Liberalism & Jewish Emancipation

Crossposted at Liberal Currents

How did religious freedom first emerge? This is the theme of Persecution & Toleration (CUP, 2019). Here I focus on one part of this question: how did Jews obtain civic rights?

Antisemitism has a long history in Europe. Elsewhere, I discussed its institutional foundations in the Middle Ages. But even as pogroms and antisemitic violence waned, disabilities and restrictions on Jews remained in place. It was not until the 19th century that most were removed in Western European countries. In Persecution and Toleration, Noel Johnson and I argue that this discrimination reflected the political economy of fragile states. Religious freedom was impossible in weak states reliant on religious legitimacy. But this doesn’t answer the question: How did this discrimination end? How did we get religious freedom?

The struggle for Jewish emancipation was a long one. When it finally took place it was closely associated with the emergence of modern liberal states. It was only once the institutional basis for political authority had changed that granting Jews full civil rights became feasible or even conceivable.

Here I will focus on the removal of Jewish disabilities in England. And in particular, I’ll focus on one paradigmatic statement of religious liberty that Thomas Babington Macaulay made in Parliament in 1829 in favor of ending all civil disabilities on Jews. As a statement of religious freedom and liberalism more generally, it is sadly neglected.

Jews faced restrictions on their ability to settle, reside, work and practice their religion in all European societies before 1800. These societies were governed by religion-based identity rules, rules that treated individuals differently based on their religious faith. Britain was relatively liberal; when Jews settled in England following their invitation by Oliver Cromwell in 1655, they were free of most of the discriminatory legislation that burdened them across continental Europe. In particular, they were free of the onerous residency or marriage restrictions that burdened many communities. Nevertheless, they were excluded from political power and from occupations such as the law, government service, and the universities. They lacked religious freedom.

Attaining full religious liberty was a decades-long struggle. Even after disabilities were removed from dissenting Protestants and from Catholics, there was opposition to allowing Jews to sit in Parliament, to graduate from Oxford or Cambridge, or to serve as judges.

Understanding where this opposition came from one requires appreciating how religion upheld political order, even in a society as apparently modern as 18th-century England. Restrictions on dissenters, Catholics, or Jews did not only reflect simple prejudice. Britain was a Protestant nation. Loyalty to the state was inseparable from loyalty to the Protestant Settlement of 1689. The Church of England was a bulwark of the Constitution. Privileges and economic rents were monopolized by the Anglican elite. Catholics, Methodists, Quakers, and Jews were tolerated — they were largely free as private citizens — but they were kept away from political power.

Overturning this required a new basis for political authority. As discussed in an earlier piece on Catholic emancipation by the early 19th century the threat of militant Catholicism had receded while the Church of England was itself a diminished force. Meanwhile, the narrow oligarchic post-1689 settlement was being challenged. British elites were forced to reimagine the sources of political legitimacy.

One of the first to do so was Thomas Babington Macaulay (1800–1859). As an MP, Macaulay was an establishment figure and no radical. But the view of government he laid out was fundamentally different than what had animated his predecessors. It was a secular and liberal view of the role of the state, in which identity rules based on religion had no place. It was in his view only “because men are not in the habit of considering what the end of government is, that Catholic disabilities and Jewish disabilities have been suffered to exist so long”.

“We hear of essentially Protestant governments and essentially Christian governments, words which mean just as much as essentially Protestant cookery, or essentially Christian horsemanship. Government exists for the purpose of keeping the peace, for the purpose of compelling us to settle our disputes by arbitration instead of settling them by blows, for the purpose of compelling us to supply our wants by industry instead of supplying them by rapine. This is the only operation for which the machinery of government is peculiarly adapted, the only operation which wise governments ever propose to themselves as their chief object.”

Macaulay is outlining a liberal, non-heroic, instrumental, view of government. The state is not a project or painting; it is a mechanism for resolving disputes peacefully and facilitating social cooperation. It is a tool meant to serve specific practical purposes rather than a religion or work of art meant to fulfill a symbolic or spiritual need.

