From Works In Progress, June 18:
In 1688, England swept away the encrusted vetocracy that had held back economic growth for centuries. Could we do the same today?
Industrial modernity was invented in the English midlands around the end of the eighteenth century, kicking off an unprecedented global rise in living standards that continues to this day. But what made this revolution possible was a lesser-known political revolution that took place in the previous century: a period known in English history as the Glorious Revolution.
Today, the Glorious Revolution is remembered for having introduced the system of constitutional monarchy, which subordinated the power of the monarch to Parliament. What is really interesting, though, is how Parliament used its new power: to untangle excessively strong and complex property rights, making it possible for the first time for sustained investments to take place in infrastructure and agriculture across England. And unlike in most other political revolutions, this happened almost entirely peacefully and with the consent of the people whose rights were being redrawn.
Fragmented political and property rights have again become one of the Western world’s biggest problems, leading to the ‘vetocracy’ that paralyzes many developed countries. Could we foment a Glorious Revolution of our own?
Multiple scleroses
Seventeenth-century Europe was economically stagnant. Despite intellectual advances like the creation of patent systems, the flourishing of mathematical schools, and the founding of learned societies like the German Leopoldina and France’s Académie des Sciences, the physical world saw only plodding progress.
Agriculture was practically the only game in town. Almost everyone lived in small rural settlements: fewer than ten percent of Europeans lived in towns of more than 5,000 people in 1500. By 1700 this had grown to just 12 percent; and by 1800, to 15 percent. In France, Europe’s most populous country, nearly 70 percent of the workforce worked in agriculture between 1695 and 1790. Germany was similar, and Scandinavia, Russia, Eastern Europe, Southern Italy and Spain were possibly more agrarian.
The default was for countries to continue for centuries with virtually no growth. Spanish output per capita was flat for half a millenium between 1300 and 1800. Other areas saw temporary bursts of growth, followed by stagnation or reversion: Swedish and Portuguese incomes were lower in 1800 than in 1550, and the Italian efflorescence during the Renaissance was followed by steady decline for centuries. Even the Dutch golden age of 1500 to 1680, which saw the Netherlands buck the European trend with a large majority of its population working in industry or commerce and living in towns, was followed by more than a century of relative stagnation.
Property ownership was so fragmented that nobody investing in improvements could expect to make a return. Splintered ownership of farmland discouraged the adoption of new crops and rotations. Rigid inheritance rules made it prohibitively difficult to invest in improvements to land or infrastructure. Roads were bad because nobody took responsibility for them, hindering the transportation of manure for fertilizer and preventing the trade that would allow different areas to specialize in different crops. Agricultural yields were so low that nearly everybody had to work to produce food instead of in other industries like mining or manufacturing.
Many European states tried to solve these problems, and nearly all failed. The reason was usually the same: monarchs depended on the support of landowning aristocrats and clergy, and those landowners had no confidence that reforms would leave them better off....
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