To Örebro University

The state formation processes in Prussia and Sweden have often been described in the literature as driven by the military exploitation of foreign territories in combination with a relative efficient mobilization of limited domestic resources. Credit and capital have not been seen as important factors in these processes. It has been emphasized that Prussia did not have any long-term government debt, while Sweden in the eighteenth century was dependent on unstable systems of paper money to finance its wars. In my presentation, I will examine the role credit played in the systems of military procurement. By using the contractor state perspective, which focuses on the spending of states and the relationship between states and merchants, I can shed new light on how credit functioned during wartime in the two states.

In Sweden, the government used special procurement commissions to centralize procurement. This arrangement required the close interaction with merchants and the financial support of institutions such as the Bank of the Estates. Merchants provided information, international contacts and short-term credit, while the state paid the merchants promptly upon the delivery of goods. The system would not have worked without the credit of the state.

In Prussia, the government did not centralize procurement. Instead, it relied on ordinary taxation, war commissariats close to the theater of war and contributions from enemy territory. However, Prussia also required the assistance of merchants, and the contributions can be seen as a way to get indirect access to credit in places such as Breslau, Leipzig and Rostock since the merchants could not provide the goods to the Prussian army without the use of their credit. During the Napoleonic Wars, the Prussian system was forced to change in order to cope with the demand for goods that the French army put on the Prussian Crown after 1806. In order to deliver the vast quantities of goods, the Prussians had to develop ties with merchants in several locations, and it had to rely on credit since it was impossible to pay the suppliers with ordinary revenues. After the war, the debt was maintained and Prussia developed a system of long-term debt.

In Sweden, the government opted not to centralize procurement during the Napoleonic Wars. Instead, it relied mostly on local war commissariats and merchants in Lübeck, Stralsund and Ostrobothnia. The role of credit was limited during the military campaigns, and stating in 1812, government debt was slowly liquidated. Thus, while Prussia developed into a fiscal-military state that depended on credit during the Napoleonic Wars, Sweden dismantled its fiscal-military state after 1815. 

This chapter focuses on political bargaining about taxation in the Swedish riksdag during the period 1789–1812. This was a time when European states faced challenges either to expand their state capabilities or to face the threat of invasion and political change. The analysis focuses on the types of taxes that became objects of political deliberation and the tax rates different social groups were obliged to pay. In order to broaden the perspective on the developments in Sweden, limited comparisons are made with the decisions taken at the same time by the estates of Hungary. The analyses show that the Swedish king increased his political autonomy in the 1770s and 1780s, but it was difficult in the long run to expand the government’s resources without the participation of the riksdag. One difference between Hungary and Sweden was the role government debt played in the political negotiations between the ruler and the estates. While the estates of Hungary had a limited role in this regard, the Swedish riksdag was involved in financing and also in the administration of government debt through its Debt Office. Public debt was therefore a key object of political contestation in Sweden over the course of the period.

According to many existing narratives, the eighteenth century witnessed a decline of Sweden's position in the European states system as it tried to come to terms with a rising Russian Empire in the east and a growing Prussian state in the south. According to the same narratives, Sweden tried to compensate for this declining geopolitical position by expanding long-distance trade in Asia, the Americas and the Mediterranean, and by promoting internal cultivation. Unlike the bellicose seventeenth century, wars and preparations for wars have therefore not been seen as drivers of economic, political and social developments in Sweden during the eighteenth century, even though Sweden participated in several of the major conflicts during the period 1700-1815: the Great Northern War (1700-1721), the Russo-Swedish War of 1741-1743, the Seven Years' War (1757-1762), the Russo-Swedish War of 1788-1790 and the Napoleonic Wars (1805-1814). In my presentation, I will show that the narrative of decline is too simplistic, and that there were several changes made in both the financial and military infrastructure to improve the capacity of the Swedish state to cope with the changing international states system. I will pay particular attention to the system of credit and its implications for warfare; but the capacity of the military to procure necessary goods will also be examined.

