France and England in the Seven Years' War: The Role of Deficit Spending and Debt Financing in Eighteenth Century Europe

David Husband, Union College - Schenectady, NY


This thesis explores the use of deficit spending and debt financing by England and France during the Seven Years’ War that took place from 1756 to 1763. Modern governments are constantly using deficit spending to fund government activities. The evolution of deficit spending was sparked by the evolution of financial institutions in Europe during the 16th, 17thand 18thcenturies and the necessity of deficit spending to fund wars. When tax revenues could not cover the expenses of warfare, the governments and kingdoms of Europe had to offer debt-backed securities to supplement their revenues and ensure that they could remain fighting in the various wars of pre-modern Europe.

In order to successfully analyze the war through an economic scope, revenue streams, financial statements, primary documents, and historical developments of the European capital markets were analyzed to gain a grasp on the financial and economic situations of both England and France prior to, during, and after the Seven Years’ War. By analyzing French and English documents relating to monetary and fiscal policy prior to and during the war, economic and political theories were applied to each country to reach the conclusion that England’s superior economic and financial systems ensured that they defeated the French during the Seven Years’ War. The Seven Years’ War would have a lasting impact on global history, and was a seminal moment in the shaping of England, France, and North America’s political and economic systems.


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