Historical Materialism 25.3 (2017) 210–222

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The Rise of Capitalist Manufacture in the Ancien Régime A Review of Economic Development in Early Modern : The Privilege of Liberty, 1650–1820 by Jeff Horn

Henry Heller University of Manitoba, Winnipeg [email protected]

Abstract

Viewing the development of French trade and manufacturing between 1650 and 1820, Jeff Horn underscores their great success based largely on overseas markets. His evidence supports the view of Friedrich Engels and Perry Anderson that capitalism developed within the pores of the Old Regime. Yet Horn attempts to deny the leading role of the bourgeoisie in this advance. He claims that it was through the Old Regime system of economic privileges rather than the agency of bourgeois capital accumulation that such progress was made. This article rejects Horn’s exclusive preoccupation with the positive economic role of the privileges granted by the state. It reasserts the importance of the agency of the bourgeoisie in furthering economic development. Moreover, it contends that for all the economic gains made by the system of state privileges, such privileges were more than offset by the weight of rents on the peasantry and to the benefit of the nobility and Church imposed by this same regime of privileges. The distorted development that privileges imposed on economic and social life became an important factor behind the outbreak of the Revolution.

Keywords privileges – bourgeoisie – society of orders – institutional economics

Jeff Horn, Economic Development in : The Privilege of Liberty, 1650–1820, Cambridge: Cambridge University Press, 2015

© koninklijke brill nv, leiden, ���7 | doi 10.1163/1569206X-12Downloaded341531 from Brill.com09/27/2021 09:53:51AM via free access Rise of Capitalist Manufacture in the Ancien Régime 211

There are those such as George Comninel and David Parker on the left and Alfred Cobban and George Taylor on the right who have taken the view that the was not capitalist because capitalism barely existed prior to 1789.1 Comninel rejects the idea that the workforce was fully proletarianised prior to the Revolution, which he believes is a sine qua non for accumulation. Parker finds no capitalist bourgeoisie at the time of the seizure of the Bastille. Meanwhile Cobban sees the Revolution based on the lower classes as more anti-capitalist than capitalist. Taylor rejects the view that the Revolution could have been capitalist because the crucial junction between financial and productive capital had not yet been made. I have tried to argue for the contrary view that the Revolution was both bourgeois and capitalist based on the evidence of current research showing that there had developed a certain commercial, industrial and even agrarian capitalism prior to the Revolution which was sufficiently strong to allow the bourgeoisie to take political power in the crisis of 1789.2 Moreover, I have also emphasised that the revolutionary seizure of the state allowed the bourgeoisie subsequently to strengthen its political and economic grip on power and especially fostered the tie between financial and productive capital.3 This position reinforces the view articulated by Friedrich Engels and Perry Anderson that a capitalist bourgeoisie developed within the interstices of the Old Regime. Engels took the position that the Old Regime balanced itself by holding the ring between the nobility and the rising bourgeoisie.4 On the contrary, Anderson more convincingly viewed early modern absolutism as an institution which essentially served the interests of the nobility.5 Both agree that the forces of production of capitalism directed by the bourgeoisie were able to advance under the protection of the absolute state in France. Jeff Horn’s important new work Economic Development in Early Modern France: The Privilege of Liberty, 1650–1820 lends further support to this perspective. Horn previously published The Path Not Taken: French Industrialization in the Age of Revolution, 1750–1830, which I reviewed in the pages of Historical Materialism.6 That work was distinguished by its acknowledgement not of bourgeois ascendancy but of the importance of nascent class conflict rooted

1 Comninel 1987, Parker 1996, Cobban 1968, Taylor 1962. 2 Heller 2006. 3 Heller 2014. 4 Anderson 1974, pp. 15–16. 5 Anderson 1974, p. 18. 6 Heller 2012.

Historical Materialism 25.3 (2017) 210–222 Downloaded from Brill.com09/27/2021 09:53:51AM via free access 212 Heller in working-class resistance to industrialisation. Horn’s recognition of the reality of an emerging working class and the progress of industrialisation represented a real advance in the light of the existing and highly-influential revisionist historiography which has largely denied the progress of capitalist industrialisation before and during the Revolution. On the other hand, I criticised it because it exaggerated the importance of working-class resistance in limiting the pace of nineteenth-century French industrial development as against other factors such as competition in the international market, institutional and infrastructural problems, and the organisational structure of French industry.

