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March 15 - May 27, 2014
There was no separation between the religious and secular realms, and therefore no way to articulate social consensus other than in religious terms.
This underlines one of the central themes of this book, namely, that the different components of modernization were not all part of a single package that somehow arrived with the Reformation, Enlightenment, and Industrial Revolution.
Thus two of the basic institutions that became crucial to economic modernization—individual freedom of choice with regard to social and property relationships, and political rule limited by transparent and predictable law—were created by a premodern institution, the medieval church.
Westerners often think that the fusion of church and state is intrinsic to Islam while being foreign to Christian Europe, and that the kind of theocratic regime set up in Iran after the 1979 revolution somehow constitutes a reversion to a traditional form of Muslim rule. None of this is accurate.
Even if not every state deserves to be called predatory, all states are tempted to become predatory when circumstances demand it.
demand for a return to the sharia throughout the Arab world reflect a grave dissatisfaction with the lawless authoritarianism of contemporary regimes in the region and a nostalgia for a time when executive power was limited by a genuine respect for law. He maintains that the demand for sharia should be seen not simply as a reactionary turning back of the clock to medieval Islam, but rather as a desire for a more balanced regime in which political power would be willing to live within predictable rules.
Powerful, modern states that are not offset by rule of law or accountability simply succeed in being more perfect tyrannies.
the Iranian constitution carves out a reserved sphere of executive powers, given not to an emperor but to the clerical hierarchy. As in Japan and Germany, these executive powers are corrupting and have led to increasing control of the clerisy by the armed forces rather than the reverse relationship specified in the constitution.
The law would become a more binding constraint on rulers under certain specific conditions: if it was codified into an authoritative text; if the content of the law was determined by specialists in law rather than political authorities; and finally if the law was protected by an institutional order separate from the political hierarchy, with its own resources and power of appointment.
This meant that no succeeding Ming emperor was allowed to have the equivalent of a prime minister but instead had to deal directly with the tens of ministries and agencies that did the actual work of government. This system was barely workable for an extremely energetic and detail-oriented emperor like Taizu, and a disaster for subsequent rulers of lesser capabilities. In one ten-day period, Taizu had to respond to 1,660 different official documents dealing with 3,391 separate matters.23 One can imagine what his successors thought about the work load he imposed on them.
Email, Ming dynasty style
raises troubling questions about the durability of good governance under conditions where there is no rule of law or accountability. Under the leadership of a strong and capable emperor, the system could be incredibly efficient and decisive. But under capricious or incompetent sovereigns, the enormous powers granted them often undermined the effectiveness of the administrative system.
What China did not have was the spirit of maximization that economists assume is a universal human trait. An enormous complacency pervaded Ming China in all walks of life. It was not just emperors who didn’t feel it necessary to extract as much as they could in taxes; other forms of innovation and change simply didn’t seem to be worth the effort.
It was Deng Xiaoping, the statesman who inaugurated China’s opening to the world, who said, “It doesn’t matter whether the cat is white or black as long as it catches mice.”
For precocious state building in the absence of rule of law and accountability simply means that states can tyrannize their populations more effectively.
The new universal understanding of rights meant that the political revolutions to follow would not simply replace one narrow elite group with another but would lay the grounds for the progressive enfranchisement of the entire population.
The story of the emergence of modern constitutional democracy has frequently been told from the standpoint of the winners, that is, based on the experience of Britain and its colonial offshoot, the United States. In what has become known as “Whig history,” the growth of liberty, prosperity, and representative government is seen as an inexorable progress of human institutions
Liberty was interpreted as privilege, and the result was a society in which, according to Tocqueville, “there were not ten men willing to work together for a common cause” on the eve of the revolution.
This underlines a central lesson of tax policy, which is that extraction costs are inversely proportional to the perceived legitimacy of the authority doing the taxing.
Any understanding of why representative institutions developed in England and not in France has to revolve around the question of why the sovereign courts failed to develop into powerful institutions in one country but did in the other.
Like many dictatorships in more recent times, the French monarchy found it could not create investor confidence or repeal basic laws of economics by political
Tax exemption was the most hated of all privileges and became all the more so as the burden of taxation increased steadily throughout the sixteenth and seventeenth centuries.
This was, then, a perfect collective-action problem: the society as a whole would have benefited enormously from abolishing the system, but the individual interests of the parties making it up prevented them from cooperating to bring about change.
Respect for the rule of law thus helped to create a highly unequal society in which the state tried but ultimately failed to get its hands on the wealth of the oligarchic elite. As a result, it had to raise revenues on the backs of the poor and the politically weak, exacerbating inequality and paving the way for its own demise.
Indeed, this outwardly powerful state sold off larger and larger pieces of its public sector, including much of its military, to private entrepreneurs in its quest for cash.
