France languished? Why did England lead the way in technological achievement, advancing into the Industrial Revolution, while France remained mired in the past and oppressed by poverty and tyranny? And what’s the relevance of their contrasting experiences for us today?
Perhaps the contrast was due to England’s limited government. The Magna Carta forced the king to call Parliament if he wished to levy a tax, however Parliament usually demanded a voice in government, so the Stuart kings of the 17th century preferred to rule without them. This kept taxes low or nonexistent, and enabled the English to accumulate vast amounts of capital, which they invested and built wealth. Near the end of the 17th century the Stuarts kings were replaced in a bloodless revolution. The new monarchs agreed to an English Bill of Rights, which limited royal power and granted even greater political and economic freedoms.
Assured of low taxation, of their rights as freeborn Englishmen, and of a free market economic system which rewarded hard work and thrift, they began to accumulate wealth. Soon London became the financial capital of the world. Their merchant ships spanned the globe, and their financial sector provided capital for world markets. By the 18th century wealth continued to accumulate, helping to catapult Britain into modernity, allowing then to be at the cutting edge of innovation, building the factories which became the industrial revolution, and exporting their products world-wide.
Across the channel their French neighbors were ruled by absolute monarchs. There was no Magna Charta, no Parliament to control the crown’s taxing and spending powers. The Bourbon monarchs of the 17th century, Louis XIII and Louis XIV, squeezed every centime they could out of the French people to build spectacular palaces and massive armies. They also forced the Protestant minority, which was most of their entrepreneurial class, to convert to Catholicism or leave France. These Huguenots emigrated to Holland, England or the 13 colonies in America, where they blessed their new homelands with their knowledge and skills. Rockefellers, DuPonts, and Gettys settled in New York, where they built fortunes free of the taxation and persecution they experienced in France.
The Bourbon monarchs of the 18th century, Louis XV and Louis XVI, continued their heavy taxing and spending policies until their entire system collapsed into the chaos and bloodbath of the French Revolution. Dickens’ Tale of Two Cities confirms this comparison of London and Paris. While England was busy investing, creating and producing, France was beheading their population and setting government price controls on their commodities, which further decreased productivity. When farmers hoarded their grain, rather than selling it at government imposed prices, they too were executed. Who would go to the trouble of producing a crop, if forced to sell it at a loss or forfeit one’s life. In their hunger and fear the French sought the personality cult of a strong leader, Napoleon Bonaparte, who promised them “liberty, equality and fraternity”, but actually brought more tyranny, then marched them to their death across Europe.
What lessons can be learned from 17th and 18th century England and France? Low taxes, limited government, and free markets produce wealth and freedom. High taxes, government-controlled markets and charismatic leadership produces hunger, suffering, and tyranny. If we do not learn from history, we are doomed to repeat it, but one thing we learn from history is that we usually don’t learn from history.