On Branko Milanovic’s recommendation, I read Aldo Schiavone’s The End of the Past. Scholarly and elegantly written, it provides one of the best imaginative reconstructions of the ancient Roman economy.

Previous posts have touched on the economies of late antiquity, the modernist primitivist debate, and diagnosed problems in many recent assessments of the ancient economy (here, and here). I want to use Schiavone’s book to revisit a question raised by Peter Temin in The Roman Market Economy. How advanced was the Roman economy? Specifically, how did it compare to the economy of Europe in late medieval or early modern times? Was the Roman economy only as developed as that of Europe circa 1300 or was it as advanced as that of western Europe on the eve of the Industrial Revolution in say 1700.

This question is not mere idle speculation. It matters for our understanding of the causes of long-run economic growth whether an industrial revolution could have happened in Song China or ancient Rome. This type of counterfactual history is crucial for pinning down the causal mechanisms responsible for sustained growth, especially as historians like Bas van Bavel are now proposing explicitly cyclical accounts of growth in societies as varied as early medieval Iraq and the Dutch Republic (see The Invisible Hand? (OUP, 2016))

Temin’s GDP estimates suggest that Roman Italy had comparable per capita income to the Dutch Republic in 1600. The Empire as a whole, he suggests, may have been comparable to Europe in 1700 (Temin 2013, 261). My gut reaction is that this is plausible as an upper-bound. Schiavone (writing several years before Temin), however, raises important points that I had not fully considered previously.

Schiavone opens with an account of a speech given by Aelius Aristides celebrating the wealth of the Roman empire in the mid-2nd century AD.

“Whatever each culture grows and manufactures cannot fail to be here at all times and in great profusion. Here merchant vessels arrive carrying these many commodities from every region in every season and even at every equinox, so that the city takes on the appearance of a sort of common market for the world. One can see cargoes from India and even from southern Arabia in such numbers that one must conclude that the trees in those lands have been stripped bare, and if the inhabitants of those lands need anything, they must come here to beg for a share of what they have produced….

Your farmlands are Egypt, Sicily, and all of cultivated Africa. Seaborne arrivals and departures are ceaseless, to the point that the wonder is, not so much that the harbor has insufficient space for all these merchant vessels, but that the sea has enough space (if it really does). Just as there is a common channel where all waters of the Ocean have a single source and destination, so that there is a common channel to Rome and all meet here: trade, shipping, agriculture, metallurgy— all the arts and crafts that are or ever were and all things that are produced or spring from the earth. What one does not see here does not exist” (Aristides, The Roman Oration).

This is a panegyric addressed to flatter the emperor but its emphasis on long-distance trade, commerce, manufacturing is highly suggestive. Such a speech is all but impossible to imagine in a predominantly rural and autarkic society. Aristides is painting a picture of a highly developed commercialized economy that linked together the entire Mediterranean and beyond. Even if he grossly exaggerates, the image he depicts must have been plausible to his audience. In evaluating the Roman economy in the age of Aristides, Schiavone notes that:

“Until at least mid-seventeenth century Amsterdam, so expertly described by Simon Schama — the city of Rembrandt, Spinoza, and the great sea-trade companies, the product of the Dutch miracle and the first real “globalization of the economy — or at least, until the Spanish empire of Philip II, the total wealth accumulated and produced in the various regions of Europe reached levels that were not too far from those of the ancient world” (Schiavone, 2000, 94).

This is the point Temin makes. Whether measured in terms of the size of its largest cities — Rome in 100 AD was larger than any European city in 1700 — or in the volume of grain, wine, and olive oil imported into Italy, the scale of the Roman economy was vast by any premodern standard. Quantitatively, then, the Roman economy looks as large and prosperous as that of the early modern European economy.

Qualitatively, however, there are important differences that Schiavone draws out and which have been obscured in recent quantitative debates about GDP estimates.

Observe that Roman history leaves no traces of great mercantile companies like the Bardi, the Peruzzi or the Medici. There are no records of commercial manuals of the sort that are abundant from Renaissance Italy; no evidence of “class-struggle” as we have from late medieval Europe; and no political economy or “economics”, that is, no attempts to systematize one’s thoughts and insights concerning the commercial world. The ancient world, in this view, only superficially resembled that of early modern Europe. Seen from this perspective, the latter contained the potential for sustained growth; the former did not. Why is this?

The most obvious institutional difference between the ancient world and the modern was slavery. Recently historians have tried to elevate slavery and labor coercion as crucial causal mechanisms in explaining the industrial revolution. These attempts are unconvincing (see this post) but slavery certainly did dominate the ancient economy.

In its attempt to draw together the various strands through which slavery permeated the ancient economy, Schiavone’s chapter “Slaves, Nature, Machines” is a tour de force. At once he captures the ubiquity of slavery in the ancient economy, its unremitting brutality—for instance, private firms that specialized in branding, retrieving, and punishing runaway slaves — and, at the same time, touches the central economic questions raised by ancient slavery: to what extent was slavery crucial to the economic expansion of the period between 200 BCE and 150 AD? And did the prevalence of slavery impede innovation?

It is impossible to do justice to the argument in a single post. Suffice to say that after much discussion, and many fascinating interludes, Schiavone suggests that ultimately the economic stagnation of the ancient world was due to a peculiar equilibrium that centered around slavery.

One can think of this equilibrium as resting on two legs. The first is the observation that the apparent modernity of the ancient economy — its manufacturing, trade, and commerce — rested largely on slave labor. The expansion of trade and commerce in the Mediterranean after 200 BC both rested on, and drove, the expansion of slavery. Here Schiavone notes that the ancient reliance on slaves as human automatons — machines with souls — removed or at least weakened the incentive to develop machines for productive purposes.

The existence of slavery, however, was not the only reason for the neglect of productive innovation. There was also a specific cultural attitude that formed the second leg of the equilibrium:

“None of the great engineers and architects, none of the incomparable builders of bridges, roads, and aqueducts, none of the experts in the employment of the apparatus of war, and none of their customers, either in the public administration or in the large landowning families, understood that the most advantageous arena for the use and improvement of machines — devices that were either already in use or easily created by association, or that could be designed to meet existing needs — would have been farms and workshops”

The relevance of slavery colored ancient attitudes towards almost all forms of manual work or craftsmanship. The dominant cultural meme was as follows: since such work was usually done by the unfree, it must be lowly, dirty and demeaning:

“technology, cooperative production, the various kinds of manual labor that were different from the solitary exertion of the peasants on his land — could not but end up socially and intellectually abandoned to the lowliest members of the community, in direct contact with the exploitation of the slaves, for whom the necessity and demand increased out of all proportion . . . the labor of slaves was in symmetry with and concealed behind (so to speak) the freedom of the aristocratic thought, while this in turn was in symmetry with the flight from a mechanical and quantitative vision of nature”

Thus this attitude also manifested itself in the disdain the ancients had for practical mechanics.

Similar condescension was shown to small businessmen and to most trade (only truly large-scale trade was free from this taint). The ancient world does not seem to have produced self-reproducing mercantile elites. Plausibly this was in part because of the cultural dominance of the landowning aristocracy.

The phenomenon coined by Fernand Braudel, the “Betrayal of the Bourgeois,” was particularly powerful in ancient Rome. Great merchants flourished, but “in order to be truly valued, they eventually had to become rentiers, as Cicero affirmed without hesitation: ‘Nay, it even seems to deserve the highest respect, if those who are engaged in it [trade], satiated, or rather, I should say, satisfied with the fortunes they have made, make their way from port to a country estate, as they have often made it from the sea into port. But of all the occupations by which gain is secured, none is better than agriculture, none more delightful, none more becoming to a freeman’” (Schiavone, 2000, 103).

Such a cultural argument fits perfectly with Deirdre McCloskey’s claim in her recent trilogy that it was the adoption of bourgeois cultural norms and specifically bourgeois rhetoric that distinguished and caused the rise of north-western Europe after 1650.

Having taken note of the existence of such a powerful equilibrium — one resting on both material and cultural foundations — we can now return to Schiavone’s argument for why a modern capitalist economy did not develop in antiquity. He argues that given the prominence of slavery and the prestige of the landowning elite, economic expansion and growth of the kind that took place between c. 200 BCE to 150 CE was not self-reinforcing. It generated a growth efflorescence that lasted several centuries, but it ultimately undermined itself because it was based on an intensification of the slave economy that, in turn, reinforced the cultural supremacy of the landowning aristocracy and this cultural supremacy in turn eroded the incentives responsible for driving growth.

Compare and contrast with early modern Europe. The most advanced economies of early modern Europe, say England in 1700, were on the surface not too dissimilar to that of ancient Rome. But beneath the surface they contained the “coiled spring”, or at least the possibility, of sustained economic growth — growth driven by the emergence of innovation (a culture of improvement) and a commercial or even capitalist culture. According to Schiavone’s assessment, the Roman economy at least by 100 CE contained no such coiled spring.

We are not yet at the point when we can decisively assess this argument. But the importance of culture and the manner in which cultural and material factors interacted is clearly crucial. The argument that the slave economy and the easy assumptions of aristocratic superiority reinforced one another is a powerful one. For whatever historical reasons these cultural elements in the Roman economy were relatively undisturbed by the rise of merchants, traders and money-grubbing equites. Likewise slavery did not undermine itself and give rise to wage labor.

Why this was the case can be left to future analysis. The full answer to the question why this was the case and a more careful consideration of the counterfactual “could it have been otherwise” are topics deserving their own blog post.

Medieval rulers were therefore quite content to allow their barons to possess powerful and strongly garrisoned castles if those barons were part of their governing coalition. These castles, moreover, were costly for the king to besiege so they made the threat of a rebellion against the king tangible.

Now the question this post addresses is why did this feudal castle equilibrium eventually disappear?

There are essentially two competing explanations:

1. Rising state capacity and the desire of early modern rulers to monopolize power.

2. Changing military technology that rendered most baronial castles obsolete.

Of course, these are not mutually exclusive (and were in fact deeply interwoven). But, as I’ll argue below, the evidence is much more consistent with (2) rather than (1).

The Early Modern State-Building Thesis

As discussed in classic works by Otto Hintze, Charles Tilly, and Thomas Ertman more powerful and centralizing states after 1500 after protracted struggleda, disarmed their nobility, imposed a measure of civil peace, and eventually centralized military capacity.

Simplifying things, the Tilly-thesis would suggest that causation ran from the emergence of stronger states after 1500 to the subduing and disarming of the feudal aristocracy and the destruction of their castles.

In his biography of Cardinal Richelieu, the American Congressman and historian James Breck Perkins provides an elegant summary of this perspective. Circa 1600, he writes:

“Over all the land, numerous chateaux were scattered. ‘In France there are too many chateaux,’ said an ancient proverb, showing the deep-seated dislike to a powerful nobility that was still fresh at the era of the French Revolution.

Richelieu, however, tore down many of these castles (although probably far fewer than historians used to think). Perkins continues:

“They were the relics of a past age rather than important features of the present age. Richelieu might have allowed them to stand until they fell from decay or were torn down to suit new demands of fashion, without fearing any effective resistance to the royal authority. Still, the destruction of fortresses scattered through the interior of the country marked the close of an era of internal disorder and private warfare. It was an outward sign that the robber-baron and the noble highwayman had ceased to exist”

The image of Richelieu urging the destruction of internal fortifications is captured in an early scene in one of the most disturbing historical films I’ve seen: Ken Russell’s The Devils. The Catholic priest Urbain Grandier made an enemy of Cardinal Richelieu by opposing an edict to take down the city walls.

The Tilly explanation suggests that the timing of these developments should have occurred sometime after 1500 (consistent with the Richelieu example). He wrote:

“In 1500, no full-fledged national state with unquestioned priority over the other governments within its territory existed anywhere in the West. England was probably the closest approximation . . . [But] . . . . It still harbored a number of great lords who controlled their own bands of armed retainers”

But as Perkins recognized, the destruction of castles and city walls in the interior of France was not just driven by the centralizing tendencies of the early modern French state. It was also a reflection of changing military realities such as the rise of gunpowder weapons.

Military Obsolescence

In fact, the timing suggests that most castles had ceased to be military relevant before early modern states became powerful enough to fully suppress their independent nobility. That is, the disappearance of feudal castles wasn’t caused by the rise of the state. Rather, the rise of the state was made possible by the decline in feudal castles.

Certainly, this seems to be the case in late medieval England.

The civil wars of the 12th and 13th centuries had been castle wars. During the civil war between Stephen and Matilda known as the Anarchy, pitched battles were a rarity. So common were sieges, that a phenomenon known as the “siege castle” emerged: castles that were built just to besiege other castles.

We haven’t yet run the numbers (or found good enough data) to compare the ratio of sieges to pitched battles during the Anarchy. But it is clear that former predominated. We have done this analysis for the 1st Barons’ War, however and the numbers are stark: 90% of engagements were either categorized as sieges or castle events.

In contrast, following the development of gunpowder weapons and specifically iron cannonballs, the high walls of medieval castles became extremely vulnerable. The rapid French reconquest of Normandy and Gascony in the 1440s were made possible by the development of a formidable royal artillery train. Similarly, even the previously impregnable Theodosian Walls of Constantinople quite rapidly became vulnerable.1

Warfare rapidly evolved. Sieges were still common but the ratio of sieges to pitched battles fell dramatically. This was because towns and castles that previously had a good chance of resisting a siege now surrendered. In our paper, we document this with data we collected on all the battles and sieges in the Wars of the Roses (1455-1487). While a majority of encounters were still sieges, the proportion of pitched battles dramatically increased.

When Henry Tudor invaded in 1485 he was able to bypass the major castles of the kingdom and force Richard III to fight a risky, and as it turned out, decisive battle at Bosworth Field.

By the late 15th century, castles were no longer the “bones of the kingdom”. As predicted by our theory, this made England militarily and politically unstable.2 The norms that had previously governed feudal rebellion had disappeared. Whole bloodlines of the English aristocracy wiped themselves out. As Henry VII, Henry Tudor worked hard to reduce the remaining military power of the feudal aristocracy. Sir William Stanley - the man whose change of sides during the battle had been decisive for Henry’s victory - was nonetheless, executed for plotting against the king in 1495.

There are nuances, of course. Into Elizabeth’s reign, the royal government kept track of which castles were in good repair and in royal hands and during the English Civil War, many medieval castles proved useful as bases of operations or even as fortifications. Nonetheless, we argue it was changing military technologies that led to the end of the feudal equilibrium and the rise of the more powerful states largely post-dates this.

As we discuss in the paper, already by the early 16th century new types of fortifications were emerging to deal with the threat posed by cannon. These trace italienne fortifications were immensely expensive, however, and required far larger garrisons. As a result, they were built by the new fiscal states such as France after 1600, and they tended to be built on the borders of the consolidating territorial states rather than in the interior.

I opened the previous essay by mentioning the magnificent castles of Northern Wales. But it would be more accurate to anchor our expectations with reference to Mountfitchet castle near Stansted airport.

When we describe England as being covered with many hundreds of castles in the early 12th century, the majority of them were more like Mountfitchet than the massive royal fortifications like Caernarfon Castle.

The question, however, remains: Why did strong Anglo-Norman Kings such as William I and Henry I permit their barons to cover the land with their own private fortifications?

Defense against the native Anglo-Saxons is an obvious answer. No doubt the rapid establishment of motte and bailey castles across England right after 1066 can be explained this way. And the large number of castles along the Welsh marches can be explained by ongoing conflict with the native population. But in general by the 1070s or 1080s there was no serious ongoing internal threat. In any case, with Jacob Hall and Desiree, we tried to see if possible internal and external threats (see the map below) could explain castle location and there is simply no relationship.

So why did the Norman kings allow their barons to build so many castles? The answer has to do with the coalitional nature of feudal government. Unlike early modern rulers or Tilly-inspired political scientists, they did not view private castles as a measure of state weakness.

Rather, as we document in our paper, baronial castles helped to hold a feudal realm together because they helped make the deals and arrangements between the king and his barons credible.

The Credibility of Feudal Promises

The key idea that we have been working on across several papers is to model the feudal world as a coalitional bargaining game. Simply put, no king rules alone. He needs lords to contribute their military and economic resources to his coalition.

You can think of this coalition as held together by a series of implicit and explicit promises and agreements. Those lords who support him with more resources will expect a greater share of the spoils and rents. But these agreements are non-binding — the king can always renege and take a larger share for himself. Or he can redistribute the lands and castles one lord expected to another lord.

This was one reason why the problem of royal favorites was so acute in the medieval period. Successful medieval kings were able to manage their coalitions of aggressive, aggrandizing, and ambitious barons. Unsuccessful ones like Edward II (r. 1307-1327) failed in this. Edward II’s lavishing of lands and titles on Piers Gaveston at other barons’ expense illustrates exactly the kind of royal reneging that destabilized feudal coalitions.

What helps to keep the king honest? The lord’s castle.

Lords, as we have noted, had their own independent military power. But, it was almost impossible for an individual baron to successfully defeat the king. This only happened when kings alienated their entire baronage (as Edward II eventually did).

It is the existence of private castles that makes it costly for a king to break too many promises to individual barons.

If a baron rebels, he retreats to his castle and takes with him whatever resources he can defend. The baronial castle can eventually be retaken, but it is very costly to do so. Moreover, the castle can allow the baron to raid out and control the nearby countryside.

This is the key mechanism that we formally model: baronial castles raise the cost of reneging for the king, making his promises to the barons more credible. And once this is understood, it becomes clear why rulers like William I and Henry I did not oppose castle-building by their own barons. Baronial castles allow more barons to provide resources to the king, making the realm larger in equilibrium. They make the king more likely to honor his commitments and make his promises more credible, reducing the number of rebellions.

In other words, private castles were not a sign of state weakness. They were the institutional glue that held feudal polities together.

Powerful kings did not monopolize castles

Powerful feudal rulers did not eliminate private castles because to have done so would have been incongruent with other features of feudal rule such as the decentralization of military capacity and the low level of fiscal capacity. Castles were costly to maintain and garrison. No king could aspire to possess all or even a majority of the castles in his realm.

This is evident from the reign of Philip Augustus (r. 1180-1223). Philip was a formidable ruler who greatly expanded both the royal domain and the borders of his kingdom.

Philip Augustus certainly dispossessed barons who opposed him. But, as his biographer John Baldwin notes, he did this through fundamental feudal methods. He redistributed castles to his followers but he did not dramatically increase the share of castles in royal hands.

Importantly, the doctrine of renderability (discussed in Part 1) meant that he didn’t have to directly control all of the castles in his realm. Moreover, like any feudal ruler he lacked the resources to directly maintain and garrison all the castles in the realm himself.

John Baldwin in his landmark biography of Philip Augustus writes that

“not only did Philip acquire and build fortresses to consolidate the royal domain and his new acquisitions, he also gave them away when it best served his interests” (Baldwin, 1986, 301).

This is clearly not the behavior of an early modern ruler seeking to monopolize all military power in his realm. Philip Augustus was no Louis XIV. When it came to castles, there are numerous instances of him giving away castles such as Montboissier which he gave to the Count of Auvergne in 1189; furthermore:

“In this inaccessible region Bertrand de la Tour received three castles, the bishop of Clermont four, and the bishop of Le Puy five.”

Similarly, when Philip conquered Normandy he granted many castles to his vassals. Powerful English kings like Henry II behaved similarly in this period.

Checking despotic power

Finally, what evidence is there that castles allowed feudal lords to check despotic power?

Here we draw on our paper on Magna Carta, written with Jacob Hall, where we demonstrate that baronial castles played a critical role in the formation of the rebel coalition that was capable of checking King John in 1215 (see my earlier post). You can read about that paper here.

