In Stuff and Money in the Time of the French Revolution, Rebecca Spang turns to one of modern history’s most infamous examples of monetary innovation to demonstrate that money is as much a social and political mediator as it is an economic instrument. In her tracing of the creation and abandonment of the assignats—a currency initially defined by French revolutionaries as “circulating land”—we gain not just a new understanding of the Revolution but also greater insight into larger truths about the chasms that can arise between intentions and outcomes, political ideals and practical realities. With those lessons in mind, we asked Spang how the French Revolution’s failed monetary experiment may help us understand the present eurozone impasse.
In the eighteenth century, fiscal-monetary crises provoked two major revolutions. “No taxation without representation” was an early rallying cry of the American Revolution and something similar is true for France, as well. Throughout the eighteenth century, the French monarchy repeatedly tried to tap the vast wealth of the nobility and the Catholic Church. The rich and the super-rich stymied these attempts at more equitable taxation by charging the monarchy with “despotism” and positioning themselves as defenders of the public good. Noblemen and magistrates thereby successfully protected their own privileges—including their largely tax-exempt status—by claiming to be at the vanguard of resisting oppression. Some would say this is what anti-EU Conservatives in Great Britain are doing today; you could also think of the Koch Brothers and other wealthy Tea-Party supporters in the US. In the short term, it was an effective strategy. But it had its limits.
After several years of stalemate and near government shutdown, the King agreed that the Estates-General (the French parliamentary body) would be allowed to vote on any new taxes. It was men elected to that body who rejected centuries-old procedure and instead—speaking, as the elites had done, in the name of “the public”—took the revolutionary step of proclaiming a National Assembly. The French Revolution was a case where no one was trying to start a revolution: the King and his ministers wanted to increase tax revenues, while the political elite wanted to protect their wealth. Similarly, when European officials say that Greece needs to honor its debt, they are taking a conservative position. But it’s one that is having radical effects.
Looking at the case of the French Revolution, we see that trying to hold onto power and privilege by claiming to have the public good at heart can easily backfire. It empowers others to make the same claim. In this sense, calling a referendum was a stroke of genius on Alexis Tsipras’s part. It lets Syriza take the political-moral high ground, and rightly so. At the same time, the Revolution’s history is the story of one unintended consequence after another. So I find it hard to join those who are cheering the current situation as a victory for “democracy” and the beginning of the end of neoliberal austerity. Because I know we don’t know what comes next.
Q: As in the eurozone, revolutionary France saw the introduction of a new currency: the assignats. What was intended by the creation of the assignats, and what—if anything—might their history teach us about the euro?
The assignats were paper instruments based on the value of properties nationalized from the Catholic Church. They were created so that France’s national debts could be paid with that property. For their proponents, the assignats were the most solid form of currency imaginable: circulating land! For their opponents, however, the bills were blasphemy, an attack on the religion that had been a fundamental part of French life for centuries. Money creation was hence absolutely central to the divisive politics of the Revolution. The disciplinary distinction between economic history (today, usually done in Economics departments) and political or social history has made this issue’s significance for the Revolution difficult to see, however. In fact, several very clever historians have said to me, “Oh, I never understand any of that financial stuff because it’s all so technical. I just skip those debates and go to the parts where the Assembly is talking about liberty and rights.” One of my main goals with Stuff and Money in the Time of the French Revolution was to say that “technical” economic-monetary questions and “ideological” political matters really have to be understood as part of a single history.
The creation of the euro was in many ways very different. The political goal—and remember this is in the immediate context of the USSR’s collapse and Germany’s pending reunification—was to foster a sense of shared European identity, facilitate trade, and help create a “Europe” that could be a credible international counterweight to the United States. At the same time, strict economic criteria (having to do with inflation rates, debt levels, etc.) were established for participation in the euro. So, in both cases, we see laudable political ambitions (equality, rights, citizenship) yoked to economic philosophies that make those aims increasingly more difficult to achieve. And in both instances, I think, the tension arises from confusing political liberty with economic non-regulation.
Q: Are we right to take from these histories an overall wariness towards monetary systems as tools for political change?
Can I say both “yes” and “no”?! Yes, because everybody uses money, so these sorts of policies are a really good way to make sure the entire population is affected by what the government does. Everybody pays attention. It really creates a sense of “public” policy. But this means the stakes are very high.
Right now, I think we see a real disjunct between the political ideals of the European Union—human rights, peaceful cooperation, an alternative to the militaristic, nationalism of 1914-1945 that reduced Europe to ruins—and the monetary policies-politics of the eurozone. The eurozone and the EU are not identical (Britain is part of the EU but it doesn’t use the euro, for instance). But the danger is that the social disruption caused by economic “austerity” in much of the eurozone polarizes politics, such that we see growing radicalism both on the left (Syriza, Podemos) and on the right (a whole host of xenophobic, arguably neo-fascist, nationalist parties). Right now, these extremes are actually finding common ground in their opposition to the EU and the Eurogroup: Marine Le Pen, leader of the far-right French National Front party, congratulated Greece on the outcome of Sunday’s referendum and she’s been known to quote Yanis Varoufakis.
Q: At the risk of forcing this comparison past its usefulness, does the present situation include a counterpart to the French Revolution’s radical break from the past? Would it be the original creation of the European monetary union? A possible Greek exit?
The creation of the euro was revolutionary insofar as it directly challenged what is sometimes called the “Westphalian” model of money: one nation=one currency. That model is called Westphalian after the 1648 Treaty of Westphalia, but it really only became the norm less than two centuries ago. (Another HUP book, Stephen Mihm’s A Nation of Counterfeiters vividly evokes life in the United States in the pre-Westphalian era, when thousands of banks issued their own bills). So, yes, the euro was a revolution of sorts, but it was a quiet one and it certainly wasn’t intended to be “revolutionary” in the usual meaning of that word.
As for “Grexit”: it would depend, in part, on whether Greece left the eurozone or the European Union. If from the former alone, the immediate effect for Greece could very easily be the outbreak of full-scale social and political revolution, as people discover that voting against austerity doesn’t immediately create prosperity. If the Greek economy were then to recover, however, this whole episode would reveal austerity as a deeply flawed policy and doing so ought to have significant effects across the rest of Europe (and, indeed, the world). If Greece leaves the EU? Well, there’s going to be a referendum about Britain doing that, and if they both go, it’s hard to imagine the EU continuing to exist in anything like its current form. Greece is the one instance of successful political nationalism in the early nineteenth century. I personally hope it doesn’t become the same for the twenty-first century. Nationalism doesn’t fit on the Left-Right political spectrum—nationalists can be either, or a mix. But as a historian of modern Europe, it’s hard for me to think of nationalism as a progressive force.