Accept this liberal view of the state and the rest of the case for religious freedom follows. As Macaulay put it:

“The points of difference between Christianity and Judaism have very much to do with a man’s fitness to be a bishop or a rabbi. But they have no more to do with his fitness to be a magistrate, a legislator, or a minister of finance, than with his fitness to be a cobbler. Nobody has ever thought of compelling cobblers to make any declaration on the true faith of a Christian. Any man would rather have his shoes mended by a heretical cobbler than by a person who had subscribed all the thirty-nine articles, but had never handled an awl. Men act thus, not because they are indifferent to religion, but because they do not see what religion has to do with the mending of their shoes. Yet religion has as much to do with the mending of shoes as with the budget and the army estimates. We have surely had several signal proofs within the last twenty years that a very good Christian may be a very bad Chancellor of the Exchequer.”

Why did this argument, which seems natural to us, shock Macaulay’s contemporaries? Israel Finestein observed that in “their view it was precisely the religious difference which unfitted the Jew to be a legislator in a Christian country. To them, Macaulay’s argument was dogmatic, even irrational and certainly question-begging”.

Herbert Butterfield observed that

“Those who are interested in the way in which liberty came to emerge will find themselves safeguarded against certain types of error if they will keep in mind that they are looking at the actions and purposes of men as these appear in retrospect — they are making their observations from the hither side of a great transition” (Butterfield, 1977, 574).

Macaulay’s liberal view of the state made sense only on the other side of this transition. It presupposed a state that had moved from religion-based identity rules to general rules.  And this transition, as we discuss in Persecution and Toleration, is the bedrock of modern liberal society.

Of course, once emancipated Jews excelled in numerous fields of endeavor and European society at large reaped huge economic and cultural benefits. Emancipation also had a transformative effect on Jewish communities themselves, giving rise to both the liberal Reform Judaism movement and to various strands of Orthodoxy.  But emancipation also provoked a backlash.

Though the transition from identity rules to general rules and the attendant rise of modern liberal societies and of economic growth brought huge net benefits,  there were many losers – individuals who lost relative status as industrialization reordered the economic order.  Many blamed the Jews, who were seen as the greatest beneficiaries of the new liberal order.

Modern antisemitism arose in the late 19th century just as the last restrictions on Jews were being removed.  In Bavaria, for instance, emancipation was opposed by a petition of citizens from the town of Hilders who did not wish to “humble themselves before the Jews” (Hayes, 2017, 23).

Liberalism has remained resilient in countries like Britain or the United States where its institutional and cultural foundations were strong, but it is not irreversible. To preserve these foundations it is helpful to remember where they made. From that perspective, the case of Jewish emancipation is both instructive and cautionary.

References

Butterfield, Herbert, “Toleration in Early Modern Times,” Journal of the History of Ideas,
1977, 38 (4), 573–584.

Finstein, Israel “A Modern Examination of Macaulay’s Case for the Civil Emancipation of the Jews.” Transactions & Miscellanies (Jewish Historical Society of England), vol. 28, 1981, pp. 39–59.

Hayes, Peter (2017). Why? Explaining the Holocaust. W.W. Norton & Company, New York.

Johnson, Noel D and Mark Koyama. Persecution and Toleration (Cambridge Studies in Economics, Choice, and Society) ( Cambridge University Press.

Thomas Babington, Lord Macaulay, Critical and Historical Essays contributed to the Edinburgh Review, 5th ed. in 3 vols. (London: Longman, Brown, Green, and Longmans, 1848). Vol. 1

Catholic Emancipation as a Constitutional Revolution 

Religious toleration is important to Britain’s historical self-image as a bastion of liberty against continental tyrants like Hitler, Napoleon, and Louis XIV.

But for much of the 18th century, Catholics in Britain were barred from government service, the army and navy, the law, and the universities. Formally, they were not allowed to inherit land or even marry with Catholic rites (though in practice there were well-recognized workarounds). Catholic priests faced life imprisonment and Catholic schools were illegal. When these laws were liberalized in 1778, this provoked the worst riot in early modern British history, the Gordon Riots.

Frazer details the travails involved in passing Catholic Emancipation. The King and the Anglican establishment were strenuously opposed to liberalizing laws against Catholics. Despite the fact that he had Catholic friends, George III opposed emancipation because it violated his coronation oath to champion the Protestant religion.

Prime Minister William Pitt proposed emancipation in 1801 and offered to resign if the King disapproved. This prompted George III’s descent into paranoia or “madness”. Frazer notes that

“There had already been a bout of this madness in 1788 and 1789, with the younger George as temporary Regent. Whatever the actual illness from which he periodically suffered, it included among the symptoms an obessional quality which certain topics unquestionably aroused. Catholic Emancipation, that appalling prospect which would cause him to be damned for breaking his sacred vow, was prominent among them:

None of this is mentioned in the 1996 film, featuring Nigel Hawthrone, of course!