Consistent with this argument, when the Barons’ War did break out following John reneging on Magna Carta, control of key castles played a critical role in the conflict. Baronial control of Rochester Castle delayed John’s army for more than 7 weeks before capitulating.

In future work it would be interesting to see how important castles were in other attempts to impose checks on royal behavior (particularly outside England).

The Bones of the Kingdom

William of Newburgh called castles “the bones of the kingdom” (*regni ossibus*). Our paper explains why. In a world without formal constitutional constraints, without independent courts, without any mechanism to bind the king’s future actions, baronial castles solved the fundamental commitment problem of medieval governance. They made the king’s promises credible by making reneging costly.

In Part 3, I’ll turn to the question of why baronial castles eventually disappeared — and what that tells us about the transition from the feudal world to the early modern state.

But we often forget one crucial feature of medieval castles: many of them did not belong to the king but rather were the “private” possessions of feudal barons.

We are tempted to take the persistence of private military fortifications throughout the Middle Ages for granted. But this is in fact a puzzle.

One that Desiree Desierto and I explore in a recent paper published in European Economic Review.1

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The Barbarian Invasions and the Emergence of Defense-in-Depth

Two preconditions were important in the proliferation of private castles across medieval Europe: (i) external invasions and raids; and (ii) the collapse of public authority over much of Western Europe.

The logic of defense-in-depth is laid out in Edward Luttwak’s classic The Grand Strategy of the Roman Empire. At the height of the principate, the Roman empire invested in a system of linear defenses. Static defense was expensive but if it held, it could provide peace and stability for the interior. But with more mobile invaders, a static perimeter defense had to be abandoned in favor of defense-in-depth. This is what happened in the later Roman empire, as linear defenses were abandoned for self-contained strongholds.

Luttwak’s concerns were the barbarian invasions of the 3rd and 4th century. But the logic also applies to the invasions that beset Western Europe between the 8th and 10th centuries.

Raids from Scandinavia intensified after around 800 CE. These were made possible by innovations in longship design which meant that raiders from Scandinavia posed a threat to the rulers of sedentary populations across Europe. Their ability to choose where and when to attack, to navigate river-ways and penetrate deep inland rendered static defenses ineffective.

In addition to Viking raids, there were intensified attacks from the Eurasian Steppe. Nomads like the Magyars possessed comparable mobility across land and conducted lightning raids hundreds of miles from their base in the Hungarian plain.

Defense-in-depth required self-contained fortifications that could hold up invaders, prevent them from raiding the nearby countryside, and provide time for a reinforced defense force to be assembled. While the threat of external invasion explains the need for fortifications and defense in-depth, it does not account for why so many of the fortifications of the Middle Ages were private fortifications. After all, the fortifications of the late Roman empire were built and controlled by a centralized state.

This brings us to the second precondition: the collapse of centralized political authority.

The fall of the Western Roman empire in the 5th century had been accompanied by the decentralization of political and military authority. During the 8th century, the Franks under the Carolingian dynasty restored a measure of public authority. But their empire lacked strong fiscal or administrative foundations and in response to the raids of invaders and internal conflict, real power devolved from the royal court to a new provincial aristocracy.

As military and judicial power localized, the power of the king was hollowed out. This process reached its culmination in 11th century Francia, or France, where the early kings of the Capetian dynasty became equivalent in power to many of the territorial lords. This period of weakening central authority is associated with the rise of feudalism.

Was the proliferation of the baronial castles in the 11th and 12th centuries evidence of state weakness or was it part of a distinctive feudal political order?

Baronial Castles as a Measure of State Weakness

From the perspective of modern social science it is natural to view the proliferation of private castles as a measure of state weakness. In a fantastic paper that I hope is published soon, Cappelen and Hariri introduce a dataset of medieval castles. They put this important data to work by using castles

“ . . . to trace the gradual monopolization of the means of violence in medieval and early modern Europe. Because castles are physical structures with coercive potential, castle ownership measures the extent to which the means of violence have been monopolized by the Crown.”

For Cappelen and Hariri as political scientists, the share of castles that were controlled by the ruler versus the proportion controlled by the barons is a natural measure of state development. As they write, this ratio “can be used to trace historically the rise of the attribute that is distinctive of the modern state: that it holds a monopoly on the means and use of violence within a territory:

In general, private castles were a threat to the ruler’s effort to centralize power, and state-making rulers therefore prohibited private castle construction, conquered private castles or demolished them. By contrast, royal castles were the administrative and military strongholds of the state. It is these historical dynamics that we use to gauge the the process of state formation in medieval and early modern Europe

The fortifications built in England by Alfred the Great (r. 871–899) to defend against Viking raids were built and controlled by the king. These fortifications, known as burhs, provided a point of refuge for the population from raiders. They were state-driven efforts, described by one historian as “a public works programme of unparalleled magnitude.” So the idea of centrally controlled fortifications was not unknown. Why, then, did private castles rise in prominence, proliferating across Western Europe in the 11th and 12th centuries? After all, this was over a century after the worst nomadic or Viking threats had receded.

One reason is that decentralized defense meant a more dispersed and flexible military organization. Authority and military command had to be delegated to the local lord on the spot. As Marc Bloch observed, “the most successful resistance came rather from the regional powers which, stronger than the kingdoms because they were nearer to the human material and less preoccupied with inordinate ambitions, slowly emerged from among the clutter of petty lordships.”

From the perspective of the modern state, this proliferation of private castles looks like a straightforward failure — the inability of rulers to achieve a monopoly of force. Charles Tilly’s influential account of state formation treats baronial castles as barriers to progress: objects that needed to be removed for the state to become what it was ultimately destined to become. When Louis XIII of France demolished private castles and built new fortifications on the frontiers, the American historian James Breck Perkins described it as marking “the close of an era of internal disorder and private warfare.” This view — castles as symptoms of disorder — has dominated how historians and political scientists have understood medieval Europe.

But there are reasons to doubt this story.

Problems with the State-Centric Perspective

While I am a great fan of Tilly’s work, one cannot deny that narrative he proposes is deeply teleological. It takes the modern centralized state as the natural endpoint of political evolution and judges everything that came before against that benchmark. From this vantage point, baronial castles can only appear as aberrations.

Our paper was initially written for a conference celebrating the work of James C. Scott. And, Scott argued, when we view the world exclusively through the lens of the modern state, many prior forms of political organization appear deviant or inexplicable — when in fact they may have had their own logic.

There is also a problem of sources. Our medieval chronicles were typically written by clerics who favored royal authority. Early modern jurists — often men with positions in government — went further, developing arguments for state sovereignty that cast feudal arrangements in an unflattering light. The seventeenth-century jurist Denis de Salvaing epitomized this tradition, describing baronial castles as “grains of sand and gall-stones in the bowels of the State.”

While social scientists and historians have inherited a long-standing narrative that sees baronial castles as measures of feudal disorder, some of this rests on misunderstandings about how feudalism functioned.

For example, when we think of “private” or “baronial” castles we imagine they were simply the private property of the baron. And it follows that the baron could then exclude anyone including the king from his own property. But that is not how feudal property rights worked.

As Charles Coulson documents, baronial castles were not truly “private” in the modern sense. They were subject to the principle of renderability: the obligation to hand the fortress over to the feudal overlord on demand. During an invasion, a baron’s castle would be available to the king if needed. Baronial castles were not outside the political order — they were embedded within it. Coulson notes that “a rigid distinction between ‘private’ and ‘public’ traditions of defence does not represent the reality of the early Middle Ages.”

This raises a deeper question. If private castles were not simply symptoms of disorder, what role did they actually play? Why did medieval kings — even powerful ones — tolerate and sometimes encourage their barons to build and maintain their own fortifications?

The medieval chronicler William of Newburgh called castles “the bones of the kingdom.” He did not distinguish between royal and baronial castles. Both, in his view, were critical to the defense and governance of the realm.

In Part 2, I will explore Desiree’s and my answer to this puzzle — and argue that baronial castles were not a sign of state failure but a functional institution within a distinctive feudal political order.

Recent Nobel Laureate Joel Mokyr together with Avner Greif and Guido Tabellini have recently published a landmark book, Two Paths to Prosperity. This was reviewed by the equally eminent Jan Luiten van Zanden for EH.net. Van Zanden’s essay is recommended reading for anyone interested in these topics.

Van Zanden opens his essay noting that

“Kenneth Pomeranz’s book The Great Divergence (2000) opened the twenty-first-century debate about the timing and causes of the divergent economic development of China on the one side and Western Europe on the other. In Western Europe after 1780, the Industrial Revolution (IR) got under way, ultimately leading to sustained economic growth, whereas in China — whose economy had been dynamic up to that point — the trend reversed and GDP per capita began to shrink. Before the IR, the dynamic center of the world economy was in China (and in the Middle East).

Explaining this reversal was the central question in the Great Divergence debate . . . Much of the literature, going back even to Max Weber, had claimed that Europe’s institutional divergence dated back to the Middle Ages and that industrialization after 1750 had roots deep in European history. Pomeranz and other representatives of the California School that coalesced around this topic around 2000 pointed to two contingencies that, after 1750, supposedly triggered the IR: (i) the presence of cheap coal in Great Britain and (ii) the colonial powers’ access to cheap raw materials such as cotton. Whether these claims were valid lay at the heart of the Great Divergence debate.

As Two Paths to Prosperity convincingly shows, the central theses of the California School have not withstood critical scrutiny.”

Jack’s post below is a direct response to this claim and a fascinating discussion of the claims made by Greif, Mokyr, and Tabellini about the origins of the Great Divergence itself.

*******

J.L. van Zanden is one of our leading economic historians in his own right, and his review of Avner Greif, Joel Mokyr, and Guido Tabellini, Two Paths to Prosperity: Culture and Institutions in Europe and China, 1000–2000 is sweeping and bold, stating that this book can “be read as a conclusion to the debate on economic development that has dominated economic history since 2000.”

I would like to assert that this debate is not yet concluded! Van Zanden errs in one major respect: he states that the California school argued not only for a “late” divergence between European and Chinese economic development, c. 1750, but also that this Great Divergence was down to “two contingencies that, after 1750, supposedly triggered the IR: (i) the presence of cheap coal in Great Britain and (ii) the colonial powers’ access to cheap raw materials such as cotton. Whether these claims were valid lay at the heart of the Great Divergence debate.” That is just not true. These claims were never advanced by the California School as a whole, but were argued primarily by Kenneth Pomeranz. Other scholars in the School, including R. Bin Wong, John M. Hobson, James Z. Lee and Wang Feng never accepted that “coal and colonies” drove the Great Divergence, though they agreed with the later, 18^th century, dating of the divergence itself. Moreover, the California School, for the most part, NEVER argued that the causes of the great divergence were not traceable further back in time. Rather what the School as a whole argued was (1) that the rapid economic divergence between Europe and China in income per capita and economic technology that started after 1750 was NOT based on an earlier divergence in income per capita and economic technology many centuries earlier; rather as late as the early 18^th century output per person and most elements of technology were still comparable between Europe and China, with the latter still more advanced in agricultural output per acre, and the production of cotton and silk textiles and ceramics; and that (2) since the Great Divergence was not based simply on earlier economic progress, the explanation must lie in some combination of events and processes in other domains: exploration, culture, political and social organization, that enabled the West to produce and then sustain a burst of history-changing innovations in the 18^th and 19^th centuries that produced unprecedented economic growth.

Far from “the central theses of the California School have not withstood critical scrutiny,” in fact the main theses have stood up quite well.

That is, “coal and colonies” were NEVER the “central theses” of the California School. Rather, to put it more briefly, the central theses were (1) that the quantitative divergence of GDP/cap occurred no earlier than 1700, and that (2) the divergence was primarily due to prior developments that were not simply economic. The first thesis has been repeatedly accepted and documented by the work of Stephen Broadberry and his many partners in reconstructing long-term GDP/cap series for European nations and for the leading regions of China. To quote Broadberry, Guan, and Li:
“GDP per capita in the leading region of China remained around the same level as in the leading region of Europe until the 18th century before declining substantially during the Qing dynasty. The Great Divergence thus began around 1700 [emphasis added], earlier than originally suggested by the California School, but later than implied by earlier writers.” ¹ In addition, studies of particular areas of production, including iron and steel, cotton textiles, and ceramics, have shown that c. 1700 Europeans were still trying to catch up and find substitutes for imports from the Middle East, India and China that were technologically superior to what Europeans could produce.² Now one might say that Pomeranz and other California School authors in the 1990s and early 2000s argued for a divergence date somewhat later, after 1750. But in my view, if 20 years of distinguished cliometric research by Broadberry and all of his associates simply moved the date of the divergence up by 50 years, then that is strong confirmation of the California School thesis denying that a divergence in GDP/cap had put Europe economically ahead of any major region in China many centuries earlier.

The acceptance of the second thesis is shown by the numerous economic historians who have now located the reasons for the great divergence not in prior economic progress, but in cultural divergence, including most notably Deirdre McCloskey’s focus on the development of “bourgeois virtues,” and Mokyr’s own Nobel-winning works emphasizing the crucial emergence of a “culture of innovation” as the fount of later economic breakthroughs.³ That the California School was on this same track much earlier should be evident from my own 1987 paper “Cultural Orthodoxy, Risk, and Innovation: The Divergence of East and West in the Early Modern World.” ⁴

Now, the reasons for that cultural divergence are still much debated, even if van Zanden thinks that Greif, Mokyr and Tabellini have now found “the answer” in the role of the Catholic Church in western political development. In fact, even this answer is much more limited and complex than van Zanden allows.

Let me acknowledge that of course the Catholic Church played a critical role in the preservation and promulgation of Roman Law, in Western state formation, and in developing the balance between secular political and divine authorities that helped promote political pluralism and independent city-states in the West, albeit that was also down to the manner of collapse of the Western Roman Empire and the reconstitution of political authority by Germanic leaders. These processes have been well described by Anna Grzymala-Busse and Walter Scheidel.⁵

But while the political fragmentation of Europe into diverse states was clearly necessary for the sustained innovations leading to the rise of the West, it was also clearly not sufficient, as shown by the experience of the Warring States era in China, or the history of southeast Asia, in which centuries of competing warring states in a dynamic cultural system gave birth to sophisticated state structures but not to economic breakthroughs.

More importantly, we need to understand the paradoxical role of the Catholic Church in what van Zanden rightfully recognizes as the crucial element in the Great Divergence, namely “long-term changes in the knowledge economy.” Mokyr helpfully broke these down into a two-fold change in theoretical knowledge (the scientific breakthroughs of the Scientific Revolution and Enlightenment), and practical knowledge (embodied in highly skilled craftsmen). While craft skills were essential, what really separated the West from the rest was the West’s ability to break through what E.A. Wrigley identified as the energy barrier, by shifting from solely organic sources of energy (including wind and water) to inorganic energy, which only became available for motive force when Europeans learned to build and harness reliable steam engines. While skillfully made machines, such as the spinning jenny and water-driven spinning and weaving machines, helped Europeans to catch up to Indian and Chinese producers in cost, it was only with the application of steam power to such machinery that Europeans surpassed the rest of the world in volume production while drastically undercutting them in prices, and at the same time became capable of producing much cheaper iron and steel in volume, leading to railways and steamships and other miracles of the 19^th century.

Breaking the energy barrier required the insights of modern science, including the existence of air pressure and the ability to quantify and measure work and heat. This work, which included both Protestant and Catholic scientists (Boyle, Black, Watt, Torricelli, Pascal, Lavoisier, Thompson), set scientists and craftsmen on the road to building machines to convert heat into work, from Savery to Newcomen to Watt. Yet the Catholic Church, even though it had long supported academic inquiry and even trained the Jesuits to be their scholarly warriors, set itself firmly against the modern science of Isaac Newton, which seemed to posit a “clockwork universe” with no need for an active, intervening God, and defended Aristotelian and Biblical ideals such as the absence of a vacuum in nature and the centrality of Earth in the universe (even the Jesuits, in adapting to modern astronomy, adopted Tycho Brahe’s alternative to the Copernican system, retaining Earth as the center of solar, lunar, and planetary motions.)

Thus, for all the value of the Catholic Church in promoting an organizational structure that was conducive to growth, it was only the failure of the Catholic Church to retain its hold on orthodoxy of thought and monopoly of power, as manifested in the rise of Reformation states and Protestant thinkers who fought the Counter-Reformation to a standstill and eventually triumphed, that enabled a radical modern science to triumph. By contrast, in the Middle East, India, and China, from 1400 a series of repressively orthodox dynasties (the Ottomans, the Mughals, and the late Ming and Qing) progressively contained and stifled innovation, such that the rate of innovation in the East slowed down, while the way for innovation was cleared in the West, enabling the latter to surpass the East and all prior civilizations after 1700.⁶

To be sure, there is still much more to debate about the cultural foundations for European science and Eastern stagnation, and broader questions about the Rise of the West. How important was the Ming decision to curtail their program of maritime exploration and trade, while the Europeans happened, in contingent fashion, to discover a heavily peopled new continent that challenged all their prevailing ideas about geography, botany, and humanity? How important was European military technology to its ability to exploit its new productive powers? How crucial was European imperialism to provide new ideas, raw materials, and subjugated manpower to underwrite European growth?⁷

Even on the matter of family structure, which van Zanden cites as another way the Catholic Church shaped the West for dominance, there is ample disagreement. James Lee and Wang Feng demonstrated that Chinese families were no larger than European families, and the idea that the European Marriage Pattern was a decisive difference for economic growth has been largely debunked.⁸ And while Greif, Mokyr and Tabellini praise western corporations while denigrating China’s vast regional merchant associations, which operated national and international networks and promoted economic development, calling them mere “clans,” it should be noted that the British and Dutch East Indian Companies – the “model” corporations – both failed when trying to run their colonial domains and had to be rescued by state takeovers, and that in Britain from 1720 to 1824, precisely when modern economic technology and growth emerged, joint-stock corporations were mostly banned due to the spectacular failure of the South Sea Bubble. During this period, it was partnerships that fueled the rise of modern banks and manufacturing companies, including the firm of Boulton and Watt that revolutionized mechanical power.

Finally, it is important to remain aware of the full context of the Great Divergence. The Enlightenment was more than an Encyclopedia of technical innovations and knowledge. It was also a full-fledged assault on Biblical infallibility, hereditary royal and aristocratic superiority and privilege, and many of the certainties of antiquity. It is striking that the Industrial Revolution was just one of THREE divergences that characterized the 18^th century: there was also the advent of the first large-scale constitutional democratic republics in America and France to replace absolute monarchies, and the displacement of classical/theological theories of nature by modern experimental science. Economic, political, and scientific revolutions went together to create the modern world, and each needs to be framed in the context of the others if we are to fully understand any of them.

In sum, the reasons for the Great Divergence are likely to remain debated, and are almost certainly more complex than a straight line running from the medieval Catholic Church to the Industrial Revolution. I am a great admirer of the works of Greif, Mokyr, Tabellini and van Zanden, but at this point to understand the rise of the West will require less simplification or reduction, and a more willing embrace of non-linear, multi-causal complexity.

Notes

1. Broadberry, S., H. Guan and D.D. Li, “China, Europe and the Great Divergence: A Restatement,” Journal of Economic History 81:3 (2021), p. 958.

2. Riello, G. and R. Tirthankar, Global Economic History 1500-2000, 2^nd ed., London: Bloomsbury Academic, 2024.

3. McCloskey, D. The Bourgeois Virtues: Ethics for an Age of Commerce, University of Chicago Press, 2006; Mokyr, J. A Culture of Growth: The Origins of the Modern Economy, Princeton University Press, 2018.

