Дарон Аджемоглу - Why Nations Fail

It was the inclusive nature of English institutions that allowed this process to take place. Those who suffered from and feared creative destruction were no longer able to stop it.

WHY IN ENGLAND?

The Industrial Revolution started and made its biggest strides in England because of her uniquely inclusive economic institutions. These in turn were built on foundations laid by the inclusive political institutions brought about by the Glorious Revolution. It was the Glorious Revolution that strengthened and rationalized property rights, improved financial markets, undermined state-sanctioned monopolies in foreign trade, and removed the barriers to the expansion of industry. It was the Glorious Revolution that made the political system open and responsive to the economic needs and aspirations of society. These inclusive economic institutions gave men of talent and vision such as James Watt the opportunity and incentive to develop their skills and ideas and influence the system in ways that benefited them and the nation. Naturally these men, once they had become successful, had the same urges as any other person. They wanted to block others from entering their businesses and competing against them and feared the process of creative destruction that might put them out of business, as they had previously bankrupted others. But after 1688 this became harder to accomplish. In 1775 Richard Arkwright took out an encompassing patent that he hoped would give him a monopoly on the rapidly expanding cotton spinning industry in the future. He could not get the courts to enforce it.

Why did this unique process start in England and why in the seventeenth century? Why did England develop pluralistic political institutions and break away from extractive institutions? As we have seen, the political developments leading up to the Glorious Revolution were shaped by several interlinked processes. Central was the political conflict between absolutism and its opponents. The outcome of this conflict not only put a stop to the attempts to create a renewed and stronger absolutism in England, but also empowered those wishing to fundamentally change the institutions of society. The opponents of absolutism did not simply attempt to build a different type of absolutism. This was not simply the House of Lancaster defeating the House of York in the War of the Roses. Instead, the Glorious Revolution involved the emergence of a new regime based on constitutional rule and pluralism.

This outcome was a consequence of the drift in English institutions and the way they interacted with critical junctures. We saw in the previous chapter how feudal institutions were created in Western Europe after the collapse of the Western Roman Empire. Feudalism spread throughout most of Europe, West and East. But as chapter 4 showed, Western and Eastern Europe began to diverge radically after the Black Death. Small differences in political and economic institutions meant that in the West the balance of power led to institutional improvement; in the East, to institutional deterioration. But this was not a path that would necessarily and inexorably lead to inclusive institutions. Many more crucial turns would have to be taken on the way. Though the Magna Carta had attempted to establish some basic institutional foundations for constitutional rule, many other parts of Europe, even Eastern Europe, saw similar struggles with similar documents. Yet, after the Black Death, Western Europe significantly drifted away from the East. Documents such as the Magna Carta started to have more bite in the West. In the East, they came to mean little. In England, even before the conflicts of the seventeenth century, the norm was established that the king could not raise new taxes without the consent of Parliament. No less important was the slow, incremental drift of power away from elites to citizens more generally, as exemplified by the political mobilization of rural communities, seen in England with such moments as the Peasants’ Revolt of 1381.

This drift of institutions now interacted with another critical juncture caused by the massive expansion of trade into the Atlantic. As we saw in chapter 4, one crucial way in which this influenced future institutional dynamics depended on whether or not the Crown was able to monopolize this trade. In England the somewhat greater power of Parliament meant that the Tudor and Stuart monarchs could not do so. This created a new class of merchants and businessmen, who aggressively opposed the plan to create absolutism in England. By 1686 in London, for example, there were 702 merchants exporting to the Caribbean and 1,283 importing. North America had 691 exporting and 626 importing merchants. They employed warehousemen, sailors, captains, dockworkers, clerks—all of whom broadly shared their interests. Other vibrant ports, such as Bristol, Liverpool, and Portsmouth, were similarly full of such merchants. These new men wanted and demanded different economic institutions, and as they got wealthier through trade, they became more powerful. The same forces were at work in France, Spain, and Portugal. But there the kings were much more able to control trade and its profits. The type of new group that was to transform England did emerge in those countries, but was considerably smaller and weaker.

When the Long Parliament sat and the Civil War broke out in 1642, these merchants primarily sided with the parliamentary cause. In the 1670s they were heavily involved in the formation of the Whig Party, to oppose Stuart absolutism, and in 1688 they would be pivotal in deposing James II. So the expanding trade opportunities presented by the Americas, the mass entry of English merchants into this trade and the economic development of the colonies, and the fortunes they made in the process, tipped the balance of power in the struggle between the monarchy and those opposed to absolutism.

Perhaps most critically, the emergence and empowerment of diverse interests—ranging from the gentry, a class of commercial farmers that had emerged in the Tudor period, to different types of manufacturers to Atlantic traders—meant that the coalition against Stuart absolutism was not only strong but also broad. This coalition was strengthened even more by the formation of the Whig Party in the 1670s, which provided an organization to further its interests. Its empowerment was what underpinned pluralism following the Glorious Revolution. If all those fighting against the Stuarts had the same interests and the same background, the overthrow of the Stuart monarchy would have been much more likely to be a replay of the House of Lancaster versus the House of York, pitting one group against another narrow set of interests, and ultimately replacing and re-creating the same or a different form of extractive institutions. A broad coalition meant that there would be greater demands for the creation of pluralist political institutions. Without some sort of pluralism, there would be a danger that one of the diverse interests would usurp power at the expense of the rest. The fact that Parliament after 1688 represented such a broad coalition was a crucial factor in making members of Parliament listen to petitions, even when they came from people outside of Parliament and even from those without a vote. This was a crucial factor in preventing attempts by one group to create a monopoly at the expense of the rest, as wool interests tried to do before the Manchester Act.

The Glorious Revolution was a momentous event precisely because it was led by an emboldened broad coalition and further empowered this coalition, which managed to forge a constitutional regime with constraints on the power of both the executive and, equally crucially, any one of its members. It was, for example, these constraints that prevented the wool manufacturers from being able to crush the potential competition from the cotton and fustian manufacturers. Thus this broad coalition was essential in the lead-up to a strong Parliament after 1688, but it also meant that there were checks within Parliament against any single group becoming too powerful and abusing its power. It was the critical factor in the emergence of pluralistic political institutions. The empowerment of such a broad coalition also played an important role in the persistence and strengthening of these inclusive economic and political institutions, as we will see in chapter 11.