Why did Catholic emancipation provoke this reaction? The British state faced a crisis in the early 19th century. Most accounts focus on the French and Industrial Revolutions, which disrupted the existing social order and alarmed ruling elites. Religion is scarcely mentioned. Thus from a Marxian perspective, the Chartists and the passing of the Great Reform Act — which extended the franchise to property holders — represent the bourgeoisie, demanding political rights to match their economic power. Acemoglu and Robinson model the transition from oligarchy to democracy as a game theoretic problem, in which the threat of revolution from below obliged elites to grant democratic rights, in order to make the promise of economic redistribution credible. Neither spends much time on religion.

But an older historical tradition saw the Catholic Emancipation as among the key causes of the constitutional crisis that the British state underwent in the 1820s and 1830s. According to John Derry (1963, 95):

‘The Protestant ascendancy was part of the Constitution: one might say without it the Constitution would never have existed. The Coronation Oath pledged the monarch to maintain the Protestant religion as by law established, while the Act of Settlement ensured a Protestant succession. Both the landed gentry and the commercial classes — as well as the urban mob — believed that if the Protestant ascendancy went the gates were open to unimaginable horrors.”

To understand why this was so, and why Catholic Emancipation paved the way for further liberalization and the rise of liberal democracy, let us revisit the argument of Persecution & Toleration.

The significance of the Protestant Ascendency reflected Reformation England’s Church-State equilibrium. The treatment of Catholics is a canonical instance of what we call condition toleration. Catholicism per se was not illegal, but it was constrained, and these constraints were justified in political terms. Throughout the 17th century, Protestants feared a return of Catholicism which they associated with unrestrained autocratic rule. For Henry Capel MP in 1679:

“From popery came the notion of a standing army and arbitrary power. Formerly the Crown of Spain, and now France, supports the root of this popery amongst us; but lay popery flat and there’s an end of arbitrary government and power. It is a mere chimera without popery”.

It was on these grounds that the Whigs sought to disbar James II from the throne. After the Glorious Revolution, the Toleration Act of 1689 excluded both Catholics and atheists. And famously, the great advocate of religious toleration, John Locke rejected toleration for Catholics, as they were loyal to a foreign prince.

The religious aspect of the Glorious Revolution is neglected in the seminal accounts of it in the political economy and economic history literatures (i.e. here). But the Glorious Revolution settlement did not only guarantee the independence of Parliament from the Crown, it also safeguarded the political position of the Anglican Church by excluding Catholics from positions of power. In return, the Church of England remained the mainstay of state. As J.C.D. Clark (1985, 438) observed:

“The Church justified its established status on a principle of toleration — the toleration of other forms of Trinitarian Christian worship. It drew a sharp distinction between this and the admission of Nonconformists to political power.”

This was particularly significant in Ireland, where the Protestant Ascendency ensured the political and economic dominance of the Anglo-Scottish Protestant elite over the Catholic majority.

Now 18th century Britain was much less reliant on religion to legitimate political authority than prior regimes. As Jared Rubin argues, one consequence of the Reformation was a decline in the legitimizing power of religion; it was superseded by institutions such as parliaments, which represented economic rather than religious elites.

Other things had changed too. The ascendancy of the Church of England was seen as crucial to state security in post-Reformation England. But this was no longer the case by 1800. Following the initial break with Rome in the 16th century, these fears had not been groundless: Protestant Englishmen felt threatened by revanchist Catholic powers such as Spain and France and, in the Gunpowder plot, Catholic conspirators threatened the death of the king and the destruction of Parliament. The fact that the vast majority of Catholics were loyal to crown and country was not enough to alleviate Protestant fears, which occasionally erupted into persecutions, such as those that accompanied the Popish plot.

Following the French Revolution, however, Catholicism was no longer associated with an aggressively expansionist continental power. The old enemy was now secular. Catholic priests fleeing Revolutionary persecution found sanctuary in Britain. And by the 1820s there was a growing pragmatic and liberal opinion in favor of Catholic Emancipation. Lord Palmerston’s argument, as summarized by Frazer (p 157), was that

“. . . times had inevitably changed, and the argument to history could not be sustained: what if Nelson, Fox and Burke had all happened to be Catholics by birth. Would it have been right to deprive the nation of their services?”

