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

century the Habsburg lands included, in the west, what is today Belgium, then known as the Austrian Netherlands. The largest part, however, was the contiguous block of lands based around Austria and Hungary, including the Czech Republic and Slovakia to the north, and Slovenia, Croatia, and large parts of Italy and Serbia to the south. To the east it also incorporated much of what is today Romania and Poland.
    Merchants in the Habsburg domains were much less important than in England, and serfdom prevailed in the lands in Eastern Europe. As we saw in chapter 4 , Hungary and Poland were at the heart of the Second Serfdom of Eastern Europe. The Habsburgs, unlike the Stuarts, were successful in sustaining strongly absolutist rule. Francis I, who ruled as the last emperor of the Holy Roman Empire, between 1792 and 1806, and then emperor of Austria-Hungary until his death in 1835, was a consummate absolutist. He did not recognize any limitations on his power and, above all, he wished to preserve the political status quo. His basic strategy was opposing change, any sort of change. In 1821 he made this clear in a speech, characteristic of Habsburg rulers, he gave to the teachers at a school in Laibach, asserting, “I do not need savants, but good, honest citizens. Your task is to bring young men up to be this. He who serves me must teach what I order him. If anyone can’t do this, or comes with new ideas, he can go, or I will remove him.”
    The empress Maria Theresa, who reigned between 1740 and 1780, frequently responded to suggestions about how to improve or change institutions by remarking. “Leave everything as it is.” Nevertheless, she and her son Joseph II, who was emperor between 1780 and 1790, were responsible for an attempt to construct a more powerful central state and more effective administrative system. Yet they did this in the context of a political system with no real constraints on their actions and with few elements of pluralism. There was no national parliamentthat would exert even a modicum of control on the monarch, only a system of regional estates and diets, which historically had some powers with respect to taxation and military recruitment. There were even fewer controls on what the Austro-Hungarian Habsburgs could do than there were on Spanish monarchs, and political power was narrowly concentrated.
    As Habsburg absolutism strengthened in the eighteenth century, the power of all non-monarchical institutions weakened further. When a deputation of citizens from the Austrian province of the Tyrol petitioned Francis for a constitution, he responded, “So, you want a constitution! … Now look, I don’t care for it, I will give you a constitution but you must know that the soldiers obey me, and I will not ask you twice if I need money … In any case I advise you to be careful what you are going to say.” Given this response, the Tyrolese leaders replied, “If thou thinkest thus, it is better to have no constitution,” to which Francis answered, “That is also my opinion.”
    Francis dissolved the State Council that Maria Theresa had used as a forum for consultation with her ministers. From then on there would be no consultation or public discussion of the Crown’s decisions. Francis created a police state and ruthlessly censored anything that could be regarded as mildly radical. His philosophy of rule was characterized by Count Hartig, a long-standing aide, as the “unabated maintenance of the sovereign’s authority, and a denial of all claims on the part of the people to a participation in that authority.” He was helped in all this by Prince von Metternich, appointed as his foreign minister in 1809. Metternich’s power and influence actually outlasted that of Francis, and he remained foreign minister for almost forty years.
    At the center of Habsburg economic institutions stood the feudal order and serfdom. As one moved east within the empire, feudalism became more intense, a reflection of the more general gradient in economic institutions we saw in chapter 4 , as one moved from Western to Eastern Europe. Labor mobility was highly circumscribed, and emigration was illegal. When the English philanthropist Robert Owen tried to convince the Austrian government to adopt some social reformsin order to ameliorate the conditions of poor people, one of Metternich’s assistants, Friedrich von Gentz, replied, “We do not desire at all that the great masses shall become well off and