In her striking debut, historian Charlotte Robertson shows how the French state and its citizens navigated a turbulent era of European capitalism in the nineteenth-century, animated by debates over the social purpose of financial capital. Below, read an excerpt from the introduction of Capital Untamed: The Politics of Finance in Nineteenth-Century France, published this month.

Introduction: The Struggle over the Bourse

Amid the revolutionary ferment of February 1848, Prefect of Police Marc Caussidière preemptively closed the Palais Brogniart in Paris. This towering neoclassical edifice housed the Bourse, the second most important stock exchange in the world after London’s. For Caussidière, who commanded the Garde du peuple, maintaining public order was vital to the success of the revolution. He was himself a seasoned militant and republican leader who had fought in the bloody workers’ uprisings that erupted in and around Lyon in 1834, during which his brother was violently killed and his body mutilated by troop bayonets. Familiar with how insurrections tended to unfold, he feared that the Bourse might be “invaded by bands of workers hostile to agiotage.” Unlike more neutral descriptions of stock exchange activities, such as spéculation or placement, the word “agiotage” carried moral baggage. It connoted deceptive, illegal, or dishonorable financial activity, which many believed had corrupted the political regime of the recently overthrown “Citizen King,” Louis-Philippe d’Orléans, who had ruled as a constitutional monarch from 1830 to 1848 in a period known as the July Monarchy. Once celebrated as a revolutionary, Louis-Philippe had been recast as a reactionary lackey of the “finance aristocracy” that wielded real power. The Second Republic established after the Revolution of 1848 did not, however, decommission the stock exchange. The new government signaled instead the people’s appropriation of the Bourse by hiring artists to inscribe the French revolutionary motto—Liberté, égalité, fraternité—on its main facade. In March, as part of a revival of republican symbolism, a liberty tree was planted outside the Bourse at 11:00 p.m., the ceremony illuminated by fireworks bursting overhead.

The revolutionaries of 1848 fought first and foremost for universal suffrage, with more radical contingents calling for welfare protections and the right to work. The overthrow of the July Monarchy ushered in republican experiments designed to serve the people rather than a privileged elite, a vision embodied in Louis Blanc’s Commission du gouvernement pour les travailleurs, popularly known as the Luxembourg Commission, and the National Workshops, which aimed to guarantee employment and prevent destitution during the economic slump that followed the revolution. These republican efforts sought economic dignity for the entire citizenry and to ensure that the revolutionary motto translated into material reality, but did so amid deepening economic dislocations.

Paris in 1848 had descended into not only political but financial chaos: Government bond prices had plummeted, 10 percent of private issues had disappeared from the Bourse, and savings banks had been driven to default when depositors withdrew two-thirds of their funds. Against this backdrop, some reformers extended the call for political and social rights into the financial realm and argued that real emancipation required not only access to votes and wages but command over capital—the
financial resources necessary to launch enterprises, build infrastructure, and shape the material future.

This growing consciousness of capital’s political significance had been sharpened by the advance of industrial capitalism during the preceding decades, when transformative investments were increasingly
pooled and channeled through publicly traded financial securities, such as joint-stock shares and debt instruments like corporate bonds. The spectacular achievements of the railroad era, along with investments in canal construction, steamships, and manufacturing, made visible what funds aggregated through the capital market could accomplish. For that reason, many reformers argued that power over investment should not be concentrated in the hands of a small capitalist class, especially if the latter refrained from putting capital to work in times of instability when its stimulus was most needed. Articulating an ideal that capital could achieve more if it were wielded more democratically, workers, artisans, and farmers submitted petitions proposing new associational enterprises designed to deploy capital to alleviate local social predicaments and to mutualize financial resources through cooperative or communal systems of self-management and ownership. Even Pierre-Joseph Proudhon, the first self-proclaimed “anarchist,” founded a People’s Bank intended to federate workers and producers into a decentralized, mutualist network that would underwrite the extension of free credit to all without reliance on private capital. Yet most of these projects did not come to fruition, and the radical financial experiments that did successfully launch were as ephemeral as the Second Republic that gave rise to them.

Charlotte Robertson is assistant professor in the Business, Government, and International Economy Unit at Harvard Business School. 

Capital Untamed is available from our website or your favorite bookseller. For a 30% discount on copies purchased from our site, use promo code UCPNEW at checkout.