4. Goldstone, J. A. “Cultural Orthodoxy, Risk, and Innovation: The Divergence of East and West in the Early Modern World,” Sociological Theory 5 (1987), pp. 119-135.

5. Grzymala-Busse, A., Sacred Foundations: The Religious and Medieval Roots of the European State, Princeton University Press, 2023; Scheidel, W., Escape from Rome: The Failure of Empire and the Road to Prosperity, Princeton University Press, 2019.

6. Goldstone, J.A. “Political Trajectories Compared, “ Chapter 18 in The Cambridge World History, vol. 6: The Construction of a Global World, 1400-1800 C.E. (Part 1), eds. J. Bentley, S. Subrahmanyam, and M.D. Weisner-Hanks, Cambridge: Cambridge University Press, 2015, pp. 447-489; Goldstone, J.A., “Divergence in Cultural Trajectories: The Power of the Traditional within the Early Modern,” in Comparative Early Modernities 1100-1800, ed. D. Porter, New York: Palgrave-Macmillan, 2012, pp. 165-192.

7. Goldstone, J.A., “Either/or – why ideas, science, imperialism and institutions all matter in the ‘rise of the West,’” Erasmus Journal for Philosophy and Economics, 9 (2016), pp. 14-24.

8. Lee, J. and F. Wang, One Quarter of Humanity: Malthusian Myths and Chinese Realities, 1700-2000, Cambridge, MA: Harvard University Press, 2001; Tracy Dennison and Sheilagh Ogilvie, “Does the European Marriage Pattern Explain Economic Growth?” Journal of Economic History 74:3 (2014), pp. 651-693.

Our paper asks: under what circumstances do protests bring down an autocratic regime? We don’t know the medium or long-run consequences of the December-January protests in Iran, which began as protests against soaring inflation, a collapsing rial, and economic mismanagement but coalesced into demands for full regime change. But we do know that the initial momentum of the protests appears over and that for now what appears to have been an incredibly brutal repression has pacified the country.

This illustrates a common phenomenon. Western observers and journalists routinely overestimate the ability of protests to bring down autocratic regimes. Brought up with images of the Fall of the Berlin Wall or the Color Revolutions in Eastern Europe, we seem to imagine that such protests have the force of history behind them and are destined to succeed. Social scientific research, in contrast, documents that successful regime changes are usually internal coups and typically rely on powerful regime insiders defecting.

Why do we overestimate the power of protests? Part of this is translating the logic of protests from democratic regimes to autocracies. Even in democracies, I suspect protests are overrated. The Iraq War Protests in Britain didn’t stop the war or prevent the subsequent reelection of Tony Blair in 2005. Peaceful protest is an important democratic right. So we tend to romanticize it and overestimate its power.

The Death of Stalin is much better social science than V for Vendetta.

Nonetheless, there is a logic of political protest and a cost that protests can impose even in autocracies. Furthermore, we uncover the role that cross-cutting ties between ordinary people and political elites play in amplifying these costs. In so doing, we can shed light upon the role that civil society can play in driving political transitions.

Here is how we think about it. Consider the influential selectorate theory developed by Bruce Bueno de Mesquita and his collaborators. All rulers, whether democratic or autocratic, need the support of some coalition to stay in power. Call the “selectorate” the pool of people who have some say in choosing leaders. Then there is a ruling coalition, which is the smaller group whose active support is essential for survival.

Leaders maintain power by distributing a mix of public goods (which benefit everyone) and private transfers or patronage (which benefit only coalition members). In democracies, winning coalitions are large, so leaders must rely more on public goods provision; in autocracies, coalitions are small, so leaders can buy loyalty through targeted patronage. This framework offers a unified way to think about political survival and governance.

What our approach adds to selectorate theory is a focus on civil society and the role of ordinary citizens who fall outside the winning coalition. Traditional selectorate models focus on how leaders maintain elite loyalty, but largely ignore the ordinary citizens who cannot directly remove the ruler. We show that these ordinary citizens still matter indirectly because they can protest. In our telling, protests don’t directly topple a dictatorship — after all, who has the guns? But protests raise governance costs and therefore they can be decisive if they induce political actors to defect.

Civil society organizations, be they parties, NGOs, trade unions, or social clubs, can matter here if they are groupings that span both political actors and ordinary citizens.

Our model then distinguishes between those elites who can remove a ruler from power directly (we call them political actors) and ordinary citizens who cannot directly depose a ruler. Ordinary citizens can protest. But protests don’t automatically lead to regime change. Rather, they simply make it harder for a ruler to maintain loyalty among political actors, but protests alone are rarely sufficient.

This allows us to articulate a novel role for civil society organizations even in autocratic regimes. Our main result is that civil society organizations that include both political actors and ordinary citizens are far more effective at achieving political change than organizations composed of only one type.

An organization of only ordinary citizens can protest, but a well-resourced ruler can weather the storm. An organization of only political actors can threaten defection, but without popular support, they’re easier to buy off with patronage.

But a cross-cutting organization that spans both types creates a powerful feedback loop: popular discontent among ordinary members puts pressure on political actor members, who can then credibly threaten to withdraw support from the regime.

In the paper, our key example is historical: the Glorious Revolution of 1688. But we also discuss some other case studies and it is those I’ll focus on here.

The People Power Revolution

In 1986, President Ferdinand Marcos of the Philippines was deposed peacefully as a result of popular protests. Why did popular pressure work in this instance but not in others?

While there are many reasons for this, our model provides an analytical template for understanding why Marcos was unable to hold on to power in the face of the People Power movement. As we discuss in the paper:

“Marcos had been in power since 1965 and had declared martial law in 1972, which allowed him to rule as a dictator. By the early 1980s, many segments of Philippine society, elites as well as the masses, had reasons to oppose his continued rule. His regime was characterized by widespread corruption — a ‘politics of plunder’ — and human rights abuses.”

At the same time, Marcos’s regime was far from totalitarian. There was widespread support for more democracy, and civil society organizations were allowed to flourish. The economy was also heavily reliant on American investment.

External economic pressures and the cutting of international lending created the situation that made Marcos vulnerable. Various organizations, including labor unions, student groups, and professional associations, mobilized the public against the Marcos government.

The most important civil society organization, however, was the Catholic Church. Initially, Church leadership in the Philippines was willing to support Marcos because he was anti-Communist. But after the murder of opposition leader Ninoy Aquino, their position changed and Church leaders like Cardinal Sin called for a democratic transition.

What followed in early 1986 was a classic example of popular protest inducing regime change. Protests involving priests as well as pro-democracy activists jammed up the main roads bringing Manila to a standstill. This dramatically raised the costs of repression to the Marcos regime (killing Communists in secret was one thing, shooting priests and nuns in public would be quite another).

In the language of our model, these protests raised the costs facing the government and dramatically increased the costs and risks of repression (as international attention was now focused on the ongoing revolution). From the perspective of our model, this, in conjunction with the drying up of external loans and US support, made it very difficult to buy off members of the ruling coalition. Key military and government officials, including Defense Minister Juan Ponce Enrile and Armed Forces Vice Chief of Staff Fidel Ramos, then defected from the Marcos government and declared their support for the opposition leader Corazon Aquino. By February 26, Marcos realized that he could not govern and resigned and went into exile.

As we argue in the paper, the example of the People Power Revolution illustrates the usefulness of our model in understanding regime change. The Catholic Church’s role in organizing opposition to Marcos was critical because it was a wide-reaching group spanning both political actors and ordinary citizens.

There are of course clear parallels to the role Solidarity played in Poland at the same time. At the same time, this example illustrates why popular protests elsewhere have failed to bring down autocratic regimes.

The Arab Spring

An important counterpoint is the Arab Spring. As is well known, the initial spark was the self-immolation of Mohamed Bouazizi on December 16, 2010, in the Tunisian town of Sidi Bouzid. Protests against President Ben Ali then spread across Tunisia, and then to Egypt where protesters opposed the regime of Hosni Mubarak, and from Egypt across the Middle East.

The Arab Spring was a dramatic series of events that grabbed world attention. But it did not deliver on its promise to spread democracy across the region.

Many scholars have offered assessments for this failure. From a Marxist perspective, the Arab Spring failed because it was a revolution without revolutionaries. But many scholars argue that what limited the effectiveness of the Arab Spring were the divisions among the various dissident groups. At the time, my colleague Jack Goldstone warned that “history is replete with student movements, workers’ strikes, and peasant uprisings that were readily put down because they remained a revolt of one group, rather than of broad coalitions”.

We draw on this assessment to argue that the long-standing weakness of civil society organizations in the Middle East meant that there was an absence of genuine cross-cutting groups.

As such, in contrast to the Philippine case, the Arab Spring did not involve organizations which spanned all of society. In addition, many rulers in the Middle East have greater resources to quell opposition. On the eve of the Arab Spring, countries like UAE, Bahrain, and Saudi Arabia had access to substantial oil revenues, which, according to our model, would make their regimes more resistant to popular pressure. Interestingly, it was only in Tunisia where there had been a strong labor movement (the Tunisian General Labour Union, the UGTT) that the regime fell and was not reimposed.

Economic history is distinct as perhaps the only subfield in economics where publishing a book is still somewhat normal or perhaps even expected for a senior scholar. This was certainly true of the generation of scholars whose work has shaped our current understanding of economic history: the Joel Mokyr’s, Robert Allen’s, Greg Clark’s, Gavin Wright’s of the world. Sadly, there is a sense that this expectation is fading away, as in some departments at least economic history simply becomes another genre of applied economics. Walker Hanlon’s book The Laissez-Faire Experiment is a marvelous exception to this trend and certainly deserves more attention than it has so far received.

Economic historians have a growth preoccupation. The Industrial Revolution and its causes play the leading role in most prominent books in the field. And there are many other works that seek to explain the absence of an industrial revolution elsewhere in the world.

It is refreshing therefore to read a book that is not about the causes of industrialization but its consequences. If we reach back to the past, say 200 or more years ago, two dramatic transformations are visible: one is the abundance of material goods and transformative technologies due to industrialization; the second transformation is the rise of large, modern, welfare states.

Walker Hanlon’s book The Laissez-Faire Experiment addresses this second transformation. He asks two fundamental questions: ‘First, how well did limited government in mid-19th century Britain work? Second, why was limited government abandoned in favor of the more interventionist government found in the U.K., and essentially all other developed countries, today?’

Hanlon’s argument is elegant and simple and it is grounded in standard economic theory.

The main problem facing the British economy in the early 19th century was dismantling the inefficient policies of the pre-Napoleonic war era, i.e., the fiscal-military state of the 18th century which protected large land-owners and relied on local and ad hoc institutions. Hanlon suggests that laissez-faire was an appropriate economic philosophy in this context: ‘across the first half of the nineteenth century, Britain’s laissez-faire system was successful. Economic growth was booming, and the benefits were accruing not only for the rich but also for average workers. Technological progress continued at a rapid pace. As a global power, Britain was unmatched.’

But, as the Industrial Revolution unfolded, the costs associated with this policy of non-interference mounted. For example, rapid urbanization brought new problems of overcrowding, sanitation, disease control, and pollution. There was a large health penalty to urban living in the 19th century.

Hanlon provides a compelling empirical assessment of the economic problems that led British policymakers to adopt a more interventionist series of policies. Increasingly severe market failures in the form of externalities from pollution, asymmetric information in a range of markets made government intervention potentially welfare enhancing.

The book is admirably clearly written. First, Hanlon presents the relevant economic analysis, which will be familiar to those who have taken Intermediate Micro or Public Economics, outlining the main explanations for market failure: information problems, monopolies, credit constraints, public goods, and coordination problems. Each chapter then considers different applications of the general principles, and provides a survey of relevant literatures in economic history, for example the literature on child labor regulations or urban public health.

The chapter on unemployment insurance, for example, condenses a tremendous amount of information and evidence into just a few pages. One charge that classical liberals have made against the modern state is that unemployment benefits and insurance crowded out the many forms of charity and private insurance that were commonplace prior to the welfare state.

Indeed, Hanlon discusses the wide array of traditional and occupational based non-government forms of insurance available prior to 1850. He then, however, explains how the rise of large, geographically concentrated industrial agglomerations based on a single industrial (or related industrials) such as cotton textiles in Lancashire changed the problem of insuring workers. Neither family, locality-based, nor occupation-based forms of unemployment insurance, could deal with a general downturn in cotton textiles.

The most tragic example of a highly concentrated exogenous shock in the mid-19th century was the Irish potato famine, for which existing forms of relief were entirely inadequate. But there are other less well-known examples.

For example, the cotton crisis brought about by the American Civil War caused concentrated distress in the Northwest. In towns like Blackburn and Preston between 30-50 percent of the population were on poor relief by late 1862. Poor relief was locally organized at the parish level. Therefore, the hardest hit areas struggled to provide the needed aid. There was, widespread recourse to charity and voluntary aid but this, though generously provided, was often unreliable and difficult to coordinate. In response, policymakers therefore allowed local parishes to draw on resources from their county therefore allowing for pooling for resources in a more centralized manner, though there was strong resistance to organizing relief at a national-level.

In developing this argument, Hanlon combines systematically data with references to Parliamentary debates, and to the positions of individual policymakers. He draws on the secondary literature and on original research he has done with Vellore Arthi and Brian Beach that explores how this cotton shock affected mortality, migration, and population growth. These long-lasting impacts suggest that a more active government response would have improved welfare, though moves towards such policies only really took place in the early 20th century.

Overall, the book offers an exemplar of how to write a modern work of economic history. I wouldn’t hesitate in recommending this book to anyone interested. Beyond, an economic history audience, it is an important book for anyone interested in understanding the rise of the modern state in the 19th and 20th centuries.

Nonetheless, as I discuss below, I want to push the implications of the book’s arguments a little of further and explore some aspects of the debate which Hanlon perhaps neglects.

Having lavishly praised The Laissez-Faire Experiment as a work of economic history, my more critical comments will focus on the implicit political economy of the book and its treatment of economic ideas.

First, and I think intentionally, Hanlon’s treatment of what he calls ‘a laissez-faire philosophy’ is remarkably flat. I say intentionally as Hanlon clearly wants to focus on the economic history. From this perspective, too much engagement with the literature on the history of ideas would be distracting. So, he uses laissez-faire as a short-hand to refer to what is often called classical liberalism, essentially the idea of limited government and a general presumption of liberty.

This is entirely understandable and indeed defensible. Nonetheless, there is a price to taking this approach which I will attempt to cash out below.

First, there is the use of the term laissez-faire as a shorthand. Classical liberalism has never been identical to laissez-faire because classical liberal thinkers have always recognized areas where government intervention is required.

Hanlon doesn’t really defend his use to laissez-faire as shorthand. But this approach overstates the degree of elite consensus and underestimates the extent to which there were competing intellectual traditions in 19th century Britain.

It is true that many of these positions came together in favoring a limited state in the mid-19th century, but it is precisely by recognizing that they were not a coherent ‘philosophy’ that we can appreciate why some of the leading figures also came to push for more technocratic interventions in society. A case in point would be Edwin Chadwick. Chadwick was both a utilitarian follower of John Stuart Mill and a founder of modern public health and policing and he was more than willing to abrogate private property rights to achieve an improved societal outcome.1

There is an fact a long history of debate about whether 19th century Britain was laissez-faire. Certainly, the idea of 19th century Britain as a laissez-faire paradise or hellhole was a cliché of both left-wing and right-wing polemic and of much popular history. But some early papers in of the Journal of Economic History asked whether there was any truth to this? (”the laissez-faire question”). Some suggested that “British laissez faire was a political and economic myth” advanced by nostalgic late 19th-century historians such as A.V. Dicey rather than a realistic description of actual policies or political principles

John Stuart Mill saw the doctrine of laissez-faire as valuable for clearing away the detritus of the old order but did not endorse its ends and was clearly favorable to a more interventionist social philosophy. Indeed, later classical liberals viewed Mill ambiguously for this reason, seeing in his writings the anticipation of many later more egalitarian policies.2 As Brebner observed:

“Jeremy Bentham and John Stuart Mill, who have been commonly represented as typical, almost fundamental, formulators of laissez faire, were in fact the exact opposite, that is, the formulator collectivist ends and his devout apostle” (Brebner, 1948, p 59-60).

Hanlon’s narrative is of liberal, laissez-faire inclined policymakers and thinkers confronting the reality of widespread market failure and externalities and gradually adapting their policies and intellectual principles. He writes that ‘government intervention during the nineteenth century was not the work of a group of ideological collectivists. Rather, many interventions were the work of laissez-faire adherents who nevertheless believed that intolerable or inefficient conditions exist and were open to the possibility of experimenting with various forms of government intervention’. My feeling is that a deeper investigation of the ideas and writings of the classical economists and associates like Chadwick will reveal a more forthright commitment to policies of amelioration and improvement rather than what is conventionally meant by the term laissez-faire.

Moreover, as Colin Holmes documented more than 50 years ago, something recognizable as a doctrine of laissez-faire did exist in the mid-19th century but it was never the animating principle of the British elite or government. Opposition to great government involvement in society could be animated by traditional small c conservative principles.3 We don’t get a sense of this opposition (no John Ruskin or Thomas Carlyle, for example) in The Laissez-Faire Experiment.

Acknowledging this does not weaken Hanlon’s argument, but it would strengthen our understanding of the issues at hand in 19th century Britain.

My second comment concerns the treatment of political economy in the rise and fall of laissez-faire.

In general, Hanlon’s treatment is broadminded. He doesn’t assume that the existence of widespread market failures automatically translated into policies that could by assumption correct for those failures. Aware of the role played by both ideology and interests, he rather argues that the market failures that were exacerbated by industrialization ‘created opportunities for efficiency-enhancing government intervention’. Many factors would be critical in determining the extent to which these opportunities were realized.

Hanlon provides a similarly nuanced discussion of the shift towards more government activism at the end of the 19th century. He draws on recent historical scholarship to discuss the extent to which the example of the German welfare reforms and the pressures of war and imperial competition pushed policymakers away from laissez-faire.

Nonetheless, this part of the argument was less compelling that the first part of the book where Hanlon provides a systematic account how the new industrial economy generated all kinds of new externalities.

There is a reason for this. The type of evidence that Hanlon does a great job of assembling is very convincing in demonstrating the existence of market failures. He combines rigorous evidence with economic theory. But he doesn’t have an equivalently powerful framework for discussing how and why certain policy decisions were made.

In his conclusion, Hanlon tackles some of the big questions raised by his account: ‘is there evidence that the expansion of British government intervention . . . was misguided?’. Hanlon provides evidence that this was not so. He contends that policymakers followed experience and were not led by public opinion.

There is a risk here that the political economy of the 19th century does not get the full attention it deserves. Political economy is about heterogenous preferences and Hanlon’s framing in terms of an unmet nascent demand for education or for regulations abstracts from these conflicting preferences. Hanlon appreciates that government policies do not always achieve their aims. But political economy considerations are only occasionally mentioned, for example in explaining the failure to tackle coal pollution.

In contrast, conflicting political interest groups were prominent in earlier accounts of the rise of the state in late 19th century England. Holmes noted that what was traditionally seen as the high-point of laissez-faire ideology, the mid-19th century, was in fact a period of centralization and increased regulation, a point that Hanlon’s narrative and data in fact substantiate. But the role of conflict between different interest groups is not a major theme in The Laissez-Faire Experiment. And this also limits the ability of Hanlon to speak to developments in the 20th century when much larger and more interventionist states emerged.

None of these comments take away from the fact that The Laissez-Faire Experiment is a great work of economic history and a major achievement. All subsequent scholarship will have to engage with it and will no doubt build upon its findings.

