by Prosperity;Poverty Why Nations Fail: The Origins of Power
Octavius to his brother Candidus, greetings.
I have several times written to you that I have bought about five thousand modii of ears of grain, on account of which I need cash. Unless you send me some cash, at least five hundred denarii, the result will be that I shall lose what I have laid out as a deposit, about three hundred denarii, and I shall be embarrassed. So, I ask you, send me some cash as soon as possible. The hides which you write are at Cataractonium—write that they be given to me and the wagon about which you write. I would have already been to collect them except that I did not care to injure the animals while the roads are bad. See with Tertius about the 8½ denarii which he received from Fatalis. He has not credited them to my account. Make sure that you send me cash so that I may have ears of grain on the threshing-floor. Greet Spectatus and Firmus. Farewell.
The correspondence between Candidus and Octavius illustrates some significant facets of the economic prosperity of Roman England: It reveals an advanced monetary economy with financial services. It reveals the presence of constructed roads, even if sometimes in bad condition. It reveals the presence of a fiscal system that raised taxes to pay Candidus’s wages. Most obviously it reveals that both men were literate and were able to take advantage of a postal service of sorts. Roman England also benefited from the mass manufacture of high-quality pottery, particularly in Oxfordshire; urban centers with baths and public buildings; and house construction techniques using mortar and tiles for roofs.
By the fourth century, all were in decline, and after AD 411 the Roman Empire gave up on England. Troops were withdrawn; those left were not paid, and as the Roman state crumbled, administrators were expelled by the local population. By AD 450 all these trappings of economic prosperity were gone. Money vanished from circulation. Urban areas were abandoned, and buildings stripped of stone. The roads were overgrown with weeds. The only type of pottery fabricated was crude and handmade, not manufactured. People forgot how to use mortar, and literacy declined substantially. Roofs were made of branches, not tiles. Nobody wrote from Vindolanda anymore.
After AD 411, England experienced an economic collapse and became a poor backwater—and not for the first time. In the previous chapter we saw how the Neolithic Revolution started in the Middle East around 9500 BC. While the inhabitants of Jericho and Abu Hureyra were living in small towns and farming, the inhabitants of England were still hunting and gathering, and would do so for at least another 5,500 years. Even then the English didn’t invent farming or herding; these were brought from the outside by migrants who had been spreading across Europe from the Middle East for thousands of years. As the inhabitants of England caught up with these major innovations, those in the Middle East were inventing cities, writing, and pottery. By 3500 BC, large cities such as Uruk and Ur emerged in Mesopotamia, modern Iraq. Uruk may have had a population of fourteen thousand in 3500 BC, and forty thousand soon afterward. The potter’s wheel was invented in Mesopotamia at about the same time as was wheeled transportation. The Egyptian capital of Memphis emerged as a large city soon thereafter. Writing appeared independently in both regions. While the Egyptians were building the great pyramids of Giza around 2500 BC, the English constructed their most famous ancient monument, the stone circle at Stonehenge. Not bad by English standards, but not even large enough to have housed one of the ceremonial boats buried at the foot of King Khufu’s pyramid. England continued to lag behind and to borrow from the Middle East and the rest of Europe up to and including the Roman period.
Despite such an inauspicious history, it was in England that the first truly inclusive society emerged and where the Industrial Revolution got under way. We argued earlier (this page–this page) that this was the result of a series of interactions between small institutional differences and critical junctures—for example, the Black Death and the discovery of the Americas. English divergence had historical roots, but the view from Vindolanda suggests that these roots were not that deep and certainly not historically predetermined. They were not planted in the Neolithic Revolution, or even during the centuries of Roman hegemony. By AD 450, at the start of what historians used to call the Dark Ages, England had slipped back into poverty and political chaos. There would be no effective centralized state in England for hundreds of years.
DIVERGING PATHS
The rise of inclusive institutions and the subsequent industrial growth in England did not follow as a direct legacy of Roman (or earlier) institutions. This does not mean that nothing significant happened with the fall of the Western Roman Empire, a major event affecting most of Europe. Since different parts of Europe shared the same critical junctures, their institutions would drift in a similar fashion, perhaps in a distinctively European way. The fall of the Roman Empire was a crucial part of these common critical junctures. This European path contrasts with paths in other parts of the world, including sub-Saharan Africa, Asia, and the Americas, which developed differently partly because they did not face the same critical junctures.
Roman England collapsed with a bang. This was less true in Italy, or Roman Gaul (modern France), or even North Africa, where many of the old institutions lived on in some form. Yet there is no doubt that the change from the dominance of a single Roman state to a plethora of states run by Franks, Visigoths, Ostrogoths, Vandals, and Burgundians was significant. The power of these states was far weaker, and they were buffeted by a long series of incursions from their peripheries. From the north came the Vikings and Danes in their longboats. From the east came the Hunnic horsemen. Finally, the emergence of Islam as a religion and political force in the century after the death of Mohammed in AD 632 led to the creation of new Islamic states in most of the Byzantine Empire, North Africa, and Spain. These common processes rocked Europe, and in their wake a particular type of society, commonly referred to as feudal, emerged. Feudal society was decentralized because strong central states had atrophied, even if some rulers such as Charlemagne attempted to reconstruct them.
