Tom Paine on the "Decline and Fall of the English System of Finance" (1796)
In 1796 Thomas Paine wrote a pamphlet called "The Decline and Fall of the English System of Finance", in which he noticed a pattern of increasing public debt and paper currency in the 100 years and 6 majors wars which Britain had fought since 1697:
It is worthy of observation, that every case of failure in finances, since the system of paper began, has produced a revolution in governments, either total or partial. A failure in the finances of France produced the French revolution. A failure in the finance of the assignats broke up the revolutionary government, and produced the present French Constitution. A failure in the finances of the Old Congress of America, and the embarrassments it brought upon commerce, broke up the system of the old confederation, and produced the federal Constitution. If, then, we admit of reasoning by comparison of causes and events, the failure of the English finances will produce some change in the government of that country.
Paine noticed a long-term cycle in the relationship between war, finance, and changes in government. He studied the previous 100 years and 6 majors wars which Britain had fought since 1697 and observed the following connection: wars disrupted the economy and were becoming increasing expensive to finance, governments sought new financial means to finance their wars and turned to debt and paper money as a short term solution, increasing debt and inflation led to political difficulties which sometimes resulted in revolutionary changes in government. Ludwig von Mises also noted a similar connection in his writings about Germany, Austria, and Russia during and immediately after World War One.