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

of adult females in England. In the Netherlands and Germany, literacy rates were even higher. The Ottoman lands lagged far behind the European countries with the lowest educational attainment in this period, such as Portugal, where probably only around 20 percent of adults could read and write.
    Given the highly absolutist and extractive Ottoman institutions, the sultan’s hostility to the printing press is easy to understand. Books spread ideas and make the population much harder to control. Some of these ideas may be valuable new ways to increase economic growth, but others may be subversive and challenge the existing political and social status quo. Books also undermine the power of those who control oral knowledge, since they make that knowledge readily available to anyone who can master literacy. This threatened to undermine the existing status quo, where knowledge was controlled by elites. The Ottoman sultans and religious establishment feared the creative destruction that would result. Their solution was to forbid printing.
    T HE I NDUSTRIAL R EVOLUTION created a critical juncture that affected almost every country. Some nations, such as England, not only allowed, but actively encouraged, commerce, industrialization, and entrepreneurship, and grew rapidly. Many, such as the Ottoman Empire, China, and other absolutist regimes, lagged behind as they blocked or at the very least did nothing to encourage the spread of industry. Political and economic institutions shaped the response to technological innovation, creating once again the familiar pattern of interaction between existing institutions and critical junctures leading to divergence in institutions and economic outcomes.
    The Ottoman Empire remained absolutist until it collapsed at the end of the First World War, and was thus able to successfully oppose or impede innovations such as the printing press and the creative destruction that would have resulted. The reason that the economic changes that took place in England did not happen in the Ottoman Empire is the natural connection between extractive, absolutist political institutions and extractive economic institutions. Absolutism is rule unconstrained by law or the wishes of others, though in reality absolutists rule with the support of some small group or elite. In nineteenth-century Russia, for example, the tsars were absolutist rulers supported by a nobility that represented about 1 percent of the total population. This narrow group organized political institutions to perpetuate their power. There was no Parliament or political representation of other groups in Russian society until 1905, when the tsar created the Duma, though he quickly undermined what few powers he had given to it. Unsurprisingly, economic institutions were extractive, organized to make the tsar and nobility as wealthy as possible. The basis of this, as of many extractive economic systems, was a mass system of labor coercion and control, in the particularly pernicious form of Russian serfdom.
    Absolutism was not the only type of political institution preventing industrialization. Though absolutist regimes were not pluralistic and feared creative destruction, many had centralized states, or at least states that were centralized enough to impose bans on innovations such as the printing press. Even today, countries such as Afghanistan, Haiti, and Nepal have national states that lack political centralization. In sub-Saharan Africa the situation is even worse. As we argued earlier, without a centralized state to provide order and enforce rules and property rights, inclusive institutions could not emerge. We will see in this chapter that in many parts of sub-Saharan Africa (for example, Somalia and southern Sudan) a major barrier to industrialization was the lack of any form of political centralization. Without these natural prerequisites, industrialization had no chance of getting off the ground.
    Absolutism and a lack of, or weak, political centralization are two different barriers to the spread of industry. But they are also connected;both are kept in place by fear of creative destruction and because the process of political centralization often creates a tendency toward absolutism. Resistance to political centralization is motivated by reasons similar to resistance to inclusive political institutions: fear of losing political power, this time to the newly centralizing state and those who control it. We saw in the previous chapter how