Absolutism

Absolutism is a political arrangement in which rulers exercise power without effective constraint by law or by the wishes of others, ordinarily relying on a small elite to sustain their position. Its significance lies not simply in the concentration of authority but in the way that authority shapes economic life: where rulers can control institutions, they can restrict property rights, competition, and innovation to protect their power, even at the cost of wider prosperity. The cases considered here also show that absolutism was neither uniform nor inevitable; political conflict could limit it, while fear of losing power could preserve it across very different societies.

Definition and Institutional Logic

Absolutist rule is not the same as a state having the capacity to govern. The defining feature is the absence of effective constraints on the ruler, not merely the presence of centralized authority. In practice, even an absolutist depends on a small group or elite; the political system is organized around preserving the power of this narrow circle rather than enabling broad participation. In nineteenth-century Russia, for example, the tsars were supported by a nobility representing about 1 percent of the population, while political representation and Parliament were absent.

The economic consequences follow from this political structure. Extractive political institutions are connected to extractive economic institutions because those who control the state can shape markets and property rights to preserve their position. Policies that could promote growth may also redistribute income and power, leaving a predatory ruler or politically powerful group worse off. The choice to obstruct economic change can therefore be politically intelligible even when it impoverishes the wider population. In the same way, advice about more efficient policy will not necessarily change outcomes if the institutions and incentives confronting rulers reward the preservation of power instead.

Contrasting Paths in England and Europe

The English struggle against absolutism unfolded through repeated reversals. Under Oliver Cromwell, Parliamentarians defeated the Royalists, and Charles I was tried and executed in 1649. But abolishing the monarchy did not create inclusive institutions: Cromwell’s dictatorship replaced royal rule. After his death, the monarchy returned in 1660, and Charles II pursued the creation of absolutism. His brother James II, who came to the throne in 1685, intensified that effort. His attempt to reestablish absolutism in 1688 brought another crisis and civil war.

The settlement after 1688 shifted authority toward Parliament. William abandoned practices associated with earlier kings, including interference in legal decisions and the claim to customs revenues for life. The political change did not depend solely on a new formal enforcement mechanism; Parliament had become powerful enough that the king no longer exercised those practices. With the 1707 union of England and Scotland, Parliament’s control of state policy extended across Great Britain. Many members had investments in trade and industry, giving them a strong interest in secure property rights. Parliament also became more willing to raise taxes and spend public money on purposes it valued, especially strengthening the navy to protect overseas commercial interests.

The wider European comparison makes clear that absolutism could take forms other than personal monarchy. In Poland-Lithuania, the Szlachta, an elite powerful enough to introduce elections for kings, ruled over a largely rural society dominated by serfs, whose movement and economic opportunities were restricted. This was not the absolutism of Louis XIV, but it remained an extractive political order. In Russia, Peter the Great consolidated an even more intense and extractive absolutism. Such arrangements could endure despite economic stagnation, but they also constrained the institutions and incentives needed for industrial development.

France and the Revolutionary Break

Before 1789, France had been ruled for three centuries by an absolutist monarchy. Society was divided into three estates: the nobility, the clergy, and everyone else. The First and Second Estates enjoyed rights denied to the Third Estate and were exempt from taxes, while ordinary citizens bore several kinds of taxation. The Church owned extensive land and could levy taxes on peasants; meanwhile, the monarch, nobility, and clergy enjoyed luxury as much of the Third Estate lived in poverty. These unequal rules entrenched economic advantage as well as political privilege.

The French Revolution arose from a confluence of factors, including the pressures associated with Britain’s rapid industrialization and the failure of several efforts by the monarchy to stabilize its regime. Its path was contingent: in 1789, its eventual success in transforming France and influencing Europe was not self-evident. The revolutionary period brought violence, suffering, instability, and war, but it also began an irreversible movement away from absolutism and extractive institutions. The change ultimately culminated in the Third Republic in 1870, with a parliamentary system comparable in important respects to the political direction set in motion in England after the Glorious Revolution.

The contrast mattered for industrialization. The end of absolutism in France opened a path toward more inclusive institutions and rapid economic growth. More broadly, the Industrial Revolution became a critical juncture: societies that allowed and encouraged people to invest in new technologies could grow quickly, while extractive regimes often failed to provide those incentives or actively obstructed change. Absolutist control in Spain and Ethiopia had weakened economic incentives long before the nineteenth century; Austria-Hungary, Russia, the Ottoman Empire, and China likewise illustrate how fear of creative destruction could limit economic progress.

Empires, Reform, and Resistance to Change

In China, strong absolutist government coexisted with a history of naval power and long-distance trade. The central political problem, in this account, was not a lack of earlier commercial activity but the decision by Ming emperors in the late fourteenth and early fifteenth centuries to turn away from the oceans. Expanded trade and the creative destruction it might bring were seen as potential threats to the rulers’ position. In India, institutional drift followed a different course: a rigid hereditary caste system constrained markets and the movement of labor between occupations, while Mughal rulers maintained another strong form of absolutism. Indian merchants still traded across the Indian Ocean, and a substantial textile industry developed, but caste restrictions and centralized rule limited economic possibilities.