This was first published at Fusion and I am very grateful to Sam Goldman for comments

The 2025 Nobel Prize in Economics was awarded for explaining innovation-driven economic growth. Philippe Aghion and Peter Howitt were pioneers in endogenous growth theory and many would assume that they missed their moment when Paul Romer won in 2018. Now their seminal contributions in growth theory have been paired with Joel Mokyr’s insights into the historical process of economic growth and innovation. It is Mokyr’s work that I want to focus on here.

Mokyr’s earliest work (including a formal model published in Explorations in Economic History in 1976) was focused on issues of economic growth. But until he wrote The Lever of Riches in 1990, Mokyr was best-known for his work on the Irish famine of the mid-19th century. The Lever of Riches, however, was a blockbuster. It is a testament to the book’s impact and longevity that it is still on many undergraduate reading lists today (including my own).

From The Lever of Riches onwards, Mokyr’s work has not just been focused on growth but specifically on the question of innovation. Innovation has two components: the first is pure discovery, and is traditionally the subject matter of the history of science. The second is the process of bringing a discovery to market and turning it into a profitable part of a business. Mokyr’s work seeks to explain both why Europe became an intellectual hub of discovery after around 1500 and why and how this eventually translated into modern economic growth in the 19^th century.

In that book, Mokyr distinguished between macro-inventions and micro-inventions. By the former, he meant what we often call general purpose technologies such as the printing press or the internet. Macro-inventions have the potential to be transformative but it often take many decades for their full impact to be felt. Moreover, macro-inventions are potentially sterile unless complemented by a stream of micro-inventions, small improvements and cost-savings that improve the initial technology and allow it to be disseminated on a broad basis. For example, the macro-inventions of the internal combustion engine and the automobile required a host of complementary improvements (such as rubber tires) to ultimately bring about the transformation in transportation that took place by the early 20th century.

Mokyr’s insight was that a lone genius inventor such as a Leonardo da Vinci could not on his own have much impact on the history of technology and growth. I recall a British TV documentary from the 2000s where scientists established that many of Leonardo’s inventions such as his parachute and helicopter were feasible in design. But lacking either supporting micro-inventions or craftsmen and mechanics capable of implementing his ideas, these insights were neglected by Leonardo’s contemporaries.

The series of books Mokyr has published since iterated on this topic, providing novel insights into the process of innovation. An important difference between Mokyr’s work on these topics and those of most historians is that he continuously relates discoveries in science and technological breakthroughs to the overall problem of economic growth. He was interested in explaining why economic growth was largely stagnant for so many centuries before the Industrial Revolution.

These books have fundamentally reshaped how economic historians think about the origins of sustained economic growth. When I reviewed his 2016 book A Culture of Growth, I observed that while in previous work,

“Mokyr advanced what one could consider as cultural arguments for the rise of, not only inventors and innovators, but also a workforce made up of tinkerers and ‘improvers’ in eighteenth century England. But in those books, he shied away from investigating in full the forces that help to give rise to such culture of practical innovation and improvement.”

In A Culture of Growth, Mokyr focused explicitly on culture. At the time, I noted that this was a recognition that culture had arrived as an important and legitimate concept in discussions of economic growth. Jared Rubin and I focus extensively on these arguments in our book, How the World Became Rich.

But here I want to focus on one important part of Mokyr’s argument, an aspect that has been picked up by researchers in the field but perhaps has not yet penetrated beyond that: the complementarity of institutional and cultural explanations for economic growth.

Many books pose a dichotomy between different explanations of what Deirdre McCloskey calls the Great Enrichment or the origins of sustained economic growth: it is either geography and sheer “luck,” or exploitation; or it is all institutions; or all cultural values. As Rubin and I discuss, however, it is an obvious mistake to assert that these factors operated in isolation of one another. Any plausible explanation of the origins of sustained economic growth has to take into account their interaction.

This is something that Mokyr has been stressing in his work for at least two decades. In particular, he draws attention to what he calls a “meta-institution”: the Republic of Letters.

Beginning in the 16th century but really getting going after 1600, Mokyr discusses the emergence of a transnational and later trans-religious community of scholars, which referred to itself as the Respublica Literaria. This circle of scholars drew its membership from scientists, physicians, philosophers, and mathematicians, as well as theologians, astrologers, and mystical and occultist writers.

Mokyr’s emphasis on the shared beliefs and values of this educated and polyglot community is an argument for the importance of cultural values. These thinkers promoted innovation. In contrast to their medieval predecessors, they did not revere the ideas of Aristotle, Ptolemy, and Galen or engage in what Carl Becker called “ancestor worship”. Rather, their behavior was competitive (sometimes unscrupulously so) as they sought to uncover the secrets of nature.

But it is also an argument for the importance of institutions. This group of scholars itself functioned as an informal international network and as well as distributing new ideas and findings, it generated insights that incentivize further innovation.

By the late 17th century something resembling “refereed” scientific periodicals began to emerge, such as the Transactions of the Royal Society. Improvements in transportation made it possible for books to be distributed more widely. The physical infrastructure supporting this virtual community included universities (especially Padua, Paris, and Leyden) but these were less important than the more informal academies and scientific societies.

Institutional infrastructure was critical. Mokyr draws attention to the importance of the postal system. The origins of a European postal system lie in the 15th century as the de Tasso family began organizing a postal network in Italy. This expanded into the Holy Roman Empire in the 16th century. By the 17th century, all of Europe was linked together by a network that enabled continuous and reliable correspondence between scholars living in different countries, a necessary precondition for the emergence of the Republic of Letters.

Institutions also matter at a higher level. All of this took place against a backdrop of a competitive and fragmented state system. As Mokyr contends, and as Noel Johnson and I also argued in Persecution and Toleration, this made it very difficult for any one state or ruler to suppress new knowledge or new ideas. Members of the Republic of Letters, Mokyr documents, used foreign publishers to circumvent censorship. In extreme cases, footloose members moved from one nation to another and played one power against another. The combination of political fragmentation and competition between dynasties, polities, and different religions made coordination by reactionary powers almost impossible. By the 18th century, troublesome books were still being burned in Western Europe, but thinkers were not being physically coerced.

This set of arguments nicely illustrates the interplay between institutional and political factors and cultural factors and shows how difficult it can be to disentangle them cleanly.

These arguments also slot in nicely to other explanations of the origins of growth which emphasize other factors such as political institutions or skills and human capital, which Mokyr also stresses in other research (for example, his work on millwrights, and skilled workers in general). Indeed, in his work from A Lever of Riches onward, Mokyr gradually constructed a rich framework which weaves together many such factors into a coherent account of how sustained growth emerged.

Throughout his research, Mokyr has focused on addressing questions about the timing and location of the Industrial Revolution that economic historians have long puzzled over. Specifically, why did it take place in Britain and not in another part of Europe or the world? And why did it take place in the 18^thcentury and not earlier or later?

Drawing on this larger body of work, one can reconstruct a narrative that begins by explaining the origins and success of the Scientific Revolution in the 16^th and 17th centuries, a pan-European phenomenon which provided the vitally important propositional knowledge that future technological developments would eventually come to build upon but which itself did not translate directly into faster economic growth.

Mokyr then traces the application of selected scientific principles into industry itself in the 18^th century. This was a development that Mokyr terms the Industrial Enlightenment. Unlike the Scientific Revolution, it was predominantly a British phenomenon. It was based around tea and coffee shops, where scientists, entrepreneurs and skilled artisans interacted and shared ideas. And of course, institutional factors were crucial: political stability, integrated markets, and religious toleration were preconditions for this Industrial Enlightenment. These all provided background conditions for the Industrial Revolution itself.

But Mokyr’s narrative does not stop there. His work has also considered the application of modern science after 1850 and it contains insights that have direct relevance for today. At a time when there seems to be a growing backlash against technological progress in many parts of the world and on both sides of the political spectrum, this is a Nobel Prize that acknowledges the importance of innovation and technology. Mokyr’s particular contribution has been to lay out in great detail how innovation took root in Western Europe in the early modern period. While many are seeking to restrain innovation in the name of various political causes, Mokyr reminds us of how much we have to gain through free exchange and a competitive marketplace for ideas. By giving the prize to Mokyr alongside Aghion and Howitt, the Nobel committee have rewarded research that points to the deep historical origins of modern prosperity.

This post will mostly be about why, and why Thomas Cromwell matters for thinking about some of the big questions in economic history.

But first a detour about the limits of TV as a medium for understanding history.

In recent years, commentators have, I think, come to the belated realization that the "age of prestige TV" was less of a golden age than we imagined. While there have been some exceptions (like the first season of Wolf Hall), most TV series produced since 2011 (when Game of Thrones premiered) will be soon forgotten. This is especially so of many of the historical TV series. The Medici, anyone? Or Versailles?1

Why is this? One failing is that geopolitics, economics, religion and strategy are not investigated in detail. When they are depicted, they are flattened into personal antagonisms. Personal conflict and romance are easier to depict.

Despite the quality of the production, I worried that The Mirror and the Light risked falling into this trap. Too much screen time was devoted to humanizing Cromwell.

The antihero who commits terrible crimes but also loves and wishes to be worthy of love is a mainstay of modern fiction – think Tony Soprano. And Mantel's portrait of a protean, aspiring, ambitious, but also human and humane, Cromwell was a revelation. Here, we see him try his best to look after a series of vulnerable young women: Princess Mary, Queen Jane Seymour, the illegitimate daughter of Cardinal Wolsey, and his own daughter. The quality of Mark Rylance and the other actors make many of these scenes compelling. But each scene is a variation on the same theme. Dramatically, these scenes may be needed; but narratively they are constraining and restrict the scope of the historic drama being depicted.

By episode 6, I was almost won around. Cromwell's rapid fall from power is brilliantly depicted. The fragility and arbitrary nature of political power at the top of the pyramid is exposed. Cromwell's mistakes don't have to be particularly momentous for Henry to tire of him and for his enemies, principally the Duke of Norfolk, to sweep in. Nonetheless, everything happens so fast. I would have appreciated more than one episode where we got to see more about why the likes of Richard Rich and Thomas Wriothesley choose to betray their master (see below).

I wish more TV shows as ambitious as Wolf Hall were being made. In this essay, though, I want to delve into some more problems with how Cromwell is depicted both in the show and in the novels.

[Note there are spoilers below for Wolf Hall: The Mirror and the Light]

The Problem of Thomas Cromwell

The Mirror and the Light both as a TV show and the novel face the same dilemma: How to explain the fall from power of a man who up until this point has been shown to be an incredibly capable administrator and courtier, the man who always knows what to say and how to say it.

Mantel, in the novel, explores Cromwell's unraveling through his rivalry with Thomas More. She invents a backstory between them: Cromwell had been a servant at More's school and had looked up to More; but More has no memory of it and never recognizes Cromwell's worth. Peter Straughton and Peter Kosminsky, the writer and director of the TV series, cannot do this because their depiction of More – played by Anton Lesser – was less nuanced than in the book itself, emphasizing his priggishness and hypocrisy, without granting him any of his historical grandeur. And Mantel's portrayal of More was already controversial.2

The show replaces More's role in Cromwell's interior dialogues with Cardinal Thomas Wolsey, the father figure and mentor who plucked him from obscurity. Instead of being haunted by his role in More's death, he is obsessed with the idea that in his rise to power he may have betrayed his patron. Ultimately, however, this can't bear the dramatic weight it's supposed to; it cannot adequately explain Cromwell's own personal dissolution. Given Cromwell's abilities, it is unclear why he felt he owed so much to the Cardinal. Moreover, if Cromwell's Protestantism is as sincere as recent historians and Mantel believe, then why does Cromwell have such fealty to the corrupt embodiment of the old church?

But to explain why Wolf Hall but especially The Mirror and the Light felt like a missed opportunity, one needs to delve into the political economy of Tudor England.

Missed Opportunity 1: Cromwell's Boys

Wolf Hall captures the sense that Tudor England was a highly fluid and meritocratic society. Indeed, those depicted in the show as "old aristocracy" were in fact relative parvenus. The Duke of Norfolk makes much of Cromwell's lowborn status. But in reality, Thomas Howard's family had only been recently ennobled as a result of the extinction of the Mowbray line. The Howard family had been prosperous gentry until the late 15th century. The Tudors themselves of course were Welsh outsiders.

Amid this flux, Cromwell stands out as someone who can pick out talent and ambition. He collects ambitious young men; men who then rise alongside him.

Having lost his daughters, among the young men he raises is Ralph Sadler who remains loyal to Cromwell even to the end (and would rise to become a privy counselor under Elizabeth). Cromwell treats Sadler as a son. One of his endearing characteristics is his sense of family duty. His ambition is partly in the service of establishing his family and those who have served him well.

So, who else does he support and reward? And what does his selection reveal about his character and goals?

Apart from Sadler, two others stand out among Cromwell's coterie: Richard Rich and Thomas Wriothesley. And in the final episode they are prominent in his fall. Wriothesley, in particular, incriminates his former master. But his betrayal seems reluctant. It is intended to indict the overall political environment rather than the man. The court of Henry VIII is, as we know, a dangerous and ruthless place.

But Straughton and Kosminsky missed a trick. Rich and Wriothesley are among the most repellent and scheming individuals in Tudor history. They are most notorious for personally racking Anne Askew in the Tower of London until her limbs were pulled from their sockets. Rich was a political survivor. A man who rose to prominence by testifying against More in his trial and became "rich" acquiring large amounts of monastic lands during the Dissolution, but who during Mary's reign was a leading persecutor of Protestants in Essex. He remained in favor during Elizabeth's reign, changing his religion and politics to suit the times: a man who has been described as the “arch-villain of Tudor history.”3

Mantel knew about how unscrupulous and shady Rich and Wriothesley are. But it seems like the screenwriters and the actors in the Mirror and the Light apparently don't, so their portrayal was underwhelming. It is not simply that they are men corrupted by the system; rather they are further evidence for F.A. Hayek’s thesis about authoritarian or totalitarian government — that the “worst get on top’’ i.e. that there is a process of negative selection.4

Missed Opportunity 2: What Happens to the Poles?

The Poles and the Courtenays represent the remnant of the old medieval nobility of England, many of whom had been wiped out by the Wars of the Roses or reduced in prominence by the fiscal policies of Henry VII.

There were three Pole brothers, rough contemporaries of Henry VIII: Henry, Geoffrey and Reginald. They were rich, powerful and politically prominent; they possessed Plantagenet blood via their mother Margaret Pole, Countess of Salisbury, and owned lands across England. They had not been in favor of Henry's divorce, and all had traditional religious sympathies.

A decisive break occurred when the youngest Pole, Reginald, who had been in semi-exile, denounced Henry’s break with Rome and urged his deposition. As Henry's government reacted to the aftermath of the Pilgrimage of Grace, Cromwell used this as an opportunity to eliminate the Pole family and their allies. These included Henry Courtenay, a cousin of Henry VIII and a descendant of the House of York, and Edward Neville, a member of the great northern family that had played so prominent a role in the Wars of the Roses.

The Mirror and the Light shows us some of this in Episode 3 but then entirely drops this plot point. We see Cromwell intimidating Geoffrey Pole, but we aren't told that the rest of his family (bar Reginald) are wiped out. Margaret Pole’s horribly botched execution admittedly happened after Cromwell’s death. But leaving the fate of the Poles unspecified is itself a problem. The TV show's relentless focus on Cromwell's fate obscures that of his victims. This is a missed opportunity. Cromwell's ruthless destruction of the Pole family and men like Henry Courtenay, who had been bosom companions of the King, presages the vicious way Henry and the other courtiers will turn on Cromwell in 1540 and reveals the dark side of his state-building project.

Missed Opportunity 3: The Dissolution of the Monasteries and the Pilgrimage of Grace

Having just written a paper (with Desiree Desierto and Marcus Shera on the dissolution of the monasteries), I naturally think that The Mirror and the Light doesn’t spend nearly as much time as on this it should!

England’s monasteries were incredibly rich and owned vast swathes of land. The dissolution of the monasteries between 1536 and 1540 was a huge event which had consequences that would reverberate for decades if not centuries. In his recent account, The Dissolution of the Monasteries, James Clark writes that:

“As a shockwave shared countrywide, it recalled only moments in the remote past, the Black Death, nearly 200 years distant, or the conquest of the Normans another three centuries beyond that”.5

In contrast, the Dissolution is just part of the background in The Mirror and the Light. The scale of the disruption is not shown and Cromwell’s part in this revolutionary episode is consequently under-explored.

When Cromwell visits Shaftesbury Abbey in Episode 2, he reassures the Abbess that the Dissolution will not effect her. It is, he says, only about closing the smaller monasteries, eliminating waste and corruption, and reallocating resources. Is he lying? Or is he telling the truth?

We are not told. But this is a weighty question. Did Cromwell plan on eliminating all of England’s monasteries as early as 1536? Or was the policy much more ad hoc, driven by opportunism and other actors? Clark notes that recent research has “questioned Cromwell’s capacity to orchestrate policy as well as he could conceive its central theme,” and suggests that “it was the servants of this vast undertaking, and not its master, who first perceived its problems and proposed its solutions.”6 To what extent was he driving Henry’s policies and to what extent was he riding a tiger?

Mantel’s portrayal of Cromwell does not resolve this tension.

Similarly, the audience was underserved by not being shown the political reaction to the Dissolution. The rebellions in the north of England against Henry and Cromwell’s policies occur offscreen. Cromwell stayed in London while the Pilgrimage of Grace rebellion was taking place and The Mirror and the Light almost exclusively follows Cromwell (though we occasionally have scenes without him).

We never see the popular unrest and we don't see Henry's duplicitous offer to negotiate with the rebel leader Robert Aske or his hosting of Aske at court during Christmas 1536, all events that Cromwell would have been involved with. And we don't see the subsequent repression.

And the repression was brutal. The Duke of Norfolk declared martial law so that he could executed rebels en masse without recourse to jury trials (as he expected many of them to be acquitted by their neighbors). Cromwell was responsible for interrogating Aske personally and for constructing the (legally dubious) case against him.7 Aske and hundreds (!) of other rebels were executed by being hanged in chains.

This apparently involved being hanged alive in chains until one died, a form of death that could take days.8

This brings me to some concluding thoughts. How should we think about the process of state-building and the often brutal and ruthless ways in which modern states were constructed.

Cromwell and the Modern State

In both her Cromwell books and in her excellent novel of the French Revolution, A Place of Greater Safety, Mantel's sympathies are with those individuals who, by disrupting the old moribund and irrational order of things, are responsible for bringing the modern world into being.

Cromwell in her novels is such an avatar of modernity. He embodies all the apparently "new" things that historians identify with the post-1500 order. His rise is based on merit and ability; he has no noble ancestors; he is comfortable with commerce and nascent capitalism, as well as with the law; he despises superstition and traditional Catholic religiosity, and though a sincere bible-reading follower of Tyndale, in practice, he is a vehicle of secularization and the privatization of religious faith. Above all else, he is associated with the rise of a stronger and more assertive state. He was building state capacity.

