Medieval foundations of the second coming of democracy

Jørgen Møller & Svend-Erik Skaaning - Democracy and Democratization in Comparative Perspective

June 15, 1215, is an important day in the history of modern democracy. On this day, a number of England’s most powerful barons rallied against King John (aka Lackland) at Runnymede, a short distance to the west of London. Under the threat of rebellion, the barons forced the English king to sign the Magna Carta Liberatum, the Great Charter of Liberties. As the name indicates, the Magna Carta codified a considerable number of liberties together with habeas corpus, the right to have one’s case tried in the court system. 2 The Magna Carta thus served as a set of legal barriers against the arbitrary exercise of power by the king. Above all, it meant that the law placed limits on the power of the ruler. The charter also declared that the free subjects in the Kingdom (above all, the aforementioned barons) had the right of rebellion should the king fail to respect the legal concessions he had made. In return, the barons renewed their oath of loyalty to King John. set of legal barriers against the arbitrary exercise of power by the king. Above all, it meant that the law placed limits on the power of the ruler. The charter also declared that the free subjects in the Kingdom (above all, the aforementioned barons) had the right of rebellion should the king fail to respect the legal concessions he had made. In return, the barons renewed their oath of loyalty to King John.

The Magna Carta was actually in no way unique. Similar charters of liberties were forced upon monarchs in even the remotest corners of Western Christendom over the course of the Middle Ages. 3 The right to resistance has been dated all the way back to the Oaths of Strasbourg in AD 842 (Bloch 1971b [1939]: 451–452), an occasion at which Charles the Bald and Louis the German pledged their allegiance to one another in an alliance against their brother, Emperor Lothar I. The Oaths of Strasbourg are remarkable for including the following point: If one of the kings broke the mutual oath, their soldiers – who had also taken the oath – were bound by duty not to assist their king. This was arguably one of the earliest reflections of the modern conception of popular sovereignty4 which was to prove hugely influential in most of Western Europe in the High Middle Ages.

The importance of the precedent in Strasbourg should not be overstated, however. It was not until the 13th and 14th centuries that actual ‘charters of rights’ began spreading throughout Western Europe. In addition to the Magna Carta (1215), a number of so-called ‘golden bulls’ (aurea bullae) were issued in the 13th century. The most important of these was that of the Hungarian King Andreas II in 1222, which granted privileges to the Hungarian nobility relatively similar to those mentioned in the Magna Carta. The Aragonese Privilege of the Union (Privilegio de la unión) of 1287 and the the statute of Dauphiné of 1341 could also be mentioned as instances (Bloch 1971b [1939]: 451–452). The distinct historical status of the Magna Carta owes to the subsequent significance of the charter for English constitutionalism. On the European continent, the various charters of liberties were annulled or at the very least diluted following the advent of absolutism after the onset of the 16th-century military revolution (Downing 1992; Finer 1997b: 1298–1307). Conversely, the catalog of rights in the Magna Carta proved durable. In fact, the charter remains valid in England and Wales to this day. For example, it provides specific rights to the City of London and the Anglican Church. The Magna Carta thus assumes a prominent position in the traditional English notion of having an ‘ancient constitution’ that guarantees the time-honored Anglo-Saxon liberties (Pocock 1957).

Plutarco (Plut., Luc. 43.3.)

 Gredos 362 - Plutarco - Vidas Paralelas, Tomo V

Estas cosas alejaron aún más a Lúculo de la política. Y cuando Cicerón fue expulsado de la ciudad y Catón fue desterrado a Chipre, se marchó a la par. E incluso antes de su muerte se dice que enfermó su entendimiento y se marchitó poco a poco. Pero Cornelio Nepote 178 dice que no enloqueció Lúculo por la vejez o por una enfermedad, sino a causa de un veneno que uno de sus libertos, Calístenes, le suministró. Pues le dieron drogas para que Calístenes fuera más amado por él, al creer que tenían tal poder, pero le hicieron perder la razón y le eclipsaron el entendimiento, de forma que, estando aún con vida, su hermano se hizo cargo de la administración de sus bienes. Sin embargo, cuando murió 179, como si estuviera en el culmen de su poder militar y político a la hora de su muerte, el pueblo se afligió y acudió en masa. Y el cuerpo fue llevado al foro para obligar a los jóvenes de más alta cuna a enterrarlo en el Campo de Marte, donde Sila había sido sepultado también 180. Pero como nadie hubiera esperado esto, ni fuera sencillo hacer tales preparativos, su hermano, a fuerza de ruegos y plegarias, les persuadió para que permitieran que se le tributaran honores fúnebres en su finca de Túsculo. Pero él mismo no le sobrevivió mucho tiempo, sino que, como en edad y fama lo siguió a poca distancia, en el momento de su muerte también, quedando como un amante hermano 181.

Notas

178 Al parecer, Nepote escribió sobre Lúculo en De uiris illustribus. Han sobrevivido los libros sobre generales extranjeros (como Cimón, cf. supra) junto con biografías como las de Catón el Censor y Atico.

179 Según parece en el invierno del 57-56 a. C., a los 70 años de edad

180 Cf. Plutarco, Sila 38, 6. El sepelio en el Campo de Marte era un honor exclusivo.

181 La relación entre Lúculo y su hermano Marco fue tomada como modelo de amor fraternal en Séneca, Consolación a Polibio XV 1 (Cf. Diálogos. Apocolocintosis. Consolaciones a Marcia, a su madre Helvia y a Polibio. Intr., trad, y notas de J. Mariné. Madrid, Gredos, B. C. G. 220, 1996).