Liberal Protestant clergy further argued that

“a Catholic layman who finds all the honor of the state open to him, will not, I think, run into treason and rebellion” (quoted from Frazer, 2018, 158).

Translated into the framework of Persecution & Toleration: the equilibrium had changed. Catholics no longer posed a political threat. The legitimatizing power of the Church of England was waning. Population growth, urbanization — particularly the rise of new urban centers — as well as immigration from Ireland, undermined the ideological hold of the Church of England.

Nevertheless, when the issue finally came to head in 1827–1829, it brought down the government. Catholic Emancipation was the Brexit of its day. When the pro-emancipation George Canning became Prime Minister, its leading opponents, the Duke of Wellington and Robert Peel resigned and the Tory party split into two. Canning then died. But the move towards liberalization now had momentum. Agitation in Ireland raised fears of revolution. In 1828 the Test Act was Repealed. Wellington and Peel reluctantly switched sides. 1829 Catholic Emancipation passed, despite the fact that King George IV disapproved of it.

Thus according to J.C.D. Clark’s insightful (though contested) account:

“As significant were the consequences of Emancipation: the belief that the sovereign would not resist massive constitutional change; and the profound schism which now rent the party of Wellington and Peel” (Clark, 1985, 536).

Catholic Emancipation thus set in motion a more general constitutional revolution. Both Whigs and Tory ultras who opposed Catholic Emancipation lost faith in the existing Parliamentary system. A fundamental pillar of society, the Church-State alliance, had been undermined. It was followed by the Great Reform Act and the rise of liberal democracy. In Clark’s word’s

“. . . the effect of the measures of 1828–1832 was to open the floodgates to a deluge of Whig or radical reform aimed against the characteristics institutions of the former social order . . . English society can point to few events which changed the pattern on the ground with the totality and the dynamism of 1776, 1789 or 1917: 1832 was not such an event. It was, however, decisive in many other ways, for it dealt a death blow to England’s old order. In the process, it produced what in other disciplines is called a ‘paradigm shift’”(Clark 1985, 555–556).

The Institutional Foundations of Antisemitism

Antisemitism has returned to mainstream politics in Europe and America. One fundamental misconception about antisemitism is that it is simply another form of racism. Thus Jeremy Corbyn responds to charges of antisemitism with “ ‘I’ve spent my whole life exposing racism in any form”. But of course, Corbyn is, at the very least, an enabler of antisemitism (and there is evidence he holds antisemitic prejudices himself — see here).

Why is antisemitism different from other forms of racism? And what makes antisemitism unique. When Noel Johnson and I began writing Persecution & Toleration, we didn’t envision antisemitism returning to prominence, but I believe our analysis sheds important insight on the institutional foundations of antisemitism.

Continue reading

Why Persecute?

Why was religious persecution common in the premodern world? This is the question Noel Johnson and I address in Persecution and Toleration.

Answers that rely on the alleged barbarism of the times or the brutality or narrowed-mindedness of individual churchmen or rulers are unsatisfying. We need to understand why religious dissent was so alarming that political and religious authorities resorted to violent repression.

In Persecution and Toleration, we outline why states often had an incentive to enforce religious conformity.

Suppose the ruler wants to pass a law. The religious authority can choose to legitimate this law or to oppose it. If the religious authority opposes it, the law will be seen as illegitimate, and the ruler will face unrest or opposition in attempting to enforce it. If the religious authority legitimates the law, then compliance with the law will be greater and the law will be enforced at a much lower cost for the ruler. Rulers therefore have a good reason to want legitimacy. Because religious authorities were the most powerful source of legitimacy in the premodern period, it was natural for rulers to rely on religious legitimacy.

Rulers can bargain with religious authorities to obtain legitimacy. One way to do this is to enforce religious conformity. This provides a natural framework for studying religious persecutions.

One insight is that persecutions are necessarily political. The justification for persecution can vary. Secular authorities will persecution in terms of secular arguments. Religious authorities may persecute on religious or doctrinal grounds. But structurally these persecutions will resemble one another.

A second key argument is that some form of religious repression was the default in the premodern world but outright persecution was, in fact, quite rare. The default level of religious repression we characterize as a state of conditional toleration. Religious differences were usually tolerated, but only conditionally. Outright persecution was quite rare. But the threat of persecution played an important role in enforcing religious conformity, restricting dissent and providing states with legitimacy.

