Abstract

http://ssrn.com/abstract=2085326
 
 

Footnotes (148)



 


 



At the Origins of Public Credit: A Story of Stock-Jobbing and Financial Crisis in Prerevolutionary France


Malick W. Ghachem


Massachusetts Institute of Technology; University of Maine School of Law

2011

‘The Financial Crisis of 2008: French and American Responses,’ Proceedings of the 2010 Franco-American Legal Seminar, pp. 151-199, 2011

Abstract:     
This paper concerns a stock jobbing scandal involving the French Company of the Indies on the eve of the French Revolution. Speculative trading in the company’s shares on the Paris stock market triggered a credit crisis that brought down the king’s chief minister, Calonne, and ushered in the immediate chain of events that led to the collapse of the Old Regime and the beginning of the French Revolution. The episode witnessed the emergence of the modern French notion of “public credit” as a method of protecting the royal finances from the putatively corrupting influences of speculative capitalists. Two dynamics informed this broader development. First, the enterprise of speculative finance was linked to the worst excesses of Old Regime privileges generally. Second, the crisis of 1785-1787 served to displace the traditional notion of “royal credit” as the asset that required protection from the dangers of financial capitalism, making way for a more abstract, less personalized idea of public credit as an instrument and reflection of the financial power of the nation as a whole. That notion of public credit was, in principle, compatible with a monarchical form of government, but did not require a king to make it work.

Number of Pages in PDF File: 49

Keywords: financial crisis, short selling, credit crisis, public credit, public debt, French Revolution, Company of the Indies, speculation, capitalism

JEL Classification: B10, B12, B15

Accepted Paper Series


Download This Paper

Date posted: June 17, 2012  

Suggested Citation

Ghachem, Malick W., At the Origins of Public Credit: A Story of Stock-Jobbing and Financial Crisis in Prerevolutionary France (2011). ‘The Financial Crisis of 2008: French and American Responses,’ Proceedings of the 2010 Franco-American Legal Seminar, pp. 151-199, 2011. Available at SSRN: http://ssrn.com/abstract=2085326

Contact Information

Malick W. Ghachem (Contact Author)
Massachusetts Institute of Technology ( email )
United States
617-324-7284 (Phone)
HOME PAGE: http://history.mit.edu/people/malick-w-ghachem
University of Maine School of Law ( email )
246 Deering Avenue
Portland, ME 04102
United States
HOME PAGE: http://mainelaw.maine.edu/faculty/profiles/ghachem.html
Feedback to SSRN


Paper statistics
Abstract Views: 345
Downloads: 43
Footnotes:  148

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.406 seconds