The Gardens of Sallust

Kim J. Hartswick - The Gardens of Sallust. A Changing Landscape (University of Texas Press, 2004) 18-19 

A garden estate was clearly not only a physical manifestation of the owner’s social and political standings, or philosophical leanings but a potential source of his immortality. The domus could publicly advertise the owner’s glory as effectively as or even more effectively than an inscribed name on the architrave of a temple. After one’s death, a grand estate could retain the name of its former owner, just as temples sometimes were referred to after their founders rather than for the divinity to which they were dedicated. 211 In the case of the gardens of Sallust, these seem never to have lost the name of the original owner. Even in the Middle Ages, the district was called “Sallustricum,” and in the sixteenth century, it was known in common parlance as “Salustrico.” 212 Perhaps accounting for the interest in his gardens during these times was the importance of Sallust’s historical writings in the medieval and Renaissance periods. 213

It is not surprising, therefore, that the Roman garden, reflecting one’s life and anticipating the preservation of one’s memory, could serve as the final resting place after death and that monumental tombs on villa properties were characteristic features already by the second century b.c. 214 Such burials, at least in the Republican period, however, did not have to be in suburban gardens. Tombs in the city on private property were an ancient custom reserved for patrician families until imperial times, when this right was reserved for only the emperor and the vestals. 215 Indeed, when Lucullus died in 56 b.c. not only was he honored with a public ceremony, but the people requested he have a tomb in the Campus Martius. His family, however, declined this offer, opting to bury their relative at Tusculum in a tomb perhaps already constructed. 216

Notas

211. Wiseman 1987, 395–396. See Sallust’s comment (Cat. 12.4): Delubra deorum pietate, domos suas gloria decorabant.

212. Fulvio 1527, fr. 24; Marliani 1544, IV, 23; Marliana 1544, V, 24; Mauro 1556, 83.

213. P. J. Osmond, “Princeps Historiae Romanae: Sallust in Renaissance Political Thought,” MAAR 40 (1995) 101–143.

214. M. Verzár-Bass, “A Proposito dei Mausolei negli Horti e nelle Villae” in Horti Romani, 401–424.

215. Serv., ad Aen. 5.64, 6.152, 11.206.

216. Plut., Luc. 43.3.

Michael G. Heller - Capitalism, Institutions, and Economic Development

 

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Introduction

Based on a timely reassessment of the classic arguments of Weber, Schumpeter, Hayek, Popper, and Parsons, this book reconceptualizes actually-existing capitalism. It proposes capitalism as an impersonal procedural solution to the problems of spontaneously coordinating public institutions that enable durable market-based wealth generation and social order. Few countries have achieved this. A novel contribution of the book is that it identifies a practical sequence of economic and institutional shortcuts to real capitalism.

The book challenges current orthodoxies about varieties of capitalism and relativist recipes for economic growth, and it criticizes culturalist and incrementalist viewpoints in institutional economics. It calls on the social sciences to help in constructing dynamic and prosperous open societies of the twenty-first century by reclaiming older ideas of ‘social economics’. Better and faster solutions will emphasize crisis-induced change, rational leadership, ideological persuasion, institutional engineering, rules-based market freedom, and the universalistic formal-procedural impersonality of optimal regulatory systems.

Chapter 1 - Institutional capitalism

A common fallacy of our time is that because the institutions of the more advanced countries evolved over many generations so too must the developing countries follow their own evolutionary path and slowly create institutions that match their special needs and values. Any effort to shortcut the evolutionary process, goes the argument, will be a recipe for disaster. The error of this view lies in the conviction that there are no universal truths about institutions, that a society only sets itself such institutional tasks as it can solve through original experimentation and learning, and that the task only presents itself when the social conditions for its solution already exist. The argument advanced in this book is that if an institutional solution has been tried and tested, knowledge of it can be used to advantage by other societies. With appropriate knowledge, motives, resources, opportunities and leadership, it is possible to compress the evolutionary process by imitating the successful institutional systems. Contemporary societies in transition to capitalism have no need to rediscover by a long and costly route of trial and error the institutions that enable durable prosperity and dynamic social order. The term ‘capitalism’ is used unusually in this book to describe a particular kind of institutional system found in the more advanced societies, one which has arisen as a solution to the problem of coordinating the institutional subsystems of market regulation, law, public administration, and political representation. This is a general solution manifested in rules about institutional procedures, rules about the functions of key institutional subsystems, and rules about the formulation and enforcement of rules. It is quite different from the everyday temporal and conjunctural solutions that must continually be found to resolve problems of context, such as new regulations for new markets or new methods for managing a public service. Rather it encompasses overarching principles that enable modern society to coordinate its institutional forces in such a way that the everyday tasks can be accomplished most effectively without threatening the survival and further evolution of the system. I will examine the institutional nature of capitalism, and priorities of institutional change in a capitalist direction, themes which have a long history in the social sciences. I draw on the scholarship of Weber, Schumpeter, Hayek, Popper, and Parsons, among others. In contrast to many present-day social scientists, these writers expressed considerable intellectual confidence in capitalism and had a keen sense of the policy dimensions of capitalist transitions. In exploring and adapting their work I have aimed for a composite and favourable analysis of capitalism’s institutional architecture and the methods of its construction. Two insights emerge, which can be the building blocks of ideas that communicate the nature of capitalist transition to the agents of change.