How general is our account? Is this story only applicable to Western Europe? Or to monotheistic societies? Can it explain the persecution of Christians in pagan Rome or the persecution of Christians in 17th century Japan? And what distinguishes religious persecutions from other persecutions?


To address these concerns, consider the persecution of Christians in the Roman Empire. Historians such as Candida Moss downplay these persecutions (here). Catherine Nixey’s The Darkening Age — reviewed positively in the New York Times —for example, writes:

“The idea, therefore, of a line of satanically inspired emperors, panting for the blood of the faithful is another Christian myth. As the modern historian Keith Hopkins wrote, ‘the traditional question: “Why were the Christians persecuted?” with all its implications of unjust repression and eventual triumph, should be re-phrased: “Why were the Christians persecuted so little and so late?”

Nixey correctly cautions the reader not to view Christian accounts of the death of martyrs as historical accounts. But her argument is a larger one. To her mind, the persecution of Christians was not a religious persecution. Commenting on the Roman governor Pliny’s decision to persecute some Christians, she writes:

“Pliny’s problem with all of this is not religious. He is not upset because Jupiter has been neglected, or Hera has been slighted: he is upset because the citizens of his province are becoming disgruntled by the Christians’ behaviour . . .”

“. . . Even the locals who were forcing Pliny’s hand might not have been complaining about Christians for religious reasons either: it has been speculated that what was really upsetting them was not theology but butchery. Local tradesmen were angry because this surge of Christian sentiment had led to a drop in the sales of sacrificial meat and their profits were suffering: anti-Christian sentiment caused less by Satan than by a slow trade in sausage-meat.”

Because Christians were punished as pests and social deviants, rather than for reasons conventionally identified as religious, Dixey suggests this was a simple matter of“law and order”. If anything her sympathies appear to be with the Roman governor responsible for prosecuting Christians:

“What should Pliny do with these odd people? Trajan’s reply is brief and to the point. He doesn’t get into theological or legal debates about the legal status of Christianity (to the disappointment of later scholars); nor does he (thus confounding the martyrdom tropes) fulminate against the Christians. He does agree with Pliny that those who are proved to be Christian ‘must be punished’ — though for precisely what charge is unclear. He also adds that ‘in the case of anyone who denies that he is a Christian, and makes it clear that he is not by offering prayers to our gods, he is to be pardoned as a result of his repentance however suspect his past conduct may be’. Roman emperors wanted obedience, not martyrs. They had absolutely no wish to open windows into men’s souls or to control what went on there. That would be a Christian innovation.”

This hardly not exculpates the Romans or implies the persecution of Christians was a myth. Nixey is correct that the Roman authorities were unconcerned with what Christians believed. But she is wrong to suppose that this is the defining characteristic of religious persecution. And the urge to downplay the persecution of Christians suggests other anachronistic instincts are at work. After all, no-one denies that Christians were killed, often horrifically, in the Roman persecutions (for a critical review of Moss’s book, on which Nixey relies, see here).

Theologians were, of course, concerned with wrong beliefs. But the reason why religious dissent became a major concern to both secular and religious authorities in medieval Europe was precisely due to the threat heresy posed to the established social and political order.


Consider another example from medieval Europe. Norman Cohn’s Pursuit of the Millennium explains the threat heretical movements posed to political order. Focusing on the most revolutionary millennium sects — movements that envisioned the last days as at hand, and took action to herald their coming — Cohn’s text vividly captures both the appeal as well as the radicalism and violence of these movements. Describing the manifesto of the “Revolutionary of the Upper Rhine”, Cohn writes:

“the route to the Millennium leads through massacre and terror. God’s aim is a world free from sin. If sin continues to flourish, divine punishment will surely be visited upon the world; whereas if sin is once abolished, then the world will be ready for the Kingdom of the Saints. The most urgent task of the Brethren of the Yellow Cross is therefore to eliminate sin, which in effect means to eliminate sinners . . . To achieve that end assassination is wholly legitimate: ‘Whoever strikes a wicked man for his evildoing, for instance for blasphemy — if he beats him to death he shall be called a servant of God; for everyone is in duty bound to punish wickedness.’ In particular the Revolutionary calls for the assassination of the reigning Emperor, Maximilian, for whom he had an overwhelming hatred.”

Such beliefs were a threat to all established authority. Church authorities were naturally concerned with monitoring belief and practice. But heresy also posed a potent threat to secular authority.

