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Inclusive Political and Economic Institutions
The Industrial Revolution was the period of rapid innovation and technological change that began in England in the late 18th century and quickly spread to other inclusive nations like the United States. It transformed manufacturing processes, significantly increasing economic productivity and improving standards of living. Acemoglu and Robinson argue that modern global inequality truly began with the Industrial Revolution, as countries with inclusive institutions rapidly embraced new innovations while those with extractive institutions resisted them.
The Industrial Revolution Quotes in Why Nations Fail
The Why Nations Fail quotes below are all either spoken by The Industrial Revolution or refer to The Industrial Revolution. For each quote, you can also see the other terms and themes related to it (each theme is indicated by its own dot and icon, like this one:
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Chapter 7
Quotes
The life expectancy of a resident of the Natufian village of Abu Hureyra was probably not that much different from that of a citizen of Ancient Rome. The life expectancy of a typical Roman was fairly similar to that of an average inhabitant of England in the seventeenth century. In terms of incomes, in 301 AD the Roman emperor Diocletian issued the Edict on Maximum Prices, which set out a schedule of wages that various types of workers would be paid. We don’t know exactly how well Diocletian’s wages and prices were enforced, but when the economic historian Robert Allen used his edict to calculate the living standards of a typical unskilled worker, he found them to be almost exactly the same as those of an unskilled worker in seventeenth-century Italy.
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By 1760 the combination of all these factors—improved and new property rights, improved infrastructure, a changed fiscal regime, greater access to finance, and aggressive protection of traders and manufacturers—was beginning to have an effect. After this date, there was a jump in the number of patented inventions, and the great flowering of technological change that was to be at the heart of the Industrial Revolution began to be evident. Innovations took place on many fronts, reflecting the improved institutional environment. One crucial area was power, most famously the transformations in the use of the steam engine that were a result of James Watt’s ideas in the 1760s.
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Chapter 8
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The Industrial Revolution created a critical juncture that affected almost every country. Some nations, such as England, not only allowed, but actively encouraged, commerce, industrialization, and entrepreneurship, and grew rapidly. Many, such as the Ottoman Empire, China, and other absolutist regimes, lagged behind as they blocked or at the very least did nothing to encourage the spread of industry. Political and economic institutions shaped the response to technological innovation, creating once again the familiar pattern of interaction between existing institutions and critical junctures leading to divergence in institutions and economic outcomes.
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Chapter 10
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In England there was a long history of absolutist rule that was deeply entrenched and required a revolution to remove it. In the United States and Australia, there was no such thing. Though Lord Baltimore in Maryland and John Macarthur in New South Wales might have aspired to such a role, they could not establish a strong enough grip on society for their plans to bear fruit. The inclusive institutions established in the United States and Australia meant that the Industrial Revolution spread quickly to these lands and they began to get rich. The path these countries took was followed by colonies such as Canada and New Zealand.
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The Industrial Revolution Term Timeline in Why Nations Fail
The timeline below shows where the term The Industrial Revolution appears in Why Nations Fail. The colored dots and icons indicate which themes are associated with that appearance.
Chapter 1: So Close and Yet So Different
...Idea, Starting a Firm, and Getting a Loan,” Acemoglu and Robinson explain how, after the Industrial Revolution kicked off in England, Americans followed suit and started inventing new technologies. Because of the...
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Chapter 3: The Making of Prosperity and Poverty
...and technologies replace old ones). For example, both landholding aristocrats and traditional artisans protested the Industrial Revolution . In Austria-Hungary and Russia, the aristocracy actually managed to stop it, but not in...
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Chapter 4: Small Differences and Critical Junctures: The Weight of History
...playing field. These incentives drove technological advances like the steam engine, which then spurred the Industrial Revolution . But they wouldn’t have been possible without England’s inclusive political institutions—especially its centralized state...
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...Differences That Matter,” Acemoglu and Robinson argue that political institutions determined which countries adopted the Industrial Revolution ’s technologies and thus achieved rapid economic growth. England, France, and Spain were similarly absolutist...
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...junctures to explain how different parts of the world developed in divergent ways after the Industrial Revolution —and why many of the patterns in its development still persist. English settler colonies (like...
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Chapter 6: Drifting Apart
...and the Middle Ages, Britain was politically irrelevant and economically underdeveloped—later, though, it led the Industrial Revolution .
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...and economically. This lack of early success shows that England wasn’t destined to lead the Industrial Revolution —rather, it led the Industrial Revolution because it just happened to have the right kind...
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...Early Growth,” Acemoglu and Robinson that, between the Neolithic Revolution of 9500 BC and the Industrial Revolution in the 18th century, there was sporadic economic growth in societies like Rome and Venice....
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Chapter 7: The Turning Point
...usually succeeded, while the workers have usually failed.) Thus, between the Neolithic Revolution and the Industrial Revolution , most institutions were extractive, and wages and life expectancy barely changed at all.
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...so after receiving hundreds of anti-monopoly petitions containing thousands of signatures. Parliament also made the Industrial Revolution possible by strengthening property rights, taxing land instead of manufacturing, and founding the Bank of...
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In the section “The Industrial Revolution ,” Acemoglu and Robinson argue that the British state supported innovators and fostered the Industrial...
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...Parliament balanced different groups’ interests and protected the domestic textile industry, which eventually drove the Industrial Revolution . By establishing a national monopoly for international commerce—only English ships could trade with English...
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All these legal factors promoted innovation during the 18th century, which culminated in the Industrial Revolution . For instance, James Watt significantly improved the steam engine by combining his own original...
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...final section, Acemoglu and Robinson ask, “Why in England?” They conclude that England fueled the Industrial Revolution because its political and economic institutions were more inclusive than anywhere else in the world....
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Chapter 8: Not on Our Turf: Barriers to Development
During the critical juncture of the Industrial Revolution , many states encouraged innovation and commerce—but many others did not. Over time, these decisions...
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...summarize their argument that societies like Spain, Russia, and Austria-Hungary couldn’t take advantage of the Industrial Revolution because they didn’t share England’s inclusive institutions. The Austro-Hungarian Empire, which was run by the...
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...such, Somalia could not have possibly built an industrial economy in the wake of the Industrial Revolution . The country’s politics also prevented it from adopting new technology. For instance, the Kingdom...
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...argument in the section “Enduring Backwardness.” Different societies respond to the critical juncture of the Industrial Revolution in different ways. Some societies give their citizens incentives to innovate, but most don’t, whether...
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Chapter 10: The Diffusion of Prosperity
...invested heavily in infrastructure and industry. These reforms allowed Japan to grow rapidly after the Industrial Revolution . Thus, until the mid-1800s, China and Japan were very similar: they were poor, absolutist,...
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...Inequality,” Acemoglu and Robinson summarize their argument in the last three chapters. England led the Industrial Revolution because of its inclusive institutions. Then, industrialization quickly spread to countries with similar institutions—including the...
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