Chapter 2 - The modern state

I propose Max Weber’s theories as a foundation for a new approach to the study of capitalism and capitalist transition. Weber was born to a German merchant family in 1864. He died in 1920 before completing the writings assembled in Economy and Society (first published in German in 1922), his greatest work. Weber studied law, and he taught political economy at universities in Germany and Austria. Among his collaborators and friends were leading figures of twentieth-century economics and sociology, including Schumpeter, von Mises, Sombart, and Simmel. Weber left his characteristic mark on major intellectual controversies of the period. He was active in German politics, and wrote widely on sociology, economics, politics, law, philosophy, comparative history, and culture. The themes of his scholarship and his opinions on economic policy reflect his engagement in debates on the side of the German Historical School as well as on the side of its main rival, the Austrian School. Today, however, Weber is best known as one of the founders of modern sociology. His economic sociology offered perhaps the most rigorous twentieth-century counterweight to Marxian political economy. More broadly, and in the best sense of the term, Weber was a social scientist. His systematic development of methods and theoretical concepts for the social sciences dealing with social and economic action, rationality, bureaucracy, organization, and power is unmatched by any scholar before or since. Of most relevance in the present context is Weber’s central interest in the nature of ‘capitalism’. My argument grows out of Weber’s emphasis on the impersonal procedural norms of state institutions in capitalist societies. In addition, I present Weber’s theories of capitalism as explanations of the logic of a development strategy favouring (1) the construction of a parametric state with classical liberal economic functions, (2) market expansion as the driving force for legal reforms, (3) the short-run precedence of legal change over administrative and political change, and (4) the short-run precedence of political leadership over political participation. Weber clearly demonstrated, on technical grounds, why bureaucracy must be rationalized and why politics must be democratic in modern capitalism. In the absence of free political representation bureaucracy’s power escapes supervision and feeds on economic irrationalities. On the other hand, Weber’s theories can show why market-led and law-led transitional sequences to capitalism are usually more appropriate in developing societies than bureaucracy-led and democracy-led sequences. In this and the following chapter I will single out Weberian ideas that seem most relevant to the understanding of contemporary transitions to capitalism. Some steps in the analysis build on Weber’s concepts or suggest alternative concepts that fit better with current realities. His best-known essay, The Protestant Ethic and the Spirit of Capitalism (1992), which often misleads people about Weber’s view of the nature and origins of capitalism, is only briefly discussed. Weber himself said that this essay treats ‘only one side of the causal chain’ of capitalism (ibid.: 27). I concentrate on Economy and Society (1978), which can be read as a brilliant though somewhat inscrutable manual for the practitioners of capitalist transitions. My objective is to distil the practical inferences from Weber’s extraordinary vision of ideal state action, a chain of reasoning made up of many elements that are often only loosely held together under seemingly disparate thematic headings, and to reassemble the elements that most tellingly reveal the present-day potential for constructed capitalism.

Chapter 3 - Law and economy

Weber’s theories of capitalism provide compelling support for the argument that policymakers in developing countries should focus their initial reform efforts on economic liberalization and the construction of appropriate legal mechanisms to regulate markets. In the typical conditions of sequenced capitalist transition, the order of priorities gives proportionally less emphasis to building up state administrative and representational capacities. Weber’s relevant writings deal with the intertwined evolution of markets, ethics, and law over long historical periods during which capitalism began to emerge through trial and error in parts of Europe. Yet there are reasons to suppose that the causal chains which Weber observed during the original transitions will be similar during necessarily telescoped phases of contemporary development. The discussion of law in this chapter is relevant to debates on whether formal rules or informal norms and social relations are the foundations of economic trust. Trust between persons with shared morals improves market behaviour and substitutes for the formality of legal organizations. Weber (1978: 320) observed that in modern economies it is hardly ever necessary for partners in exchange to resort to third-party adjudication. Social convention may be ‘far more determinative of . . . conduct than the existence of legal enforcement machinery’. Ethical consensus compensates for the limitations of legal foresight and counteracts the many incentives to circumvent formal rules. However, in a complex social system made up of many organizations, reliable administration of law is the structure on which trust acquires incontrovertible force. Weber said: ‘To the person to whom something has been promised the legal guaranty gives a higher degree of certainty that the promise will be kept’ (ibid.: 667) At issue is the advantage of procedural certainty. In advanced economic and political exchange the source of ultimate trust is law, unambiguously guaranteed by neutral state power. Legal trustworthiness improves the calculability of outcomes in economic relationships: ‘Industrial capitalism must be able to count on the continuity, trustworthiness and objectivity of the legal order, and on the rational, predictable functioning of legal and administrative agencies’ (ibid.: 1095). Maintenance of market freedoms requires something more solid than amorphous social virtues. A modernizing society needs a rule-compliant economy in which contracts can be upheld independently of the personal authority of power holders. Strongly developed interpersonal or communitarian networks based on localized trust tend – especially when overarching frameworks of impersonal law are absent – to begin excluding outsiders in the effort to monopolize economic opportunities. In this way, they become obstacles to economic development. In reliably regulated competitive markets, the nebulous microfoundations of informal trust have less significance. During capitalist transitions, communitarian ethics are typically abandoned as economic actors transit from closed markets to open markets. As producers and consumers move beyond the internal economy and into the external economies, so too are their attitudes toward competition revolutionized.