Of course, many people in medieval society had incorrect and unorthodox religious beliefs. What principally concerned the Church was not ignorance but heresy: obstinately holding beliefs that directly contradicted Church teachings.

Heresy was feared because it was a source of disorder. Religious dissent had the potential to unleash revolutionary violence and social chaos. This was one reason why Martin Luther recanted his earlier support for religious liberty during the Peasant Revolt.

Arguments for enforcing religious conformity went deeper than the fear of revolutionary violence. Such was the importance of the Church to the social and political order that all challenges to Church authority were perceived as threats to society.


Consider the doctrine of apostolic poverty — which emerged in the 11th and 12th centuries as the Commercial Revolution was transforming the European economy increasing urbanization, trade, wealth, inequality and also poverty. Shocked by the growing gap between the rich and the poor, adherents to this doctrine aspired to the simple poverty of Christ’s followers. They lived without property or money and they were critical of the wealth accumulated by the Church.

The fact that the Church was wealthy did not, of course, imply that Churchmen were not devout or dedicated. The problem was, however, that the Church was also a political institution. Many bishoprics were the preserve of the nobility who would jostle to ensure that their younger sons became influential churchmen. These prelates were expected to be the equal of the secular nobles, to entertain lavishly, and to dress splendidly. Taken too far, therefore, apostolic poverty threatened the legitimacy of the Church and its relationship with secular authority.

Through mendicant orders such as the Franciscans, the Church could accommodate these demands and concerns. But groups who directly attacked the legitimacy of the Papacy itself, such as the Waldensians and the Spiritual Franciscans could not be tolerated. The leader of the Spiritual Franciscans, Angelo da Clareno denied that Pope John XXII was pope, a direct challenge to the legitimacy of the Church. Precisely because of the threat they posed to the church and state alliance — and not because of their theological beliefs, which were unremarkable — the Spiritual Franciscans had to be repressed.

Were the concerns of the Roman Emperors so different from those of medieval rulers and churchmen? Religion was not a private affair in antiquity. It had political consequences; it mattered for the fate of the Empire. The first Empire-wide persecution of Christians occurred under Decius (r. 249–251). Decius’s response to the political crisis facing the Empire — invasions from both Persia and the Goths — was a revival of the state religion and the imperial cult.

Claiming that Roman persecutions of Christianity were not religious but political, as Moss and Nixey do, is misleading; all persecutions are political. Because it began as a persecuted cult, Christianity as a religion contained many potent arguments against religious persecution. For these reasons, it was probably less predisposed to persecution than many other religions. Nevertheless, the fact that the medieval Church eventually came to persecute dissent points to deep, structural, political economy factors that made religious freedom impossible. It this these factors that are the subject matter of Persecution & Toleration.

Persecution & Toleration

I’m glad to announce that my new book, Persecution & Toleration (with my colleague Noel Johnson) is now available in the UK.  I’m hoping to receive copies next week. The book is available at CUP, although Amazon still has a US release date of April (you can preorder it).

The blurb is below:

Religious freedom has become an emblematic value in the West. Embedded in constitutions and championed by politicians and thinkers across the political spectrum, it is to many an absolute value, something beyond question. Yet how it emerged, and why, remains widely misunderstood. Tracing the history of religious persecution from the Fall of Rome to the present-day, Noel D. Johnson and Mark Koyama provide a novel explanation of the birth of religious liberty. This book treats the subject in an integrative way by combining economic reasoning with historical evidence from medieval and early modern Europe. The authors elucidate the economic and political incentives that shaped the actions of political leaders during periods of state building and economic growth.

‘A profound new argument about the relationship between political power and religion in the making of the modern world. If you want to know where the liberty you currently enjoy, for now, came from, this is the book to read.’ James Robinson, Richard L. Pearson Professor of Global Conflict, University of Chicago

‘Johnson and Koyama investigate the fascinating intersection of the state and religion in late medieval and early modern Europe. Rather than enduring patterns of religious toleration or persecution, of liberty or tyranny, they tell a rich history of change and variation in rules, institutions, and societies. This is an important and persuasive book.’ John Joseph Wallis, Mancur Olson Professor of Economics, University of Maryland, College Park

‘Lucidly written, incisively argued, this book shows how religious toleration emerged not only from ideas, but also from institutions which motivated people – especially the powerful – to accept and act on those ideas. A brilliant account of early modern Europe’s transition from identity-based privileges to open markets and impartial governance.’ Sheilagh Ogilvie, University of Cambridge

