representation of business and merchant interests) in the English Civil War of
the 1640s and again in the Glorious Revolution of 1688. This gave Parliament
the authority to curb the exercise of arbitrary and confiscatory power by the
Crown through judicial independence and ultimately the supremacy of
Parliament. The long-term consequences were the increased security of prop-
erty rights, greater incentives to undertake long-term investments and so ulti-
mately the onset of the Industrial Revolution. France and Spain had absolutist
monarchies that took longer to create a system of law and property rights exist-
ing independently of the Crown. The historical failures were the Ottoman and
Mughal empires where property was held at the discretion and whim of the
Crown and Sub-Saharan Africa where property was held communally. Chapter
7 examines why well-established private property rights in fifteenth-century
China failed to generate similar patterns of growth as in Western Europe.
More specific case-study evidence of the link between good institutions and
innovation is hard to find in respect of Britain. Beginning in the 1760s, the
stream of technological innovations in British textiles noted above trans-
formed the industry. Yet, even during the height of the Industrial Revolution,
England was not good at rewarding innovation and many of the innovators died
in poverty as the secrets of their innovations quickly leaked to others (Clark,
2007:236). The story of coal was the same. Between the 1700s and 1860s coal
output increased nearly 20 times but the leading pioneers Trevithick,
Stephenson and Davy captured very few rewards. Innovation mainly benefited
consumers in the form of lower prices rather than the innovators in the form of
higher profits (Clark, 2007:237).
Geography
The growth of Western Europe from the sixteenth to nineteenth centuries was
almost entirely accounted for by the growth of nations with easy geographical
access to the Atlantic Ocean (Britain, France, the Netherlands, Portugal and
Spain). The most rapid economic growth occurred in those countries which
had freer political institutions where this growth in trade enriched and
strengthened commercial interests outside the royal circle and so enabled them
to demand the institutional changes (such as non-arbitrary taxes and well-
protected property rights) necessary for long-term economic growth
(Acemoglu et al.,2005). Others have explained this growth pattern in terms of
the availability of natural resources rather than political and institutional
change. Trade and conquest in the Atlantic world made possible the importa-
tion of sugar and grain for food, cotton for manufacturing and timber for heat-
ing using slave labour. This enabled first England then later elsewhere in
Europe to avoid diverting extra acres and labour that would otherwise have
been required to produce them and to use them instead for working in industry.
There is not much evidence for this second explanation. Until the early 1820s,
long after the onset of industrialization,wheat imports into England were
negligible and even by the 1840s wheat imports were only 12 per cent of
consumption and mostly came from Russia and Prussia, not the Americas.
18 Introduction