2017년 11월 16일 목요일

[발췌: Weir] Tontines, Public Finance, and Revolution in France and England, 1688-1789



※ 발췌 (excerpt):

In 1688 England's Glorious Revolution, ( ... ) One of the first most profound consequences was the development of a funded public debt.[주]1  In 1789 an ongoing crisis in French public finance led to the convocation of the Estates General and from there to a political revolution. ( ... )

Prior to 1688 France under Louis XIV held the upper hand in its ability to raise money for political ambitions. The ensuing century marked a dramatic reversal in the relative strength of public finance and in military fortunes.[주]3  ( ... ) Some historians credit this financial revolution with a vital role in Engliand's industrial revoltuon of the 18th century, and contrast it with the debilitating effects of french financial backwardness.[주]4

The years also enclose the heyday of the tontine as a form of government borrowing. France offered the first national tontine in 1689, England the last in 1789.[주]5 [:]
  • Tontines are a form of life annuity in which survivors benefit from the deaths of other participants. In simple life annuity loans the government borrowed by taking in lump-sum payments in exchange for providing a stream of payments during the lifetime of a nominee. 
  • Tontines were a variant in which payments forfeited by deceased subscribers within some prespecifie group were redistributed among survivors. 
  • The government's obligation ended only with the death of the last member of the group. 
  • National tontines have little in common with tontine life insurance as it developed in the late 19th century.[주]6  Plans varied in important details and are considered more fully below.
 This article seeks to explore the developments of public finance in France and Britain, and with it, the origins of the French Revolution. Two strands connect the fiscal crisis to the Revolution. [:]
  • One is the political impasse over budget reform that led Louis XVI to call the Estates General.
  • The other is the rapid radicalization of the Third Estate, particularly its assertion of control over public finance.[주]7  
It is sometimes convenient to attribute both to the burden of the debt. But, as the next section shows, France's debt burden was surely lower than Britian's[주]8  We cannot predict the Revolution from the ^state^ of the system in 1789; we need to seek its origins in the path by which that state was reached, that is, in the evolution of policy.

The first strand will not be unravelled here. The annual deficit in peacetime, still as much a subject of debate today as it ws for Necker and Calonne, was more peculiarly French.[주]9  The political obstacles to raising taxes remain an important area for research. This article takes up the second strand. It traces the development of life-contingent debt and the evolution of policy regarding it. By 1789 it was the largest and most politically volatile component of the French debt. ( ... ) The focus in this article is on the early formation of that policy in tontine loans.

Tontines were a minor, though not insignificant fraction of total French government borrowing. What makes them interesting is the clear insight they give into the emergence of different styles of public finance in the two countries. From the confused beginnings in the 1690s, tontine policy evolved in a way that clearly defined each countries's increasingly distinctive approach to public finance: market orientation in Britain, and market avoidance and political coalition-building in France. The life annuities (rentes viagères) that emerged both as a major component of French debt by 1789 and a highly controversial issue in Revolutionary politics can be seen as the logical continuation of policies begun with the tontines. The experience gained by French rentiers in the tontine "reforms" of 1770 prepared them for mobilization in defense of their interests in the fiscal crisis of the 1780s.

( ... ... ) In contrast to Britain, where the funded debt (almost exclusively perputual rents) held a fairly constant 855 share of the government debt, France relied more and more on a variety of short-term and life-contingent borrowings.[주]22  Perpetual rents fell from 51 to 24 percent of interest charges between 1740 and 1788. By 1788, life-contingent loans accounted for 46%, and short-term debt for 13% of interest charges.

Life annuities, especially the tontines, drew on a much broader spectrum of the population than did British consols. The evolution of French government policy regarding its life-contingent debt alerted this large group of creditors to the warning signs of strategic default.


TONTINES: THE HISTORICAL BACKGROUND

The tontines takes its name from Lorenzo Tonti, an expatriate Neapolitan banker who first proposed the scheme to Cardinal Mazarin of France in 1652.[주]23  Although the plan was never enacted, its structure and the reasons for its rejection provide a useful introduction to the institution.

Tonti proposed to group subscribers into ten age classes of seven years each (0 to 7, 7 to 14, ..., 43 to 70). Each subscriber was to pay the government 300 livres, as a one-time lump-sum payment. The government would then make an annual payment equal to 5% of the total capital raised. The toal annual payment would be divided among the survivors. Payments would cease at the death of the last survivor in the class. An additional 1,250 livres would be paid to one member of each class (or an adult substitute) to handle payments and verifications.

There are three roles involved in a tontine contract, not counting the government. I will define "subscriber" to mean the person providing the initial capital, "shareholder" to be the person entitled to receive the annual income, and "nominee" to be the person on whose life the contract is contingent. These three roles can each be filled by a different person, though in practice two forms dominated. The most common was for one person to fill all three. The second was for one person (typically a parent) to act as subscriber and as shareholder during his own lifetime, with the shareholder rights passing to the nominee (typically a child) at the death of the subscriber.

( ... ... )

Tonti's projections were ambitious. Each class was scheduled to receive 101,250 livres in rents plus 1,250 in overhead. That would have required 67,500 subscriptions, and netted 20,253,000 livres in capital. When the plan was put to the Parlement of Paris for approval in 1653, it was turned down for two main reasons. ( ... ... )

( ... ... ) To make sense of the price information, and then to interpret the policies that set the prices, we need first to consider the economics of tontines in the abstract.


TONTINE ECONOMICS  ( ... ... )

ECONOMIC POLITICS AND THE TONTINE  ( ... ... )

FRANCE  ( ... ... )

THE CONVERSION: FROM TONTINES TO LIFE ANNUITIES

In November of 1763 a royal edict banned any future government tontines, citing their enormous expense.[주]55  The tontine was finally brought to an end in 1770 by the abbe Terray, recentaly appointed Controller General. For Marcel Marion, the tontine was the most onerous form of public borrowing and Terray was the first man since Colbert with the courage to face up to the financial pressures on the monarchy.[주]56

( ... ... )


댓글 쓰기