Financial Revolutions and Power Transitions, 1600-1815

• In Event: Rising Power and Power Transitions

Abstract

Power transition theory’s focus on industrialization as the source of economic growth limits the theory to the industrial age and neglects alternative sources of power transitions throughout history. We focus on financial revolutions as an infrequent but consequential source of power transitions. We begin with the Dutch Republic in the early 17th century followed by England later in the century, noting the impact of their respective financial revolutions on their power trajectories. We emphasize the role of learning in England’s emulation of the Dutch, its subsequent fears that France might emulate the English experience and surpass Britain in strength, and, in anticipation, its role in forming an anti-French alliance that helped lead to the French Revolutionary Wars. Those wars then prevented the feared impact of French financial reforms that had begun in 1790-92, by spiraling France into a debt and inflation crisis.

Author

• Jack S. Levy, Rutgers University