This Cromwell owes much to Geoffrey Elton's classic The Tudor Revolution in Government. Elton was perhaps the first historian to depart from the traditional depiction of Cromwell as a schemer who sought to make Henry an absolute monarch. Rather he emphasized that "the Henrician Reformation rested on conscious co-operation with Parliament and that the propagandists of the time never produced a theory of absolute monarchy". Elton argued that Cromwell was not only a master of bureaucracy but also that his "political creed centred on the legal supremacy of the king in Parliament and included no ambitions for a purely royal despotism".9 Subsequent scholarship has modified many of Elton’s claims but his portrait of Cromwell has largely survived.10

In his excellent Thomas Cromwell: Machiavellian Statecraft and the English Reformation, J. Patrick Coby lists Cromwell’s praiseworthy traits: he could be charming and warm, his intellectual interests ranged widely, he enjoyed entertaining at dinner etc. in a manner that is entirely consistent with the rich and nuanced portrait of Cromwell we get from The Mirror and the Light. But he follows this with:

“. . . But he could be terrifying . . ."11

Like the French Revolution then, where one stands on Cromwell sheds interesting light on one’s broader ideological commitments. It is revealing that Simon Schama was a notable critic of Wolf Hall’s depiction of Cromwell, saying:

“ . . . the documents shouted to high heaven that Thomas Cromwell was, in fact, a detestably self-serving, bullying monster, who perfected state terror in England, cooked the evidence, and extracted confessions by torture.”12

Schama is not a Tudor specialist (and in blaming Cromwell he may be inadvertently letting Henry VIII off the hook) but he is the author of a landmark history of the French Revolution, Citizens which is notable for its emphasis on its human cost. In other words, Schama is more attuned to the human costs of state-building than are either Elton or Mantel.

My feeling after reading and watching Mantel’s Cromwell are that, excellent though both the television show and the books are, they provide only a partial window into Cromwell’s role in the turbulent mid-16th century period of Reformation and state-building. I’m still holding out for a television show or a film capable of showing us this.

King John agreed to the provisions of the Magna Carta on June 15, 1215. We recently passed the 800-year anniversary of a perhaps almost as important event, Henry III’s 1225 reissuing of the agreement under his own free will.

Since it was almost rediscovered by the great lawyer of the constitution Sir Edward Coke in the early 17th century, Magna Carta has been a rallying point for those who would limit the arbitrary power of the sovereign, first in England and then in North America. It was to Magna Carta that the Virginia state legislature appealed when protesting the Stamp Act of 1765.

For both English Parliamentarians in the 17th century and the American Founders in the late 18th century, the Magna Carta was a taproot for critically important ideas: the idea of the rule of law – rules that bind rulers as well as ruled; the aspiration of equality before the law; and the idea of taxation by consent of the realm.

All this is true.

Yet over time, critical aspects of Magna Carta’s significance have been forgotten or misunderstood.

It was the product of the feudal world. The significance of this is not so much that it was the product of baronial self-interest. Skeptics of the document have often pointed this out. Rather, what gets forgotten is that Magna Carta was an agreement that the king could be compelled to accede to because the rebel barons had their own military capabilities.

The king had no monopoly over violence. In 1215 King John was the greatest landlord in the country: he had his household retainers, mercenaries, a siege train, and a large number of royal castles. Nonetheless, he could be compelled to come to agreement because the capability for organized violence was dispersed among a fairly broad section of the barons and their followers. On their own, a baron like Geoffrey de Mandeville, from whom John extracted large amounts of money, had no means to oppose the king. But together with other disgruntled barons, men like Saer de Quincy and Eustace de Vesci, barons like de Mandeville could directly threaten the position of the monarch.

Another critical but often overlooked feature of this rebellion is that the rebels did not seek to depose the reigning monarch. King John was an oppressive ruler by all accounts, guilty of atrocities that included murdering his nephew and starving to death the wife and son of a baron.

Despite this, the rebels did not aim at regime change; nor did they raise a pretender to the throne. Rather, they put forward a program, the Magna Carta, that could gain the support of a large segment of the political nation.

It is also often forgotten that King John reneged on the Magna Carta almost immediately. So, the willingness of the barons to fight for its provisions had to be demonstrated in the field. Henry III agreed to the terms of a revised Magna Carta in 1225, but he would later face similar baronial rebels over his perceived violations of it during the 1230s and 1240s. Magna Carta was finally incorporated into English law by Edward I again in response to baronial unrest and opposition.

Why does this matter? The fact that the Magna Carta was the product of a feudal rebellion accounts for why in the later Middle Ages it fell into abeyance.

18th and 19th century constitutional scholars imagined that the Magna Carta was a realization of a still more ancient constitution. They believed that an ancient constitution guaranteeing the rights of free-born Englishmen could be found in the Anglo-Saxon Witan or the tribal practices of earlier Germanic peoples. But this was a myth. The Witan was no more than the King’s council. The Magna Carta was quite different. It was the product of a “baronial bridle” that could be placed upon the king because the underlying distribution of economic and military resources empowered a broad enough coalition of rebel barons.

Considered on its own, the agreement made at Runnymede in 1215 was perhaps not that important. What mattered was the precedent that it set and the fact that the Magna Carta was reissued and fought over for the next century. Magna Carta was from the first, a focal point for opposition to royal exactions. It required baronial opposition to have teeth.

Thus, by the late 16th century, it had largely ceased to matter. Shakespeare’s play King John makes no mention of it. The enduring idea of Magna Carta that no one should be subject to arbitrary treatment by the sovereign survived. But following the Tudor suppression of the aristocracy, there was no means of compelling the sovereign.

There are lessons here for today.

Constitutions are seldom self-reinforcing in the very long run. The Roman Republic was the longest lasting and most successful regime in antiquity. But its numerous devices for preventing one-man rule eventually could not stop Julius Caesar and Gaius Octavianus. A similar account applies to the institutions of medieval city-states such as Florence and Venice.

Similarly, the institutions that supported democracy and the rule of law in the 20th century may need to be reworked to meet the challenges of the 21st.

In order to inspire the American Revolutionaries in the 18th century, Magna Carta had to be revived and reinterpreted in the 17th century by English Parliamentarians. The preservation of the rule of law may require similar acts of imagination and courage. If we do need to reinvigorate or reform our own institutions, we should not neglect critical episodes in English history such as the background to the Magna Carta in the 13th century and to the conflicts between crown and Parliament in the 17th century for guidance.

There have been countless oppressive rulers throughout history. What distinguishes the barons of 1215 is that they coalesced around general principles (as well as some specific demands). Rather than replacing a bad ruler with "their guy," they had thought deeply about the roots of the crisis they found themselves in. One present moment may require a similar level of reflection.

Note: This column draws on my paper with Desiree Desierto and Jacob Hall. “Magna Carta” available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4503918. This work was funded by the Templeton Foundation.

A new edition of the Handbook of New Institutional Economics, edited by Claude Ménard and Mary Shirley was recently published. And thanks to a generous donation from the Coase Institute, it is open access!

It was an honor to contribute a chapter (written with Desiree Desierto) on Institutional Change; I remember reading through the original edition (I think from 2005) as a graduate student. I’ve written about that chapter in detail here.

The Handbook retains the original chapters written by the four Noble laureates of New Institutional Economics: Douglass North, Ronald Coase, Oliver Williamson, and Elinor Ostrom but the rest of it is brand new and many of the chapters will be of interest to Broadstreet readers.

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I’ve only glanced through the Handbook, but here are a couple of chapters that took my attention.

First, Claude Ménard and Mary Shirley discuss the range and scope of the New Institutional Economics (NIE). This is not an easy task, as the New Institutional Economics is no longer new. The seminal work by North, Coase, Williamson and Ostrom was published 60 to 30 years ago. In the meantime institutional analysis has become mainstream. Overall, Menard and Shirley have done a commendable job of surveying a large and increasingly sprawling literature. But I felt that it was a shame they could not get Daron Acemoglu and James Robinson to contribute. Their work is probably more representative of new work in institutional economics since the first edition of the Handbook was published in 2005.

Next, I found Roger Myerson on Local Politics in Nations and Empire of particular interest from the perspective of historical political economy. Myerson’s puzzle is how can national or centralized state effectively govern an extensive territory of heterogeneous individuals. This is tricky because:

“The establishment of a national state means imposing its national leaders’ authority over communities which may already have their own forms of local leadership with local political accountability (Murtazashvili, 2018; Myerson, 2022)”.

Power has to be delegated by the ruler. The question is who to delegate to?

Myerson considers two paradigms. The first is a centralized cadre of elites loyal to the center. Myerson calls these mandarins. Because their social and ideological ties are to the center and because they are rotated, mandarins cannot take a long-term perspective on the development on any one province.

In contrast, authority can be given to elites whose ties are local, namely the gentry. The gentry stay in their local area so they have a long-term interest in how it is governed. But they also need some of communicating with the center in order to influence policies.

For Myerson then the difference between a feudal monarchy and an absolute monarch is determined by the relative influence of the mandarins versus the gentry. Ancient Egypt for him is a clear instance of a mandarin state. In general, Myerson argues the role of the two types of elites are complementary so most traditional regimes rely on a mixture of the two.

This tension between mandarin rule and gentry-rule can be related to Machiavelli’s well known dictum that some states are easier to invade but difficult to conquer whereas others are difficult to invade but easy to conquer. (Machiavelli gives France during the Hundred Years War as an example of the former, and Persia before it was conquered by Alexander the Great as an example of the latter). Myerson notes that:

This distinction can be derived from the relative strengths of the local gentry and the central mandarin administration of a kingdom. A stronger gentry could retain a larger share of local revenues, leaving less resources for the central government’s defense of the kingdom’s frontiers; but in that case, a successful invader would meet continuing resistance from local leaders who were determined to defend their privileges of power.

Next Myerson considers the role of representative institutions. He sees this as a way of aligning local interests with those of the central state. In particular, it was the presence of towns in the English Parliament that would distinguish it from other representative bodies such as the Polish Sejm:

The fact that towns were represented in Parliament could make them more effective as engines of economic growth. Unlike the tradition in Spain, towns in medieval England did not have jurisdiction over the rural areas around them, and so the town councils and rural gentry each had their own representatives in the English Parliament.

Myerson then goes on to discuss the development of local political participation in the colonies of North America and then in the democratic United States. He makes the intriguing observation that while social scientists often associate a successful democratic with citizen’s voting rights in central elections,

[s]uch an assumption would ignore the historical fact that representative institutions of national democracy originally developed from institutions for maintaining a balanced working relationship between local community leaders and the state’s national leadership. A comparison between the American Revolution and the French Revolution provides further evidence of the potential importance of local political roots for successful national democracy.

He goes on to link this discussion with a more conventional account of federalism in the United States. The overall message is that the stability and prosperity of national states has historically depended on working with local elites. He concludes by pointing to how this insight might shape our understanding of recent failed attempts at democratic nation-building:

The need for deeper understanding of the foundations of successful democratic states was tragically demonstrated by the 2021 collapse of the US-supported Republic of Afghanistan, where the last President, Ashraf Ghani, had been widely regarded as an expert on fixing failed states. Ghani and Lockhart (2008) cogently argued that the ultimate goal of state-building assistance should be to help a country establish an effective government that is accountable to citizens. But from our perspective, serious questions should have been raised about whether effective democratic accountability could be achieved in a state that centralized all responsibility for government under one elected official, the President of Afghanistan, leaving no public responsibilities for local leaders who could be directly accountable to their communities.

This struck me as an important and original insight. And there are many more of these to be found in the rest of the handbook.

“The tyrant feudalism must be declared once and for all deposed and its influence over students of the Middle Ages finally ended” (Elizabeth Brown, 1974)

This post is cross-posted at the How the World Became Rich

A goal of Historical Political Economy (HPE) is to build connections between social scientists and historians. But this laudable goal is, in fact, very hard to realize. Interdisciplinary scholarship has become ever more challenging. Academic specialization does not reward it and the intensive methods training required for mastering new techniques in economics or quantitative social science in general crowd out reading in other fields or disciplines.

Consider one of my favorite papers in historical political economy: “The Feudal Revolution and Europe’s Rise: Political Divergence of the Christian West and the Muslim World before 1500 CE” published in the American Political Science Review in 2013 by Lisa Blaydes and Eric Chaney.

Blaydes and Chaney compile data on ruler duration in Europe and the Middle East. Ruler duration — how long a king or queen reigned for — is a basic measure of political stability. The findings of the paper are straightforward:

“First, ruler duration in Western Europe statistically diverged from duration in the Islamic world during the medieval period. Second, this divergence was driven, in part, by a reduced probability of monarchical overthrow in Western Europe”.

Figure one from their paper demonstrates their main results. No fancy econometrics are needed: it is a simple and powerful empirical finding. Until sometime in the 10th century, rulers in the Islamic Middle East and Western Europe ruled for similarly short reigns. However, after that point ruler duration diverged. Rulers in Western Europe enjoyed longer and more stable periods of rule.

In other words, there was a divergence in political outcomes long before the start of the economic divergence between Western Europe and the Middle Age.

How do Blaydes and Chaney explain this divergence? Their answer is the “Feudal Revolution”. They provide a potted history of the rise of feudalism":

“ . . . with the collapse of the western Roman Empire. The fiscal position of the Germanic successor states to the Roman Empire tended to be weak. Unable to fund military expenditure through tax receipts, European rulers sought other avenues for raising armies. The innovations introduced by Charlemagne marked a pivotal change. Lacking the capacity to introduce a system of tax collection, Charlemagne required landholders to contribute troops instead of funds.

This change increased the power of large landlords in two ways. First, small, independent landowners pooled their lands with those of larger landholders to avoid having to offer themselves up for military service. As individual landholders began to “aggregate up,” large landowners emerged who could ensure the cultivation of land while distributing the burden of military service across the larger body of peasants. Second and contemporaneously, European kings—like Charlemagne—required mounted troops, not just infantrymen, as a result of the introduction of the stirrup. The technological innovation of the stirrup meant that “mounted shock combat” became the norm in warfare and the large investment required to purchase a horse and armor for battle meant that monarchs needed to recruit individuals with wealth to serve as the mounted military elite (White 1962).

Mounted warriors, or knights, were often compensated for their service to the king through land grants (North, Wallis and Weingast 2009, 79). According to Mann (1986, 393), the primitive state of European economies left “land grants, which gave the vassal soldier a potentially autonomous power base” as the only option for cash-strapped monarchs. European barons operating in the feudal system entered battle with their own, privately financed equipment, archers, and associated infantry. Such individuals often enjoyed opportunities to increase their land holdings or other forms of advancement as a result of their fighting. Together, the methods of military recruitment that emerged in medieval Europe came to be known as the feudal system.’’

This is a paper that should be highly influential on subsequent scholarship. And it is. At least within political science and economics. The paper has been cited 319 times on Google Scholar and the technique of using ruler duration as a proxy for political stability has been applied to other parts of the world. But almost all of these citations are from other social scientists. As far as I can tell, the paper has been totally ignored by historians. Why is this?

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How Feudalism Became the F-Word

Historians would no doubt quibble with the potted history Blaydes and Chaney provide (quoted above). The deterioration of the Roman fiscal system and reliance on levies long predates Charlemagne. The emergence of mounted shock combat is more properly dated to the late 11th or early 12th century. But this unlikely to be the reason why they have neglected it.

The bigger barrier to interdisciplinary dialogue is concept/ideological.

What do I mean by conceptual barrier to dialogue?

Many historians reject the term “feudalism” entirely. In a survey written in History Compass in 2009, Richard Abels describes “a growing consensus among medieval historians that ‘feudalism’ should be banned not only from scholarly monographs, but from textbooks and classrooms as well . . . Indeed, over the last decade, ‘feudalism’ has become an ‘F-word’ at some professional conferences for medieval historians, only uttered ironically or with the intention to provoke”.

Why do historians reject feudalism, even as an organizing concept for thinking about the medieval world?

It is impossible to fully do justice to this debate here. A concise version is as follows.

First, there were general reasons why scholars came to distrust the term. A influential article published in 1974 by Elizabeth Brown noted that feudalism had too many definitions. Was feudalism introduced into England in 1066? Or was Anglo-Saxon England already feudal? Based on the variety of different definitions of feudalism available, there was no obvious way to settle this question. The Marxian definition of feudalism in a stage in history is very different to the precise legalist definition to it given by mid-20th century historians like F.L. Ganshof who viewed it as primarily a system of military recruitment. Similarly, it has been applied to too many times and places. Pre-Meiji Japan, 18th century France, Tsarist Russia, and 12th century Germany have all been labelled feudal but they have almost nothing in common. As Brown noted:

“The variety of existing definition of the term and the general unwillingness of any historian to accept any other historian's characterization of feudalism constitute a prime source of confusion” (p. 1070).

A term so flexible in application surely has no fixed meaning?

Then, Susan Reynolds wrote Fiefs and Vassals in 1994 and this book was a serious scholarly attack on the key concepts underlying the concept of feudalism, as it had been established by 20th century historians like Ganshof and Marc Bloch. Eschewing Marxian or popular notions of feudalism, Ganshof and Bloch had focused on the legal relationship between lords and vassals. This was idea that lords granted lands (fiefs) to their vassals in exchange for military service. They saw this fief-vassal relationship as underpinning the larger feudal order.

Reynold’s argument was technical and scholarly. She argued that modern historians understanding of feudal law was in fact the product of the development of late medieval and early modern legal culture:

“The resultant academic law of fiefs was concerned only with the law about properties called fiefs, whose holders it called vassals. Its connection with the law actually practised in the courts of the supposedly feudal kingdoms of medieval Europe was for the most part rather tenuous and indirect” (Reynolds 1994, p 4).

The upside of this is that

“The concepts of vassalage and of the fief, moreover, as they have been developed since the sixteenth century, originated in the work of the sixteenth-century scholars rather than in the late medieval texts they studied”.

For Reynolds the legal relationship between fiefs and vassals that lies at the heart of feudalism was not a core feature of actual medieval societies. Rather, it was an abstraction created by lawyers centuries later.

Reynolds does not reject generalizations or ideal types. She agrees that “we must have some generalizations . . . but generalizations are propositions that can be verified or falsified, rather than abstract nouns that we use as labels to save us having to look at the contents of the bundle”:

“It has been suggested that the concept of feudalism . . . may ‘inform us of what manner of creature we may expect to encounter on our travels without purporting to lay bare the nature of the beast’ . . . “

But, she counters, this:

“ . . . does not apply to feudalism in any of its senses. What the concept of feudalism seems to have done since the sixteenth century is not to help us recognize the creatures we meet but to tell us that all medieval creatures are the same so that we need not bother to look at them. Put another way, feudalism has provided a kind of protective lens through which it has seemed prudent to view the otherwise dazzling oddities and varieties of medieval creatures.” (p. 11)

Regardless of what we think about the merits of this argument (and most non-specialists are not equipped to have an informed opinion), Fiefs and Vassals is an impressive, indeed intimidating, piece of work.

Though it remains commonly used in popular histories, feudalism began to drop out of scholarly usage among historians. It became the F-word.

What to do?

So where does this leave those of us interested in doing historical political economy? Everyone will have their own response, but my thinking is as follows.

First, it goes without saying that good historical social science should be in dialogue with the most up-to-date historical scholarship. This is hard. The demands of publishing in general interest journals often makes it even harder. Long footnotes referencing some obscure debate in the historiography are the first to go on the chopping board when a paper is being edited for submission. Editors, referees and readers want the gist of things, not all of the historical nuance.

Second, however, while I think social scientists should be up to date with how historians are currently thinking about a topic, we cannot be hostage to scholarly fashions in another field.

