1 Positive Feedback and Virtuous CirclesEngland, France, Russia and the US

2 Preview English Civil War and the waning of monarchyThe Black Act and the rule of law The slow march of democracy (inclusion), England France Russia Inclusion and exclusion in the US Positive feedback and virtuous circles

3 English Civil War and the waning of monarchy: 1640-1649, 1649-1660, 1688-After Charles I banned Parliament in 1629, he tried to reconvene Parliament in 1640 to raise taxes to finance royal wars and an military operations in Ireland and Scotland. But parliamentarians rejected approval of new taxes and were hostile to the king’s religion as well. Parliamentarians also rejected royal approval of publishing, and started their own printing presses. Civil war started in 1642 and lasted for 7 years. It involved many atrocities and religious fundamentalism, not unlike modern civil wars. See

4 English Civil War and the waning of monarchy: 1640-1649, 1649-1660, 1688-But after a decade of rule by Parliament ( ), Charles II gained power from But Parliamentarians then regained power in 1688 and the monarch’s power was significantly limited.

5 The Black Act and the rule of lawSeveral decades later, in 1723, the Whig government in Parliament passed the Black Act, which stipulated that aristocratic judges, not the monarch, had to prosecute and try the accused in a court, and in particular, those accused of painting their face black and stealing. This (rule of) law was in contrast to the divine right of kings that had been used under the monarchy. Subjective rule or the divine right of kings was viewed as backward and against the interests of landed elites.

6 The Black Act and the rule of lawOn November , John Huntridge was accused of aiding deer thieves. According to the Act, Mr. Huntridge was prosecuted by the Regency Council of Lords Justices. The jury found Mr. Huntridge innocent, partly on procedural grounds because of irregularities in the collection of evidence. The aristocrats decided to follow the rule of law, rather than presume guilt.

7 The slow march of democracy (inclusion)The power of courts to interpret laws and the corresponding rule of law grew slowly in the UK and other countries. Emancipation, voting rights and property rights occurred gradually from 1600 onward.

8 The slow march of democracy (inclusion)The political and economic “inclusion” process was often bloody. The UK, France, the US suffered from periodic bouts of social unrest and violence. The French revolution occurred in 1789, after which the Reign of Terror occurred and Napoleon’s dictatorship. Widespread social unrest occurred in Britain periodically during The US had a civil war from and periodic labor riots in the 1800s and 1900s.

9 The slow march of democracy (inclusion)New technologies in agriculture, transportation and communication changed the balance of economic, social and political power. Economic, social and political groups could respond with either peaceful or violent demands for change. Governments could respond with either reform or violent repression. Wars (civil or foreign) also were an impetus for change.

10 The slow march of democracy (inclusion)Thus, “revolutions” can be either violent or non-violent. And they can be caused by reform from the top or demands for reform (protests) from the bottom. In the worse case, demands for reform from the bottom can be violent and can be met with violence and repression.

11 The slow march of democracy (inclusion)In Britain during the early 1800s, the ruling elites chose reform from the top to avoid or to reduce protests and violence from the bottom.

12 The slow march of democracy (inclusion)Reforms in voting rights, taxation, education and tariffs occurred incrementally and gradually during several decades: First Reform Act in 1832 increased suffrage from 8% to about 16% of adult males and reformed districting to make voting more fair for the poor. Slavery was abolished in 1834. Chartist movement in 1838 enacted a secret ballot and annual parliamentary elections and ended the requirement for land ownership to run for parliament.

13 The slow march of democracy (inclusion)Corn Laws were repealed in 1846, which had banned imports of grain (corn). This helped consumers and hurt domestic farmers/landowners. Landowners were becoming less powerful as the economy increasingly shifted to manufacturing, commerce and finance. Second Reform Act of 1867 increased electorate to 32% of adult males, and prohibited “treating” or buying votes. Third Reform Act of 1884 increased the electorate to 60% of adult males. Representation of the People Act of 1918 allowed all males older than 21 and women 30 years or older who were taxpayers or married to taxpayers to vote. Parliament enacted these reforms in response to the sacrifices of fighting the Great War and worries about a communist revolution.

14 The slow march of democracy (inclusion)All women 21 or older were given the right to vote in 1928. The Education Act of 1870 committed the government to universal education, and primary and secondary education became free in1891. Education was required until 11 years old in 1893 and 12 years old 1899. The Education Act of 1902 increased resources for schools. The value of taxes relative to income from domestic production more than doubled from , and then doubled again from The tax system also became more progressive during this time.

15 The slow march of democracy (inclusion)Because changes were incremental, those in power had to cede power only incrementally. Because losses in power were incremental, those in power were willing to compromise. Using repression was unattractive and difficult because changes were incremental. technologies and commerce made access of resources more diffuse. Diffuse access to economic resources and free markets are supposed to be more efficient for society, allowing more people to pursue their economic interests and to profit and to innovate (create new technologies).

16 The slow march of democracy (inclusion)In contrast, the French Revolution of 1789 deposed the monarch and tried to revolutionize society quickly. Like in England from , widespread violence and civil war soon resulted from 1792–1797. See https://www.youtube.com/watch?v=-SP4iii_THQ from 3:42 to 8:50, 15:25 to 17:25, 20:36 to 29:26, 33:07 to 35:30, 55:31 to 1:08:29 and 2:05:52 to 2:10:17. Because of anarchy, a military dictatorship or monarchy was re- established from , , and from In 1870, the monarchy was deposed and the French Third Republic was established.

