French Industrial Revolution: Challenges and Growth 1789-1860
The Industrial Revolution in France
In the mid-eighteenth century, France was, due to a variety of circumstances, better prepared than England for a great economic effort. Contributing to this were its natural wealth, population, number of flourishing industries, trade volume, etc.
However, during the nineteenth century, France’s industrialization was considerably delayed. The main causes of these delays were:
- Poverty of Coal Beds: France had coal, but its sites were located in geographically difficult-to-access areas.
- Unique Structure of Land Ownership: Confiscation of land occurred, but the new owners were poor peasants who did not have enough capital to innovate. Innovations were introduced so slowly that the agricultural sector became a drag on other economic sectors.
- Poor Credit System: Modern banking did not appear until the end of the 19th century, so there were no banks to fund modernization. (Law’s attempt to strengthen the banking system failed).
- Little Entrepreneurship: There was no business bourgeoisie; the existing bourgeoisie was directing their investments to fixed income, lacking the entrepreneurial dynamism of the English bourgeoisie.
- The period of wars and revolutions that occurred.
Understanding the Evolution of France’s Economy
First Period (1789-1830)
France was involved in a war that resulted in large-scale compulsory labor. The increased demand that existed in this period increased economic production but with little economic progress. Some weaving looms and steam engines were installed, but the chemical and steel industries suffered a major impasse.
Of note is the presence of English technicians and English capital to finance economic development in these sectors.
In 1815, Napoleon was defeated, and after a post-war period, stagnation resulted from the wars that drained wealth and resources (1789-1830). The war cost the French economy more than two million men, absorbed all savings, and paralyzed the economic effort that had begun.
Second Period (1830-1850)
From 1830 to 1850, a period of economic effort began, which was evident:
- In the textile industry
- In the steel industry
- In the emergence and development of railways
- In the creation of joint-stock companies
The Reign of Napoleon III
The strongest economic effort took place under Napoleon III. During this time, with an authoritarian regime, there was a considerable departure for the French economy.
- Development and organization of credit, construction of railroads, and great public works all contributed to an unprecedented industrial effort. As a result of economic development, the working classes became aware of their organization.
- The structure and functions of the Bank of France were rightly reorganized.
- New banks (e.g., Credit Lyonnais) and societies of considerable importance (e.g., Credit Mobilier) were created.
- Great public and municipal works were undertaken.
- The commercial sector was transformed with the emergence of department stores, a manifestation of commercial capitalism.
- France moved towards a free trade policy by signing the treaty with England in 1860, which stimulated much of French industry.
- The mining, textile, and steel industries developed greatly.
- The increase in industrial production ran parallel with sustainable consumption and expenditure on luxury goods.