Among the direct causes of the French Revolution were a massive financial crisis caused by France's enormous debt, the lack of food and the outrageous prices, the desire to imitate the American Revolution, the government's lavish spending, and an archaic system of taxation which brought little money to the national coffers by placing the greatest tax burden upon the Third Estate (in theory, all of the commoners; in practice, the bourgeoisie), while virtually ignoring the First Estate (the Clergy) and the Second Estate (the Nobility). The first son of a noble family would go into the Second Estate; second son into the First Estate. Successive attempts at reforming the system had proven fruitless in the face of opposition from the First and Second Estates.
On 22 February 1787, Charles Alexandre de Calonne, the minister of finances, convened an Assembly of Notables to deal with the financial situation. On 13 July, the assembly demanded that Louis XVI call the Estates-General, and on 18 December, the king promised to do so within five years. By this time, Calonne had been succeeded as finance minister by his chief critic, Étienne Charles de Loménie de Brienne; In turn, Brienne was succeeded by Jacques Necker, a former finance minister who was sympathetic to the Third Estate. With Necker once again in charge of the nation's finances, the King, on 8 August 1788, agreed to convene the Estates-General in May of 1789.
The prospect of an Estates-General highlighted the conflict of interest between the Second and Third Estates. The First Estate and the Second Estate together represented only 3% of France's national population. The Third Estate, theoretically representing the other 97% of the French population, in practice represented an increasing proportion of the country's wealth. But the other two Estates, which historically had often voted with each other, could still outvote it. Many of this rising class nonetheless saw the calling of the Estates-General as a chance to gain power.
According to the model of 1614, the Estates-General would consist of equal numbers of representatives from each Estate. The Third Estate demanded double representation, which they already had in the provincial assemblies. This became a topic for pamphleteers, the most notable pamphlet What is the Third Estate? coming from the pen of Abbé Sieyès. Necker, hoping to avoid conflict, convened a second assembly of notables on 6 November 1788, but, to his chagrin, they rejected the notion of double representation. By calling the assembly, Necker had merely underlined the nobles' opposition to the inevitable policy.
The royal decree of 27 December 1788 announced that the Estates-General would amount to at least a thousand deputies, and granted double representation of the Third Estate. Furthermore, mere parish priests (curés) could serve as deputies for the First Estate, and Protestants could be deputed to the Third Estate.
According to historian François Mignet, after reasonably honest elections, "The deputation of the nobility comprised two hundred and forty-two gentlemen, and twenty-eight members of the Parlement; that of the clergy, of forty-eight archbishops or bishops, thirty-five abbés or deans, and two hundred and eight curés; and that of the communes, of two ecclesiastics, twelve noblemen, eighteen magistrates of towns, two hundred county members, two hundred and twelve barristers, sixteen physicians, and two hundred and sixteen merchants and agriculturists." Other sources give slightly different numbers; one French-language source gives the breakdown for the First Estate of "270 representatives of the nobility (90 of them liberals), for the Second Estate: 206 curés and 85 higher clergy, for the Third Estate 578 representatives including 200 lawyers, 3 priests, and 11 nobles.
When the Estates-General convened in Versailles on 5 May 1789 amidst general festivities, many in the Third Estate viewed the double representation as a revolution already peacefully accomplished. However, with the etiquette of 1614 strictly enforced, the clergy and nobility in their full regalia, and the physical locations of the deputies from the three estates dictated by the protocol, an immediate impression emerged that less had, in fact, been achieved.
When Louis XVI and Charles Louis François de Paule de Barentin, the Keeper of the Seals, addressed the deputies on 6 May, the Third Estate discovered that royal decree granting double representation also upheld the traditional voting "by orders", i.e. that the collective vote of each Estate would be weighed equally.
The apparent intent of the King and of Barentin was for everyone to get directly to the matter of taxes. The larger representation of the Third Estate would remain merely a symbol, while giving them no extra power. Necker had more sympathy for the Third Estate, but on this occasion he spoke only about the fiscal situation, leaving it to Barentin to speak on how the Estates-General was to operate.
Trying to avoid the issue of representation and focus solely on taxes, the king and his ministers had gravely misjudged the situation. The Third Estate wanted the Estates to meet as one body and vote per deputy ("voting by heads" rather than "by orders"). The other two estates, while having their own grievances against royal absolutism, believed — correctly, as history was to prove — that they stood to lose more power to the Third Estate than they stood to gain from the King. Necker sympathized with the Third Estate in this matter, but the astute financier lacked equal astuteness as a politician. He decided to let the impasse play out to the point of stalemate before he would enter the fray. As a result, by the time the King yielded to the demand of the Third Estate, it seemed to all as a concession wrung from the monarchy, rather than a magnanimous gift that would have convinced the populace of the king's good will.
The Estates-General reached an impasse immediately. The first item on the agenda involved the verification of powers. Mirabeau, noble himself but elected to represent the Third Estate, tried but failed to keep all three orders in a single room for this discussion. Instead of discussing taxes of the King, the three Estates began to discuss separately not taxes but the organization of the legislature. Shuttle diplomacy continued without success until 27 May, when the nobles voted to stand firm for separate verification. The following day, Abbé Sieyès (a member of the clergy, but, like Mirabeau, elected to represent the Third Estate) moved that the representatives of the Third Estate, who now called themselves the Communes ("Commons"), proceed with verification and invite the other two Estates to take part, but not to wait for them.
On 13 June 1789 the Third Estate had arrived at a resolution to examine and settle in common the powers of the three orders, and invited to this common work those of the clergy and nobles. Some of the nobles and the majority of the clergy joined the Third Estate, which on 17 June arrived at the celebrated decision by which it affirmed the principle of the national sovereignty residing in the mass of the nation.
On 17 June, with the failure of efforts to reconcile the three Estates, the Communes completed their own process of verification and almost immediately voted a measure far more radical: they declared themselves redefined as the National Assembly, an assembly not of the Estates but of the People. They invited the other orders to join them, but made it clear that they intended to conduct the nation's affairs with or without them.
The King tried to resist. Under the influence of the courtiers of his privy council, he resolved to go in state to the Assembly, annul its decrees, command the separation of the orders, and dictate the reforms to be effected by the restored Estates-General. On 20 June he ordered the Salle des États, the hall where the National Assembly met, closed. The Assembly moved their deliberations to the King's tennis court, where they proceeded to swear the Tennis Court Oath, under which they agreed not to separate until they had settled the constitution of France. Two days later, deprived of use of the tennis court as well, the Assembly met in the church of Saint Louis, where the majority of the representatives of the clergy joined them: efforts to restore the old order had served only to accelerate events.
In the séance royale of 23 June, the King granted a Charte octroyée, a constitution granted of the royal favour, which affirmed, subject to the traditional limitations, the right of separate deliberation for the three orders, which constitutionally formed three chambers. This move failed; soon, that part of the deputies of the nobles who still stood apart joined the National Assembly at the request of the king. The Estates-General had ceased to exist, having become the National Assembly (and after 9 July 1789, the National Constituent Assembly), though these bodies consisted of the same deputies elected by the separate orders.