The foremost problem facing Louis XV was the disastrous state of French finances created by high military expenses and low taxation. The wars of Louis XIV left France in debt and near bankruptcy. The debt amounted to 36 percent of the government's budget in 1739. Royal opulence compounded the problem: The cost of maintaining the royal family, splendid palaces such as Versailles, and the life of the royal court exceeded 10 percent of the national budget, whereas all expenditures on social welfare, including royal pensions, got only 8 percent of the budget. The extravagant spending on luxuries could reach absurd levels. A single piece of furniture for a royal palace, gilded and bejewelled, cost more than the servant who dusted it could earn in two thousand years.

Cardinal Fleury established financial order in France, but he could not resolve the underlying problems of inadequate taxation and therefore could not eliminate the debt. The principal direct tax, the taille, was collected on land and property, but it was inadequate because the aristocracy, the church, and some towns had exemptions from it. Attempts to create an income tax without exemptions, such as the dixieme (10 percent) of 1710, had been blocked by the aristocracy, the church, and the parlements. The right to collect indirect taxes, such as tax stamps on documents, had been sold to "tax farmers" for a fixed sum, while they collected whatever excess they could. Many traditional taxes, such as the salt tax (gabelle), had been cut for some regions and could not be increased.

The Seven Years' War converted an intractable financial problem into a national crisis. France was populous, rich, and powerful, but the government was facing bankruptcy. The war cost most of the French colonial empire and 50 percent of French world trade. The national debt rose to 62 percent of the national budget in 1763, and it was growing because of huge interest obligations and a rigid tax structure; new loans to restructure the debt could reduce the percentage of the budget consumed but perpetuate the problem. So finances became the dominant issue in France during the twilight years of the Old Regime. Ultimately, neither side won. The financial crisis led France to one of the greatest revolutions of modern history.

King Louis XV, once beloved, was unable to handle these problems. His indebted and ineffective government plus his life of luxury and debauchery produced unpopularity and stately torpor. The death of Madame de Pompadour in 1764 left the king in despair. He slowly became an eighteenth-century stereotype, the aging voluptuary. After a few years of entertaining himself with a royal brothel at Versailles known as Deer Park, Louis selected another official mistress in 1769. Unfortunately, Madame du Barry lacked the insights and education of Madame de Pompadour. . . .

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