How did France balance the budget by 1738?

Question

I recently read (Citizens by Simon Schama) that France had a per capita debt of two-thirds of the annual income of a carpenter or tailor in 1714. By 1738 France had managed to balance the budget (more-or-less) despite the failure of John Laws' bank managed loan system. Given the failure of Banque Generale, what were the other strategies or predicaments that lead to France balancing the budget by 1738?

Answer 1

Balancing the Budget is very different from eliminating the National Debt. A Balanced Budget simply means that a country made a decrease, no matter how small, in the National Debt over the specified time period (usually a year).

Given the horrendous expense of running Louis XIV's court, it is easy to see how the Budget might have improved simply in consequence of his death in 1715. According to Wikipedia's article on Louis XV it was sufficient to stabilize the French currency in order to complete the process of balancing the budget by 1738. However, no mention is made of eliminating the French National Debt.

Answer 2

As Pieter Geerkens pointed out, a balanced budget and the national debt are NOT the same thing. A balanced budget means that the national debt is not getting WORSE, not that it is being eliminated. Put another way, a balanced budget means that receipts and expenditures are in "balance" for a given year. That is not to say that the "cumulative" budget, for all years is in balance.

There were several reasons why the French budget was relatively easy to balance in 1738, and not some other year, and they mostly had to do with Louis XV, the French king.

1. Louis XV (born in 1711), was a relatively young king, who had not developed the expensive tastes of his later years (e.g mistresses). His wife was Marie Leszynski of Poland, a virtuous, frugal woman.

2. Louis XV's Prime Minister from 1726-43 was Cardinal Fleury, his former tutor, an able and efficient man who built roads and canals in France, while stabilizing the country and reining in other expenses. Subsequent Prime Ministers were neither as efficient or well meaning.

3. There were no major wars going on, like the War of Spanish Succession that closed out Louis XIV's latest years, or the Wars of Austrian Succession that began shortly afterwards in 1740.