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

available, given the low density of even indigenous populations in Virginia at that time, was the prospect of going it alone on the frontier beyond the control of the Virginia Company. The power of the company in the face of these options was limited. It could not coerce the English settlers into hard work at subsistence rations.
    Map 2 shows an estimate of the population density of different regions of the Americas at the time on the Spanish conquest. The population density of the United States, outside of a few pockets, was at most three-quarters of a person per square mile. In central Mexico or Andean Peru, the population density was as high as four hundred people per square mile, more than five hundred times higher. What was possible in Mexico or Peru was not feasible in Virginia.
    It took the Virginia Company some time to recognize that its initial model of colonization did not work in Virginia, and it took a while, too, for the failure of the “Lawes Divine, Morall and Martiall” to sink in. Starting in 1618, a dramatically new strategy was adopted. Since it was possible to coerce neither the locals nor the settlers, the only alternative was to give the settlers incentives. In 1618 the company began the “headright system,” which gave each male settler fifty acres of land and fifty more acres for each member of his family and for all servants that a family could bring to Virginia. Settlers were given their houses and freed from their contracts, and in 1619 a General Assembly was introduced that effectively gave all adult men a say in the laws and institutions governing the colony. It was the start of democracy in the United States.
    It took the Virginia Company twelve years to learn its first lesson that what had worked for the Spanish in Mexico and in Central and South America would not work in the north. The rest of the seventeenth century saw a long series of struggles over the second lesson: that the only option for an economically viable colony was to create institutions that gave the colonists incentives to invest and to work hard.
    As North America developed, English elites tried time and time again to set up institutions that would heavily restrict the economic and political rights for all but a privileged few of the inhabitants of the colony, just as the Spanish did. Yet in each case this model broke down, as it had in Virginia.
    One of the most ambitious attempts began soon after the change in strategy of the Virginia Company. In 1632 ten million acres of land on the upper Chesapeake Bay were granted by the English king Charles I to Cecilius Calvert, Lord Baltimore. The Charter of Maryland gave Lord Baltimore complete freedom to create a government along any lines he wished, with clause VII noting that Baltimore had “for the good and happy Government of the said Province, free, full, and absolute Power, by the Tenor of these Presents, to Ordain, Make, and Enact Laws, of what Kind soever.”
    Baltimore drew up a detailed plan for creating a manorial society, a North American variant of an idealized version of seventeenth-century rural England. It entailed dividing the land into plots of thousandsof acres, which would be run by lords. The lords would recruit tenants, who would work the lands and pay rents to the privileged elite controlling the land. Another similar attempt was made later in 1663, with the founding of Carolina by eight proprietors, including Sir Anthony Ashley-Cooper. Ashley-Cooper, along with his secretary, the great English philosopher John Locke, formulated the Fundamental Constitutions of Carolina. This document, like the Charter of Maryland before it, provided a blueprint for an elitist, hierarchical society based on control by a landed elite. The preamble noted that “the government of this province may be made most agreeable to the monarchy under which we live and of which this province is a part; and that we may avoid erecting a numerous democracy.”
    The clauses of the Fundamental Constitutions laid out a rigid social structure. At the bottom were the “leet-men,” with clause 23 noting, “All the children of leet-men shall be leet-men, and so to all generations.” Above the leet-men, who had no political power, were the landgraves and caziques, who were to form the aristocracy. Landgraves were to be allocated forty-eight thousand acres of land each, and caziques twenty-four thousand acres. There was to be a parliament, in which landgraves and caziques were