Still, for all of Colbert’s grand vision, there was one significant problem: Most of his projects failed to make profits and compete with the Dutch. Colbert had to force merchants to invest in the money-losing East India Company. Millions of livres disappeared into unprofitable, state-subsidized factories, and many of Colbert’s rules and regulations stifled industry.
Even more problematic, Colbert saw economic success as tied to state secrecy and absolute power. He organized a police, spying, and censorship network. The authors of pamphlets against the crown were sentenced to the galleys—forced to work rowing boats until they died—and those who leaked state information found their lives destroyed. Even before the mass expulsion of Protestants in 1685, many businessmen, skilled artisans, and influential thinkers fled to the freer air of Holland, England, and the British North American colonies, taking their entrepreneurial energy and brainpower with them.
At the same time, Louis spent scarce state funds on frivolous continental wars and building pleasure palaces, leaving increasing deficits, which mortified Colbert’s accountant sensibilities. French industry was not profitable enough to support itself and endless war. Colbert died in 1683, and by the time Louis XIV followed in 1715, the state was bankrupt and many of Colbert’s projects had long collapsed.
D oes this mean that Colbert’s state-sponsored model presages the failure of China? There are key differences that might allow for Chinese success, at least in the near term. Where France was perpetually in the red due to overexpenditure and foreign war, China has a massive $500 billion sovereign wealth fund (which, in a Colbertian move, the government forces citizens to support through no-interest bank accounts). France constantly trailed Britain in industrialization; China, on the other hand, is one of the world centers of industry. And, as yet, it has avoided the kind of colonial or aggressive warfare that, as France and America have learned, drains state coffers. Finally, where France failed to dominate global resources, China’s international deals and acquisitions are securing the material resources to meet its future growth.
Like France, China is competing with politically free and tolerant states, but many are indebted to China itself, and without comparable industrial policies, they are disadvantaged in the race to snap up world resources. Even if China’s strategies fail and its industries lag, and even if it experiences political unrest, it has the wealth, labor force, internal market, and well-funded repressive police state to confront these challenges, at least for a time.
In the end, however, it was political freedom that was France’s Achilles’ heel, and it might be China’s, too. Colbert was the first to understand the idea of human capital as a means of state-building. He spent major resources bringing the best minds to France. This was a purely mercantile tactic: Presumably, there were only so many great minds on earth. The irony is that his very philosophy doomed the effort: Political repression later drove many away, and their talents ended up fueling the growth of France’s freer rivals.
So far, in this other arena of human resources, it may be the United States that turns out to be the Colbertists. In human terms, America has been mercantilist itself in drawing the world’s finite number of highly skilled workers, thinkers, and business leaders to bolster all sectors of its society. Though China is on the rise in terms of physical resources, its current political climate means that it is a long way from competing with America on that front. To beat America in the world market for brains while maintaining its tight social control, China will have to solve a problem that eluded even Jean-Baptiste Colbert.
Jacob Soll is a professor of history at the University of Southern California. His new book, “The Reckoning: Accountability and the Rise and Fall of Nations” (Basic Books), will be published next year.