[...] having done Revolutions, it makes me want to go back and get a master’s degree in finance with a particular interest in the history of banking. I am truly not 100 percent qualified to answer some of these questions. But what I do know is that it has far less to do with out-and-out debt or the size of the debt or what kind of deficits you are running, as it does with confidence in the regime. There’s a very famous thing where the debt load that Louis XIV left upon his death was greater than the debt load that was facing Louis XVI in 1786, when they said, “Sir, the monarchy is broke. We cannot get any more money.” And the reason they could not get any more money is because the bankers in Paris would not lend them any more money.
The regime, back in the early 1700s, was able to continue to draw loans and pay its debt and get back on its feet, in a way that Louis XV couldn’t—even though, in objective nominal terms, it was a lower debt load than Louis XIV had left. And so it comes down to both: how confident people are in the regime’s future ability to pay back these debts, and then also, is there a clique of bankers who think that they can use this to their advantage?
I'm not saying there is no reason to lose confidence I'm saying if you're gonna make your central argument that the loss of confidence the deciding factor then you must also explain how that loss of confidence came to be.
Who cares? They can't take their factories or land with them lol. And like the conditions in 1700s Europe were so different that you shouldn't make comparisons between foreign lenders then and today.
If you read the interview, Duncan said that he's the opposite of an expert in finance and hesitated even giving his opinion. His broad point is that in revolutions, a lot depends not on whether a state is strong, but weather the state is perceived as strong, ie confidence. When bankers become unsure of the stability of a government and fear loss of a loan, they can end up creating actual instability by withholding further credit.
It's similar to a bank run. As long as depositers have trust in their bank, everything operates ok. If depositers are unsure of their safety of their deposit though, it creates a feedback loop in which some people withdrawing creates further distrust in the institution and stimulates additional withdrawal.
I did read that part and it doesn't fucking matter. Money is fake and all the financial BS doesn't justify his underlaying argument.