‘This analysis of the historical process underlying the modern state formation is a fantastic scholarly accomplishment. The implications for the present, in terms of the risks associated to the loss of the core liberal values of modern western states, will not be lost to the careful reader.’ Alberto Bisin, New York University

 

Forging ahead, falling behind and fighting back: British economic growth from the industrial revolution to the financial crisis

Nick Crafts can be viewed as the doyen of British economic history. His major publications date back to the 1970s – a favorite of mine is this piece from 1977 on the role played by chance in determining whether the Industrial Revolution would occur in England or France.  He is also the joint author of the Crafts-Harley interpretation of the Industrial Revolution.  But, perhaps because the majority of his research focuses on British economic history, he remains highly underrated outside of the UK.  His new book Forging ahead, falling behind and fighting back: British economic growth from the industrial revolution to the financial crisis summarizes much of his research.

I’ve reviewed it for the Economic History Review. But given the whims of academic publishing, it may be a long time until my review appears in print so I’ve decided to post a preview of my draft below.

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Why was Britain the first industrial nation and the workshop of the world? Why was it eventually caught up and overtaken? Why once it had fallen behind the United States, did it fall further behind its European rivals in the Post-War period? And how did it recover its relative position in the 1980s and 1990s? All these questions are addressed in Nicholas Crafts’s slim new book.

In Forging ahead, falling behind and fighting back, Crafts provides a macroeconomic perspective on the British economy from 1750 to today. The word macro is advisory. Crafts surveys the British economy from 1000 feet, through the lens of growth theory and growth accounting. The upside of this approach is that he delivers a lot of insight in a small number of pages. Readers looking for discussions of individual inventors, innovations, politicians, or discussion of specific policy decisions can look elsewhere.

The first part of the book provides an overview of the Crafts-Harley view of the British Industrial Revolution. This view emphasizes the limited scope of economic change in the early 19th century. On the eve of the Industrial Revolution, the British economy already had a comparatively modern structure, with many individuals working outside agriculture. Growth between 1770 and 1850 was highly reliant on a few key sectors and TFP growth was modest (0.4% a year). Most workers remained employed in traditional sectors of the economy. It took until the second half of the 19th century for the benefits of steam, the general purpose technology of the age, to fully diffuse through the economy. Nonetheless, from a long-run perspective, the achievements of this period, a small but sustained increases in per capita GDP despite rapid population growth, were indeed revolutionary.

An important theme of the book is institutional path dependency. Characteristics of Britain’s early position as an industrial leader continued to shape its political economy down to the end of the 20th century. Crafts mentions two interesting instances of this. First, Britain’s precocious reliance on food imports from the early 19th century onwards left a legacy that was favorable of free trade. Elsewhere in the world democratization in the late 19th century often led to protectionism, but in Britain, it solidified support for free trade because, after the expansion of the franchise, the median voter was an urban worker dependent on cheap imported bread. Second, industrial relationships were shaped the nature of the economy in the 19th century. Britain thus inherited a strong tradition of craft unions that would have consequences in conflicts between labor and capital in the 20th century.

The second part of the book considers the late Victorian, Edwardian, and inter-war periods. It was in the late 19th century that the United States overtook Britain. A venerable scholarship has identified this period as one of economic failure. Crafts, however, largely follows McCloskey in exonerating Edwardian Britain from the charge of economic failure. The presence of fierce competition limited managerial inefficiencies in most areas of the economy; though there were notable failures in sectors where competition was limited such as the railways. The main policies errors in this area were thus ones of omission rather than commission: more could have been done to invest in R&D and support basic science – an area where the US certainly invested in more than the UK.

The seeds of failure, for Crafts, were sown in the interwar period. Traditionally these years have been viewed relatively favorably by economic historians, as the 1930s saw a shift away from Industrial Revolution patterns of economic activity and investment in new sectors. However, in a comparative light, TFP growth in the interwar period was significantly slower than in the US. The new industries did not establish a strong export position. This period also saw the establishment of a managed economy, in which policymakers acceded to a marked decline in market competition. Protectionism and cartelization kept profits high but at a cost of long-run productivity growth that would only be fully revealed in the post-war period.

Most economic historians view the postwar period through the lens of Les Trente Glorieuses. But in Britain, it has long been recognized that this was an era of missed opportunities. Simple growth accounting suggests that Britain underperformed relative to its European peers. Thus though the British economy grew faster in these years than in any other period; it is in this period that Britain’s relative failure should be located.