Chapter 4 - Development in disequilibrium

This chapter outlines a theoretical framework for understanding institutional change during capitalist transitions. A central argument will be that the reciprocal conditioning of economic and institutional change is frequently a discontinuous rather than incremental process. Recurrent instability is a feature of both institutional and economic life during capitalism’s development. The economist, Joseph Schumpeter, gave a strong sense of this when he described the ‘jerks and rushes’ of industrial progress and its associated ‘social and cultural’ transformations.

Chapter 5 - Carriers of change

When motivated policymakers in developing countries set out to achieve a capitalist transition they need knowledge of the capitalist institutions that can be emulated, and knowledge of sequences and dynamics of institutional change. How is such knowledge created and how is it made available in the world? Can leaders and citizens in the developing countries be persuaded to take the capitalist path? What resistance will be encountered? What cognitive capacities are required? This chapter applies positive ideas about the agencies of change to a critique of approaches that emphasize interest-group, cultural, or cognitive constraints on reform. The objective is to restore two interlinked cognitive and volitional variables – ideology and rationality – to the centre of the analysis of capitalism and capitalist transition. The major political and economic systems of the world in the past century were shaped, for better or worse, by the ideas of intellectuals who knew the power of ideology and realized the potential of rationality. Hayek, for one, understood that ‘ideology may well be something whose widespread acceptance is the indispensable condition for most of the particular things we strive for’. Ideology is ‘the indispensable precondition of any rational policy, but also the chief contribution that science can make to the solution of the problems of practical policy’ (Hayek 1982: vol. 1, 58, 65). I will argue that ideology must be cognitive, rational, and scientific in order to motivate capitalist policy. Good policy, also, needs to be rationally formulated and implemented. Since these requirements of the transition to capitalism assume a preexisting level of knowledge of capitalism, it will be important also to take a hard look at how the social sciences interpret capitalism. Some summary definitions of the basic terms – ideology and rationality on one hand, and interest and culture on the other – will serve to introduce the argument. The Oxford English Reference Dictionary explains ‘ideology’ simply as ‘the system of ideas at the basis of an economic or political theory’. To this could be added that ideology aims to influence the attitudes and beliefs of a population with the intention of maintaining or changing the political or economic orientation of the social system. Ideology communicates belief in the relative legitimacy, justice, or effectiveness of a theoretical or empirical system of means to ends, such as could be applied to state policy. My understanding of ‘ideology’ is close to Mannheim’s definition of utopia, although Mannheim (1960: 184) understood utopianism as the opposite of ideology: ‘Ideas which later turned out to have been only distorted representations of a past or potential social order were ideological, while those which were adequately realized in the succeeding social order were relative utopias’. I understand ideologies to be cognitive rationalizations of concrete reality for ideal purposes. In contrast, Elster (1983: 141) describes ideology as ‘a set of beliefs or values that can be explained through the position or (non-cognitive) interest of some social group’. It is easy to agree that ideology is a biased belief, a disposition towards one opinion or interest rather than another. Yet ideology can be a true expression of socialscience data, founded on fact and logic. It can also be detached from the values or interests of the group or the individual. As a cognitive innovation rational ideology may be hostile to capitalism, or a carrier for the stock of knowledge favouring capitalist transition. ‘Rationality’ as it relates to policy is the effort to calculate optimum means to the end. One thinks rationally by applying a scientific style of reasoning to the decision. Weber said that ‘rational technique’ is ‘a choice of means which is consciously and systematically oriented to the experience and reflection of the actor, which consists, at the highest level of rationality, in scientific knowledge’ (Weber 1978: 65). Rationalism aims for precision in the estimation of the outcomes of an action, in order, as far as is reasonably possible, to control experience.

Chapter 6 - Models of crisis

Crises in developing countries provide an opportunity for the ideological determination of capitalist transition policy. The objective in this chapter is to identify the main forms of crisis, their causes, and the policy options arising during crises. I focus on two dynamic crisis-prone models of political economy – ‘activism’ and ‘neoliberalism’. A characteristic of activist and neoliberal models is that they do not transit successfully between the Weberian sequences of institutional reform – markets to law, law to bureaucracy, and bureaucracy to democracy – which this book depicts as the ideal path for emerging capitalism in the developing countries. Nevertheless, activist and neoliberal models – and their corresponding crises – will be described here as ‘developmental’. They are not the best methods of transition, but do have potential to generate change in a capitalist direction. Each can be an intermediate mechanism in so far as, for a period of time, an activist or neoliberal model increases the scope or quality of market activity, promotes economic growth, and achieves goals of social development. Three preliminary observations can be made. First, activist and neoliberal ‘developmental’ crises, unlike the Schumpeterian ‘long-wave’ crises discussed in Chapter 4, are in principle more likely to be avoidable. They are similarly ‘structural’, however, in the sense that they reveal an incompatibility between existing institutional forms and the pattern of economic change. Second, each of the progressive policy models – activist, neoliberal, and capitalist – are ideological in Hayekian terms. By viewing them as ‘transition ideologies’ we can compare the relative soundness of their scientific foundations and prescriptive utility. Third, crises in the developing countries, like Schumpeterian crises in the capitalist countries, tend to be recurrent. Crises that repeat at intervals provide recursive opportunities for sequenced institutional change. Development crises are ‘revolving doors’ of opportunity rather than merely ‘windows’ of opportunity for institutional reform. Crises that can help to transform societies are not rare events. The plan for the chapter is as follows. The first section proposes a typology of crises. Its purpose is to classify the kinds of crises that dysfunctional institutions cause, and their comparative transitional prospects. Once the variations in development crises have been identified, it should be easier to assess the knowledge that policy leaders require in order to exploit periodic volatility and propel capitalist transitions forward. The following four sections substantiate the theoretical claims and present an overview of activism and neoliberalism in East Asia and Latin America. The extended analysis of Latin America’s twentiethcentury economic-policy trajectory serves to illustrate several theoretical themes from earlier chapters, including state dysfunctions, government-business relations, and the role of leadership and ideology during policy transitions.