The discovery of significant deposits of silver in Potosí (Bolivia) and Zacatecas (Mexico) in the 1540s led to the creation of a huge extractive empire in which the European rulers lived off of mining rents, while the work was done by enslaved indigenous laborers.
The colonial government in Latin America was structured as if the political institutions of the United States had been built around only the Southern states in which black slavery had been well established.
Inflation via loose monetary policy is in effect a tax, but one that does not have to be legislated and that tends to hurt ordinary people more than elites with real rather than monetary assets.
Cortés’s uncle and father participated in the military campaign against the Moors. Cortés conducted his campaign against the Aztecs as if he were fighting the Moors and used similar strategies of divide and conquer.
The encomienda did not technically enslave the indigenous people given in grant, but it required their labor in return for the encomenderos instructing them in the Christian religion and treating them well.
Cortés began his conquest of Mexico in 1519, the year before the outbreak of the great comunero revolt; as a result of the outcome of that struggle, the political institutions transferred to the Americas would not include a strong Cortes or other types of representative bodies.
historian J. H. Elliott writes, “If the ‘modernity’ of the modern state is defined in terms of its possession of institutional structures capable of conveying the commands of a central authority to distant localities, the government of colonial Spanish America was more ‘modern’ than the government of Spain, or indeed of that of almost every Early Modern European state.”29 It contrasts in this respect with the rather laissez-faire attitude of the English monarchy to its new colonies in North America.
As in North America, the simple fact of being white conferred status on people and marked them off from tribute-paying Indians and blacks.
Through much of the 1500s, they had tried to create a more modern, impersonal political order in the colonies, only to have these schemes undone by the deteriorating fiscal position of the Crown,
A new political system in which recruitment into public office was to be based on merit and impersonality—something the Chinese had discovered nearly two millennia earlier—was then brought to the rest of Europe by a man on horseback. Napoleon’s defeat of a patrimonial Prussian army at Jena-Auerstadt in 1806 convinced a new generation of reformers like Baron vom Stein and Karl August von Hardenberg that the Prussian state would have to be rebuilt on modern principles.35
Formal democracy and constitutionalism was not based on confrontation and negotiated consensus between social classes, but was granted from above by elites who could take it back when it no longer suited their interests.
The twentieth century has taught us to think about tyranny as something perpetrated by powerful centralized states, but it can also be the work of local oligarchs.
It is the responsibility of the central government to enforce its own laws against the oligarchy; freedom is lost not when the state is too strong but when it is too weak.
"freedom is lost not when the state is too strong, but when it is too weak"
On the other hand, when a strong state sides with a strong oligarchy, freedom faces a particularly severe threat.
Many contemporary Russians, when asked why their state and political culture differ so greatly from those of Western Europe, immediately blame the Mongols.
But both the Ottomans and the Mamluks at their peak displayed a stronger respect for rule of law than did Russian rulers.
Political institutions are needed precisely because of the narrowness of collective action typical of kin-based societies.
While the details of these institutions may seem of only antiquarian interest today, they are extremely important in explaining the evolution of Parliament as a political institution.
Thus the organization of England into local, self-governing bodies, the rootedness of law and belief in the sanctity of property rights, and the association of monarchy with a global Catholic conspiracy all contributed to a striking degree of solidarity on the parliamentary side.
Marx’s influence has been such that many generations of students have continued to see the “rise of the bourgeoisie” as something that simply happens as a concomitant of economic modernization, without the need for further explanation, and to see that class’s political power as flowing from its economic power.
Samuel Huntington has suggested that if the rallying cry of the English Parliament was “no taxation without representation,” today’s slogan ought to be “no representation without taxation,” since it is the latter that best incentivizes political participation.
no representation without taxation
One of the Glorious Revolution’s main accomplishments was to make taxation legitimate because it was henceforth clearly based on consent.
Two decades of nearly continuous warfare proved enormously expensive, with the size of the English fleet nearly doubling between 1688 and 1697 alone. Taxpayers were willing to support the costs of this and later wars because they were consulted on the wisdom of the wars themselves and asked to approve the tax burden imposed. The much higher rates of British taxation did not, needless to say, stifle the capitalist revolution.
The three components were highly interdependent. Without a strong early state, there would not have been a rule of law and a broad perception of legitimate property rights. Without a strong rule of law and legitimate property rights, the Commons would never have been motivated to come together to impose accountability on the English monarchy. And without the principle of accountability, the British state would never have emerged as the great power it became by the time of the French Revolution.
The Third Estate consisted of tradesmen, merchants, free serfs, and others who inhabited towns and cities and lived outside of the manorial economy and feudal legal system.
Except for the peasantry, these social groups were mobilized to a greater or lesser extent and thus could behave as political actors and struggle for power. The state could try to expand its dominion, while the groups outside the state sought to protect and enlarge their existing privileges against the state and against one another. The outcome of these struggles depended largely on the collective action that any of these major actors could achieve.
collective action
