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

institutions of the empire, economic regress became all but inevitable.
    The Venetian dynamics were similar. The economic prosperity of Venice was forged by institutions that had important inclusiveelements, but these were undermined when the existing elite closed the system to new entrants and even banned the economic institutions that had created the prosperity of the republic.
    However notable the experience of Rome, it was not Rome’s inheritance that led directly to the rise of inclusive institutions in England and to the British Industrial Revolution. Historical factors shape how institutions develop, but this is not a simple, predetermined, cumulative process. Rome and Venice illustrate how early steps toward inclusivity were reversed. The economic and institutional landscape that Rome created throughout Europe and the Middle East did not inexorably lead to the more firmly rooted inclusive institutions of later centuries. In fact, these would emerge first and most strongly in England, where the Roman hold was weakest and where it disappeared most decisively, almost without a trace, during the fifth century AD . Instead, as we discussed in chapter 4 , history plays a major role through institutional drift that creates institutional differences, albeit sometimes small, which then get amplified when they interact with critical junctures. It is because these differences are often small that they can be reversed easily and are not necessarily the consequence of a simple cumulative process.
    Of course, Rome had long-lasting effects on Europe. Roman law and institutions influenced the laws and institutions that the kingdoms of the barbarians set up after the collapse of the Western Roman Empire. It was also Rome’s fall that created the decentralized political landscape that developed into the feudal order. The disappearance of slavery and the emergence of independent cities were long, drawn out (and, of course, historically contingent) by-products of this process. These would become particularly consequential when the Black Death shook feudal society deeply. Out of the ashes of the Black Death emerged stronger towns and cities, and a peasantry no longer tied to the land and newly free of feudal obligations. It was precisely these critical junctures unleashed by the fall of the Roman Empire that led to a strong institutional drift affecting all of Europe in a way that has no parallel in sub-Saharan Africa, Asia, or the Americas.
    By the sixteenth century, Europe was institutionally very distinctfrom sub-Saharan Africa and the Americas. Though not much richer than the most spectacular Asian civilizations in India or China, Europe differed from these polities in some key ways. For example, it had developed representative institutions of a sort unseen there. These were to play a critical role in the development of inclusive institutions. As we will see in the next two chapters, small institutional differences would be the ones that would really matter within Europe; and these favored England, because it was there that the feudal order had made way most comprehensively for commercially minded farmers and independent urban centers where merchants and industrialists could flourish. These groups were already demanding more secure property rights, different economic institutions, and political voice from their monarchs. This whole process would come to a head in the seventeenth century.

7.

T HE T URNING P OINT
T ROUBLE WITH S TOCKINGS
    I N 1583 W ILLIAM L EE returned from his studies at the University of Cambridge to become the local priest in Calverton, England. Elizabeth I (1558–1603) had recently issued a ruling that her people should always wear a knitted cap. Lee recorded that “knitters were the only means of producing such garments but it took so long to finish the article. I began to think. I watched my mother and my sisters sitting in the evening twilight plying their needles. If garments were made by two needles and one line of thread, why not several needles to take up the thread.”
    This momentous thought was the beginning of the mechanization of textile production. Lee became obsessed with making a machine that would free people from endless hand-knitting. He recalled, “My duties to Church and family I began to neglect. The idea of my machine and the creating of it ate into my heart and brain.”
    Finally, in 1589, his “stocking frame” knitting machine was ready. He traveled to London with