11 July, 1789: Louis XVI dismisses his finance minister

By the late 1780s France was on the brink of revolution. Support for the Americans during their war of independence, and general overspending, had left it with huge debts. At the same time, a more politically aware population was beginning to demand an end to the absolute monarchy of Louis XVI.

With popular revolts starting to spring up, Louis turned to his popular former finance minister, Jacques Necker, to come up with a solution to the problems.

Necker attempted to solve these problems through negotiation. He organised the return of the Estates-General, an assembly consisting of clergy, aristocrats, and commoners (the ‘Third Estate’), for the first time since 1614.

However, the three parties couldn’t reach an agreement as to whether they should have equal power, or should have support in proportion to their membership. For his part, Necker failed to grasp that the main demand was political reform, not administrative tinkering.

By the summer of 1789, it was clear that the King wasn’t prepared to give up any power, while the Third Estate wanted full democracy, with many even pushing for a republic. On 11 July, all hopes of a compromise were ended when Louis dismissed Necker. This was widely seen as confirmation that the king wished to go on ruling as an absolute monarch. Three days later, crowds would storm the Bastille, showing that royal forces had lost effective control.

The next three years would see the Third Estate, (renamed the National Assembly) firmly in control. Attempts by monarchists to seize back power only boosted the faction that wanted a complete end to the monarchy. After a disastrous war with Austria, these radicals became ascendant, culminating in the formal end of the monarchy in August 1792. Louis would eventually be executed in January 1793.

  • davidstuart

    Umm! Huge debts and a more politically aware population – interesting!

Merryn

Claim 12 issues of MoneyWeek (plus much more) for just £12!

Let MoneyWeek show you how to profit, whatever the outcome of the upcoming general election.

Start your no-obligation trial today and get up to speed on:

  • The latest shifts in the economy…
  • The ongoing Brexit negotiations…
  • The new tax rules…
  • Trump’s protectionist policies…

Plus lots more.

We’ll show you what it all means for your money.

Plus, the moment you begin your trial, we’ll rush you over THREE free investment reports:

‘How to escape the most hated tax in Britain’: Inheritance tax hits many unsuspecting families. Our report tells how to pass on up to £2m of your money to your family without the taxman getting a look in.

‘How to profit from a Trump presidency’: The election of Donald Trump was a watershed moment for the US economy. This report details the sectors our analysts think will boom from Trump’s premiership, and gives specific investments you can buy to profit.

‘Best shares to watch in 2017’: Includes the transcript from our roundtable panel of investment professionals – and 12 tips they’re currently tipping. The report also analyses key assets, including property, oil and the countries whose stock markets currently offer the most value.