Lawrence Broz 213an international money market. However, regarding the stability of the international
gold standard, the French practice of assisting Britain in time of crisis certainly
played a role. These actions as lender of last resort were not based on the desire
to provide the system with this public good but to insulate the French economy
from the untoward effects of British policies, to which it was vulnerable.
DOMESTIC POLITICS OF FRENCH MONETARY POLICY
The political sources of French monetary institutions and policies were deeply
ingrained in the structure of French society. Unlike England, France did not
develop an alliance of land, finance and bondholder in favor of gold-standard
orthodoxy. Although these groups played a crucial role in the formation of the
country’s monetary institutions and policies, their specific situations vis-à-vis
the domestic and international economies produced monetary outlooks that were
quite different from those of their English counterparts. The French landed sector
is a case in point.
In terms of land tenure, one of the consequences of the revolutionary period in
France was that there was no precise equivalent of the English landed aristocracy.
In contrast to the British landlord, who made his living by renting his land on
long leases to tenant farmers, land was widely distributed in France and worked
in small, inefficient units by owner-operators for subsistence needs or for the
domestic market. This fundamental difference in land-tenure systems was of
considerable importance to national monetary preferences. Whereas the small group
of well-placed English landlords sought stable or falling prices to preserve the
purchasing power of their rental incomes, the multitudes of small farmers in France
preferred rising prices for their crops. For this reason, land was consistently in
the nationalist camp in France, seeking a policy to insulate the domestic economy
from the deflationary aspects of the gold standard. Moreover, the landed sector
was politically powerful in France but for a reason different from that in England.
While English lords could obtain a favorable hearing by virtue of their positions
in Parliament, the rural constituencies in France were empowered by revolutionary
era political structures that gave effective voice to their numbers.
The structure of French industry also tended to mitigate against the development
of a strong pro-gold lobby among manufacturers. Staple French exports (other
than wines and spirits) were mainly the manufactured textile specialties of silk,
wool, or cotton usually produced in traditional small workshops and sold in the
high-income urban areas of the world. These were not the inexpensive, standardized
goods produced for mass foreign markets, such as those in which the British
excelled. Even the most modern sectors of French industry (iron and steel, for
example) were not competitive on world markets. Overall, exports played a much
smaller role in industrial activity than in England. As a consequence, France did
not possess a strong segment of the manufacturing class that stood behind a gold
standard and fixed-exchange-rate regime....
Without a powerful rentier landed elite and an externally oriented manufacturing
segment to support it, the fate of the gold standard rested upon the position and