The Ottoman Empire provides a further example of absolutist rule joined to extractive institutions. After the Ottomans captured Constantinople in 1453, it became their capital; their rule later extended across much of the Middle East and North Africa. The sultan was accountable to few and shared power with none. In the nineteenth century, Ottoman reformers tried to reverse tax farming and bring locally autonomous groups under control. They also discussed private property rights in land as a way to raise agricultural productivity. Yet the desire to retain political control and taxation helped preserve the status quo, while elite fears of economic or political loss obstructed reform. Absolutism persisted until the empire collapsed at the end of the First World War. After European rule ended, independent elites in parts of the region took over extractive colonial institutions, continuing patterns of concentrated power in altered forms.

The Ottoman resistance to printing illustrates how control over knowledge could serve the same institutional logic. Books could spread useful ideas, but they could also circulate challenges to the social and political order and weaken elites who controlled oral knowledge. Because literacy made knowledge accessible beyond those elites, the sultans and religious establishment feared the creative destruction that wider access could bring. Their response was to forbid printing. The broader point is that opposition to innovation was not simply a failure to recognize its possible economic value; it could be a means of defending control.

Law, Constraint, and the Limits of Absolutism

The concept of the rule of law marks an important boundary between constrained power and rule by a powerful individual or group. After the Glorious Revolution, the Black Act showed that even political elites could face constraints when attempting to use law repressively. A harsh statute could be passed, but its implementation was not simply a matter of political command: common people had rights to a fair trial, and the law could not legitimately be applied selectively. The account stresses that rule of law differs from rule by law, in which legal instruments serve power without requiring equal treatment.

The rule-of-law ideal acquired force through practice, not declaration alone. In the Black Act episode, the jury that acquitted Huntridge consisted of major landowners and gentry who might have been expected to sympathize with Walpole. Yet the political and legal world had changed: it was no longer the seventeenth-century setting in which the Court of Star Chamber could act openly for Stuart monarchs or kings could remove judges whose decisions displeased them. The law remained on the statute books until 1824, and many accused people were hanged or transported, but the acquittal demonstrated that enforcement could not be assumed to follow elite wishes.

Pluralistic institutions and equal application of law can reinforce one another. Pluralism makes it harder for a dictator, faction, or even a well-meaning president to concentrate power; the ability to resist such an attempt is a measure of pluralism itself. When no individual or group stands above the law, political opponents and ordinary people alike have grounds to contest arbitrary enforcement. This contrasts sharply with systems in which formal legal remedies coexist with practical impunity. In Mexico, for instance, challenges to Telmex’s monopoly were unsuccessful despite the Mexican Competition Commission’s 1997 finding that Telmex held substantial monopoly power in local and long-distance telephony. Telmex and its owner could invoke the amparo, a petition arguing that a particular law did not apply to them, and regulatory efforts to limit the monopoly came to nothing.

Persistence and Political Stakes

Absolutism’s persistence is best understood through the distribution of power, rather than as a simple consequence of ignorance or bad advice. Ghana’s economically irrational projects—including a footwear factory undermined by poor siting and a mango cannery located where mangos did not grow, with planned output exceeding world demand—were not explained by the absence of informed counsel. Kwame Nkrumah had advisers who knew the policies were unsound. The projects helped him buy political support and sustain an undemocratic regime. The obstacle to better economic policy was therefore the political incentive to preserve rule, not merely a lack of economic knowledge.

The same conflict appears in the question of why a ruler would not simply make the whole country richer and then take a larger share. Greater prosperity can create new wealth, but growth-promoting institutions can also redistribute income and political power in ways that make a predatory dictator and other powerful groups worse off. For the people subject to the regime, the result can be persistent poverty; for the rulers, blocking change can remain a rational defense of their position.

Nor does the end of formal colonial rule necessarily end extractive arrangements. In Argentina, a party that had once cultivated the labor movement as its political base later shifted toward buying votes from other groups as labor was weakened by military repression. Economic policies and institutions were directed toward supporters rather than a level playing field. When President Menem faced a term limit in the 1990s, he rewrote the constitution to remove it. The account treats El Corralito as another instance in which an elected government could override property rights and expropriate citizens without effective checks. These examples show that absolutism is not confined to a crowned monarch: concentrated executive power and weak pluralism can reproduce its defining effects under other political forms.

The recurring issue is whether institutions can constrain those who hold power and allow economic and political change without making the gains depend on elite permission. Absolutist systems suppress that possibility when innovation, wider participation, or secure property rights threaten the existing distribution of authority. Their history is therefore not just a catalogue of strong rulers. It is a sequence of conflicts over who may make decisions, whose rights the law protects, and whether prosperity can develop without undermining the interests of those who govern.