Why Nations Fail: The Origins of Power, Prosperity, and Poverty

by Daron Acemoğlu

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.”

1589, his “stocking frame” knitting machine was ready.

She refused to grant Lee a patent,

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,

creative destruction.

The fear of creative destruction is the main reason why there was no sustained increase in living standards between the Neolithic and Industrial revolutions.

But the elite, especially when their political power is threatened, form a more formidable barrier to innovation.

Farther north, in England, wages were higher and increasing, and things were changing. How this came to be is the topic of this chapter.

In 1215 the barons, the layer of the elite beneath the king, stood up to King John and made him sign the Magna Carta (“the Great Charter”) at Runnymede

Conflict over political institutions continued, and the power of the monarchy was further constrained by the first elected Parliament in 1265.

First, it represented not only elites closely allied to the king but also a broad set of interests, including minor aristocrats involved in different walks of life, such as commerce and industry, and later the “gentry,” a new class of commercial and upwardly mobile farmers.

many members of Parliament were consistently opposed to the monarchy’s attempts to increase its power and would become the mainstay of those fighting against the monarchy in the English Civil War and then in the Glorious Revolution.

intra-elite conflict ended with the War of the Roses,

increasing political centralization, put into motion by the Tudors.

The removal of the power of the Church

This centralization of state institutions meant that for the first time, inclusive political institutions became possible.

increased the demand for broader-based political representation.

fifteenth and sixteenth centuries, this meant greater efforts by these groups to have Parliament as a counterweight against the Crown and to partially control the way the state functioned.

widening of political conflict

The Peasants’ Revolt of 1381 (this page) was pivotal, after which the English elite were rocked by a long sequence of popular insurrections.

The first Stuart king, James I, inherited not only the institutions but the conflicts over them.

In the economy, extractive institutions manifested themselves not just in the opposition to Lee’s invention, but in the form of monopolies, monopolies, and more monopolies.

Central in this conflict was the control of trade both overseas and within the British Isles.

In 1623 Parliament scored a notable victory by managing to pass the Statute of Monopolies, which prohibited James I from creating new domestic monopolies.

Charles I came to the throne in 1625, declined to call Parliament after 1629, and intensified James I’s efforts to build a more solidly absolutist regime.

In 1640 he faced conflict with Scotland and, without enough money to put a

proper army into the field, was forced to call Parliament to ask for more taxes.

Long Parliament, because it continued to sit until 1648,

In 1642 the Civil War broke out between Charles and Parliament,

Shrewsbury and Oswestry

Birmingham

Lancashire

Under the leadership of Oliver Cromwell,

monarchy was replaced by the dictatorship of Oliver Cromwell.

the monarchy was restored in 1660 and clawed back many of the privileges that had been stripped from it in 1649.

In 1688 James’s attempt to reestablish absolutism created another crisis and another civil war.

After victory in the Glorious Revolution, Parliament and William negotiated a new constitution.

Declaration of Rights, produced by Parliament in February 1689.

Crucially, however, it did establish some central constitutional principles.

succession to the throne,

monarch could not suspend or dispense with laws,

the illegality of taxation without parliamentary consent.

no standing army in England without parliam...

“The election of members of Parliament oug...

Parliaments ought to be held frequently.

and thus the end of absolutism in England and subsequently Great Britain—as

because the interests of Parliament were very different from those of the Stuart kings.

strong stake in enforcing property rights.

Now that Parliament itself controlled spending, it was happy to raise taxes and spend the money on activities that it deemed valuable.

strengthening of the navy,