Chapter 7 - The transition sequence

Previous chapters have examined the institutional nature of capitalism and of precapitalism, general dynamics of institutional change, factors of human agency that drive change, and reasons why societies do not make the transition to capitalism. What are the relevant policy lessons? How might motivated and rational technocrats put transition theory into practice? How does the Weberian model translate into workable guidelines for reform? The plan of the chapter is as follows. The first section explores a policy priority sequence. The second section suggests a crisis-induced sequence of opportunities for initiating and sustaining capitalist transition. In the remaining two sections I look in more detail at how reforms might be implemented in the legal and administrative subsystems, and examine the insights that can be gleaned from literature on legal and administrative reform. For capitalist theory to be practically applied by policymakers it is necessary to bring to light and systematize the procedural principles that give shape and consistency to a ‘causal chain’ of market-led and law-led transformations, which lead, in turn, to the modernization of public administration and political representation. I propose a succession of discrete policy regimes of fairly short duration that overcome obstacles to the construction of institutions. The sequence is a mechanism for building state strength. Its key procedural goal is the depersonalization of the state.

Chapter 8 - Making the change

If, as historians state, history is rewritten every generation, it is not typically because subsequent evidence has developed clearly refutable tests of previous hypotheses but because different weights are assigned to the existing evidential material to provide different explanations consistent with current ideology . . . [Even] in the present world, replete with immense quantities of information, the ability of scholars to develop unambiguous tests of complex, large-scale hypotheses that are involved in explaining secular change is very limited. Therefore, competing explanations tend to have a heavy ideological cast.

State formation

Jørgen Møller - State Formation, Regime Change, and Economic Development (Routledge, 2017)

Representative institutions redux

In recent decades, the ‘Why Europe?’ question has attracted overwhelming interest in the social sciences. From having been a dusty, forgotten issue, primarily studied by historical sociologists, it is now a part of mainstream political science and economics. For example, over the last decade, the leading journal in political science, American Political Science Review, has published a series of articles that, often with the help of sophisticated statistical methods, address different aspects of the question (e.g., Acemoglu and Robinson 2006; Stasavage 2010; 2014; Hariri 2012; Woodberry 2012; Blaydes and Chaney 2013; Kokkonen and Sundell 2014). Similarly, the question has received attention from economists, an issue to which we return in Chapter 13.

It is thus hardly an exaggeration to say that much of contemporary social science – as in the late nineteenth and early twentieth centuries – revolves around the causes of the emergence of modernity in the West and the implications of this for the rest of the world. This new interest in old questions primarily seems to have been prompted by the following insight: only a historical perspective can enable us to understand the contemporary variation in economic prosperity and levels of democracy, particularly outside of Europe and the European settler colonies (e.g., Acemoglu et al. 2001; 2002a; Acemoglu et al. 2008; Hariri 2012). The more specific claim is that a series of medieval political institutions contributed to putting a leash on European monarchs and limiting their arbitrary exercise of power. These institutions were subsequently transplanted to some of the European colonies, where they facilitated economic growth as well as democratization.

What kinds of institutions have been attributed these tantalizing effects? As we shall see in Chapter 13, which addresses economic and political development outside of Europe, the answer to this question is not always clear. But it should be obvious that the representative institutions of the Middle Ages – Estates or parliaments and diets – form part of the core. Here, we can repeat Ertman’s (1997, 19) observation from Chapter 2 that these institutions alone were able to limit the monarchy’s exercise of power in a systematic manner.

The following pages are premised on this point. The purpose is to address a new body of literature on the origins and character of representative institutions. I have already reviewed Ertman’s (ultimately, Otto Hintze’s) account of why medieval representative institutions were stronger in some areas than others, and why they therefore had a varying impact on state formation and regime change. However, new research has been burgeoning in recent years. Most importantly, English political scientist David Stasavage has followed up on Hintze’s and Ertman’s analyses of the character and impact of the representative institutions in medieval Europe. Stasavage’s work has thus far resulted in two books (2008; 2011) and four scientific articles (2007; 2010; 2014; 2016). This chapter discusses this work and sets the stage for the next chapters, which use this medieval legacy to explain contemporary variations in economic and political development.