A concept like feudalism may have needed to have been taken down a peg or two in the 1970s. But this does not mean that we should be barred from using it today. Indeed, reading Brown’s 1974 essay, one gets the sense that she is fighting battles against foes who simply don’t exist in 2025:

“Another problem is the inclination to employ the idea of fully developed, classical, or perfectly formed feudalism as a standard by which to rank and measure areas or societies” (p 1076)

“To say that a person or a group is attempting to live up to or realize a standard certainly suggests virtuous dedication on the part of the people in question. To declare that a country which is not feudalized is lagging behind is to indicate that the area is in some sense backward. Even more evidently evaluative are such expressions as decayed, decadent, and bastard feudalism, all of them implying a society's failure or inability to maintain pure principles that were once upheld” (p 1077)

“Using the terms seems to lead almost inevitably to treating the ism or its system as a sentient, autonomous agent, to assuming that medieval people-or at least the most perspicacious of them-knew what feudalism was and struggled to achieve it, and to evaluating and ranking societies, areas, and institutions in terms of their approximation to or deviation from an oversimplified Ideal Type.” (p. 1088)

All valid points, no doubt, but also hardly relevant to how feudalism is being used by social scientists.

So does this play out in my own research? I think feudalism remains a useful concept if properly used.

Desiree Desierto and I have recently published a paper entitled Feudal Political Economy where we argue that medieval Europe c. 1000-1300 did have a distinctive system of government and it makes sense to call that system of government “feudal”. And we rely on this definition in our paper with Jacob Hall on Magna Carta.

We just have to persuade our colleagues in history that the f-word is back.

It may be surprising, therefore, to realize that the causes and the consequences of the English Reformation are a matter of fierce historical debate among specialists. Was traditional Christianity moribund by the early 16th century? Or vibrant and popular? We know that people were willing to die (and kill) for religion but equally if religion was so central to the identity of early modern Englishmen and women, why were so many willing to change their faith according to who was in power? How rapid or gradual was the process of Reformation? How long did the Reformation take? Was it ever “completed”?

One way to make sense of this tangle of questions is to revisit a very basic question: What was the political economy of the English Reformation? This is what I try to do in a new paper with Desiree Desierto and Marcus Shera.

As this quote from Patrick Collinson (the historian, not the tech entrepreneur) indicates, the Reformation was a truly transformative event.

“England, which at the beginning of the sixteenth century seems to have been one of the most Catholic countries in Europe, became, by the seventeenth century, the most virulently anti-Catholic, and the almost dominant ideology of anti-Catholicism fueled the civil wars that engulfed all parts of the British Isles in mid-century and later provoked the Bloodless Revolution, from which what passes for a British constitution derives” (Collinson, 2004, p 10).

We think that focusing on the Dissolution of the Monasteries provides crucial insights into the political economy of this transformation.

This will be the first of a two posts describing the gist of our argument.

Part (1) below will examine how the allocation of land following the Dissolution created a vested interest opposed to Mary’s policies of restoring Catholicism in the 1550s. Part (2) will demonstrate that the political economy interests created by the Dissolution remained important into the late 17th century and will focus on the Exclusion Crisis of the late 1670s.

How did the Dissolution Affect Religious Policy?

In our paper we take up and explore an old but in my view quite neglected idea. The Dissolution of the Monasteries undertaken by Thomas Cromwell between 1536-1540 created a group of prominent and wealthy individuals who had a vested interest in keeping that property and hence in the success of the Protestant Reformation in England. It was these individuals who provide the key to understanding the political economy of the Reformation from Mary I’s reign (1553-1558) all the way up to the Glorious Revolution of 1688.

England’s monasteries were tremendously wealthy. The Valor Ecclesiasticus commissioned by Henry VIII in 1535 gives an indication of the extent of monastic land holdings and is the basis of the data used by scholars studying the consequences of the Dissolution. And these monastic lands were scattered far and wide.

We actually don’t know much about the precise motivations for the Dissolution. But the scale of this monastic wealth must have been important in tempting Henry and Cromwell to move from the goal of dissolving the smaller monastic houses to the ultimate policy of eradicating monasticism in its entirety. Once the Dissolution took place, the land, however, did not stay in royal hands for long. Through the Court of Augmentations it was rapidly sold off to courtiers and aspiring elites. Historians since Robert Tawney have debated the role that this played in creating a new class of “gentry” but the modern consensus emphasizes that this process was less discontinuous than once thought. Existing elites were the ones most likely to augment their landholdings. Religious affiliations don’t seem to have mattered for who bought that land: traditional Catholics and evangelicals alike did not want to miss out.

What we then explore in our paper is how possession of these former monastic lands could have shaped the incentives English landowning elites had to back certain religious policies thereafter. We formally model the idea that individuals care about both money and their religion and that they also want to pass these things down to the next generation.

The key thing about our model which makes it quite different to anything else we are aware of is that we explicitly model the political economy of Tudor and Stuart England. The monarchy sets policy, but elites can decide whether to support or oppose that policy and their opposition raises the costs of enforcement.

Put simply: we show that possession of monastic lands shifts an individual elite’s incentive towards supporting more “Protestant” religious policies.

Reginald Pole’s Credible Commitment Problem

Does the data support this hypothesis? Before we get there, it is worth pointing that there is compelling evidence for the mechanisms described above in the historical record.

Consider the reign of Mary I and her decision to return England to Rome. With the benefit of hindsight, we know that this would not last. Mary’s reign is seen as an unsuccessful interlude marked by bloody persecution. But contemporaries did not know that. Mary was 37 when she became Queen; had she lived as long as her younger sister her reign would have lasted until 1586, plausibly long-enough for Catholicism to have fully restored.

A major barrier to a Catholic restoration, however, was the loss of Church wealth and income and the destruction of the monasteries. Rex Pogson writing in 1974 put the dilemma facing Mary’s chief minister, Archbishop of Canterbury Reginald Pole clearly:

“If the Roman Church was to recover its traditional authority in England, it had to recover also the wealth which it had surrendered in the schism . . .. His letters and the decrees of his synod reveal that he aimed at a restoration of traditional Roman order, custom and discipline in the English Church rather than a vigorous, new-style Counter- Reformation campaign of preaching. He wanted to inspire affection and respect for Roman ritual and law by reviving Catholic ceremonial, providing highly-qualified clergy for the parishes, restoring the monasteries, and removing the financial abuses which had aroused anti- clericalism. But he could not bring back the beauty of holiness in the Catholic ritual without the vestments which had been removed and the ornaments which had been sold or stolen during the schism. He could not re-endow many monasteries without the confiscated monastic lands'' (Pogson, 1974 pp. 250-251)

But how could this be achieved? While committed Protestants had already begun to flee England, the majority of elites in Parliament and the House of Lords were prepared to return to Rome (or at least appeared to be so, there were many like William Cecil, later Elizabeth’s chief minister who concealed their true opinions -there was a lot of preference falsification in Tudor England). The sticking point, however, was the return of former monastic properties. This the English landowning elite were not prepared to countenance.

Mary was willing to give up Crown lands to set a precedent. But this policy backfired! According to her leading biographer, its created a "fear that the queen’s surrender of her property was but the first step towards a general restoration: the Venetian envoy said that some men believed that they might be forced by virtue of the statute to make a similar cession of their own former church property at a later point" (Loach, 1986, p 137). In total only four (small) monastic houses were in fact restored.

What about Rome? Pope Julius III was prepared to make major concessions in order to return England to the fold:

“Mary had interceded for the holders of monastic property, and the Pope announced that he would place reconciliation with England before quibbles over money. This time Pole was empowered to absolve Englishmen for their sins of holding both land and ornaments, and dispense them to continue to do so. But a saving clause was added, by which those cases which seemed to Pole of great importance and requiring a higher authority could be referred to Rome. This prevented the new brief from easing English fears, for it held out the daunting prospect of a tribunal at Rome which might decide the fate of lands which English families had come to think of as their own” (Pogson, 1974 pp. 253)

This was the nub of the issue. Parliament distinguished between movable goods (which they allowed could be returned to reendow the Church) and immobile goods such as land; for the latter they required a guarantee that their property rights would not be impinged upon.

Parliament rejected the first Papal Bull in July 1554 on these grounds. Only in December of that year was an agreement struck on the basis of an assurance that monastic lands were secure. As Pogson (1974, p 253) notes “many councillors seem to have been quite prepared to shelve the reconciliation until they had organized the full reassurance that the land was safe in lay hands."

This was agreed. All well and good. Then disaster nearly struck. England had formally accepted Papal terms for the restoration of Catholicism in February 1555, dispatching an envoy to Rome. But before the envoy arrived, Julius III died, and then his immediate successor Pope Marcellus II died just 22 days later. The Papacy then passed to Cardinal Carafa who became Paul IV. Carafa was a hardliner - he had been crucial in founding the Roman inquisition — and was a personal enemy of Pole (he would later instigate an inquisitorial investigation into him). Paul IV’s initial reaction was to denounce any agreement based on the alienation of Church lands.

Only after it was explained that this would jeopardize England’s reconciliation, did Paul IV relent and it took until October 1555 for a second Papal Bull to be read in Parliament. This seemingly trivial episode, had lasting consequences, however: it made salient the possibility that a promise made by one Pope might be reneged upon by subsequent Pope.

Here our argument connects to long standing debates about the security of property rights in early modern England.

In a celebrated article, Douglass North and Barry Weingast argued that property rights were insecure before 1688. Of course, they were reviving arguments made by historians such as Thomas Macaulay. They provoked a critical reaction from economic historians, notably Greg Clark who found no evidence of such insecurity in land rents. This consensus is summed up by Geoffrey Hodgeson who notes that "In England, property rights (of a kind) existed and were relatively secure long before 1688".

But I actually think economic historians have been too quick to dismiss at least parts of North and Weingast’s argument. Property rights over land were for the most part secure in England from the 13th century onwards. Financial property rights were less so as instances of forced loans and defaults attests.

And when it comes to property rights over former monastic lands, English elites clearly were very concerned about the security of their property. They took seriously the idea that Catholics believed that promises made to heretics were worthless. As I’ll discuss in Part (2), the possible insecurity of former monastic property remained a concern in the long run, which seems to have been reactivated whenever there was the prospect of a Catholic revival.

Monastic Lands and the Opposition to Mary’s Policies

Drawing on a newly created dataset of members of Parliament (MPs) based on the History of Parliament website, we establish a clear link between the boroughs that had more monastic land and whether MPs supported Protestantism or opposed Mary’s policies in the 1550s.

MPs were drawn from the gentry and they were expected to represent the interests of nearby landholders. We therefore expect MPs from boroughs with more monastic lands to be more attuned to the threat of a possible Catholic restoration. This is indeed what we find.

To see how we substantiate this econometrically you’ll have to read the full paper. Here is a visualization of our baseline results.

These results are at the Parliamentary borough level, but our results also hold when we look at the biographies of individual MPs. MPs whose biographies mention monastic lands were about 2.7 times more likely to be supporters of Protestantism.

Next we will consider how these political economy incentives persisted through the 17th century

How do we get “good” institutions? This question has been the theme of my recent research (see here). And together with Desiree Desierto and Jacob Hall, I’ve just finished a new draft of our paper Magna Carta, which I’m excited about.

Now is a good time to revisit this topic in light of the recent Nobel Prize awarded to Daron Acemoglu, Simon Johnson, and James Robinson (henceforth AJR) for the study of institutions.

The Effects of Institutions or the Emergence of Institutions?

The majority of initial attention on AJR’s work focused on the effects of institutions. The authors of scientific background for the prize state this clearly:

In two seminal papers from the early 2000s, Acemoglu, Johnson, and Robinson provided compelling evidence on the crucial impact of conditions during colonization on long-run prosperity. They also showed that these conditions shaped the type of institutions established by European colonizers, and that the impact on long-run prosperity can plausibly be tied to the type of institutions chosen by the colonizers.

And, as many people have observed, these two papers have been hugely influential. Again, the Nobel committee:

These two papers shaped the subsequent empirical research agenda along a number of dimensions. First, they moved the literature from examining the proximate correlates of growth – for example, savings rates, productivity, and human capital – to examining the fundamental determinants of growth, such as institutions. Second, they introduced a new standard by illustrating the power of an explicit empirical research design for identifying a causal relationship pertaining to a broad macroeconomic question. Third, they pioneered a new literature on the historical determinants of contemporary institutional quality, productivity, innovation, and growth, using quasi-experimental research designs.

While scholarship has moved beyond the findings of these specific papers, their influence is undeniable. They made possible subsequent research such as Nathan Nunn’s work on slavery and Melissa Dell’s work on the Peruvian Mita, two major contributions to our understanding of persistent underdevelopment.

But while much of the profession became interested in the effects of institutions, less attention has been paid to the question of institutional change. Why was this? I think the answer is simple: studying the effects of institutions allowed economists to deploy the new causal inference tools developed in the 1990s and early 2000s. IVs, DID, and RDDs could be fruitfully used to disentangle the effects of institutions from other factors such as human capital, geography or culture. The main reason why the cross-country growth agenda of the 1990s floundered was due to problems of endogeneity. The application of the credibility revolution (especially using within-country variation) offered a path forward, a path that many applied economists have followed.

While most media attention has focused on this research agenda, the Nobel committee does draw attention to some of the other contributions of the Nobelists and particularly to Acemoglu and Robinson’s seminal work on democratization, which has been hugely influential in political science.

The main idea is captured in this figure, courtesy of the Nobel Prize Committee. Revolutionary pressure from below threatens existing elites. These elites cannot simply promise to redistribute resources to head-off this threat, as their promises are not credible. Therefore, to credibly commit to redistribute, they also have to share power; that is, they have to extend the franchise and eventually to democratize.

The main application of Acemoglu and Robinson’s work on democratization is to the 19th and early 20th centuries. The canonical case-study illustrating their theory is the UK, where elites successively extended the franchise in response to a revolutionary threat (see here for empirical evidence).

Now, while I think this work is great, I’ve always been drawn to earlier periods of history. As an undergrad, I studied Late Antiquity with Bryan Ward-Perkins1, and most of my research looks at medieval or early modern Europe. From this perspective: everything was set in place long before the 19th century. The roots of modernity and of liberal democracy go much deeper than the Great Reform Act or the French Revolution. We need to consider earlier periods of history.

The Medieval Origins of Inclusive Institutions

AJR, of course, have studied earlier episodes in European history too. Their work on the impact of Atlantic trade on the rise of parliaments in Northwestern Europe builds on the earlier scholarship of both new institutional scholars like Douglass North and Barry Weingast, but also Marxian historians like Robert Brenner. But the origins of parliaments and similar institutions goes back to medieval Europe.

AJR comment on this in their handbook chapter Institutions as a Fundamental Cause of Long-Run Growth:

“Our first example is the rise of constitutional monarchy in Europe. In the medieval period most European nations were governed by hereditary monarchies. However, as the feudal world changed, various groups struggled to gain political rights and reduce the autocratic powers of monarchies. In England, this process began as early as 1215 when King John was forced by his barons to sign the Magna Carta, a document which increased the powers of the barons, introduced the concept of equality before the law, and forced subsequent kings to consult with them.” (p. 452)

In fact, Why Nations Fail mentions Magna Carta 11 times! In The Narrow Corridor, Acemoglu and Robinson similarly view it “the foundation of England’s political institutions” (p. 174) and “a statement of some critical political principles” that was “continually reaffirmed by subsequent kings and assemblies” (p. 176). But they don’t analysis how the Magna Carta came about. Indeed, Magna Carta2, and its role as the ground zero for English Parliamentary history has not been seriously studied by social scientists. This is what we set out to do in our paper.

Magna Carta as a Constitutional Contract

Magna Carta or “The Great Charter” (a reference to its relative physical size, rather than its significance) didn’t arise in response to a revolutionary threat from below. Understanding it requires an entirely different model to that proposed for constitutional moments in the modern era. This was elite driven institutional change.

The main question we are interested in is: how was an agreement like Magna Carta possible? And which elites drove this process of institutional change?

The key insight for us was the realization that Magna Carta was the product of a feudal environment. Each of the barons who rose against King John in 1215 had their own armed retinue., their own military power. The monarch had no monopoly of legitimate violence. Feudal rulers governed coalitions of elites. In the feudal world, barons could withdraw support from an unpopular or oppressive ruler. Conflict between barons or between the barons and the king were common. John’s father Henry II had faced a major baronial revolt in 1173-1174.

John was a highly extractive ruler by contemporary medieval standards and he oppressed his barons through his selective and arbitrary enforcement of the legal system. The elites were the main victims of his abuse of the feudal system but non-elites also felt the hand of royal oppression. Two notorious examples of this were the Exchequer of the Jewry and the Royal Forest.

Restricting on lending money at interest (usury) encouraged the royal monopolization of Jewish moneylending. The king protected Jewish moneylending in return for getting a cut of the profits. But the biggest benefit to the King was being able to tax (“tallage”) the Jewish community when he needed a quick source of cash. This system oppressed both Jews and Christians alike and was mentioned in Magna Carta as a prominent grievance.

Another source of cash for the King was the royal forest. The royal forest covered at least one quarter of the kingdom (Roweberry 2016, p. 518). Nominally it was there so that the King could hunt freely, but in reality its main purpose was to provide the king with additional revenue. Anyone who hunted in the royal forests or even took firewood from them was liable to fined or punished. Royal officials could sell exemptions to these restrictions or accept bribes to overlook violations. The legend of Robin Hood testifies to the lasting unpopularity of the institution. We depict John’s revenue from the royal forest below.

Why did John need all of this money? The primary reason for his exactions was the need for funds to reconquer Normandy, which he had lost to the French King. In our paper, we develop a model to explain how the shock of his defeat in France in 1214 at the Battle of Bouvins acted as the spark that enabled a coalition of rebellious barons to form.

Each baron had their own reason for joining or not joining the rebellion. But critically, they had to think that the rebellion coalition had a chance of success. We argue that the key metric for a successful rebellion was the amount of resources in the rebel coalition that could be safeguarded from the king. We call these “non-appropriable” resources. Empirically, our main measure of these non-appropriable resources is the number of castles under rebel control.

Castles played a critical role in the feudal world because they made the land nearby defensible. Baronial castles enabled their owners to rebel from the King’s coalition without having their lands raided. Castles could be taken, but only with a costly siege.

In our regression analysis, we find strong support for this hypothesis. Looking within a baron’s family network, we find that a one standard deviation increase in the number of castles among rebels in a baron’s family network is associated with a 63% increase in the probability of the baron joining the Magna Carta rebellion. We find similar results when we instrument for baronial castles by using the distribution of castles in previous generations and when we use alternative proxies for non-appropriable resources.

What Does This All Mean?

Returning to the recent Nobel, back in 2005, AJR proposed a famous schematic for thinking about institutional change:

The key insights they drew were as follows. First, that economic institutions, though of central importance, were endogenous to political institutions. Second, while persistence in both economic and political institutions was highly likely because large changes in the distribution of political power were required to generate institutional change, “shocks” to de facto political power could bring about dramatic episodes of institutional change.

Our analysis of Magna Carta fits within this broad framework. First, the existing institutions of medieval feudalism have to be understood in order to understand what type of institutional change was possible. Land remained the dominant form of wealth. The majority of the population were serfs who had no economic or political power. The merchant class was small and outside of the city of London had no political representation or power. Perhaps most importantly, the state of military technology favored mounted knights. Given this, the only source of meaningful pressure for institutional change was from within the military and economic elite i.e. the barons.

Nonetheless, no matter how extractive or oppressive John was as a King, there could be little opposition to his rule so long as the majority of powerful barons were loyal. What shocked this was the (largely) exogenous fact of the defeat of his forces at the Battle of Bouvines in 1214. This was indeed a critical juncture. It confirmed the loss of Normandy and Anjou while cementing Philip II’s unification of France. In England it dealt a major blow to John’s prestige and reputation, acting as the catalyst of the formation of the rebel coalition that we study in the paper.

Our model allows us to investigate other conditions that made an agreement like Magna Carta feasible. In addition to John being highly extractive, another important precondition was the relatively egalitarian distribution of resources among barons. We provide evidence that compared to either earlier or later periods of English history, land was quite evenly distributed among England’s barons. There was no “mega-baron” who could plausible replace the king. The best deal that any potential baronial leader could get was one that limited the power of the monarchy.