Feudal institutions, which relied on unfree, coerced labor (the serfs), were obviously extractive, and they formed the basis for a long period of extractive and slow growth in Europe during the Middle Ages. But they also were consequential for later developments. For instance, during the reduction of the rural population to the status of serfs, slavery disappeared from Europe. At a time when it was possible for elites to reduce the entire rural population to serfdom, it did not seem necessary to have a separate class of slaves as every previous society had had. Feudalism also created a power vacuum in which independent cities specializing in production and trade could flourish. But when the balance of power changed after the Black Death, and serfdom began to crumble in Western Europe, the stage was set for a much more pluralistic society without the presence of any slaves.
The critical junctures that gave rise to feudal society were distinct, but they were not completely restricted to Europe. A relevant comparison is with the modern African country of Ethiopia, which developed from the Kingdom of Aksum, founded in the north of the country around 400 BC. Aksum was a relatively developed kingdom for its time and engaged in international trade with India, Arabia, Greece, and the Roman Empire. It was in many ways comparable to the Eastern Roman Empire in this period. It used money, built monumental public buildings and roads, and had very similar technology, for example, in agriculture and shipping. There are also interesting ideological parallels between Aksum and Rome. In AD 312, the Roman emperor Constantine converted to Christianity, as did King Ezana of Aksum about the same time. Map 12 shows the location of the historical state of Aksum in modern-day Ethiopia and Eritrea, with outposts across the Red Sea in Saudi Arabia and Yemen.
Just as Rome declined, so did Aksum, and its historical decline followed a pattern close to that of the Western Roman Empire. The role played by the Huns and Vandals in the decline of Rome was taken by the Arabs, who, in the seventh century, expanded into the Red Sea and down the Arabian Peninsula. Aksum lost its colonies in Arabia and its trade routes. This precipitate
d economic decline: money stopped being coined, the urban population fell, and there was a refocusing of the state into the interior of the country and up into the highlands of modern Ethiopia.
In Europe, feudal institutions emerged following the collapse of central state authority. The same thing happened in Ethiopia, based on a system called gult, which involved a grant of land by the emperor. The institution is mentioned in thirteenth-century manuscripts, though it may have originated much earlier. The term gult is derived from an Amharic word meaning “he assigned a fief.” It signified that in exchange for the land, the gult holder had to provide services to the emperor, particularly military ones. In turn, the gult holder had the right to extract tribute from those who farmed the land. A variety of historical sources suggest that gult holders extracted between one-half and three-quarters of the agricultural output of peasants. This system was an independent development with notable similarities to European feudalism, but probably even more extractive. At the height of feudalism in England, serfs faced less onerous extraction and lost about half of their output to their lords in one form or another.
But Ethiopia was not representative of Africa. Elsewhere, slavery was not replaced by serfdom; African slavery and the institutions that supported it were to continue for many more centuries. Even Ethiopia’s ultimate path would be very different. After the seventh century, Ethiopia remained isolated in the mountains of East Africa from the processes that subsequently influenced the institutional path of Europe, such as the emergence of independent cities, the nascent constraints on monarchs and the expansion of Atlantic trade after the discovery of the Americas. In consequence, its version of absolutist institutions remained largely unchallenged. The African continent would later interact in a very different capacity with Europe and Asia. East Africa became a major supplier of slaves to the Arab world, and West and Central Africa would be drawn into the world economy during the European expansion associated with the Atlantic trade as suppliers of slaves. How the Atlantic trade led to sharply divergent paths between Western Europe and Africa is yet another example of institutional divergence resulting from the interaction between critical junctures and existing institutional differences. While in England the profits of the slave trade helped to enrich those who opposed absolutism, in Africa they helped to create and strengthen absolutism.
Farther away from Europe, the processes of institutional drift were obviously even freer to go their own way. In the Americas, for example, which had been cut off from Europe around 15,000 BC by the melting of the ice that linked Alaska to Russia, there were similar institutional innovations as those of the Natufians, leading to sedentary life, hierarchy, and inequality—in short, extractive institutions. These took place first in Mexico and in Andean Peru and Bolivia, and led to the American Neolithic Revolution, with the domestication of maize. It was in these places that early forms of extractive growth took place, as we have seen in the Maya city-states. But in the same way that big breakthroughs toward inclusive institutions and industrial growth in Europe did not come in places where the Roman world had the strongest hold, inclusive institutions in the Americas did not develop in the lands of these early civilizations. In fact, as we saw in chapter 1, these densely settled civilizations interacted in a perverse way with European colonialism to create a “reversal of fortune,” making the places that were previously relatively wealthy in the Americas relatively poor. Today it is the United States and Canada, which were then far behind the complex civilizations in Mexico, Peru, and Bolivia, that are much richer than the rest of the Americas.
