Joel Mokyr () (Department of Economics, Northwestern University) John V. C. Nye (Department of Economics, Washington University)
Abstract
From the late 1600s to the mid 1800s, Britain was able to transform from a divided kingdom with a fragmented, often stagnant economy into a powerful and stable state that simultaneously saw an expansion in the power, wealth, and stability of the central government while encouraging an economic transformation that gradually allowed both industrial technology and liberal commerce to flourish and break out of its mercantilist straitjacket. We explain how rent-seeking elites who might normally have opposed such sweeping transformations promoted institutional changes that, in the long run, expanded the economy and encouraged innovation even at the expense of class interests. In the short run, this meant that rent-seeking in the 18th century was not so much reduced as redirected from local monopolies to state authorities and Parliament. But in the longer run, the process of professionalization made possible greater liberalism in general, even at the expense of general rent-seeking itself. The position of Parliament as a meta-institution for reforming and weakening rent-creating restrictions as needed was pivotal to this process. Ideological changes—particularly the Scottish enlightenment—transformed the terms of the debate but could only be operationalized once interests were aligned so that gainers from industrialization could compensate or overcome traditional interests.
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Find related papers by JEL classification: N43 - Economic History - - Government, War, Law, and Regulation - - - Europe: Pre-1913 O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth P48 - Economic Systems - - Other Economic Systems - - - Other Economic Systems: Political Economy; Legal Institutions;
Property Rights