Manufacture and Commerce in the Old Regime

In this new book Horn acknowledges some of the limitations of his earlier work, too narrowly focused on the militancy of workers as a barrier to capital- intensive industrialisation. But this recognition partly stems from the much more comprehensive view of French economic history that he develops in this ambitious and challenging new work which deals with the development of the French economy from the reign of Louis XIV until 1820. Based on primary research in the French archives dating as far back as 1990, Horn offers nothing less than an in-depth account of French commercial and manufacturing development over the course of nearly two centuries, from the reign of the Sun King through the Revolution. As such Horn gives us an unparalleled overview of the development of capitalism within the structures of the Old Regime. In so doing he helps to substantiate the view of Engels and Anderson that capitalism developed within the pores of the feudal and absolutist regime. Following Hegel, Marx understood the Old Regime as one in which civil society and the state are fused together. Indeed, Hegel’s left-wing followers, including the young Marx, were dealing with the fact that they were still living under the thrall of a German old regime which was marked by the continued dominance of feudalism and absolutism. Their enthusiasm for the French Revolution stemmed largely from the fact that the Revolution had broken the tie between civil society and the state, allowing the autonomous development of capitalist society and its bourgeois freedoms. As Marx came to recognise, it was the revolutionary intervention of the bourgeois class which brought about this separation. It was his initial hope that revolutionary change along the same lines would occur in Germany. Indeed, he made this insight on the meaning of the French Revolution the cornerstone of his historical theory based on class struggle.

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As in his earlier work, one of the goals of Horn’s work is to downplay as much as possible the role of the revolutionary bourgeoisie in this transformation. On the contrary, Horn’s work is aimed at demonstrating the reality of economic development in the Old Regime in which the state and not capitalist entrepreneurs directed the economy as well as most other aspects of society including the economic activities of the bourgeoisie. The latter were simply the dependents of an all-powerful state. The entrepreneurs with their petty concerns of exploiting labour, finding markets and maintaining profits were essentially instruments of state policy. Horn’s narrative seeks to applaud the success of this paternalistic and all-encompassing state control over economic life from the late-seventeenth to the mid-eighteenth century. The eventual demise of this system and the breakthrough of bourgeois civil society is only obliquely and reluctantly conceded. The growing revolutionary potential of the bourgeois class is denied as much as possible.

The System of Privileges

According to Horn, the key means through which the capitalism of the Old Regime developed were economic privileges accorded by the Bourbon monarchy. Privileges, economic and otherwise, were the constitutional basis of the early-modern state’s legalising the provisions of rights to some while denying them to others. Between 1683 and 1753 about 1,000 industrial guidelines, mainly in the form of privileges, were issued by the Bourbon state. Officials deployed what Horn refers to as the ‘liberty of privileges’ to towns, corporations, guilds, territories, religious minorities and entrepreneurs to foster commercial and industrial development. The bulk of Horn’s work is dedicated to showing how until the 1750s this system served to accelerate France’s growth. The remainder of the text outlines the decay and eventual overthrow of this system by the Revolution. Following an introductory chapter Horn explains how the monarchy allowed the development of free economic zones in Paris and Bordeaux while providing duty-free exemptions on the specialised products of other French towns. The privileges accorded by the crown allowed the Faubourg Saint-Antoine to emerge as a burgeoning centre of trade and manufacture independent of the powerful guilds which controlled economic life in the rest of Paris. Likewise in Bordeaux the ecclesiastical enclaves of Saint-Seurin and Saint-André achieved a similar economic independence from the rest of the town. Colbert, it is true, greatly extended the control of guilds over French economic life. Stressing the positive, Horn claims that the sway of the guilds

