1688 and all that: Property rights, the Glorious Revolution and the rise of British capitalism

Abstract

In a seminal 1989 article, Douglass North and Barry Weingast argued that by making the monarch more answerable to Parliament, the Glorious Revolution of 1688 helped to secure property rights in England and stimulate the rise of capitalism. Similarly, Daron Acemoglu, Simon Johnson, and James Robinson later wrote that in the English Middle Ages there was a “lack of property rights for landowners, merchants and proto-industrialists” and the “strengthening” of property rights in the late 17th century “spurred a process of financial and commercial expansion”. There are several problems with these arguments. Property rights in England were relatively secure from the 13th century. A major developmental problem was not the security of rights but their feudal nature, including widespread “entails” and “strict settlements”. 1688 had no obvious direct effect on property rights. Given these criticisms, what changes promoted the rise of capitalism? A more plausible answer is found by addressing the post-1688 Financial and Administrative Revolutions, which were pressured by the enhanced needs of war and Britain’s expanding global role. Guided by a more powerful Parliament, this new financial system stimulated reforms to landed property rights, the growth of collateralizable property and saleable debt, and thus enabled the Industrial Revolution.

The legacy of representation in medieval Europe for incomes and institutions today

“…3 Indeed, the North and Weingast (1989) thesis has, in its purest form, found itself as odds with historians arguing that the constitutional adjustments following the Glorious Revolution were conservative: they generally reestablished property rights in ways consistent with pre-Stuart times (e.g., Scott, 1991;Jones, 1992;Morrill, 1992;Trevor-Roper, 1992;Nenner, 1997;Pincus, 2009;Ogilvie & Carus, 2014). Though he agrees with these critiques, Hodgson (2017) argues that while "North and Weingast claim[] that 1688 secured property rights led to the rise of finance; instead […] the rise of finance stimulated the greater use of property as collateral for borrowing and financing investment" (p. 84), taking this to mean that the "evidence undermines the claims of North and others concerning the economic consequences of the Glorious Revolution […] is a step too far […;] rather "1688 triggered a series of events that prepared the ground for the take-off [in economic growth] after 1760" (p. 92).…”

Employment preservation and textile regulation in early modern England, 1550–1640

“…Similarly, Pincus and Robinson (2014) argued that the Glorious Revolution was an institutional watershed, in part, because it enabled ‘party ministries [who] depend on public support…rather than the king [to] set the economic agenda’, and ‘property rights might have become a lot less secure’ had this shift in power not occurred. Hodgson (2017) argued the Glorious Revolution ‘triggered a series of events that prepared the ground’ for changes to financial institutions that enabled the country's economic ‘take-off after 1760’. Lastly, Broadberry et al .…”