As suggested by AJR’s framework, however, the process of institutional change in medieval England was a gradual one. Magna Carta set limits on the arbitrary power of the king. But it did not revolutionize English institutions. The legal protections it promised to ordinary Englishmen and women took centuries to realize, and England’s move towards more inclusive institutions was intermittent. John soon reneged on the Great Charter. Two baronial wars (1215-1217) and (1264-1267) had to be fought over the principles articulated in Magna Carta - and in a follow-up post, I may cover the remarkable career of Simon de Montfort in the second of these - before the principle of calling Parliament to grant new taxes came to be established.

Nonetheless, by imposing limits on royal power, Magna Carta was critical in establishing important precedents. Subsequent medieval monarchs honored it. I like the following anecdote about Edward I, in many respects a brutal and imperious ruler. When a young man called Thomas Bardolf offended the king by refusing to go through with a marriage Edward had arranged, the

“. . . chancellor was therefore instructed ‘to be as stiff and harsh towards Thomas in this business as can be, without offending the law”

As Marc Morris, Edward’s biographer notes what is “striking in this instance, is that, even as he instructed his chancellor to be partial, Edward reminded him to stay within the limits of what was legal” (Morris, 2008, 367).

It was this adherence to legality and to at least the appearance of the rule of law that laid the foundations of England’s subsequent institutional trajectory. [Even if this tradition had to be rediscovered by the likes of Edward Coke in the 17th century after a period of centralization and growing royal power under the Tudors.]

Mark: How did you land on the "platform" model of religion? Was it a well formed idea before you set out to write the book? Or did it emerge out of the process of researching and writing?

Paul: I work at the Toulouse School of Economics, where a lot of the theoretical research on platforms has been conducted by Jean Tirole, Jean-Charles Rochet, Bruno Jullien, Patrick Rey, Jacques Crémer and also by younger scholars such as Andrew Rhodes, Alex de Cornière and Yassine Lefouili. This is a fantastic environment in which to think about how platform relationships pervade our economic institutions. But the book has been a long time in the making, so the centrality of the platform model to my thinking has come about gradually. I was influenced by my empirical observations that the members of religious movements are simultaneously its greatest assets, an insight that is central to the notion of platforms. Seeing how often people would tend to find spouses among fellow members, for instance, made me realize that the congregations were also functioning as dating platforms. Even if it’s a key to the way the churches do this that you wouldn’t go to church to find a spouse whose only reason for going to church was to find a spouse.

Mark: A fascinating part of the book that I didn't explore in my review was your use of Robert Aumann's paper on agreeing to disagree to explore how much differences in beliefs matter for religious choice. Can you expand upon that argument?

Paul: I came across Aumann’s extraordinary theorem while working on my PhD many years ago. It takes two Bayesian decision makers who share a common prior about some event and who then observe private information, before sharing their posterior probabilities of that event. He shows that if their posterior probabilities are common knowledge they cannot diverge! In other words, two rational decision makers cannot “agree to disagree” about the truth of some proposition unless they have divergent priors (which raises the question where those divergent priors come from, since they cannot be the product of divergent previous information). Each would give weight to the fact that the other had observed information leading to a different conclusion, and the only equilibrium of this iterative process would cause them to converge. I use the theorem in the book to explore possible explanations of how religious people can disagree about so many questions they believe to be important (though obviously similar questions can arise about disagreement over secular matters).

Divergent priors might be one explanation (to the extent that people select into religious movements according to personality traits such as optimism, pessimism, or those traits described in Jonathan Haidt’s book The Righteous Mind: Why Good People Are Divided By Politics and Religion). But I don’t think it’s the most interesting. A second explanation is that it’s often hard to know what religious people believe as opposed to what they find it appropriate to say. There may be common knowledge about the latter without their being common knowledge about the former. For example, one third of American Catholics say they believe the communion bread and wine become literally the body and blood of Jesus. But while we can all see what they say (in response to a survey), it’s not clear how many of those would accept the corollary that if we took the communion wine to a medical laboratory it would test positive for the presence of haemoglobin. So it would be very hard to know to what precise beliefs people should converge.

A third possibility is that human beings are just not very Bayesian, in two ways I discuss at length in the book (noting that these non-Bayesian features of our decision-making would not have been particularly maladaptive for us in prehistory). One is that they don’t update their beliefs efficiently when they receive new information. The second is that they don’t condition their beliefs adequately on the circumstances through which they came to acquire them. For example, if they developed their beliefs by copying other people, they don’t condition on the circumstances that gave them the particular models they copied. Thus Catholics who believe in transubstantiation, for example, rarely take into account that if they had happened to grow up in non-Catholic households they would not even have begun to consider transubstantiation plausible. And most doctrinal beliefs are simply not very important in the process of recruitment to religious movements. As I put it in the book: “accepting doesn’t require believing, and believing is optional in practice for most members, most of the time (even while it passionately preoccupies some other members). It’s only after joining that most members start to shift their beliefs in the direction of the religion’s doctrines—and they do it because it comes naturally to them, not because their membership requires it.”

Mark: Were you ever frustrated that you couldn't find compelling evidence to answer the questions you were dealing with in the course of writing the book? And what areas would you like to see more research on?

Paul: Yes, often! For example, I wish it were easier to test in a rigorous comparative way the various hypotheses I discuss about how the political instrumentalization of religion can lead to a loss of legitimacy of religious movements. I use various case studies in the book, and I’m currently working on a comparative econometric paper with my former PhD student Julia Hoefer, but the data are frustratingly limited. I also wish we could find better data about the revenues of religious movements, so we could do econometric work on the determinants of demand for religious services. I’m convinced that there’s really no such thing as religiosity, in the sense of a single psychological trait that makes people more likely to belong to religious movements. Instead there are many traits to which different religious platforms respond in a variety of ways. But it would be easier to show this if there were better field data involving detailed measurements of how much people actually contribute to their religious communities.

Still, there are some great topics wide open for smart Ph.D. students to work on. One is the determinants of religious violence. There’s pioneering work by Sascha Becker and Luigi Pascali on anti-Jewish pogroms in medieval Europe, and by Saumitra Jha on Hindu-Muslim violence in India, but there’s still so much more to do. Another is whether the doctrine of religious movements has first-order economic and social consequences. My book tends to be skeptical, suggesting that religious leaders mostly develop doctrine to suit their own purposes, and to apply doctrine flexibly when that suits their purposes better. But scholars I respect have recently made strong cases that doctrine, once adopted, can constrain future development in good and bad ways. Timur Kuran’s excellent book Freedoms Delayed: Political Legacies of Islamic Law in the Middle East argues this for the Islamic waqfs, which he claims have held back both economic and political development in the Middle East (Mark: see my review here). I’d have been curious to see a comparison with Islamic countries outside the Middle East. Robert Eisen’s fascinating Jews, Judaism, and Success: How Religion Paved the Way to Modern Jewish Achievement makes a strong positive case for rabbinical Judaism as the foundation for Jewish economic, scientific and artistic achievements in the modern world (I have a more detailed review of this to appear shortly in Contemporary Jewry). More work sorting out the causality between ideas and economic or social conditions will be a wonderful area for future researchers to work on, particularly now we have sophisticated tools available to undertake textual analysis on a large scale.

4. From the perspective of the field, what is more important: more field work (say in developing countries or for religions that are much less well studied than Christianity/Islam i.e. indigenous folk religions), more historical studies, or more detailed investigation of how large-scale religions (like the Catholic Church) work in say the US or Europe?

Paul: All of these are important, but whichever type of study it is, it must be comparative. Even a detailed participant-observed study of an indigenous folk religion in one community has to ask questions about how this compares with religious movements elsewhere, or it’s a waste of everybody’s time and energy. Anthropologists like Eleanor Power (who works on ritual in Tamil Nadu in southern India, a region I know well) can provide all the detail an old-fashioned ethnography might demand, while still asking great questions about motivations and mechanisms that are of global relevance.

Mark: How were political leaders "weaned" from their reliance on religious legitimacy? How are religious leaders "weaned" from falling into an often fatal embrace of the political authorities?

Paul: We can ask this question at so many levels. Your great book Persecution and Toleration with Noel Johnson, about the evolution of political power from identity-based to a universal rule of law, asks the question at the level of European society in the early modern period. I discuss in The Divine Economy a number of national case studies in the last few decades, comparing the Catholic Church in Spain, Ireland and Poland for example as well as making observations about Iran and the US. There seems to be a difference between situations where the alliance between religious leaders and political leaders is undermined by the loss of political authority directly (as in Spain after Franco, and as may be happening in Poland today), and those where the religious leaders lose their authority because of scandals within their movements, as in Ireland. The US is a more complex story, about which I say quite a lot in the book, though I wish I had known about David Hollinger’s 2022 book Christianity’s American Fate: How Religion Became More Conservative and Society More Secular when writing that part.

At the level of individual leaders I suspect the weaning rarely if ever occurs. Religious leaders who have sold out to political leaders don’t usually repent, they just get sidelined (or die). Political leaders who have instrumentalized religion don’t see the error of their ways, they just leave office (or die). I don’t foresee either Vladimir Putin or Patriarch Kirill ever back-pedalling on their savage partnership of bloodshed in Ukraine. But pointing out the long-term consequences of such misalliances can perhaps serve a purpose in warning other leaders who might be tempted to imitate them.

Paul Seabright’s new book The Divine Economy is an original and deeply insightful contribution to the social scientific study of religion. I first encountered Seabright’s work when reading his brilliant 2004 book The Company of Strangers, as a graduate student. At the time when my mind was absorbed solving differential equations and Hamiltonians, The Company of Strangers provided a welcome break: a wide-ranging, perspective on the division of labor and the market economy.

The Company of Strangers is a great book because it took ideas that have been in the ether since Bernard Mandeville and Adam Smith and connected them with insights and evidence from evolutionary biology and anthropology. The Divine Economy does something similar.

The main thesis of The Divine Economy is that religions can be analyzed as platforms akin to Facebook or Amazon. Religion is a difficult topic to study. I should know. Together with Noel Johnson, in our book Persecution & Toleration, we struggled with questions such as how to define religion and religious toleration. Many scholars of religion claim there is no single definition of religion; that our conventional understanding only obtains for Judaism and Christianity. Indeed there are many puzzles in the study of religion: what distinguishes a cult from a religion? Is Confucianism a religion (or a philosophy?) Is Marxism a religion? Religious experiences are so diverse and multifaceted that it is difficult to study them within a single framework.

There is a lot in the book! So if you want a short review mine is: “The Divine Economy is an original and important contribution to the economics of religion. It is accessible and readable but there is also much for specialists and scholars to discuss and debate”.

Below the break, I’ll explore in more detail some specific points of interest. But it should be noted I’m only exploring a small portion of the topics that the book goes into.

Religion and the Economics of Identity

The standard framework for studying religion in economics is the club goods model. Pioneered by Larry Iannaccone in the late 1980s and early 1990s (see here for his seminal paper), the club goods framework is squarely in the Beckerian tradition of analyzing social phenomenon through the lens of microeconomic theory.1 It offers a simple and compelling explanation for the collective aspects of religious experience. Religion cannot be an entirely sole activity. In Iannaccone’s model the religious good is a club good: up to some point, the utility I get from the religious good is increasing in the inputs (effort or money) of other people. Highlighting this club good aspect of religion allowed Iannaccone, and fellow-travelers in the sociology of religion such as Rodney Stark, to address some important puzzles.

Why do stricter, that is, more costly, religious organizations often out-compete their laxer counterparts? If Episcopalianism can offer a similar religious good as Pentecostalism, and the latter makes greater demands on one’s time or wallet, why wouldn’t everyone join the less demanding church? Iannaccone’s model made it clear that the character of the religious good is not independent of the costs it imposes. A more demanding church will also provide a more “intense” religious experience for those who want it because it will weed out the less committed or the free-riders (see here).

Stark and Iannaccone similarly took on the secularization hypothesis. Various versions of the secularization hypothesis all seemed to suggest that religious activity and belief would decline with economic development. By the 1980s, this was clearly not happening in the United States. For Stark, Iannaccone and their collaborators, secularization occurred under religious monopolies (like Scandinavia) but not where there was a flourishing market for religion capable of supplying a natural human demand for religion (see here). Seabright too, as we will see, has much to say about the secularization hypothesis.

The club goods model of religion was thus a major breakthrough, and it laid the foundation for what has become a new subfield within economics: the Economics of Religion, with its own conference ASREC. But it has also long been apparent that there are limitations to the club goods approach. One common criticism has been that there is little or no actual religion in it. What distinguishes a religious club from another club good like the neighborhood swimming pool? What role does belief play? What room is there for the supernatural? The club goods model appears most appropriate for studying competing Christian denominations in the developed world (though it has been used by Jean-Paul Carvalho and myself to study post-Emancipation Reform Judaism). It appears less useful as a model for medieval Christendom or other parts of the world with very different religious traditions.

Seabright takes a broader approach. For him religions are communities and belief systems which offer individual interlocking relationships with others and a sense of personal mission. What distinguishes religions from other similar belief systems is that religions rely on the supernatural. This is important because it means that the claims of religion cannot be falsified.

What does economics have to say about any of this? Nothing, you might think! In fact, economics has made considerable progress is better appreciating the role of culture and identity. George Akerlof and Rachel Kranton introduced the idea of identity economics more than two decades ago and deserve much credit. In recent years, however, this line of research has taken-off.

The basic idea is simple. Individuals care about their self-image as well as the goods or experiences that they consume. Some choices are orthogonal to identity. But many signal to ourselves and to others what our identity is. The precise location where I fill up my car doesn’t say much about my identity. But maybe whether my car runs on gasoline or is electric does. Identity can be more or less salient. And individuals can have multiple social, religious, or racial identities. But it is indisputable that these identities matter for what we choose to consume and produce, as well as who we choose to interact with or marry.

What is the connection between identity and religion? For many people, religion is perhaps their central or core identity. Certainly for much of history, religious identity was their most salient identity (at least those living in Europe and the Near East). But there is more than this. Religions shape and form identity. And this is not coincidental. In an AEA papers and proceedings paper, Jean-Paul Carvalho shows that because the process of identity formation relies on a cultural transmission process that is characterized by externalities, it is natural that organizations like religions would emerge to internalize them.

Seabright’s view of religious organizations as platforms fits nicely with this perspective. Religious choices involve identity. They are therefore different from deciding how many bananas to buy today. But they also involve mundane economic calculations. Religious organizations need resources to survive. Individuals have to tradeoff how much they give to their religion versus how much they spend or save for themselves. The club good model explains why individuals want to be in religious organizations with other likeminded individuals. The insights of the economics of identity help to explain why religious clubs are distinct and religious choices different from the decision whether or not to join a local swimming club. The platform perspective adds the insight that religious communities themselves offer more than just a pure club good. As Seabright sees it, therefore, his platform perspective builds on the club goods model of religion but “takes the idea a step further” because it appreciates that religious members are not just consumers of the religious good, “they are assets of the platform, and active in the delivery of such benefits to each other” (p 99). This helps to explain why religions which are successful in building large “platforms” can be extremely robust and long-lived.

Narratives and the Origins of Religious Belief

The next part of the book considers the origins of religious belief. Seabright draws on the work of evolutionary psychologists who have investigated where religious belief comes from.

Humans excel at social learning and imitation. Indeed humans are “extravagant imitations” who are prone to over-learning. These tendencies have likely been selected for by evolution and are part of what Joseph Henrich calls “the secret of our success,” the ability of human groups to rapidly evolve new cultural practices. These practices involve rituals which are hard to rationalize or explain logically but often appear highly functional. The ability to suspend belief is thus something that evolution appears to have selected for. Ritual practices are so ubiquitous (and are common among non-religious organizations) that likely predate theological commitments.

Seabright argues that theological commitments can be understood as strengthening the beliefs and religious identity of members. Few people, he argues are attracted into a religion by its theology. But once they are members, the obligation to commit to a set of beliefs plays a critical role in strengthening their identity and demarcating their beliefs from those of rival sects. According to this account then, ritual predates belief, whereas theology is a later development, a way for the faithful to distinguish their beliefs, to take pride in them, and to limit the attraction of other faiths.

To explain why religious doctrines and beliefs give meaning to individuals and indeed structure their identities, we have to go beyond viewing religion simply as a club good. Here, Seabright is able to take advantage of a stream of new research analyzing narratives and motifs (see here for the paper that laid the ground work for much of this). Humans are particularly attuned to common narrative structures (for example, the hero motifs studied by Joseph Campbell). These narratives are not culturally invariant but vary across cultures. Seabright contends that successful religions both feed into and fit with compelling narrative motifs.

In this perspective, the Axial Age religions (Judaism, Buddhism, Hinduism - and Christianity and Islam) were successful, and outcompeted traditional religious beliefs (such as those we call Greco-Roman paganism) because they employed grander and more ambitious narratives, narratives which were a better fit with the more complex and hierarchical societies that emerged after 500 BCE. These compelling narratives also explain the robustness and longevity of many of the world’s religious traditions. This emphasize on the importance of narratives thus complements the other elements of the platform perspective that Seabright argues for.

The Political Economy of Religious Organizations

The third chunk of The Divine Economy focuses on the political economy of religion. This is a topic where a lot of recent work by economists has focused.

Should a religion seek or flee political power? On the one hand, such power gives a religious organization access to untold resources that it can use to spread its message. On the other hand, as Adam Smith noted, political patronage and support for the religious authority is a double-edged sword: it confers power and resources but it erodes legitimacy. Politics is corrupting as political leaders have strong incentives to use religion to justify actions which are hard to otherwise justice — witness the way Vladimir Putin has used the Russian Orthodox Church to justify his invasion of Ukraine. The more religion becomes involved in politics, the greater the risk of delegitimization. Seabright provides as a recent example the Unification Church in South Korea which used its political involvement to acquire tremendous wealth but now appears to have undermined its long-term future because it is widely seen as corrupt. He argues that the decline of Catholicism in Spain post-Franco and in Ireland since the 1980s reflects a similar dynamic.

Seabright notices that there is a cyclical feature to this relationship. Highly successful religious organizations often evolve independently of politics. Their success, however, tempts secular rulers into co-opting them. This co-option then leads to decline,

Marcus Shera (an incoming postdoc at Chapman University) has just written a dissertation which sheds light on precisely this phenomenon within Christianity. His argument is that it was the rise of monasticism in the 4th century CE that played a critical role in allowing Christianity to navigate this dilemma. Put simply, his argument is that while Christianity was a persecuted sect, it necessarily selected for devout and sincere members. The worldly payoffs of membership were low (and negative during periods of persecution) so it could only attract members who believed in other worldly payoffs. This changed when Constantine made Christianity part of the Roman state in the early 4th century. There were strong worldly returns to entering the Church.

This threatened the legitimacy of the early Church and could have resulted in a devastating schism (Donatism can perhaps be interpreted in this light). Shera argues that the emergence of monasticism prevented this. While religious leaders like bishops could not credibly isolate themselves from the corrupting effects of political power, monks could do so. Monks could therefore play a role in legitimating bishops and other religious leaders in the eyes of the wider population. Of course, Western Christianity was not immune to the problems of political entanglement, and this conflict continuously reemerged during medieval and early modern history. But its survival and success surely owe much to its ability to maintain a degree of independence from secular power.