Historical Materialism 25.3 (2017) 210–222 Downloaded from Brill.com09/27/2021 09:53:51AM via free access 214 Heller fostered economic competitiveness, established uniformity and order, and helped to rationalise the productive and commercial environment. Following its conquest by Louis XIV, the textile centre of Lille was granted all sort of privileges which made possible the further development of its export-oriented industries. Other privileged seigneurial enclaves in the region facilitated the spread of rural industries in the countryside of French-controlled Flanders. Meanwhile the duchy of Lorraine, the Comtat Venaissin and retained aspects of sovereignty which provided their merchants and manufactures important economic advantages. Harbouring Catholic, Protestant and Jewish merchants, the Comtat’s right of transit lowered costs on commercial exchange throughout the Midi and facilitated the massive smuggling of an enormous number of products. Free of French taxes and guild restrictions the Comtat enjoyed considerable comparative advantages, as Horn puts it. The vast growth of manufacturing in upper , which is the subject of the next chapter, based itself on the provision of a host of similar privileges. By the beginning of the eighteenth century Rouen lay at the heart of an enormous system of textile manufacturing that extended deep into the countryside. An increasingly productive agriculture and a sophisticated system of roads and waterways supported a growing population dedicated to manufacture. By the time of the Revolution 16 per cent of French exports passed through Rouen, while the towns of Darnetal, Elbeuf and Louviers further reinforced the manufacturing activities of the region. The system of privileges supported exports and the development of pools of skilled labour and entrepreneurship. In the course of the eighteenth century, the French state turned Normandy’s extensive network of privileged enclaves into early-modern equivalents of present-day enterprise zones. Industries were by no means the preserve of declining or hide-bound production. By the late eighteenth century mechanical textile production, advanced metallurgical techniques and efficient chemical manufacture had become deeply entrenched. Indeed, these advances were to make Normandy a focal point of the revolutionary unrest of 1789. Chapter Three demonstrates the spectacular success of state-controlled or mercantilist commercial policy which helped put France at the forefront of global commerce. Free ports, chartered companies and entrepôts structured international commerce and represented outstanding successes of the system of privileges. Scholars have tended to emphasise a dichotomy between mercantilism characterised as out-dated and Physiocracy considered as modern. In reality this division, insofar as policy makers were concerned, involved methods and timing more than the goals of political economy which entailed not only the objective of profit but also the good of the state. During

Historical MaterialismDownloaded 25.3 from Brill.com09/27/2021(2017) 210–222 09:53:51AM via free access Rise of Capitalist Manufacture in the Ancien Régime 215 the reign of Louis XIV the state created almost forty privileged companies as instruments of overseas trade, colonialism and war-making, which went hand- in-hand. Despite constant state interference French exports quadrupled in the eighteenth century, outpacing those of England. A particularly striking example of French success was its dominance over the Mediterranean trade, which is outlined in the fourth chapter. Beginning with the reign of Louis XIV, France recaptured a dominant position in the Levantine market from its English and Dutch competitors and held onto it for more than a century. Marseilles was favoured with low taxes and privileges which made the city the major funnel of trade with the Middle East. As woollens were a key export, the state took the lead in trying to improve the quality of woollen manufacture in . As a result of state intervention, including the provision of subsidies and diplomatic initiatives, Eastern markets were widened and commercial and manufacturing practices improved. The turn to economic freedom toward the second half of the eighteenth century led to a decline in France’s commercial position in the Levant.

Protestants and Jews

Adherence to the Catholic religion was a fundamental ideological principle of the Old Regime monarchy. Chapter Five demonstrates in striking detail how in the name of economic growth exemption was made for Protestants and Jewish entrepreneurs, who as a result made extremely important contributions to the economy. No more than 40,000 Jews lived in France at the end of the eighteenth century. It was in Bordeaux that they enjoyed their most notable economic successes. By 1773 nearly one-quarter of Bordeaux’s capitation tax on trade was paid by the small Jewish community. Wealthy Jews played an important role in the West Indian trade but also in the development of New France. Forced to abjure their faith by the revocation of the Edict of Nantes, 200,000 Protestants left France. But over 500,000 remained and became known as ‘new Catholics’ who for the most part privately clung to their faith. Both the Calvinist exiles and those Protestants that remained in the kingdom played a vital economic role. Out of economic exigency the French state favoured Protestant manufacturers and allowed them to override the privileges of guilds, cities and provinces. The Van Robais, for example, a powerful Calvinist manufacturing family which settled in Abbeville, enjoyed the protection of the crown throughout the period from the reign of Louis XIV to the Revolution. Christophe-Philippe Oberkampf, a latecomer from Anspach, led the way in

