Did the French Revolution Matter?
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Did the French revolution matter? The impact of civil and fiscal reform on the rural land market in the Southern Low Countries, 1710-1812. Pieter De Reu and Nicolas De Vijlder – Economy, Ecology and Demography research group Department of History, Ghent University Work in progress - please do not quote July 2013 Did the French revolution matter? 1 Abstract In this paper we investigate to what extent the French invasion of the Austrian Netherlands in 1795, and the resulting legal reforms, impacted on the rural land market. This study centres on the parish of Eke, a community near Ghent, for which we collected a continuous series of land sales records stretching from 1710 to 1812. Our analysis is threefold. First, we assessed the level of the market’s equilibrium (e.g. price level and yearly turnover) before, during and after the French occupation. Secondly, we highlighted the changing geographical origin of property- buyers; from local residents to inhabitants of nearby cities and towns. Finally, we used a hedonic regression analysis to evaluate the price formation for single plots of land throughout the eighteenth and early nineteenth century. In the short term a rupture in the market equilibrium arose, as an immediate consequence of the installation of a new fiscal-military state, a flawing mortgage system and the lack of a land-registration system. Over a period of 3 to 5 years however, activity on the land market picked up as both the value and transferred acreage increased. We showed that the institutional changes had both a direct and indirect effect. On the one hand, the introduction of the Code Civile caused for the disappearance of the premium for freehold land, and thus a lower overall price level. On the other hand, these new institutions created a more transparent land market in the property’s intrinsic qualities accounted for a larger amount of the observed price differences. Did the French revolution matter? 2 Introduction 'Dans nos grandes familles il s'est conservé quelque chose de l'esprit d'économie, d'ordre et de prévoyance, qui animait la vieille Flandre et en même temps quelque chose de l'esprit lent et progressif d'agrandissement territorial de la féodalité; elles s'arrangent pour doubler leur avoir en vingt-cinq années de mariage, et pour laisser ainsi à chacun de leurs quatre enfants une fortune égale à celle de père et mère, lorsqu'ils se sont mariés; c'est par là qu'elles retardent le morcellement et la décadence (dont Dieu les préserve), vers lesquels les poussent le partage égal du code civil et le mouvement matériel de notre société.' In 1837 opinion maker and old retainer of the Belgian government Joseph Ferdinand Toussaint wrote a remarkable open letter to the central fiscal administration.1 He addressed Charles Joseph Faider, general director of the mammoth administration levying real estate transaction taxes: the undisputed queens of taxation at that time. Influenced by American agrarianism, like fellow utopian socialists, Toussaint feared the fragmentation and ever growing scarcity of land (for the small Flemish farmers) and the diminution of a ‘land bond’ in present-day economy. In his ‘épître d’économie politique’ he attacked the greedy behavior of modern industry and (urban) nobility, shaping the free-market economy. But above all, he warned about the fiscal and administrative institutions that made the land market even more irresistible to speculator behavior. In Toussaint’s mindset these institutions, established during and after the French revolution, severely ruptured the age-old peasant land market (insofar it ever existed).2 Yet up to this date, no long-term analysis of the rural land market in the Southern Low Countries has been carried out. However, role of the French revolution on long-term economic growth has since long generated considerable interest amongst economists and historians alike. The far- reaching reforms that were instilled in France, as well as in neighbouring countries had profound effects on these societies. Urban guilds were abolished, as were the remaining traces of feudalism. While the rigid feudal system that governed rural societies during the middle ages had largely disappeared in North-western Europe by the sixteenth century, both the aristocracy and the clergy still had substantial prerogatives in both economic and judicial matters. Hence, the decomposition of their entitlements in the aftermath of the French Revolution had profound effects on these communities. A uniform legal system was established, creating equality before the law amongst the populace and making way with the complex entanglement of property rights of the previous centuries. Consequently, by the start of the nineteenth century, a largely new regulatory framework was in place. Over the past decades, there has been substantial literature on the pivotal role of the French revolution of the economic, social and legal development of continental Europe