CONSEQUENCES OF EARLY GROWTH
The long period between the Neolithic Revolution, which started in 9500 BC, and the British Industrial Revolution of the late eighteenth century is littered with spurts of economic growth. These spurts were triggered by institutional innovations that ultimately faltered. In Ancient Rome the institutions of the Republic, which created some degree of economic vitality and allowed for the construction of a massive empire, unraveled after the coup of Julius Caesar and the construction of the empire under Augustus. It took centuries for the Roman Empire finally to vanish, and the decline was drawn out; but once the relatively inclusive republican institutions gave way to the more extractive institutions of the empire, economic regress became all but inevitable.
The Venetian dynamics were similar. The economic prosperity of Venice was forged by institutions that had important inclusive elements, but these were undermined when the existing elite closed the system to new entrants and even banned the economic institutions that had created the prosperity of the republic.
However notable the experience of Rome, it was not Rome’s inheritance that led directly to the rise of inclusive institutions in England and to the British Industrial Revolution. Historical factors shape how institutions develop, but this is not a simple, predetermined, cumulative process. Rome and Venice illustrate how early steps toward inclusivity were reversed. The economic and institutional landscape that Rome created throughout Europe and the Middle East did not inexorably lead to the more firmly rooted inclusive institutions of later centuries. In fact, these would emerge first and most strongly in England, where the Roman hold was weakest and where it disappeared most decisively, almost without a trace, during the fifth century AD. Instead, as we discussed in chapter 4, history plays a major role through institutional drift that creates institutional differences, albeit sometimes small, which then get amplified when they interact with critical junctures. It is because these differences are often small that they can be reversed easily and are not necessarily the consequence of a simple cumulative process.
Of course, Rome had long-lasting effects on Europe. Roman law and institutions influenced the laws and institutions that the kingdoms of the barbarians set up after the collapse of the Western Roman Empire. It was also Rome’s fall that created the decentralized political landscape that developed into the feudal order. The disappearance of slavery and the emergence of independent cities were long, drawn out (and, of course, historically contingent) by-products of this process. These would become particularly consequential when the Black Death shook feudal society deeply. Out of the ashes of the Black Death emerged stronger towns and cities, and a peasantry no longer tied to the land and newly free of feudal obligations. It was precisely these critical junctures unleashed by the fall of the Roman Empire that led to a strong institutional drift affecting all of Europe in a way that has no parallel in sub-Saharan Africa, Asia, or the Americas.
By the sixteenth century, Europe was institutionally very distinct from sub-Saharan Africa and the Americas. Though not much richer than the most spectacular Asian civilizations in India or China, Europe differed from these polities in some key ways. For example, it had developed representative institutions of a sort unseen there. These were to play a critical role in the development of inclusive institutions. As we will see in the next two chapters, small institutional differences would be the ones that would really matter within Europe; and these favored England, because it was there that the feudal order had made way most comprehensively for commercially minded farmers and independent urban centers where merchants and industrialists could flourish. These groups were already demanding more secure property rights, different economic institutions, and political voice from their monarchs. This whole process would come to a head in the seventeenth century.
7.
THE TURNING POINT
TROUBLE WITH STOCKINGS
IN 1583 WILLIAM LEE returned from his studies at the University of Cambridge to become the local priest in Calverton, England. Elizabeth I (1558–1603) had recently issued a ruling that her people should always wear a knitted cap. Lee recorded that “knitters were the only means of producing such garments but it took so long to finish the article. I began to think. I watched my mother and my sisters sitting in the evening twilight plying their needles. If garments were made by two needles and one line of thread, why not several needles to take up the thread.”
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p; This momentous thought was the beginning of the mechanization of textile production. Lee became obsessed with making a machine that would free people from endless hand-knitting. He recalled, “My duties to Church and family I began to neglect. The idea of my machine and the creating of it ate into my heart and brain.”
Finally, in 1589, his “stocking frame” knitting machine was ready. He traveled to London with excitement to seek an interview with Elizabeth I to show her how useful the machine would be and to ask her for a patent that would stop other people from copying the design. He rented a building to set the machine up and, with the help of his local member of Parliament Richard Parkyns, met Henry Carey, Lord Hundson, a member of the Queen’s Privy Council. Carey arranged for Queen Elizabeth to come see the machine, but her reaction was devastating. She refused to grant Lee a patent, instead observing, “Thou aimest high, Master Lee. Consider thou what the invention could do to my poor subjects. It would assuredly bring to them ruin by depriving them of employment, thus making them beggars.” Crushed, Lee moved to France to try his luck there; when he failed there, too, he returned to England, where he asked James I (1603–1625), Elizabeth’s successor, for a patent. James I also refused, on the same grounds as Elizabeth. Both feared that the mechanization of stocking production would be politically destabilizing. It would throw people out of work, create unemployment and political instability, and threaten royal power. The stocking frame was an innovation that promised huge productivity increases, but it also promised creative destruction.