Why Nations Fail

by Daron Acemoglu

  According to the Roman historian Plutarch, Tiberius Gracchus, when traveling through Etruria, a region in what is now central Italy, became aware of the hardship that families of citizen-soldiers were suffering. Whether because of this experience or because of other frictions with the powerful senators of his time, he would soon embark upon a daring plan to change land allocation in Italy. He stood for plebeian tribune in 133 BC, then used his office to propose land reform: a commission would investigate whether public lands were being illegally occupied and would redistribute land in excess of the legal limit of three hundred acres to landless Roman citizens. The three-hundred-acre limit was in fact part of an old law, though ignored and not implemented for centuries. Tiberius Gracchus’s proposal sent shockwaves through the senatorial class, who were able to block implementation of his reforms for a while. When Tiberius managed to use the power of the mob supporting him to remove another tribune who threatened to veto his land reform, his proposed commission was finally founded. The Senate, though, prevented implementation by starving the commission of funds.

  Things came to a head when Tiberius Gracchus claimed for his land reform commission the funds left by the king of the Greek city Pergamum to the Roman people. He also attempted to stand for tribune a second time, partly because he was afraid of persecution by the Senate after he stepped down. This gave the senators the pretext to charge that Tiberius was trying to declare himself king. He and his supporters were attacked, and many were killed. Tiberius Gracchus himself was one of the first to fall, though his death would not solve the problem, and others would attempt to reform the distribution of land and other aspects of Roman economy and society. Many would meet a similar fate. Tiberius Gracchus’s brother Gaius, for example, was also murdered by landowners, after he took the mantle from his brother.

  These tensions would surface again periodically during the next century—for example, leading to the “Social War” between 91 BC and 87 BC. The aggressive defender of the senatorial interests, Lucius Cornelius Sulla, not only viciously suppressed the demands for change but also severely curtailed the powers of the plebeian tribune. The same issues would also be a central factor in the support that Julius Caesar received from the people of Rome in his fight against the Senate.

  The political institutions forming the core of the Roman Republic were overthrown by Julius Caesar in 49 BC when he moved his legion across the Rubicon, the river separating the Roman provinces of Cisalpine Gaul from Italy. Rome fell to Caesar, and another civil war broke out. Though Caesar was victorious, he was murdered by disgruntled senators, led by Brutus and Cassius, in 44 BC. The Roman Republic would never be re-created. A new civil war broke out between Caesar’s supporters, particularly Mark Anthony and Octavian, and his foes. After Anthony and Octavian won, they fought each other, until Octavian emerged triumphant in the battle of Actium in 31 BC. By the following year, and for the next forty-five years, Octavian, known after 28 BC as Augustus Caesar, ruled Rome alone. Augustus created the Roman Empire, though he preferred the title princep, a sort of “first among equals,” and called the regime the Principate. Map 11 shows the Roman Empire at its greatest extent in 117 AD. It also includes the river Rubicon, which Caesar so fatefully crossed.

  It was this transition from republic to principate, and later naked empire, that laid the seeds of the decline of Rome. The partially inclusive political institutions, which had formed the basis for the economic success, were gradually undermined. Even if the Roman Republic created a tilted playing field in favor of the senatorial class and other wealthy Romans, it was not an absolutist regime and had never before concentrated so much power in one position. The changes unleashed by Augustus, as with the Venetian Serrata, were at first political but then would have significant economic consequences. As a result of these changes, by the fifth century AD the Western Roman Empire, as the West was called after it split from the East, had declined economically and militarily, and was on the brink of collapse.

  … ROMAN VICES

  Flavius Aetius was one of the larger-than-life characters of the late Roman Empire, hailed as “the last of the Romans” by Edward Gibbon, author of The Decline and Fall of the Roman Empire. Between AD 433 and 454, until he was murdered by the emperor Valentinian III, Aetius, a general, was probably the most powerful person in the Roman Empire. He shaped both domestic and foreign policy, and fought a series of crucial battles against the barbarians, and also other Romans in civil wars. He was unique among powerful generals fighting in civil wars in not seeking the emperorship himself. Since the end of the second century, civil war had become a fact of life in the Roman Empire. Between the death of Marcus Aurelius in AD 180 until the collapse of the Western Roman Empire in AD 476, there was hardly a decade that did not see a civil war or a palace coup against an emperor. Few emperors died of natural causes or in battle. Most were murdered by usurpers or their own troops.

  Aetius’s career illustrates the changes from Roman Republic and early Empire to the late Roman Empire. Not only did his involvement in incessant civil wars and his power in every aspect of the empire’s business contrast with the much more limited power of generals and senators during earlier periods, but it also highlights how the fortunes of Romans changed radically in the intervening centuries in other ways.