Historical Materialism 25.3 (2017) 210–222 Downloaded from Brill.com09/27/2021 09:53:51AM via free access 216 Heller the creation of the cotton-manufacturing industry, the most important new manufacturing sector in pre-Revolutionary France. Horn’s penchant for looking at things through the perspective of the state rather than through the lens of new economic and social forces is evident in his treatment of the Protestants. As we have seen he does show that, despite its commitment to a Roman Catholic monopoly over religion, economic exigencies from the beginning made the monarchy grant all sorts of exemptions and privileges to Protestant entrepreneurs and skilled workers. Moreover, he points out the important role that Protestants like Oberkampf took in the rise of the highly-important cotton industry – an industry which he is forced to acknowledge was created in response to irresistible grassroots consumer demand. On the other hand, he surprisingly more-or-less leaves out the increasing role of privileged Genevan Protestant bankers in financing not only this industry but also the development of France’s overseas commerce. More importantly he omits from consideration their role in financing state- debt, something which allowed France to fight its commercial wars against Britain but also made the state itself a prisoner of its own indebtedness and eventual bankruptcy. Parenthetically Horn notes the mounting pressure coming from these bankers which forced the Crown to recreate the privileges of the East India Company in 1786, in which they were heavily invested. But this serves to show that the regulatory state itself was shortly thereafter exploded by the overwhelming power of finance-capital largely in the hands of foreign Protestant bankers. Horn concludes that the policy of state-controlled economic development was extremely effective up to the middle of the eighteenth century. So enthusiastic is he about the success of the system, he even ventures to assert without real elaboration the far-fetched idea that seigneurialism constituted no barrier to capital accumulation. But that seigneurialism represented a burden is evident from the fact that French agriculture did much better after the abolition of seigneurialism than before it.7

Institutional Economics

The theoretical position out of which Horn makes his argument is that of institutional economics, which rejects the idea that state interference which privileges some economic operatives at the expense of others is inherently rent-seeking and negative overall in terms of economic performance. Indeed,

7 Sutherland 2002; Livesey 2004; Lemarchand 2008, p. 235.

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Horn takes this point further by rejecting the implausible idea that British economic advance can be understood on the basis of the application of laissez-faire principles. He insists that Britain was as fully mercantilist as France. Indeed, one has to ask when economists will finally give up the idea that there can be capitalist markets which can operate without the support of the state. The important question is the manner of such intervention. On the other hand, Horn’s institutional approach, like Hegel’s philosophy of history, tends to reify the state and block from view the growing strength of the capitalist bourgeoisie whose rising economic power was forcing changes in state policy. While Horn’s work founded on institutional economics is plausible in so far as it surveys the impressive growth of early-modern French commerce and industry in the eighteenth century, there is no doubt that the presuppositions on which it is based represent a sophisticated form of revisionism meant to occlude a class-based view of history. Thus, it is all very well for him to dismiss consideration of the historical impact of Enlightenment ideas and public debate in favour of the actions of policy makers which, as he puts it, were more important because they were actually implemented. But he in turn may be accused of blocking our ability to see the reality of new social and economic forces, institutions and ideas emerging from society based on his prejudice in favour of viewing the state as more-or-less the exclusive economic and political agent. It is clear that after 1750 the state’s capacity to maintain a monopoly over political but also economic matters came increasingly into question. Indeed, it would seem that in his under-rating of the influence of fresh ideas and an emergent public opinion as a reflection of these new forces he closes his eyes to the birth of a bourgeois civil society – a subject of central discussion in recent French revolutionary historiography. Horn’s institutional approach permits us to recognise the economic dynamism of the Old Regime in its best days. On the other hand, his approach eventually becomes a straitjacket which makes it difficult to grasp the limits of this regime and its eventual overthrow. Horn’s institutional model of the French state as economic agent has to be questioned in deeper historical perspective. The state under capitalism is a class institution whose policies, however effective, especially serve the interests of the ruling class. Likewise the state of the Old Regime was not a neutral institution whose economic initiatives can be regarded as without class bias. In so far as it was a class institution it served to protect the interests of the nobility at the expense of peasants and an emergent bourgeoisie. Indeed, fundamental to its creation was the repression of the political and economic demands of these subordinated elements. Institutional economics, whatever

