ECONOMIC CRISES UNDER THE SECOND EMPIRE. Economic crises-- in the mid-nineteenth century they were termed commercial crises--have proved to be imponderable but regular occurrences in industrial societies. The Second Empire witnessed two, those of 1857 and 1866-1867, and emerged out of another, the economic and political crisis of 1846-1851. Not surprisingly, contemporaries were struck by the serious consequences and by the unpredictability of business fluctuations. Clément Juglar ( 1819-1905), who pioneered the study of trade cycles, was trained as a physician and turned to economics only after living through the mid-century crisis and that of 1857. His first major work dates from 1862. Another contemporary, Karl Marx, carefully charted the progress of the 1857 crisis in the belief that it would bring about the demise of capitalism. Although it did not do so, he went on to develop his theory that the economic system would be subject to ever-deepening economic crises.
Neither of the economic crises that afflicted the major European economies and that of the United States in the 1850s and 1860s was as serious in France as elsewhere, and both were short-lived. Of the two, that of 1857 has greater symbolic importance. The economic crisis of that year brought to an end the great boom of the early years of the Empire. The increase in gold supply--an increase of one-third in gold in circulation between 1848 and 1856--had helped make possible the lowering of interest rates and had lubricated the wheels of international exchange. In France a combination of factors, including the return of political stability, railway building, and continuing technical innovation in textiles, had led to high economic growth rates. The crisis of 1857 marks a watershed that separates the relatively rapid growth achieved in previous decades from the deceleration and even stagnation of the later decades of the nineteenth century. By the late 1850s France was the leading industrial power of continental Europe. Thereafter, it lost its lead. The 1866-1867 crisis also had significance, for it was one element in the decline of the authoritarian Empire and the catalyst of the collapse of the Crédit Mobilier in October 1867.
There are no universally accepted explanations for either of these crises. Economists, like Juglar and, in the 1920s, N. D. Kondratieff, have classified business fluctuations according to the length of the cycle, but they have not been