Capital in the Twenty-First Century

by Thomas Piketty

One particularly emblematic case was that of the French Revolution. Late in 1789, the revolutionary government issued its famous assignats, which became a true circulating currency and medium of exchange by 1790 or 1791. It was one of the first historical examples of paper money. This gave rise to high inflation (measured in assignats) until 1794 or 1795. The important point, however, is that the return to metal coinage, after creation of the franc germinal, took place at the same parity as the currency of the Ancien Régime. The law of 18 germinal, Year III (April 7, 1795), did away with the old livre tournois (which reminded people too much of the monarchy) and replaced it with the franc, which became the country’s new official monetary unit. It had the same metal content as its predecessor. A 1-franc coin was supposed to contain exactly 4.5 grams of fine silver (as the livre tournois had done since 1726). This was confirmed by the law of 1796 and again by the law of 1803, which permanently established bimetallism in France (based on gold and silver).