17 The slow march of democracy (inclusion)Likewise, the Russian revolution of 1917 deposed the monarchy in an attempt for reform, but violence soon resulted. The monarch tried democratic reforms in 1905 after protests by workers, farmers and soldiers. A multi-party parliament (Duma) was created and a year later a constitution was ratified. In 1917, more violent revolts occurred because of the costs of the Great War and food shortages. More serious democratic reforms were tried in March and the monarch was removed from power. But with little perceived progress, the communists enforced more radical changes as violence spread. However, the communists soon became more violent than the old elite. See

18 The slow march of democracy (inclusion)Fighting for power involves risk and costs, so that there must be large potential losses or gains in power before people are willing to accept those risks and costs. But why did England (and the US) experience a diffusion of economic and political power but not France, Russia, Germany, Japan, Spain, Portugal and Italy?

19 Inclusion and exclusion in the USLike in Britain, economic and political power were also fairly diffuse in the US in the early 1800s. By the middle of the 1800s, all white males could vote in the US, and the economy was fairly competitive and free, based on agriculture, forestry and commerce. The US was established without a historical political elite, and its Constitution was based on the idea of political equality, at least for white males. Ownership of land was not a requirement to vote. And land was freely available to white settlers. The Homestead Act of 1862 made frontier land available to any settlers.

20 Inclusion and exclusion in the USHowever, slavery was formally abolished only in 1865, after a costly civil war. Some liberal legislation was passed during the Reconstruction period from , but segregationist “Jim Crow” legislation soon replaced the spirit of these laws and effectively re-imposed a de facto system of forced labor without political rights. For example, although blacks could vote for a few years after 1865, the elites soon rescinded voting rights and imposed other unfair laws on blacks and other minorities. After 1877, the Southern elite had introduced poll taxes and literacy tests for voting, which systematically disenfranchised blacks, and often also the poor white population.

21 Inclusion and exclusion in the USShare cropping agriculture—agriculture with low wages and without land ownership—persisted, both among poor whites and blacks. Share cropping agriculture in the South was maintained through a variety of channels, including both control of local politics and the exercise of violence. Other examples include Alabama’s 1865 Black Code, a vagrancy law and a law against the “enticement” of laborers to move away from their former slave masters. Thus, the US South remained an effective apartheid society until the 20th century, not unlike Zimbabwe in the early and middle 20th century, which we consider below.

22 Inclusion and exclusion in the USAlso, economic power became more concentrated after 1865. Class inequality, independent of race, increased from As railways, manufacturing and commerce expanded, monopolies were formed through consolidation and intimidation. By the 1890s, monopolies or “trusts” dominated most industries and income inequality increased.

23 Inclusion and exclusion in the USTo promote more competition and economic “inclusion”, the Interstate Commerce Act of 1887 created the Interstate Commerce Commission was passed, requiring that state-level monopolies compete more. the Sherman Antitrust Act of 1890, as the name implies, was passed to break up trusts on a national level.

24 Inclusion and exclusion in the USPopulist or Progressive movements tried to resist economic “exclusion” monopolies and income inequality. The populist movement emerged from Midwestern farmers during the 1870s, who were interested in fighting the monopsony power of railroad in grain markets. In the 1892 election, the People’s Party received 8.5% of the vote. In 1896 and 1900 the Progressive candidate William Jennings Bryan led the mainstream Democratic Party, although Mr. Jennings lost both times to the Republican candidate.

25 Inclusion and exclusion in the USNonetheless, the Republican Theodore Roosevelt also adopted some populist measures when he became president in 1901. Mr. Roosevelt help to end a strike by the United Mine Workers in by securing more pay and fewer hours for the workers. He passed the Meat Inspection Act of 1906 and the Pure Food and Drug Act of 1906 to protect consumers. The first Act banned misleading labels and harmful preservatives for meat, and the second Act similarly banned food and drugs that falsely labeled or impure.

26 Inclusion and exclusion in the USIn 1902, Mr. Roosevelt used the Sherman Antitrust Act to break up the financial institution called the Northern Securities Companies. The Administration also brought cases against DuPont, the American Tobacco Company, the Standard Oil Company. Mr. Roosevelt strengthened the Interstate Commerce Act of with the Hepburn Act of 1906, which increased the powers of the Interstate Commerce Commission to enforce interstate commerce.

27 Inclusion and exclusion in the USMr. Roosevelt’s successor, William Taft, prosecuted trusts even more, and broke up the Standard Oil Company in 1911. Mr. Taft also promoted the national income tax, which was enacted with the ratification of the 16th amendment in 1913. Mr. Taft’s successor, Woodrow Wilson, advocated the Clayton Antitrust Act, which was passed in 1914. Mr. Wilson thereafter created the Federal Trade Commission to enforce the interstate competition according to the Clayton Antitrust Act. See https://www.youtube.com/watch?v=_2MPY__3xHw

28 Positive feedback and virtuous circlesInclusive economic and political institutions do not emerge automatically. They are usually constructed as a compromise among people with power—some of whom resist change and others who wish to promote change in their favor. The change itself can come from different sources, such as war or other violence, technological innovations, natural disasters, such as famines or floods, or discovery of new natural resources (and particularly in the days of colonialism, land). The outcomes of revolution and more mundane political conflicts are never certain and path of history is contingent.

29 Positive feedback and virtuous circlesNevertheless, once in place, inclusive economic and political institutions can be more secure because of a human tendency to use precedence. Secondly, it is more difficult to usurp power when power is already diffuse throughout society than to maintain power when it is already controlled by an elite. Yet, a new leader of concentrated power can easily replaced the old leader through a coup. Thirdly, pluralist institutions need to interact with each other through mutually acceptable (objective) rule of law. Fourthly, inclusive political institutions support and are supported by inclusive economic institutions and the free communication of information and ideas (the press).

30 Positive feedback and vicious circlesUnfortunately, positive feedback also occurs with non-inclusive institutions: