Mercantilism and Jean Colbert

The Reforms of Jean Colbert, Louis XIV’s Finance Minister

Presented By

Sunil

Amaan

Introduction

Jean-Baptiste Colbert (29 August 1619 – 6 September 1683) served as the French minister of finance from 1665 to 1683 under the rule of King Louis XIV.

He achieved a reputation for his work of improving the state of French manufacturing and bringing the economy back from the brink of bankruptcy.

France actually became increasingly improverished because of the King's excessive spending on wars. Colbert worked to create a favourable balance of trade and increase colonial holdings.

Historians of mercantilism consider Colbert a key figure.

2History of Globalisation- ESC Pau IMBA

Cont.. In 1640, Colbert entered the office of Secretary of War le Tellier.

Wrote many letters to Mazarin about his wasteful and messy finances.

In 1661 the death of Mazarin allowed Colbert to take the first place in the administration, acquired power in every department except that of war.

The paper also contained an attack upon the corrupt financial minister Nicholas Fouquet( 1,20,000 livres)

French Govt. 90 million livers outstanding loans &20 million livers fine(debts)

Within four years he balanced the budget


History of Globalisation- ESC Pau IMBA 4

How come so

expensive??

ARREST HIM!!

Invited

Five Great Farms and the Attempt to Create a Duty-Free Zone

• His famous tariff of 1664 reformed the customs collected in the north-central portion of the country known as the Five Great Farms, and came close to making this region a free-trade area.

• Colbert, in 1664, substituted for this complicated system a single import and export duty, making at the same time a considerable reduction.

• Diversify of duties and uniform jurisdiction to deal with them.


Reform of tax collection Horrible mess in the 1600s. The government was deeply in debt; it was

giving up a huge percentage of its revenues to pay for the tax collecting and also, for interest on its debts.

For example, By 1661, under Mazarin, of the 84 million livres exacted in taxation, only 23 million actually made it to the royal Treasury.

Colbert using the biding method to reforms the tax collection.( taking the highest bidder) and minimize the tax burden on people

In 1670, Even though the amount of taxes paid by the French people were only 12 million livres more than in 1661, the government pulled in almost 40 million livres more.


Reforms of the gabelle (salt-tax)

Salt was a government monopoly; in many regions, the people had to buy fixed amounts of it from the government.

The salt-tax was up to 28 times higher in the around Paris, compared well as region farther south.

The varying prices of salt made conditions ripe for smuggling.

In 1663,cobert had the salt tax reduce by 6 livres per minot and later he

reduce it even more.


Reforms of tax levying

The King derived the major part of his revenue from a tax called the taille,(The taille was a direct land tax on the French peasantry and non-nobles in France. The tax was imposed on each household and based on how much land it held.

According to Colbert, resulting from the suppression of useless offices, was that the holders, on losing their position, became liable to the payment of the taille.


Building up French Naval Power& Care of the Forests

Colbert wants to make France a great power at sea.

This meant forming a fighting fleet, building andequipping the king's ships, fortifying ports, and encouraging the merchant navy.

The number of French sailors increased from 36,000 in 1670 to almost 78,000 in 1683.

In the years 1689-97, the English estimated that they had lost a total of 4,000 ships due to attacks by the French

A representative of the navy could go through a forest that was about to be cut, and mark certain trees for future naval use.

Creates of monoploy growth(meaning that only one species of tree would be growing),


Building up French Industry High Tariffs on Foreign Products

• Protect French industry by making foreign goods to expensive for French consumers to afford.

• Colbert levied moderate tariffs on Dutch goods; in 1667, he made it prohibitive, by doubling and even tripling tariffs.

• The tariffs of 1667 brought on a war with the Dutch; the result, as established by the Treaty of Nimwegen (1678), was a reduction of tariffs against Dutch goods to the lower levels of 1664.

• Tariff of 1667 My idea was not to attempt too much, but to impose a duty sufficient to encourage our manufactures, and to gradually and gently oust foreigners;


Effects of the Tariffs

The Dutch, decided to prohibit French products entirely, although this was against treaty. And war happened b/w them in 1972.

In 1683, we find Colbert writing that the people of France, after twenty years of his mercantilist policies, were still struggling with poverty and famines that would visit France from time to time.

In 1698, the industry report of the France as much same and that employment in the various industries had plummeted

At Lyons, some 18,000 looms were employed in silk manufacture, but now, only 6,000 were. 11History of Globalisation- ESC Pau IMBA

Cont..

In 1700, a council of commerce was assembled

The representative from Dunkirk stated that the tariffs hadindeed benefitted some, but hurt the country as a whole. That from Nantes said that “Liberty is the life of commerce.”

Other Improvements

Internal improvements - Although in the late 1500s, France had spent up to 1 million livres a year in building roads, Languedoc Canal(Mediterranean Sea to the Bay of Biscay (the French coast along the Atlantic).


Monopolies with the French companies

• Colbert established companies with the sole (monopoly) privilege of trading in particular regions of the world. In 1664, the French East India and West India companies were founded. They were soon followed by the North European, Senegal (to trade with Africa, in 1673), and Levant (Middle East) companies.

• These companies all failed, because Dutch are more skilled at hauling wine abroad, the Dutch were closer to the markets in northern Europe.


Conclusion

• Colbert was another great minister of the period. As Louis’ finance minister, he sought to:

• Encourage French industry• Create a strong merchant

marine• Enforce protective tariffs• Develop Canada as part of

the French Empire.


Documents

Mercantilism and Jean Colbert