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

distribution of political power in time would lead to a further redistribution of income.
    It was the inclusive nature of English institutions that allowed this process to take place. Those who suffered from and feared creative destruction were no longer able to stop it.
W HY IN E NGLAND ?
    The Industrial Revolution started and made its biggest strides in England because of her uniquely inclusive economic institutions. These in turn were built on foundations laid by the inclusive political institutions brought about by the Glorious Revolution. It was the Glorious Revolution that strengthened and rationalized property rights, improved financial markets, undermined state-sanctioned monopolies in foreign trade, and removed the barriers to the expansion of industry. It was the Glorious Revolution that made the political system open and responsive to the economic needs and aspirations of society. These inclusive economic institutions gave men of talent and vision such as James Watt the opportunity and incentive to develop their skills and ideas and influence the system in ways that benefited them and the nation. Naturally these men, once they had become successful, had the same urges as any other person. They wanted to block others from entering their businesses and competing against them and feared the process of creative destruction that might put them out of business, as they had previously bankrupted others. But after 1688 this became harder to accomplish. In 1775 Richard Arkwright took out an encompassing patent that he hoped would give him a monopoly on the rapidly expanding cotton spinning industry in the future. He could not get the courts to enforce it.
    Why did this unique process start in England and why in the seventeenth century? Why did England develop pluralistic political institutions and break away from extractive institutions? As we have seen, the political developments leading up to the Glorious Revolution were shaped by several interlinked processes. Central was the political conflict between absolutism and its opponents. The outcome of this conflict not only put a stop to the attempts to create a renewed and stronger absolutism in England, but also empowered those wishingto fundamentally change the institutions of society. The opponents of absolutism did not simply attempt to build a different type of absolutism. This was not simply the House of Lancaster defeating the House of York in the War of the Roses. Instead, the Glorious Revolution involved the emergence of a new regime based on constitutional rule and pluralism.
    This outcome was a consequence of the drift in English institutions and the way they interacted with critical junctures. We saw in the previous chapter how feudal institutions were created in Western Europe after the collapse of the Western Roman Empire. Feudalism spread throughout most of Europe, West and East. But as chapter 4 showed, Western and Eastern Europe began to diverge radically after the Black Death. Small differences in political and economic institutions meant that in the West the balance of power led to institutional improvement; in the East, to institutional deterioration. But this was not a path that would necessarily and inexorably lead to inclusive institutions. Many more crucial turns would have to be taken on the way. Though the Magna Carta had attempted to establish some basic institutional foundations for constitutional rule, many other parts of Europe, even Eastern Europe, saw similar struggles with similar documents. Yet, after the Black Death, Western Europe significantly drifted away from the East. Documents such as the Magna Carta started to have more bite in the West. In the East, they came to mean little. In England, even before the conflicts of the seventeenth century, the norm was established that the king could not raise new taxes without the consent of Parliament. No less important was the slow, incremental drift of power away from elites to citizens more generally, as exemplified by the political mobilization of rural communities, seen in England with such moments as the Peasants’ Revolt of 1381.
    This drift of institutions now interacted with another critical juncture caused by the massive expansion of trade into the Atlantic. As we saw in chapter 4 , one crucial way in which this influenced future institutional dynamics depended on whether or not the Crown was able to monopolize this trade. In England the somewhat greater power of Parliament