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

worse. As we have seen, by this time the most extreme form of serfdom, which tied people to the land and forced them to work for and pay dues to the feudal lords, was long in decline in France. Nevertheless, there were restrictions on mobility and a plethora of feudal dues that the French peasants were required to pay to the monarch, the nobility, and the Church.
    Against this background, the French Revolution was a radical affair. On August 4, 1789, the National Constituent Assembly entirely changed French laws by proposing a new constitution. The first article stated:
    The National Assembly hereby completely abolishes the feudal system. It decrees that, among the existing rights and dues, both feudal and censuel, all those originating in or representing real or personal serfdom shall be abolished without indemnification.
    Its ninth article then continued:
    Pecuniary privileges, personal or real, in the payment of taxes are abolished forever. Taxes shall be collected from all the citizens, and from all property, in the same manner and in the same form. Plans shall be considered by which the taxes shall be paid proportionally by all, even for the last six months of the current year.
    Thus, in one swoop, the French Revolution abolished the feudal system and all the obligations and dues that it entailed, and it entirely removed the tax exemptions of the nobility and the clergy. But perhaps what was most radical, even unthinkable at the time, was the eleventh article, which stated:
    All citizens, without distinction of birth, are eligible to any office or dignity, whether ecclesiastical, civil, or military; and no profession shall imply any derogation.
    So there was now equality before the law for all, not only in daily life and business, but also in politics. The reforms of the revolution continued after August 4. It subsequently abolished the Church’s authority to levy special taxes and turned the clergy into employees of the state. Together with the removal of the rigid political and social roles, critical barriers against economic activities were stamped out. The guilds and all occupational restrictions were abolished, creating a more level playing field in the cities.
    These reforms were a first step toward ending the reign of the absolutist French monarchs. Several decades of instability and war followed the declarations of August 4. But an irreversible step wastaken away from absolutism and extractive institutions and toward inclusive political and economic institutions. These changes would be followed by other reforms in the economy and in politics, ultimately culminating in the Third Republic in 1870, which would bring to France the type of parliamentary system that the Glorious Revolution put in motion in England. The French Revolution created much violence, suffering, instability, and war. Nevertheless, thanks to it, the French did not get trapped with extractive institutions blocking economic growth and prosperity, as did absolutist regimes of Eastern Europe such as Austria-Hungary and Russia.
    How did the absolutist French monarchy come to the brink of the 1789 revolution? After all, we have seen that many absolutist regimes were able to survive for long periods of time, even in the midst of economic stagnation and social upheaval. As with most instances of revolutions and radical changes, it was a confluence of factors that opened the way to the French Revolution, and these were intimately related to the fact that Britain was industrializing rapidly. And of course the path was, as usual, contingent, as many attempts to stabilize the regime by the monarchy failed and the revolution turned out to be more successful in changing institutions in France and elsewhere in Europe than many could have imagined in 1789.
    Many laws and privileges in France were remnants of medieval times. They not only favored the First and Second Estates relative to the majority of the population but also gave them privileges vis-à-vis the Crown. Louis XIV, the Sun King, ruled France for fifty-four years, between 1661 to his death in 1715, though he actually came to the throne in 1643, at the age of five. He consolidated the power of the monarchy, furthering the process toward greater absolutism that had started centuries earlier. Many monarchs often consulted the so-called Assembly of Notables, consisting of key aristocrats handpicked by the Crown. Though largely consultative, the Assembly still acted as a mild constraint on the