Crafts examines this failure using insights from the literature on “varieties of capitalism” which contrasts coordinated market economies like West Germany with liberal market economies like the United States or Britain. In the favorable conditions of postwar recovery and growth, coordinated market economies saw labor cooperate with capital enabling both high investment and wage restraint. Britain, however, lacked the corporatist trade unions of France or West Germany. As a legacy of the Industrial Revolution, it inherited a diverse set of overlapping craft unions which could not internalize the benefits of wage restraint and often opposed new technologies or managerial techniques. Britain functioned as a dysfunctional liberal market economy, one that became increasingly sclerotic as the 1960s passed into the 1970s.

An important insight I got from this book is that government failure and market failure are not independent.  Examples of government failure from the postwar period are plentiful. Industrial policy was meant to “pick winners.” But “it was losers like Ross Royce, British Leyland ad Alfred Herbert who picked Minsters” (p. 91). Market power became increasingly concentrated. Approximately 1/3 of the British economy in the 1950s was cartelized and 3/4 saw some level of price fixing. Britain’s exclusion from the EEC until the 1970s meant that protective barriers were high, enabling inefficient firms and managerial practices to survive. High marginal rates of taxation and weak corporate governance encouraged managers to take their salary in the form of in-kind benefits, and deterred innovation. Labor relations became increasingly hostile as the external economic environment worsened following the end of Bretton Woods.

Britain recovered its relative economic position after 1979 through radical economic reforms and a dramatic shift in policy objectives. Though of course, the Thatcher period saw numerous missteps and policy blunders, what Crafts argues was most important was that there was an increase in product market competition, a reduction in market distortions, and a reduction of trade union power, factors provided the space that enabled the British economy to benefit from the ICT revolution in the 1990s.

Rarely does one wish a book to be longer. But this is the case with Forging Ahead, Falling Behind, and Fighting Back. In particular, while a short and sharp overview of the Industrial Revolution is entirely appropriate, given the number of pages written on this topic in recent years, the last part of the book does need extra pages; the argument here is too brief and requires more evidence and substantive argumentation. One wishes, for instance, that the theme of institutional path dependency was developed in more detail. Despite this, Forging Ahead, Falling Behind, and Fighting Back is a notable achievement. It provides a masterly survey of British economy history tied together by insights from economic theory.

Conservative Parties and the Birth of Democracy

Understanding how political parties function is an area where recent research in political science has contributed major insights. Political parties are a fairly recent phenomenon. Prior to the 19th century, there were factions and loose groupings – the Optimates and Populares in Republican Rome, Tories and Whigs in late 17th century England, and Girondins and Jacobins in the French Revolution – but not organized parties. They were looser groupings that centered around dominant individuals – a Marius or Sulla, a Lord Shaftsbury, or a Brissot or Robespierre; but not parties with structured platforms and a deep well of local support.

I recently reviewed Daniel Ziblatt‘s recent book Conservative Parties and the Birth of Democracy for the Journal of Economic History (gated and ungated). Ziblatt provides new insights into the key role played by conservative parties in the formation and stabilization of democracy in Western Europe. Ziblatt’s thesis is that where conservative parties were able to become entrenched and organized political forces, the prospects for liberal democracy were fairly good. But where conservative parties remained weak, democracy was likely to remain poorly institutionalized. Under these circumstances, elites simply had too much to lose from acquiescing in universal suffrage.

Ziblatt contrasts the fate of England where a popular conservative party did take on solid roots in the late 19th century with that of Germany. As I write in my review:

“The central insight Ziblatt emphasizes throughout is game theoretic: the absence of a party to organize around meant that economic elites lacked the ability to strategically defend their interests and hence became willing to ally with any forces that might help them protect their property. While in Britain, the well-institutionalized Parliamentary Conservative party moderated and sidelined the more reactionary and xenophobic elements in British life, the absence of such a strong party meant that in Germany, the right tended towards antisemitism and other forms of extremism . . . “

“. .  . Stable and lasting democratization required “buy-in” from old regime elites and this buy-in can only occur if there are institutional mechanisms in place that are capable of assuaging their fears and moderating the influence of extremists. In late 19th and early 20th century Europe, strong professional conservative parties served this purpose. In the absence of such a party the transition to democracy will likely be temporary and unstable.”

Do read the full review.