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The Society of Orders

Horn informs us that the economic initiatives of the Bourbon monarchy took the form of privileges conceded to some to the exclusion of others and that these injunctions shaped the economic policy of the Bourbon monarchy. But this conception of the nature of the Bourbon regime is rooted in the views of the erudite and conservative Roland Mousnier who spoke of the Old Regime as a society of orders.8 According to Mousnier this was a regime in which, under the authority of the monarchy standing above society, every group knew and kept their place. There were to be sure uprisings, particularly by the peasantry against the fiscal demands of the state, but there was no class conflict. Mousnier’s denial of the reality of class conflict under the Old Regime has long been discounted as has his conception of a society of orders. The latter is understood to be an ideological rationalisation of a class-based society.9 Yet it is this overall political model that Horn seeks to apply to the development of commercial and manufacturing capitalism in which the bourgeoisie have no independent agency apart from the privileges accorded by the state. Capital accumulates, insists Horn, but never escapes the boundaries of the existing political order. Contrast this view with that of Perry Anderson who conceives of the early-modern French state as a redeployed apparatus of feudal domination. Redeployed because the original decentralised apparatus of domination threatened to give way in the face of urban and rural uprisings during the late . The early modern state was born above all out of the need to defend the nobility from threats from below.10 As I have attempted to demonstrate elsewhere, these threats reappeared during the religious wars of the late sixteenth century marked particularly by the assertiveness of an advancing bourgeoisie. The Bourbon monarchy established by Henri IV represented a second attempt to stifle these incipient class insurgencies through repression, cooptation and the extension of the system of privileges.11 In this way the menace from the bourgeoisie was contained during the seventeenth and

8 Mousnier 1979–84. 9 Hayden 1996; Heller 1991, pp. 8–9. 10 Anderson 1974, p. 19. 11 Heller 1991, Heller 1996, Heller 2009.

Historical MaterialismDownloaded 25.3 from Brill.com09/27/2021(2017) 210–222 09:53:51AM via free access Rise of Capitalist Manufacture in the Ancien Régime 219 first part of the eighteenth century. But the danger reappeared in even more powerful form toward the end of the eighteenth century with the emergence of a middle class now armed not only with growing economic but also intellectual power. In the light of this long history of overt and covert class conflict Horn’s attempt to view the state through the lens of institutional economics as a neutral agent of development must be treated with scepticism. His recognition of the development of the forces of production during the late-seventeenth and first part of the eighteenth century is to be welcomed. But his view of the place of the bourgeoisie in the history of the Old Regime and subsequent Revolution must be seen as a case of throwing a wet blanket over the historical process. The economic privileges conceded by the Old Regime undoubtedly helped fuel a spectacular expansion of foreign trade. It confirms the development of a strong trading and manufacturing bourgeoisie orientated toward the export economy. Yet the system of economic privileges must be judged as part of the larger system of privileges of the Old Regime which were orientated toward endowing privileges on the nobility and Church. These must be considered as forms of rent which undoubtedly placed a large burden on the growth of the French economy. That the economy grew as much as it did in the eighteenth century is remarkable. But overall the system of privileges had a negative and distorting effect. No doubt export-orientated manufacture and trade increased but also produced expensive trade wars and huge debts which finally put the solvency of the state in question. The increasing burden of rent on the peasantry helped to limit the growth of the internal market and held back investment in agricultural improvement. The final result of the system of privileges was an unbalanced economy marked by debt and insolvency, on the one side, and grain shortages and peasant and urban revolution on the other.

The Demise of Privileges

Having imposed the limits of the institutional approach on himself, Horn toward the conclusion of his narrative seeks to explain the fact that the state itself began to withdraw from the system of privileges after 1750. Without ever abandoning its overall supervision of the economy, Horn describes how it opened more and more economic sectors up to open competition, beginning with the disastrous attempt on the part of Turgot to free the grain trade. This policy, which Horn refers to as the new policy of the privilege of liberty as against the old one of the liberty of privilege, was carried on without much success. Indeed, it ended with the Anglo-French Free Trade Treaty of 1786

