In 1789 France was the most populous country in western Europe, with about 28 million people, and one of the richest. Its language was spoken at courts from Lisbon to Saint Petersburg, and its writers set the terms of European argument. Within four years its king would be dead, its church stripped of its land and its social order rebuilt from the ground up. To see how that happened, start with how the old order, later called the Ancien Régime, was put together.

Three estates

French law divided subjects into three orders, or estates. The First Estate was the Catholic clergy, perhaps 130,000 to 170,000 people, who ran parishes, schools, hospitals and poor relief; the church owned somewhere between 6 and 10 percent of the land. The Second Estate was the nobility, a few hundred thousand people at most. The Third Estate was everyone else, well over 95 percent of the population, from wealthy bankers and lawyers to artisans, servants and, above all, peasants, who made up roughly four in five French people.

The estates were not simply classes. A rich merchant was a commoner, while a poor country noble might live little better than a prosperous farmer. What set the orders apart was privilege, a word that literally means "private law." Nobles and clergy were largely exempt from the taille, the main direct tax, and nobles held special claims on army commissions, hunting rights and honors. Peasants, though many owned or rented land, still owed their lords dues and labor, paid the church a tithe on their harvests, and bore the hated salt tax called the gabelle.

Absolute monarchy, limited reach

In theory the king's power was absolute. Louis XIV, who died in 1715, had built Versailles partly to tame the great nobles by keeping them at court. In practice the crown bargained constantly. Provinces kept their own laws and tax arrangements, and many posts in the courts and the tax system had been sold and become hereditary property. The high courts known as the parlements had to register royal edicts before they took effect. The Parlement of Paris used that duty to delay and protest, presenting itself as the guardian of the nation's liberties against grasping ministers, while also guarding the privileges of its own noble judges.

A state going broke

War was the great expense. France lost much of its empire in North America and India in the Seven Years' War (1756 to 1763), then spent heavily helping the Americans win independence. Finance minister Jacques Necker paid for that war mostly with loans rather than new taxes. By the late 1780s about half of royal spending went on servicing the debt. Britain's debt was larger relative to its economy, but Britain had a parliament whose consent reassured lenders, so it borrowed cheaply. France had no such body and paid higher interest.

In 1786 the controller general, Charles Alexandre de Calonne, told Louis XVI that the crown could not go on. He proposed a tax on land that everyone, privileged or not, would pay. Hoping to win backing without facing the parlements, he called an Assembly of Notables in 1787, a hand-picked body of nobles, bishops and officials. The Notables refused his universal land tax, arguing that only the nation could consent to new taxes. His successor, Loménie de Brienne, tried again and met the same wall. In August 1788, with the treasury nearly empty, the king agreed to summon the Estates-General, which had not met since 1614, under Louis XIII.

Bread and ideas

Two other pressures met the money crisis. In July 1788 a hailstorm flattened crops across northern France, and that year's harvest was poor. Bread was the core of a working family's diet, and by spring 1789 a Paris laborer could spend more than half his wage on it. Hunger made crowds angry and ready to believe that hoarders and aristocrats were starving them on purpose.

Meanwhile Enlightenment ideas had spread through salons, reading rooms, Masonic lodges and a flood of cheap pamphlets. Few readers wanted a revolution, but many had learned to judge institutions by reason and public usefulness rather than by age. Writing in 1856, the historian Alexis de Tocqueville noticed a paradox: France erupted not when it was most miserable but while it was improving, because reform raised hopes faster than it could meet them.

Worked example: Calonne's dilemma

Put yourself in Calonne's place in late 1786. You have three choices. You can cut spending, but most of the budget is debt interest and the army, and a default would ruin the crown's credit. You can borrow more, but lenders now demand crushing rates. Or you can raise taxes, but the people with the most untaxed wealth are nobles and clergy, who also sit in the bodies that must approve any new tax.

Every road leads to the same wall: the crown needed the consent of the very people whose privileges it wanted to tax. The Notables' reply, that only the nation could consent, sounded like a defense of liberty and was partly a defense of privilege. Yet once the principle was spoken aloud it could not be taken back. If the nation had to consent, someone had to decide who the nation was and how it would speak. That question, more than the debt itself, turned a budget crisis into a revolution.