Secularization and the Future of Religion

In his conclusion, and in the appendix which comprises the final chapter, Seabright provides some speculations about the future of religion and returns to the secularization hypothesis. Looking at data from the World Values Survey, he finds that the story of secularization only really applies to a small part of the world. There has been a recent decline in religiosity, especially among young people in North America. But elsewhere in the world we see religiosity either remain high in Africa or remain stationary at fairly low levels (much of Western Europe). In Europe Catholic and Protestant countries have lost believers in the last few decades while Orthodox countries have gained them. Religiosity remains very high in Bangladesh, Ethiopia, Indonesia, Kenya, Myanmar, Niger, the Philippines, and Zimbabwe (over 90% reporting the religion is important or very important).

Precisely because religiosity is a complex and multifaceted phenomenon capable of evolving with the times, and because of the platform character of large-scale religion, we should not expect it to disappear any time soon.

Many more subjects are tackled in the book, including the problem of abuse within religious organizations and the relationship between technology and how religious organizations are structured. I urge those interested into dig into the book for themselves.

In The Divine Economy, Seabright has perhaps written two or even three books in one. The first is popular take on an important social scientific topic - how religions organize and compete. Popular social science books provide an important niche in the market; but they often frustrate experts in the field (perhaps a better word is infuriate, see, for a case in point, Sapiens). This is assuredly not the case with The Divine Economy, which offers much for both experts and the ordinary reader.

Here is a fun podcast I recorded with Robert Murphy for his Future of Finance show about my piece on Masters of the Air.

I was sad to learn that James C. Scott, the celebrated Yale political scientist passed away on July 19.

Here is (slightly modified) piece I first wrote in 2017, just when his book Against the Grain: A Deep History of the Earliest States came out. Against the Grain (which is excellent) encouraged me to reflect on Seeing Like a State — his celebrated critique of high-modernism in state planning, architecture, and economic development, a book I frequently recommend to students and friends.

Seeing Like the State, like Scott’s other work, is widely admired by many libertarians and classical liberals (see here, and here). This is unsurprising. It documents the often unseen costs of ambitious state planning. Scott describes how states seek to make the social world legible and how the quest for legibility leads to costly and often disastrous interventions in society. Across numerous examples taken from history, the top-down knowledge of state planners is contrasted to the metis — or tacit knowledge — of local communities.

Scott’s argument is highly Hayekian (as Brad Delong observed). Scott, however is ambivalent about this connection; he is no a libertarian or classical liberal himself and this is evident in his relatively skepticism towards the benefits of markets. For example, in this insightful Cato Unbound Symposium, Scott makes it clear that he sees strong parallels between the flaws of seeing like a state and the tendency of capitalism to produce homogenization:

“large-scale capitalism is just as much an agency of homogenization, uniformity, grids, and heroic simplification as the state, with the difference that, for capitalists, simplification must pay. The profit motive compels a level of simplification and tunnel vision that, if anything, is more heroic that the early scientific forest of Germany. In this respect, the conclusions I draw from the failures of modern social engineering are as applicable to market-driven standardization as they are to bureaucratic homogeneity.”

Clearly, there is something to this critique: like the High Modernist architecture of Le Corbusier that Scott criticizes so aptly, the hurly burly churn of capitalist markets produces results that are often aesthetically unappealing. But as Scott does not develop the analogy further, one is left highly unsatisfied. Scott is a deep and serious scholar of politics, but here, at least, he gives the impression of only thinking about markets and commerce at a superficial level. In the above passage, he notes that markets are in fact different than government because simplification must pay. To an economist this would suggest a check on the ambitions of capitalists to homogenize society against the wishes of consumers. But Scott thinks it merely exacerbates this instinct and concludes with the claim that his insights are as applicable to the private sector as to the domain of politics.

It is hard to avoid the impression that Scott underrates the adaptability and flexibility of markets. Yes, markets can result in homogeneity; but the market process is also a driver of creative experimentation and innovation. Too much bland standardization, and markets provide incentives for entrepreneurs to create products that appear idiosyncratic or unusual. The market as a process can certainly appear ruthless and much that is valuable can be lost as a result in the hurly burly of the market place. But everyday experience provides pretty convincing evidence that markets tend to be more capable of self-correction than are state planners and bureaucrats.

So much for Scott’s skepticism of markets. But once we recognize that Scott undervalues the power of markets, one is obliged to wonder whether his critique of the state faces a similar problem?

This is the point Paul Seabright made in his extremely insight review of Seeing Like a State in the London Review of Books. Seabright notes that Scott risks proving too much. By using similar language to describe both the catastrophic collectivization policies pursued by the Soviet Union and Tanzania, and the problems faced by scientific forestry and agriculture in nineteenth century Europe, he elides disastrous failures with policies that were, by and large successful, despite having unintended consequences. This elision is potentially misleading because, as Seabright notes:

“That scientific agriculture has faced unforeseen problems is undeniable, as is the fact that some of these problems (the environmental ones, for instance) are serious. But the achievements of scientific agriculture to be set against them are remarkable. The proportion of the world’s population in grinding poverty is almost certainly lower than it has ever been, though in absolute numbers it is still unacceptably high. Where there have been important areas of systematic failure, such as in sub-Saharan Africa, these owe more to social and institutional disasters that have hurt all farmers alike than to the science of agriculture itself. To equate the problems of scientific agriculture with those of Soviet collectivisation is like saying Stalin and Delia Smith have both had problems with egg dishes.”

I have been thinking about Scott’s ideas on the state and Seabright’s critique in the context of European state building c. 1500–180, a topic that I’ve recently been working on (here).

On the one hand, Scott’s perspective has considerable merit. The creation of stronger states in early modern Europe was a costly, violent, and, at times, almost Sisyphean task. Lauro Martines’s book, Furies: War in Europe 1450–1700, documents in vivid and sometimes grotesque details, the brutalities involved in making war in Early Modern Europe: taxes extracted at sword and pike point from resisting peasants; soldiers press-ganged into armies which were walking columns of dysentery, typhus, and other diseases; the routine rapes, burnings, and torture; and all to what end? So that France could acquire Loraine, England colonize Ireland, and the Habsburg emperor discipline Dutch or German rebels? A brief examination of the costs of European states-building on the ground suggests that Scott’s extreme skepticism of the state seems entirely justified, perhaps even understated.

On the other hand, however, countless scholars have argued that this cauldron of war and violence led to the rise of modern states after 1800 — states that were recognizably more liberal and less brutal than were their predecessors. If these arguments have merit (and I think they do) then Scott’s wholehearted skepticism of the state’s project runs into precisely the problem highlighted by Seabright. The destructiveness of the state in all its manifestations has to be set against the possible benefits that are associated with at least some forms of political order (and to be fair to Scott, he does wrestle with this issue in his book on anarchism).

I won’t provide a clear resolution to this debate here. Instead, I’ll conclude with Don Boudeaux’s astute comment from the Cato Unbound Symposium:

For example, libertarians (of which I am one) are quick to applaud any obstacles to the state’s ability to oversee and govern the populace . . . [But] [w]ith the pre-modern state hamstrung by a lack of knowledge of the peoples and regions under its domain, why didn’t individual freedom reign and capitalism burst forth before the modern state emerged with its improved abilities to monitor and control its subjects . . . Even the most ardent libertarian must keep an open mind on this matter. Perhaps the emergence of the modern state did, in fact, play a positive role in paving the way for the capitalist wealth explosion that began in 18th-century Europe. Nation-states’ standardization of language, weights, and measurements, information on ownership of real property, and knowledge about the destination of roads might not have been necessary to help spark the Industrial Revolution; that is, it might have been possible for such standardization to emerge through purely private actions (in much the same way that private railroads created “standard time” zones in Canada and the United States). But it surely seems to be untrue that a state growing in both scope and power necessarily diminishes the prospects for entrepreneurial capitalism to take hold and bloom.

I was asked to referee Geoffrey Hodgson’s 2023 book “The Wealth of a Nation: Institutional Foundations of English Capitalism” (Princeton: Princeton University Press) for the Independent Review.

In the 1990s following the Fall of the Soviet Union and the Washington Consensus, mainstream thinking in economics and development turned towards institutions.   This turn was, in many respects, a return as institutional analysis had been an important part of the toolkit of economists prior to the rise of mathematics within the discipline.

Perhaps inevitably, however, in its rise to prominence, this story about the role of institutions in economic history and particularly in British economic history became simplified and compressed. It became an ideal type and, in some cases, a cliché.   A folk wisdom arose about “Getting the institutions right” which implied that there was a simple recipe about which institutions worked and which did not.  I recall being told with certainty by economists, who were not economic historians, that the Glorious Revolution had ensured the security of private property and that this provided the incentives for the rapid, take-off style economic growth that then resulted in Britain during the Industrial Revolution.  

Of course, this simplified account, can be tracked down to the seminal paper by Douglass North and Barry Weingast on the Glorious Revolution (1989) and to various iterations on a similar theme by subsequent scholars, most notably Why Nations Fail by Daron Acemoglu and James Robinson (2012).  The version of the institutionalism absorbed by the economics profession was not so much wrong, but it was too stylized to be anything but a starting point for analysis.

Even at the time, economic historians picked away at many aspects of this story – pointing out that many changes attributed to the Glorious Revolution took several decades to be worked through, that many property rights were secure long before the Glorious Revolution, and that many institutions in England remained incongruent with economic growth into the 20^th century Numerous scholars added much to our understanding of financial markets, political institutions, and the problems of sovereign debt (see discussion in Koyama and Rubin, 2022, pp. 145-146, Johnson and Koyama, 2019, pp. 174-180 for references).

Subsequent reworkings of British national accounts, moreover, suggested that productivity and per capita income rose considerably in the 17^th century (i.e. before the Glorious Revolution) and that growth in the classic Industrial Revolution (c. 1770-1850) was slower than previously thought (Broadberry et al. 2015).  International trade and perhaps the slave trade may have been more significant than previously supposed.

But until now we did not have a compelling and detailed account of institutional development in England over the long durée.   Geoffrey Hodgson is well placed to provide such a synthesis.  Founder and long-time editor of the Journal of Institutional Economics, Hodgson has written a number of insightful books on the role of evolution in economic thought, and on both the old and the new institutional economics.    The Wealth of a Nation provides a non-teleological and historically grounded account of the slow, often haphazard institutional development of the English economy from the Middle Ages to the Industrial Revolution and beyond.

This is a scholarly volume and not an attempt at capturing the elusive popular market. The structure of the book provides clues to Hodgson’s approach.  The two chapters that follow the introduction focus on rival theoretical frameworks: Karl Marx’s approach (Chapter 2) and the more recent scholarship of Marx Weber, Richard Tawney, North, Deirdre McCloskey, and Joel Mokyr (Chapter 3).   Hodgson’s own approach is developed in Chapters 3, 4, and 5 on the importance of land, finance and industry.

The final chapter is spent on a comparison with Japan.  Careful attention is paid throughout to both the historical record, and to the secondary literature that has arisen within a large number of different literatures that span several economics and history.

Hodgson’s book will be extremely useful for scholars of England’s economic and political development.   Historians should read and engage with it to see how scholars in institutional economics have wrestled with the problems and questions thrown up by English history.   Economists should read it to get a sense of the how messy and detailed the process of institutional change can be. It does a great job both summarizing the voluminous literature of the past three decades on the development of financial and political institutions in England before the Industrial Revolution, and in presenting the author’s own nuanced and sophisticated position.

In his acknowledgements, Hodgson thanks McCloskey, Mokyr and North. And in a sense, you can read the book as a sustained engagement with (and criticism of) the work of North on institutions and their role in English development. In the central chapter of the book, Hodgson outlines what is wrong with the North and Weingast (1989) argument. Contrary to their main claims, while some property rights were at risk under the Stuarts, the majority were secure long before 1689.  North and Weingast, moreover focused exclusively on whether property was secure from expropriation from the monarch. They discounted the risk of expropriation from Parliament, which grew after 1689. This most famous example are the Parliamentary land enclosures that increased markedly in the 18th century. North and Weingast’s focus on the security of property rights also neglected the content of property rights – many feudal property rights were impediments to the productive reallocation of resources. Finally, Hodgson charges them with neglecting restrictions on finance which made it hard to borrow against the value of land.   

This is crucial for Hodgson as he argues that collateralizable property and credit creation were the critical institutional innovations.  These developed gradually over the course of the 17^th and 18^th century and were stimulated by the growth of the British state and its frequent involvement in overseas war.  

Near continuous conflict pushed the British state to develop more sophisticated financial and borrowing arrangements which, in turn, “created new incentives and possibilities for the use of landed property as collateral to finance investments, infrastructure, and industry” (p. 151).  In Chapter 5, he outlines the plausibility of his argument that finance capital was important for the Industrial Revolution itself.   But the chapter concludes with a call for further research into questions such as the extent to which businesses were self-financed out of savings or relied on loans and on the extent to which these loans were collateralized based on land.  Hodgson ends the chapter noting that “there is much empirical research still to be done to gauge the role of financial institutions in the British Industrial Revolution” (p. 183).

A key theme of the book is gradualism.  Institutional change, including changes that Hodgson thinks other scholars have undervalued, such as the development of financial institutions, typically took many decades or longer to occur.  Another example of this, is that in contrast to older Marxist approaches that sought to date the decisive rise to power of the bourgeoise to the 16th or 17 centuries, Hodgson’s sees a centuries long conflict between the landed gentry and the rising commercial class, with the former retaining considerable power into the 20^th century.

Different readers will get different amounts of mileage out of “The Wealth of a Nation”.   Some of the qualities of the book that make it valuable for scholars, including myself, will likely reduce the attractiveness of the book for other readers.  For example, Hodgson should be commended for crediting and engaging with other scholars.  As this is book that largely draws on the secondary literature for its raw materials, this is important.  By bringing together into dialogue scholarship by historians, economic historians, and economists, Hodgson is providing a considerable service to the profession.  I will be combing through his footnotes for my own research.  Nonetheless, non-academic readers may be turned off from this style.

A related characteristic of the book is Hodgson’s key arguments often come into sharper definition when he contrasts his account with rival explanations.   He is better in critiquing existing explanations than in putting forward his own thesis. This is an issue in the final section of the book which seeks to draw lessons from history   The main thesis of this section is that Darwinian explanations provide a coherent frame work for understanding institutional change – a theme of Hodgson’s earlier work – struck me as underdeveloped.   My own view is that Darwinian explanations provide a useful starting point for building explanations and models. but that ultimately for an institutional account of economic and political development to be useful it must deliver testable hypotheses.  This may strike some as naïve positivism.   And vulnerable to the numerous criticisms that have been advanced against positivism in the last 70 years (Duhem–Quine etc.) but I believe that this methodology has been extremely valuable in advancing our understanding of economic development.

Despite this criticism, I applaud “The Wealth of a Nation” as a presenting sophisticated set of arguments about institutional change over the long-run. I do not think it is the final word on the subject.  In particular, one can agree with many of Hodgson’s arguments about the shortcomings or limitation of existing viewpoints (such as his criticism of North and Weingast or of McCloskey’s reductionist approach to institutions) without believing that he has fully substantiated his own position on the importance of finance capital.  Indeed, I think Hodgson’s book is valuable in part because it raises many questions and topics for subsequent scholarship.

References

Acemoglu, D. and J. A. Robinson (2012). Why Nations Fail. New York: Crown Business.

Broadberry, S., B. M. S. Campbell, A. Klein, M. Overton, and B. van Leeuwen (2015). British Economic Growth, 1270-1870. Cambridge: Cambridge University Press.

Johnson N. and M. Koyama (2019). Persecution & Toleration: The Long Road to Religious Freedom. Cambridge: Cambridge University Press.

Koyama, M and Jared Rubin (2022). How the World Became Rich.  Cambridge: Polity.

North, D. C. and B. Weingast (1989). Constitutions and commitment: the evolution of institutions governing public choice in seventeenth century England. Journal of Economic History 49, 803–32.

Here is the syllabus. Some highlights are below.

The course was (I think!) a success. While I’ve taught economic history for more than a decade, my class has always focused on pre-20th century history. Basically, I stop around 1870 with the Second Industrial Revolution underway. So this was my first foray into teaching more more modern topics like World War 1 and World War 2. And it was the first time teaching the Great Depression since I was a grad student (teaching it admit the Great Recession).

I didn’t use a textbook. Had it been out, I would have assigned Christopher Meissner’s One From the Many as a background text. The standards of a modern undergrad class also meant that I wasn’t able to assign the kind of voluminous readings that used to be assigned to me as a student. This meant that I used the lectures to summarize classic works by Peter Temin, Barry Eichengreen, Milton Friedman and Anna Schwartz, Bob Allen, Paul Gregory, Kevin O’Rourke and Jeffrey Williamson and others to supplement the core readings.

As the class was nominally a PPE class, I included background on the history of ideas. My colleague Larry White’s book, The Clash of Economic Ideas, was on the reading list for this reason, though in practice I drew on a wide range of books including Brian Snowden and Howard Vane’s Modern Macroeconomics: Its Origins, Development and Current State, which is very much as “schools of thought” book, but is a great resource if one wants a more historical approach to macroeconomics.

In this post I’ll summarize the first couple of weeks of the class. A second post will cover the rest.

How the World Became Rich was essential background material for the course. It provided the context for the students to understand the rapid spread of modern growth after 1870. The other main reading was Brad deLong’s Slouching Towards Utopia. While I have some substantive disagreements with bits of this book, overall it did a great job of providing a narrative economic history of the entire period. DeLong’s framing of Hayek versus Polanyi provided a good starting point for class discussion.

For the first half of the semester focused on 1870-1945 - taking DeLong’s definition of the long 20th century seriously. The first two weeks of class covered 1870-1914, the first age of globalization. We considered the role of the telegraph and the steamship in opening up the world. We ask what impact failing transport and trade costs had on the allocation of economic activity?

The first age of globalization brought sustained economic growth to the West but also saw global inequalities widen. In class we examined the institutions, like the international gold standard, that supported it. We look at the dark side in the form of colonization. And we considered the intellectual ferment of the period and new ideologies like socialism emerged and classical liberalism waned.

World War 1 destroyed the first age of globalization. But what caused World War 1? Important factors include the entangled military alliances that divided Europe into two rival camps, the imperialist rivalries between the Great Powers (particularly Germany and Great Britain), German nationalism and militarism, political instability in the Habsburg, Ottoman, and Russian Empires, and the Balkan crises that escalated tensions in the region. We weighed the evidence as best we could before diving into the economics of the war itself.

As in my earlier post on Masters of the Air, I took a very economics-focused perspective in my lectures to studying the war itself.

From this economic perspective, once Germany had failed to win a decisive short war in 1914, Allied victory was always more likely. And the decisive edge the Allies had over the Axes only grew over time, especially following American entry in 1917.

World War 1, however, just set up the world for another crisis within 20 years. The Treaty of Versailles is of course blamed for this.

Here we covered Woodrow Wilson’s 14 points and different perspectives on the Treaty of Versailles. I’m skeptical that the Treaty of Versailles was an especially harsh treaty. And I share Tyler Cowen’s views that The Economic Consequences of the Peace is overrated. But perceptions are often what matters most in politics.

Delong in Slouching Towards Utopia does a great job of linking wartime inflation in Germany and Austria-Hungary with the hyperinflations of the 1920s. The model he summarizes is the fiscal theory of the price level.

In Germany, opposition to reparations meant that it was politically expedient for policymakers to print money rather than raise taxes to pay Germany’s debts. The attempts to rebuild Germany’s economy following the resulting hyperinflation through the Dawes Plan and the international failure to properly restore the pre-1914 Gold Standard would expose the world to the Great Depression.

Before we examined the Great Depression, however, the class pivoted back to study the rise of socialism in the late 19th century. My next post will pick up the story there.