Surveying representative institutions

To explain a phenomenon, one first has to capture it. With this in mind, Stasavage compiles a dataset tallying representative institutions in twenty-four European states in the five centuries between 1250 and 1800 – the period to which Myers (1975) refers as the Age of the Polity of Estates. Instead of distinguishing between the number of chambers and whether or not the representatives were representing estate groups or localities, as Hintze and Ertman do, Stasavage (2010) maps the following:

(1) Does a representative assembly exist?
(2) Does the representative assembly have a veto on taxes?
(3) Does the representative assembly audit government spending?

The first condition is fulfilled if a collective assembly is found on the national level, convenes with some regularity, and at a minimum is consulted by the monarch. We find assemblies of this kind throughout Western (or Latin) Christendom in the Middle Ages. They emerge at different points in time: relatively early in Western Europe and relatively late in Scandinavia and East-Central Europe (Poland and Hungary). The only states in Stasavage’s dataset that do not live up to the first condition at any time in the period 1250–1800 are the duchies of Milan and Tuscany and, hardly surprisingly, Russia, which is the only state outside of Western Christendom that is tallied.

The second condition is more demanding as it requires that the assemblies have a veto on taxation. This was the core prerogative of most representative bodies, and this condition is fulfilled in the vast majority of the twenty-four states. In fact, among the states with representative institutions, Denmark and Naples are the only ones without. 1 The third condition is met if the representative institutions had a direct right to audit the monarch’s expenditure and possibly even decide over public spending. There are very few cases in which we find this prerogative (eight of Stasavage’s twenty-four states). In addition to city-states such as Siena and Florence, England after the Glorious Revolution in 1688 is an instance. Finally, Stasavage codes how frequently the representative institutions convene, ‘annually’ being the highest value and ‘never’ the lowest. 2

Geographic barriers for representation

What explains the variation captured in Table 10.1? And what explains why the frequency of assemblies was so different across this universe: from the city-states, where the assemblies met many times annually, via the almost annual meetings in states such as Württemberg, Austria, and England, to the extremely rare gatherings in states such as Denmark and France?

Stasavage’s attempt to answer this question begins with an apparent paradox. As we know from previous chapters, it is widely assumed that representative institutions made it easier to impose and collect taxes for the purpose of financing warfare, and they have also been seen as easing public borrowing and promoting economic growth. If only some of these postulates are correct, then why did the representative institutions not win out throughout Europe? And why were many states so slow to introduce them? These are the questions raised by Stasavage (2010) in the article ‘When Distance Mattered’.

The title hints at his answer. Boiled down to a single sentence, there were significant geographical barriers to representation. A myriad of researchers have linked democracy with the size of the political unit. This point is best illustrated by the direct democracies of antiquity, which required that all (male) citizens were able to participate in the popular assembly. But scholars have also been pointed out that many island states have been able to maintain democracy in the period following World War II, an observation that has been linked to their limited size, which has made it easier to create a sense of political community (Dahl and Tufte 1974).

The representative institutions of the Middle Ages were not particularly democratic (see Møller and Skaaning 2013, Chapter 4). However, Stasavage argues, this does not alter the fact that geographical barriers had at least as much significance for how they worked. In Europe of the High Middle Ages, traveling great distances was associated with exorbitant costs – measured in time as well as money. The network of Roman roads had fallen into disrepair in the Early Middle Ages. In fact, it was mostly the memory of them that remained by the year 1200, at which time the representative institutions were emerging. Some improvements were made around this time, but it was only really after 1800 that large-scale advances of European infrastructure began to occur. In other words, transport was extremely cumbersome throughout the period Stasavage analyses. 3

Stasavage argues that this affected the impact of representative institutions on public borrowing. Here, he invokes economic theories about corporate finance. One of the key insights of these theories is that a common condition for being able to raise new funds for investments is that the borrower accepts external control or at least monitoring. However, such control can be so costly that potential investors pull back for this reason alone (2010, 625–626). Stasavage draws an analogical inference about the medieval representative institutions, the point being that the cities’ representatives would only go along with raising funds for the monarch if they were allowed to monitor how he spent them, but that such ex-post control could easily become too costly if geographical barriers prevented the representatives from meeting with some regularity. 4

Stasavage accordingly reasons that a state’s geographical size will have an impact on (i) the existence of representative institutions, (ii) how frequently they were called, and (iii) whether or not they had the right to oversee public spending. Conversely, he does not expect to find a relationship between geographical size and a veto on taxation, as this does not require a high meeting frequency. Stasavage applies these expectations in a series of statistical analyses in which he supplements the information from the dataset above with a number of control factors, including indicators measuring the presence of external threats and the size of the population, respectively. The intuition behind the first control variable is that the threat of war can trigger the summoning of representative institutions – and for that matter bring about an expansion of the prerogatives of these assemblies. The reasoning behind the second control variable is that the per capita expenses related to warfare will be greater in areas where the population is smaller. Finally, Stasavage controls for urbanization by rerunning his analysis without the city-states that are included in the dataset – on the basis of the potential objection that the representative institutions in these states were peculiar.

Stasavage measures geographic barriers in several different ways, including the average distance any representative would have to travel – ‘as the crow flies’ – in order to participate in an assembly. More specifically, he tests his expectations in two different ways. The first analysis operates on the ‘national’ level – that is, across the national units described in Table 10.1 above. As a next step, Stasavage shifts the level of analysis to the regional level by repeating his analysis on the French regions that had separate representative institutions. That is, Stasavage investigates whether there were also geographical barriers to representation within France.