Historical Materialism 25.3 (2017) 210–222 Downloaded from Brill.com09/27/2021 09:53:51AM via free access 220 Heller which helped to exacerbate the economic crisis which brought the Old Regime to an end. If the policy of privileges had been so successful why then, the reader asks, did the state agree to abandon it piecemeal as the Revolution drew nigh? Horn claims that the answer is largely ideological. Bourbon officials were won over by the arguments of the Physiocrats in favour of more economic freedom. But at this juncture, which is late in his account, he is forced to admit that the system of privileges did after all have its economic disadvantages in the form of local laws, internal customs barriers, feudal rights, trade corporations, tax exemptions and all the rest of the constraints of the Old Regime on the development of a free market. The pressure of international commercial competition had become especially overwhelming. As time wore on the disadvantages of the system of privileges outweighed its advantages. It would seem that the force of public opinion, including an increasingly influential agricultural, commercial and manufacturing bourgeoisie, began to make itself felt, although Horn does not openly concede this. Horn is so committed to the institutional approach that he refuses to recognise the extent to which this pressure from an emerging civil society made itself felt. Perhaps the most striking example of the opaque-like effect of Horn’s perspective is his brief discussion of Turgot’s freeing of the grain trade. No doubt this matter was one of policy and economic first principles, as he suggests. Within the state a clear split developed between those who favoured continued close supervision of the economy and those who argued under the influence of the Physiocrats in favour of more economic freedom. More discussion of these policy disagreements would have been welcome. But more to the point is the fact that by mid-century a whole interest group made up among others of grain merchants and capitalist farmers and millers had emerged which demanded a free market, and Turgot acted in response to their demands. Indeed, the economic theories of Physiocracy were explicitly based on the existence of just such a group of agricultural entrepreneurs. Horn does not really make a clear connection between these newly-powerful interest groups and the direction of state policy. As in his first book, The Path Not Taken, his aversion to acknowledging the role of a rising bourgeoisie makes itself felt as a striking omission. In that work, rather than discussing bourgeois reservations toward industrialisation, he disingenuously tips his hat to a class perspective by invoking in an exaggerated manner the backward-looking working class as the main barrier to capital accumulation. This is a similar tack to that of other revisionists who, instead of stressing the transformative role of the bourgeoisie as the leading class in the Revolution, put the stress on the mass of peasants and craftsmen as anti-capitalist. But rather than resorting to such paradoxical

Historical MaterialismDownloaded 25.3 from Brill.com09/27/2021(2017) 210–222 09:53:51AM via free access Rise of Capitalist Manufacture in the Ancien Régime 221 formulations Horn in this work simply denies the influence of the bourgeois class altogether in favour of institutional analysis. Certainly, the enormous bulk of the archival records of the economic regulations of the Old Regime and the deeper perspective that this makes possible makes it easier for Horn to do so.

Privileges and Revolution

The Revolution itself constituted a violent attack on privilege of all sorts brought on by economic crisis. The resultant changes can only be understood by looking through the lens of political economy. All privileges did not disappear at once. From 1789 to 1792 there was an ongoing debate about the role of privileges, reflecting ambivalence about their economic advantages as measured against the principle of liberty. But what vestiges there were of the regime of privileges were swept aside by the egalitarian tide of 1793–5. Privileges had a brief revival under Napoleon until finally fading away in the opening decades of the nineteenth century. The overwhelming mass of detail presented by Horn represents an important demonstration that eighteenth-century France experienced a substantial commercial and industrial advance. It is true that, for the most part, most if not all the manufacturing processes involved were more labour- than capital intensive. On the other hand, the full or part-time employment of 100,000s if not millions of workers employed in profit-making businesses as outlined by Horn strongly supports the view that we are dealing with a capitalism emerging within the shell of a feudal and absolutist regime. No doubt prior to the Revolution many if not most of these businesses were integrated into the system of privilege of the Bourbon monarchy. But clearly many of these enterprises were outgrowing this encompassing structure on the eve of the Revolution. Indeed, there is evidence that the leading entrepreneurs of the Old Regime survived the shock of the Revolution and formed the core of the nineteenth-century bourgeoisie. It will not do to argue that they were just part of what was at bottom a feudal mode of production. To argue thusly is to turn one’s back on the dialectical character of the historical process.

References

Anderson, Perry 1974, Lineages of the Absolutist State, London: New Left Books. Cobban, Alfred 1968, The Social Interpretation of the French Revolution, Cambridge: Cambridge University Press.

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