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

from East Anglia and the West Country allied with silk weavers from London, Canterbury, and the Levant Company to restrict imports. The silk importers from the Levant, even if they had recently lost their monopoly, wished to exclude Asian silks to create a niche for silks from the Ottoman Empire. This coalition started to present bills to Parliament to place restrictions on the wearing of Asian cottons and silks, and also restrictions on the dyeing and printing of Asian textiles in England. In response, in 1701, Parliament finally passed “an Act for the more effectual imploying the poor, by incouraging the manufactures of this kingdom.” From September 1701, it decreed: “All wrought silks, bengals and stuffs, mixed with silk of herba, of the manufacture of Persia, China, or East-India, all Calicoes painted, dyed, printed, or stained there, which are or shall be imported into this kingdom, shall not be worn.”
    It was now illegal to wear Asian silks and calicoes in England. But it was still possible to import them for reexport to Europe or elsewhere, in particular to the American colonies. Moreover, plain calicoes could be imported and finished in England, and muslins were exempt from the ban. After a long struggle, these loopholes, as the domestic woolen textile manufacturers viewed them, were closed by the Calicoe Act of 1721: “After December 25, 1722, it shall not be lawful for any person or persons whatsoever to use or wear in Great Britain, in any garment or apparel whatsoever, any printed, painted, stained or dyed Calicoe.” Though this act removed competition fromAsia for English woolens, it still left an active domestic cotton and linen industry competing against the woolens: cotton and linen were mixed to produce a popular cloth called fustian. Having excluded Asian competition, the wool industry now turned to clamp down on linen. Linen was primarily made in Scotland and Ireland, which gave some scope to an English coalition to demand those countries’ exclusion from English markets. However, there were limits to the power of the woolen manufacturers. Their new attempts encountered strong opposition from fustian producers in the burgeoning industrial centers of Manchester, Lancaster, and Liverpool. The pluralistic political institutions implied that all these different groups now had access to the policy process in Parliament via voting and, more important, petitioning. Though the petitions flew from the pens of both sides, amassing signatures for and against, the outcome of this conflict was a victory for the new interests against those of the wool industry. The Manchester Act of 1736 agreed that “great quantities of stuffs made from linen yarn and cotton wool have for several years past been manufactured, and have been printed and painted within this kingdom of Great Britain.” It then went on to assert that “nothing in the said recited Act [of 1721] shall extend or be construed to prohibit the wearing or using in apparel, household stuff, furniture or otherwise, any sort of stuff made out of linen yarn and cotton wool, manufactured and printed or painted with any colour or colours within the kingdom of Great Britain.”
    The Manchester Act was a significant victory for the nascent cotton manufacturers. But its historical and economic significance was in fact much greater. First, it demonstrated the limits of entry barriers that the pluralistic political institutions of parliamentary England would permit. Second, over the next half century, technological innovations in the manufacture of cotton cloth would play a central role in the Industrial Revolution and fundamentally transform society by introducing the factory system.
    After 1688, though domestically a level playing field emerged, internationally Parliament strove to tilt it. This was evident not only from the Calicoe Acts but also from the Navigation Acts, the first of which was passed in 1651, and they remained in force with alternations forthe next two hundred years. The aim of these acts was to facilitate England’s monopolization of international trade—though crucially this was monopolization not by the state but by the private sector. The basic principle was that English trade should be carried in English ships. The acts made it illegal for foreign ships to transport goods from outside Europe to England or its colonies, and it was similarly illegal for third-party countries’ ships to ship goods from a country elsewhere in