What do the analyses show? Stasavage finds that geographical size has a very consistent, statistically significant, and substantial effect: first, in terms of whether or not a representative assembly existed; second, whether it exercised oversight over public spending; and third and finally, on how frequently it met. For example, the assembles in the quartile of the smallest states in the dataset met on average more than once every second year, while the assemblies of the corresponding quartile of the largest states met less than once every third year. Conversely, as expected, there is no correlation between geographical barriers and whether or not the representatives have a veto on taxation (2010, 636–637).

Stasavage uses this baseline to predict how often the French regional Estates were convened. The model provides a reasonably good prediction of the meeting frequency in eleven of the thirteen regions. The two exceptions are Normandy and Brittany, where the regional Estates convened surprisingly often considering the large size of these units. Finally, Stasavage repeats his national analysis but substitutes the French regions for France. The results are again robust, which is reassuring in as much as it is rather artificial to work with ‘national’ units in the medieval world. France is thus not the only country with regional Estates. The same applies to the Holy Roman Empire, which had a single representative assembly (the Imperial Diet – Reichstag), but where Stasavage has instead coded the assemblies in the individual states (Landtage).

A final objection is that, over time, the political institutions might have an impact on how large a given state is (or, rather, becomes). If a certain kind of representative institution made it easier to borrow or charge money for warfare, this should make it possible to swallow up neighbouring states that did not have the same advantage – as money is the fuel of warfare. Conversely, one might imagine that authorities that are not accountable to a representative assembly would be able to engage in ambitious foreign policy more easily, which might provide opportunities to increase the size of the state in question. In both cases, this would undermine Stasavage’s test of the relationship between geographical barriers and the characteristics of the political institutions. However, Stasavage also takes this into account in his test and dismisses this objection.

Representative institutions and public borrowing

 

Dutch investors

Jan Luiten van Zanden - The Long Road to the Industrial Revolution. The European economy in a global perspective, 1000-1800 (Brill, 2009) 223

The reasons for this gap were obvious to Dutch investors: they distrusted monarchs whose actions were not bound by representative institutions. The Leiden millionaire Pieter de la Court van der Voort, for example, recommended buying English stock, as it was guaranteed by Parliament. He was, however, extremely suspicious of the other monarchies. High interest rates would only fool the ignorant, he claimed, but served as a warning for those in the know, as they were only offered by swindlers. One should be especially careful with those who invoked the bible to prove their reliability, or when dealing with monarchs: ‘Those who trust the signed promises of sovereigns find themselves easily betrayed’, De la Court told his wife and heirs (Prak, 1985, p. 137).

Two Spains

Regina Grafe - Distant Tyranny. Markets, Power, and Backwardness in Spain, 1650-1800 (Princeton University Press, 2012), 215-218

Two Spains

By the eighteenth century at the latest, it was increasingly clear that the divergence in regional fortunes was not entirely aleatory. Instead, a trend that had been observed by some since the early seventeenth century had become unmistakable. The center of gravity of the Spanish economy was moving from the Castilian heartland to the coasts. Demographic trends illustrate this. Chapter 7 showed that urbanization remained stagnant. However, this is somewhat misleading. It is not that there was no urban growth across Spain, rather population growth and decline canceled each other out. Cadiz, for example, passed from 40,000 to 70,000 and Barcelona grew significantly over the course of the eighteenth century. Increasing urbanization in the coastal provinces was accompanied by de-urbanization in the interior, with the exception of the growing capital Madrid. As a result, the overall share of population in towns hardly changed at all. A look at the population distribution between the coast, interior, and Madrid between 1700 and 1900 in figure 8.1 illustrates the point.

Rafael Dobado has argued that population density in the late eighteenth century was highly correlated with regional levels of economic well-being in Spain in the later nineteenth century, for which more reliable estimates are available. 3 Population density is therefore one of the better indicators for economic growth in an era in which population statistics are a lot more reliable than estimates of income. In 1787 about 160 people lived in every square kilometer in Spain’s coastal regions, but only about 75 in the interior. 4 The difference is strikingly large and as figure 8.1 suggests, it only increased over time. The shift from the interior to the coastal regions and to Madrid was still modest in the eighteenth century, but it accelerated in the nineteenth and continued in the twentieth.

In fact, the trend had begun much earlier. In the late sixteenth century the central Castilian regions, that is, Castille-Leon and Castille-La Mancha, accounted for 46 percent of the population of the Spanish territories, while Catalonia and Valencia accounted for about 10 percent. By the mid nineteenth century they were home to 27 and 19 percent of the total population, respectively. 5 The question thus remains why within a general pattern of slow market integration some regions patently fared worse than others. In other words, what explains the center-periphery divide in Spain, the economic, political, social, and cultural cleavage that has been the central feature of Spanish history and historiography?

Much of the Spanish historiography of the early modern period has developed around the notion of the “Two Spains.” In economic history this has been most elegantly elaborated by Ringrose, who has argued in Madrid and the Spanish Economy that the rise of the bureaucratic capital of the Crown’s making stifled growth elsewhere in central Spain. 6 The consequence was the emergence of two fundamentally different Spains. One Spain comprised Madrid and the Castilian interior, the historic territories of Leon, Old and New Castile, and Estremadura on the Portuguese borders. The other covered much of the coastal regions, in particular the northern Cantabrian coast, including the Basque Provinces and Navarra, the Mediterranean coast with the former reign of Aragon, Murcia, and Andalusia. Essentially the divide was between the “center” and the “periphery.”