in the late eighteenth and nineteenth century. On the one hand, several authors have highlighted that the French Revolution and the reforms it brought with in society had positive effects on economic growth in the long run.3 Most recently, an elaborate macro-economic analysis showed that the events of 1789 and the consecutive occupation of large parts of Europe during the following decades had positives effects on economic growth in the long run.4 However, other scholars have stressed the highly disruptive effects on both the political and economical level as being impediments to economic growth.5 This paper focuses on the rural land market in the Southern Low Countries, and attempts to assess the if and how the rural land market was affected by the reconfiguration of the institutional framework. First, a birds-eye view of the institutional changes during the period 1 VANHAUTE, 1996: 105 there: TOUSSAINT, 1837: 514. 2 See for example Sheilagh Ogilvie or Bas van Bavel on the existence of a advanced rural land market in seventeenth- century North-Western Europe. OGILVIE 2001; VAN BAVEL 2008. 3 MOKYR 1990; ROSENTHAL, 1994 4 ACEMOGLU et al., 2010 5 LANDES, 1969; BLANNING, 1986. Did the French revolution matter? 3 under consideration is provided. This is followed by a thorough analysis of the land market, in which we highlight the geographical mobility of the market participants, give an summary of some general trends in market activity and disentangle the price formation on the land market. Finally, some preliminary conclusions are given. Did the French revolution matter? 4 Context 1. Land rights, land markets and their institutions in Flanders Historical evidence shows that large parts of Western Europe possessed secure property rights from the Middle Ages onwards. In England for example, land markets for freehold land truly came into existence after legal reforms in the 1170s and 1180s during the reign of Henry II.6 Two elements brought along by the legal reforms were especially significant. First, an increased alienability by tenants enabled the emergence of land markets. Second, as a consequence of the reforms, land could be used as a security for loans. This resulted in an increased liquidity of land as an economic resource. A similar overnight transformation of the legal system did not take place in Continental Europe. The evolution towards secure property rights was fragmented, mirroring the scattered political and institutional contexts. In general terms, common law became established in France and the Low Countries somewhere during the thirteenth and fourteenth century. Key elements in this evolution were the gradual disappearance of the feudal system, the amelioration of the social and judicial position of the peasantry after the Black Death and the gradual urbanization. 7 By the end of the Middle Ages however, property rights were institutionalized within larger legal frameworks throughout North-Western Europe. Land became a ‘commodity’. Likewise, both land and credit could be transferred through respectively land and credit markets.8 Ancien Régime sale deeds were frequently officialized by either notaries, Aldermen benches or the manorial court. In densely populated areas, such as certain regions of the Southern Low Countries, official surveyors were even set out to trace the exact boundaries of each plot. This depended however on the formal initiatives of local lords. In the case of the parish of Eke (cf. infra) private contract sales – in which buyer and seller vouched for the transaction themselves – appeared in front of the local justice. Those were the majority of the transactions. But the contracts could still – if thought to be necessary – ‘pass’ by notary or Aldermen bench hands. Public sales (i.e. real estate auctions) were the exclusive domain of the notary or Aldermen bench.9 These traditions in Eke are a mere example of land market transactions customs. For real estate transactions always fell victim to regional particularism. Hence, a universal system of land title registration was absent at regional, let alone the national level. In the Southern Countries, the Austrian administration developed some strategies – state strategies which didn’t ask for a large infrastructural power – towards the land market economy.10 The central government decided on March 19th 1777 to dispose the confiscated Jesuit immovable, after the banishment of the religious order by pope Clement XIV. The sales helped funding the nation’s debts. And at the end of the century, physiocratic ideas drove remaining common land into private hands. Yet: Collective forest and land was for a long time absent in the village of Eke, and its eighteenth-century land registers didn’t list Jesuit goods.11 Furthermore, property rights themselves were far from perfect as well. First of all, since different rights over land coexisted next to each other, property rights were never exclusive. It could very well be that several people could claim to own rights established on the same piece of land.