Dans les années 1710, sous la pression d’une guerre en cours, Charles XII, le roi absolu de Suède, met en oeuvre une série de mesures fiscales et monétaires qui remettent en question les privilèges traditionnels et impliquent de profondes transformations sociales. La fiscalité est rendue progressive et le crédit de plus en plus important afin de financer la guerre. Les liquidités sont radicalement augmentées, notamment au moyen de la mise en circulation d’une grande quantité de pièces de monnaie fiduciaire. La mort de Charles XII, en novembre 1718, entraîne une réaction hostile à ses politiques militaires. Les mesures fiscales et monétaires sont abolies, provoquant le renversement de l’absolutisme royal ainsi qu’une défaillance partielle de l’État. Cet article s’organise en deux parties. Dans la première, nous cherchons à vérifier l’hypothèse selon laquelle la politique militaire et les mesures monétaires du régime de Charles XII ont conduit à une redistribution des ressources dans la société suédoise, en particulier dans les années 1715-1718. Dans la seconde partie, nous analysons la façon dont les acteurs politiques suédois ont réagi à ces changements socio-économiques entre le décès de Charles XII et le défaut de paiement de 1719. Nos résultats montrent que la monnaie fiduciaire imprégna l’économie et atteint l’ensemble des groupes sociaux, allant même, dans certains endroits, jusqu’à en bouleverser les hiérarchies en vigueur. Les paysans, parmi d’autres groupes de rang inférieur, ont été particulièrement affectés par le défaut de paiement partiel, car ils ont été en grande partie privés de leurs actifs monétaires.

In the 1710s, under pressure from an ongoing war, Sweden’s absolute king Charles XII implemented a number of fiscal and monetary measures that displayed a disdain for traditional privileges and carried a potential for social change. Taxation was made progressive and credit became more important to finance the war. Liquidity was radically expanded, most significantly by the release of very large amounts of fiat coins. Following the death of Charles XII in November 1718, there was a political reaction against the war policies and the fiscal and monetary measures were reversed, resulting in the dismantling of royal absolutism and a partial government default. This study consists of two parts. In the first, we investigate the impact of the war policy and the monetary measures of Charles XII’s regime on the social redistribution of resources in Swedish society, especially in the years 1715 to 1718. In the second, we focus on how the socioeconomic changes were addressed by political agents between the death of Charles XII and the default of 1719. Our results show that the fiat money permeated the economy and reached all social groups, and that in some locations its distribution upset the prevailing social order. Peasants and other low-ranking groups were targeted by the partial default, which largely deprived them of their monetary assets.

The extensive use of white collar workers, such as bookkeepers and clerks, played a crucial role in the formation of modern states during the early modern period. This article focuses on the formation of a Debt Office in Sweden, which was opened in 1719 in order to administer the liquidation of the debt accrued during the previous royal regime. By utilizing the available expertise that been working on the debt market, it was relatively easy for the new parliamentary rule to found the office. The office became part of the credit system when it interacted with various creditors. The clerical staff helped the market to function by providing intermediation, but their role became increasingly contentious. By examining the clerical staff, we learn how the authorities tried to build a trustworthy institution. The case thereby offers another perspective on credible commitment than research which concentrates on formal political institutions. 

En septiembre de 1757, las fuerzas suecas se trasladaron desde sus bases en la provincia de la Pomerania sueca hacia territorio prusiano para intervenir en la coalición contra este país que se había formado después del ataque de Prusia a Sajonia el año anterior. La participación de Suecia en la guerra fue el resultado de propuestas enviadas por Francia y la monarquía de los Habsburgo, que querían fortalecer la coalición y abrir un nuevo frente en el norte contra Prusia. Así, Francia ofreció subsidios si Suecia intervenía activamente en la coalición. Al mismo tiempo, los principales actores políticos suecos vieron la vulnerable posición militar de Prusia en 1757 como una oportunidad para lograr avances territoriales con riesgos limitados y sin tener que comprometer demasiadas tropas. El cálculo se basó en el supuesto de que la poderosa coalición lograría una victoria relativamente rápida y que Francia, en especial, recompensaría a Suecia generosamente por su apoyo en una futura conferencia de paz.