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

by Daron Acemoğlu

At the turn of the fourteenth century, Europe had a feudal order, an organization of society that first emerged in Western Europe after the collapse of the Roman Empire. It was based on a hierarchical relationship between the king and the lords beneath him, with the peasants at the bottom. The king owned the land and he granted it to the lords in exchange for military services. The lords then allocated land to peasants, in exchange for which peasants had to perform extensive unpaid labor and were subject to many fines and taxes. Peasants, who because of their “servile” status were thus called serfs, were tied to the land, unable to move elsewhere without the permission of their lord, who was not just the landlord, but also the judge, jury, and police force. It was a highly extractive system, with wealth flowing upward from the many peasants to the few lords.