How the World Became Rich: The Historical Origins of Economic Growth by Mark Koyama & Jared Rubin

Author:Mark Koyama & Jared Rubin [Koyama, Mark & Rubin, Jared]
Language: eng
Format: epub
Tags: Business & Economics, Economic History, Economics, General
ISBN: 9781509540242
Google: t2BkEAAAQBAJ
Publisher: Wiley
Published: 2022-03-14T20:27:50+00:00

Parliaments and the Rise of Limited, Representative Government

In Chapter 3, we discussed the role of institutions. One important set of institutions we discussed were parliaments. These assemblages of important people – nobility, clerics, and urban elite – constrained rulers and their worst whims. But parliaments were more powerful in some places than in others. As noted above, the Spanish cortes were relatively hapless when it came to preventing abuses by the Habsburg crown. This ended up not being the case in England and the Dutch Republic. There, parliaments grew in strength over time and ultimately were able to place significant constraints on central authorities. The period after 1600 saw the rise of representative political institutions first in the Dutch Republic and then in England. Meanwhile, in Southern Europe, monarchical power was consolidated. But why did this matter? Any why did limited governance arise in northwestern Europe but not in Southern Europe?

It is worth revisiting some of the relevant history. The most successful economy of the 17th century was the Dutch Republic. The cities of the Low Countries (modern-day Belgium and the Netherlands) became prosperous in the late Middle Ages. In the 15th century, the cities of the northern Netherlands prospered due to the wool trade and their control over Baltic trade routes. The wealth of their urban bourgeoisie is evident in the oil paintings of the era. As a result of a series of dynastic marriages and accidents, these rich cities came into the possession of the Habsburg Emperor Charles V (r. 1516–56) and they were passed down to his son Philip II, ruler of Spain (r. 1556–98). Tax revenues from these towns and cities helped to fund Habsburg expansion and warfare against the Ottomans.

The rich burghers of the Dutch cities resented paying taxes to a distant Habsburg monarch. At first, there was little they could do. The Habsburgs were powerful and had a legitimate claim on Dutch rule. But in the 1540s and 1550s, Protestant ideas began to spread throughout the Low Countries. This gave those looking to throw off the Spanish yoke an opportunity to do so. The heavy-handed Habsburg response – as many as 2,000 Protestants were burned alive as heretics – helped galvanize resistance from among the Dutch nobility and city leaders. The Reformation therefore helped kick-start a wider political rebellion. It resulted in the establishment of an independent Dutch Republic in the northern Netherlands and an eighty-year war with Spain.

This is precisely what we mean when we say that culture and institutions are often inseparable. It is difficult to imagine how the Dutch Revolt could have succeeded without the spread of Protestant (Calvinist) ideas. These motivated and legitimated the rebellion against Habsburg rule – binding the rebels together in a way that mere shared economic interests were unlikely to. Meanwhile, it is difficult to imagine how a religious movement like the Reformation could have succeeded without the political and institutional changes that secured Dutch independence from the fiercely Catholic Habsburgs.

The polity that arose as a result of the Dutch Revolt was a federal republic.

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