Napoleonic Reforms and Future Economic Growth

The Consequences of Radical Reform: the French Revolution is a 2009 paper by economist Daron Acemoglu and three colleagues.

The French Revolution of 1789 had a momentous impact on neighboring countries. The French Revolutionary armies during the 1790s and later under Napoleon invaded and controlled large parts of Europe. Together with invasion came various radical institutional changes. French invasion removed the legal and economic barriers that had protected the nobility, clergy, guilds, and urban oligarchies and established the principle of equality before the law. The evidence suggests that areas that were occupied by the French and that underwent radical institutional reform experienced more rapid urbanization and economic growth, especially after 1850. There is no evidence of a negative effect of French invasion. Our interpretation is that the Revolution destroyed (the institutional underpinnings of) the power of oligarchies and elites opposed to economic change; combined with the arrival of new economic and industrial opportunities in the second half of the 19th century, this helped pave the way for future economic growth. The evidence does not provide any support for several other views, most notably, that evolved institutions are inherently superior to those 'designed'; that institutions must be 'appropriate' and cannot be 'transplanted'; and that the civil code and other French institutions have adverse economic effects.

This paper has been very much discussed over the past decade, mostly at the theoretical level of designed systems imposed from the outside vs. locally evolved "organic systems." 

On the one hand, I applaud economists for seeking out actual historical data rather than just looking at models. On the other, I doubt the available data really answers this question. First, their main method of measuring economic growth is urbanization. Which is not absurd, industrialization in the 19th century (and thus economic growth) was strongly associated with the growth of cities. But it is not a very precise measure. Second, the growth they focus on took place mainly after 1850. Seems to me like a lot might have happened between Napoleon and 1850.

But let's suppose this is right, and sweeping away guilds, oligarchical elites like the Regents of Holland, and any remaining manorial dues did prepare the way for economic growth fifty years later. How did that work?

Well, for one thing, guilds set up minimum wages and other protections for industrial workers that were abolished across much of Europe. Plus they attempted to create or maintain some degree of equality among the masters, preventing anyone from getting much richer than the others. The result of abolishing the guilds was a more pure form of capitalism, with the pluses and minuses that entails.

Second, the old arrangements of European agriculture, especially gleaning rights and the existence of common pastures and woodlots, allowed very poor people to eke out a living in rural areas. What happened across much of Europe was that the loss of common lands, the right to gather firewood, and so on made it impossible for those people to hang on. In other places, like Scotland, they were evicted or bought out and had to go. So a lot of people who had been very unproductive peasants left their land and moved to places where their labor was much more productive. Sometimes that was America or Australia, but more often it was a nearby city. Therefore manufacturers who had recently been liberated from guild rules found it easier to hire workers in the places where more people had been driven off the land, leading to industrialization in Scotland and the Rhineland. The process was presumably not very happy for the peasants. Whose descendants, remember, had to wait 50 years to feel the benefits.

But my real complaint is that it makes no sense to me to isolate the arrival of the Civil Code from all the other extraordinary stuff that happened in 19th-century Europe. Nineteenth-century Europe was a quite remarkable place and time in human history. It experienced enormous population growth (250%), the industrial revolution, a very long period of comparative peace, vast social changes, etc., etc. This was in no sense a normal time in history.

Are there any normal times in history?

Anyway I am not impressed that this study says anything in general about solutions "imposed from the outside" vs. "grew up organically." The answer to that question is "it depends."