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Germany

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Germany’s role in the book’s account of European transformation is defined by uneven exposure to French power: French control weakened feudal obligations and guild restrictions in some regions, but its reach varied, and reforms could be reversed. The Rhineland offers the clearest example of how conquest changed institutions—and of how those changes helped shape the conditions for industrialization.

Before French Rule

Across the German lands, economic and social life remained constrained by older arrangements. In eastern regions, including Prussia and the Hungarian part of Austria-Hungary, serfs were bound to the land. In western territories, peasants faced seigneurial fees, taxes, and labor obligations. In Nassau-Usingen, the book notes, they were subject to 230 different payments, dues, and services, including levies associated with slaughtered animals, bees, and wax; property sales also generated fees for the lord.

Urban economic activity faced its own barriers. Guilds regulated a wide range of trades and were often stronger in these territories than in France. In Cologne and Aachen, guilds blocked the adoption of spinning and weaving machines. The contrast mattered because these restrictions impeded technological change and economic entry, while a number of cities—from Berne to Florence—were controlled by a few families. The book thus depicts German territories not as a uniform political unit, but as a landscape of local privileges and unequal constraints.

The Rhineland under French Control

The French Revolutionary Armies and, later, Napoleon carried institutional reforms into territories they conquered. In 1795, France secured control of the Rhineland, the western part of Germany on the left bank of the Rhine, after Prussia recognized the situation in the Treaty of Basel. France held the region from 1795 to 1802, when it was officially incorporated into France.

French rule formed part of a wider effort to break the institutions of the old order: feudal land relations were ended, guilds abolished, and equality before the law imposed. Napoleon sought firm control over conquered lands, sometimes relying on local elites or placing family members and associates in authority, but he also continued the Revolution’s reforms. His Code Napoleon codified Roman law and legal equality, and he wanted it applied throughout the territories under French control.

Reversals and Lasting Effects

The reforms did not endure everywhere. In Hanover, old elites were restored soon after Napoleon’s fall, undoing much of what the French had achieved. Elsewhere, however, feudalism, guilds, and aristocratic power were permanently destroyed or weakened, and the Code Napoleon remained in force in some places even after French withdrawal.

The book’s larger comparison turns on the unevenness of conquest. French armies brought suffering, but they also altered the institutional landscape; by the middle of the nineteenth century, industrialization was rapidly advancing in many places the French had controlled. Austria-Hungary and Russia, which the French did not conquer, remained largely stagnant, as did Poland and Spain, where French control was temporary and limited. Germany’s experience therefore appears not as a single, uniform transformation, but as a regional process in which the duration and reach of French rule helped determine whether institutional change took hold.