Economist: 18th Century Economic Growth May have Occurred Despite Liberalized Government

An article in the Economist outlines an argument that 18th century Britain’s robust economic performance was not the result of liberalized institutions, but were instead caused by financial innovation largely independent of political developments. Indeed, we hear that:

institutions in many cases became weaker, rather than stronger, after the Glorious Revolution. When William III, a Dutchman, became king in 1689, English governments became more extractive and rent-seeking—not less—in order to fund growing military engagements. The rising tax burden presented a challenge to property rights, and rent-seeking monopolies were allowed to grow in some sectors of the economy that had before been restrained under more absolutist governments.

This provokes some observations about how England changed after granting more power to Parliament: England experienced growing military engagements; rent-seeking monopolies (i.e. corruption) increased; and institutions became weaker. When asked whether a parliamentary democracy or an absolute monarchy would produce more war, more corruption, and weaker institutions, what would the average student of history answer?

This is, of course, old news in certain dark corners, but it is interesting seeing this point of view in a mainstream publication.