Дарон Аджемоглу - Why Nations Fail

Absolutism was not the only type of political institution preventing industrialization. Though absolutist regimes were not pluralistic and feared creative destruction, many had centralized states, or at least states that were centralized enough to impose bans on innovations such as the printing press. Even today, countries such as Afghanistan, Haiti, and Nepal have national states that lack political centralization. In sub-Saharan Africa the situation is even worse. As we argued earlier, without a centralized state to provide order and enforce rules and property rights, inclusive institutions could not emerge. We will see in this chapter that in many parts of sub-Saharan Africa (for example, Somalia and southern Sudan) a major barrier to industrialization was the lack of any form of political centralization. Without these natural prerequisites, industrialization had no chance of getting off the ground.

Absolutism and a lack of, or weak, political centralization are two different barriers to the spread of industry. But they are also connected; both are kept in place by fear of creative destruction and because the process of political centralization often creates a tendency toward absolutism. Resistance to political centralization is motivated by reasons similar to resistance to inclusive political institutions: fear of losing political power, this time to the newly centralizing state and those who control it. We saw in the previous chapter how the process of political centralization under the Tudor monarchy in England increased demands for voice and representation by different local elites in national political institutions as a way of staving off this loss of political power. A stronger Parliament was created, ultimately enabling the emergence of inclusive political institutions.

But in many other cases, just the opposite takes place, and the process of political centralization also ushers in an era of greater absolutism. This is illustrated by the origins of Russian absolutism, which was forged by Peter the Great between 1682 and his death in 1725. Peter built a new capital at Saint Petersburg, stripping away power from the old aristocracy, the Boyars, in order to create a modern bureaucratic state and modern army. He even abolished the Boyar Duma that had made him tsar. Peter introduced the Table of Ranks, a completely new social hierarchy whose essence was service to the tsar. He also took control over the Church, just as Henry VIII did when centralizing the state in England. With this process of political centralization, Peter was taking power away from others and redirecting it toward himself. His military reforms led the traditional royal guards, the Streltsy, to rebel. Their revolt was followed by others, such as the Bashkirs in Central Asia and the Bulavin Rebellion. None succeeded.

Though Peter the Great’s project of political centralization was a success and the opposition was overcome, the type of forces that opposed state centralization, such as the Streltsy, who saw their power being challenged, won out in many parts of the world, and the resulting lack of state centralization meant the persistence of a different type of extractive political institutions.

In this chapter, we will see how during the critical juncture created by the Industrial Revolution, many nations missed the boat and failed to take advantage of the spread of industry. Either they had absolutist political and extractive economic institutions, as in the Ottoman Empire, or they lacked political centralization, as in Somalia.

A SMALL DIFFERENCE THAT MATTERED

Absolutism crumbled in England during the seventeenth century but got stronger in Spain. The Spanish equivalent of the English Parliament, the Cortes, existed in name only. Spain was forged in 1492 with the merger of the kingdoms of Castile and Aragon via the marriage of Queen Isabella and King Ferdinand. That date coincided with the end of the Reconquest, the long process of ousting the Arabs who had occupied the south of Spain, and built the great cities of Granada, Cordova, and Seville, since the eighth century. The last Arab state on the Iberian Peninsula, Granada, fell to Spain at the same time Christopher Columbus arrived in the Americas and started claiming lands for Queen Isabella and King Ferdinand, who had funded his voyage.

The merger of the crowns of Castile and Aragon and subsequent dynastic marriages and inheritances created a European superstate. Isabella died in 1504, and her daughter Joanna was crowned queen of Castile. Joanna was married to Philip of the House of Habsburg, the son of the emperor of the Holy Roman Empire, Maximilian I. In 1516 Charles, Joanna and Philip’s son, was crowned Charles I of Castile and Aragon. When his father died, Charles inherited the Netherlands and Franche-Comté, which he added to his territories in Iberia and the Americas. In 1519, when Maximilian I died, Charles also inherited the Habsburg territories in Germany and became Emperor Charles V of the Holy Roman Empire. What had been a merger of two Spanish kingdoms in 1492 became a multicontinental empire, and Charles continued the project of strengthening the absolutist state that Isabella and Ferdinand had begun.

The effort to build and consolidate absolutism in Spain was massively aided by the discovery of precious metals in the Americas. Silver had already been discovered in large quantities in Guanajuato, in Mexico, by the 1520s, and soon thereafter in Zacatecas, Mexico. The conquest of Peru after 1532 created even more wealth for the monarchy. This came in the form of a share, the “royal fifth,” in any loot from conquest and also from mines. As we saw in chapter 1, a mountain of silver was discovered in Potosí by the 1540s, pouring more wealth into the coffers of the Spanish king.

At the time of the merger of Castile and Aragon, Spain was among the most economically successful parts of Europe. After its absolutist political system solidified, it went into relative and then, after 1600, absolute economic decline. Almost the first acts of Isabella and Ferdinand after the Reconquest was the expropriation of the Jews. The approximately two hundred thousand Jews in Spain were given four months to leave. They had to sell off all their land and assets at very low prices and were not allowed to take any gold or silver out of the country. A similar human tragedy was played out just over one hundred years later. Between 1609 and 1614, Philip III expelled the Moriscos, the descendants of the citizens of the former Arab states in the south of Spain. Just as with the Jews, the Moriscos had to leave with only what they could carry and were not allowed to take with them any gold, silver, or other precious metals.

Property rights were insecure in other dimensions under Habsburg rule in Spain. Philip II, who succeeded his father, Charles V, in 1556, defaulted on his debts in 1557 and again in 1560, ruining the Fugger and Welser banking families. The role of the German banking families was then assumed by Genoese banking families, who were in turn ruined by subsequent Spanish defaults during the reign of the Habsburgs in 1575, 1596, 1607, 1627, 1647, 1652, 1660, and 1662.

Just as crucial as the instability of property rights in absolutist Spain was the impact of absolutism on the economic institutions of trade and the development of the Spanish colonial empire. As we saw in the previous chapter, the economic success of England was based on rapid mercantile expansion. Though, compared with Spain and Portugal, England was a latecomer to Atlantic trade, she allowed for relatively broad-based participation in trading and colonial opportunities. What filled the Crown’s coffers in Spain enriched the newly emerging merchant class in England. It was this merchant class that would form the basis of early England economic dynamism and become the bulwark of the anti-absolutist political coalition.