Ringrose had not invented the idea of Two Spains. It became popular in the second half of the nineteenth century among Spanish commentators from Ramiro de Maeztu y Whitney (1875–1936) to Marcelino Menéndez Pelayo (1856–1912). 7 Since the twentieth century, it has generally been used to describe the conflict between liberal and reactionary forces that opened up after 1808 and persisted throughout the Civil War and dictatorship of the twentieth century. Ringrose simply traced the idea back to what he saw as its regional origins. In this, he was in good company. José Ortega y Gasset, Spain’s most influential writer of the early twentieth century, argued in Invertebrate Spain (1922) that it would be

an insult to historical intelligence to assume that when a superior national unit had been formed out of smaller nuclei, the latter cease to exist as actively differentiated elements. This erroneous idea would, for example, lead to the idea that when Castile reduces to a national Spanish unit Aragon, Catalonia and the Basque Country, these lose their character as distinct peoples [pueblos] and become part of the whole. 8

Not so, Ortega y Gasset exclaimed. While the unification might contain their centrifugal tendencies, it would not break the force of their independence. If the central organ disappeared, the nation would revert to its constituent parts. Disintegration in Spain was thus the corollary of the decadence at the center, in Castile. According to Ringrose, Ortega y Gasset, and many others the decline had started as early as the 1580s and had never ceased. 9 Here were the supposed origins of a division between a conservative, inward-looking interior Spain and an outward-looking, culturally, socially, and economically more advanced coastal Spain.

This narrative mirrors national historiographies in many places. The notion of commercially minded, more tolerant port towns and backward hinterlands has been part of histories written from Hamburg to Boston and from Canton/Guangzhou to Buenos Aires. It appeals as much to cultural historians as to hard-nosed economists, who have argued that Europe’s growth in the early modern period was largely “Atlantic,” though the latter have a hard time accounting for the poor economic performance of thoroughly Atlantic Spain. 10

From this point of departure, it was a relatively short step from the Spanish declension narratives of the sixteenth to early eighteenth centuries to the chronologically second half of the Two Spains story, that is, the role of the coastal areas in eventually pulling a recalcitrant hinterland into the modern age. In Spain, Europe, and the “Spanish Miracle,” 1700–1900, Ringrose took his interpretation into the early nineteenth century and argued that the outward orientation of the coastal regions—exemplified by the early (by Spanish standards) industrialization in Catalonia, the Basque Country, and parts of Andalusia—eventually led Spain out of backwardness. 11 By seeking integration with regions outside the Peninsula, they overcame the nefarious influence of a centralist bureaucracy that, in the later eighteenth century, contributed only slowly to this drive by opening up the Americas trades, for example. Again Ringrose was building on a long tradition of late nineteenth and early twentieth-century writers. The young, still liberal Maeztu warned against separatism of the coastal regions. Having spent part of his youth in Havana and returning to Spain just before the U.S. occupation of Cuba, he had witnessed the dismemberment of Spain firsthand. However, he also called for “another” (more modern) Spain that could only be created under the direction of the open- and industriously minded Basques and Catalans. 12

Notas

3 Dobado González, “Legado peculiar,” 101.

4 Ibid., 108–9.

5 Pérez Moreda, “El Legado demográfico,” 131.

6 “In the case of Madrid and Castile, market oriented commerce developed but only as a consequence of continuous political intervention in the economy.” Ringrose, Madrid, 2. For a similar argument, cf. Madrazo, Comunicaciones, 60–61, and Herr, Rural Change.

7 Juliá, Historias de las dos Españas; Alvarez Junco, Mater Dolorosa, 383ff.

8 Ortega y Gasset, España invertebrada, 32–33.

9 There is an endless, self-referential literature on Spanish decline. See, e.g., Elliott, “Decline of Spain,” and Kamen, “The Decline of Spain.” It is interesting to note that in the 1920s the possible loss of Catalonia or the Basque Country simply looked like a logical continuation of the loss first of the European, then of most of the American territories, and finally of Cuba, Puerto Rico, and the Philippines. For Ortega y Gasset evidently the latter had been just as much part of what he considered Spain as Catalonia; they were all part of the same entity rather than colonies of the Peninsula or even Castile.

10 Acemoglu, Johnson, and Robinson, “Rise of Europe.” Spain’s poor economic record is— once more—explained away by its supposed institutional exceptionalism.

11 Ringrose, Spanish Miracle.

12 Maeztu, Hacia otra España. See the very interesting discussion of the origins of the concept of the nation in Balfour and Quiroga, España reinventada, chapters 1–3.

Bibliografía

Balfour, Sebastian, and Alejandro Quiroga. España reinventada: Nación e identidad desde la transición. Trans. Ana Escartin. Barcelona: Ediciones Peninsula, 2007.

Dobado González, Rafael. “Un legado peculiar: La geografía.” In El legado económico del antiguo régimen en España, ed. Enrique Llopis, 97–119. Barcelona: Crítica, 2004.

Ringrose, David R. Spain, Europe, and the “Spanish Miracle,” 1700–1900. New York: Cambridge University Press, 1996.