  By the late Roman Empire, the so-called barbarians who were initially dominated and incorporated into Roman armies or used as slaves now dominated many parts of the empire. As a young man, Aetius had been held hostage by barbarians, first by the Goths under Alaric and then by the Huns. Roman relations with these barbarians are indicative of how things had changed since the Republic. Alaric was both a ferocious enemy and an ally, so much so that in 405 he was appointed one of the senior-most generals of the Roman army. The arrangement was temporary, however. By 408, Alaric was fighting against the Romans, invading Italy and sacking Rome.

  The Huns were also both powerful foes and frequent allies of the Romans. Though they, too, held Aetius hostage, they later fought alongside him in a civil war. But the Huns did not stay long on one side, and under Attila they fought a major battle against the Romans in 451, just across the Rhine. This time defending the Romans were the Goths, under Theodoric.

  All of this did not stop Roman elites from trying to appease barbarian commanders, often not to protect Roman territories but to gain the upper hand in internal power struggles. For example, the Vandals, under their king, Geiseric, ravaged large parts of the Iberian Peninsula and then conquered the Roman bread baskets in North Africa from 429 onward. The Roman response to this was to offer Geiseric the emperor Valentinian III’s child daughter as a bride. Geiseric was at the time married to the daughter of one of the leaders of the Goths, but this does not seem to have stopped him. He annulled his marriage under the pretext that his wife was trying to murder him and sent her back to her family after mutilating her by cutting off both her ears and her nose. Fortunately for the bride-to-be, because of her young age she was kept in Italy and never consummated her marriage to Geiseric. Later she would marry another powerful general, Petronius Maximus, the mastermind of the murder of Aetius by the emperor Valentinian III, who would himself shortly be murdered in a plot hatched by Maximus. Maximus later declared himself emperor, but his reign would be very short, ended by his death during the major offensive by the Vandals under Geiseric against Italy, which saw Rome fall and savagely plundered.

  BY THE EARLY fifth century, the barbarians were literally at the gate. Some historians argue that it was a consequence of the more formidable opponents the Romans faced during the late Empire. But the success of the Goths, Huns, and Vandals against Rome was a symptom, not the cause, of Rome’s decline. During the Republic, Rome had dealt with much more organized and threatening opponents, such as the Carthaginians. The decline of Rome had causes very similar to those of the Maya city-states. Rome’s increasingly extractive political and economic institutions generated its demise because they caused infighting and civil war.

  The ori
gins of the decline go back at least to Augustus’s seizure of power, which set in motion changes that made political institutions much more extractive. These included changes in the structure of the army, which made secession impossible, thus removing a crucial element that ensured political representation for common Romans. The emperor Tiberius, who followed Augustus in AD 14, abolished the Plebeian Assembly and transferred its powers to the Senate. Instead of a political voice, Roman citizens now had free handouts of wheat and, subsequently, olive oil, wine, and pork, and were kept entertained by circuses and gladiatorial contests. With Augustus’s reforms, emperors began to rely not so much on the army made up of citizen-soldiers, but on the Praetorian Guard, the elite group of professional soldiers created by Augustus. The Guard itself would soon become an important independent broker of who would become emperor, often through not peaceful means but civil wars and intrigue. Augustus also strengthened the aristocracy against common Roman citizens, and the growing inequality that had underpinned the conflict between Tiberius Gracchus and the aristocrats continued, perhaps even strengthened.

  The accumulation of power at the center made the property rights of common Romans less secure. State lands also expanded with the empire as a consequence of confiscation, and grew to as much as half of the land in many parts of the empire. Property rights became particularly unstable because of the concentration of power in the hands of the emperor and his entourage. In a pattern not too different from what happened in the Maya city-states, infighting to take control of this powerful position increased. Civil wars became a regular occurrence, even before the chaotic fifth century, when the barbarians ruled supreme. For example, Septimius Severus seized power from Didius Julianus, who had made himself emperor after the murder of Pertinax in AD 193. Severus, the third emperor in the so-called Year of the Five Emperors, then waged war against his rival claimants, the generals Pescennius Niger and Clodius Albinus, who were finally defeated in AD 194 and 197, respectively. Severus confiscated all the property of his losing opponents in the ensuing civil war. Though able rulers, such as Trajan (AD 98 to 117), Hadrian, and Marcus Aurelius in the next century, could stanch decline, they could not, or did not want to, address the fundamental institutional problems. None of these men proposed abandoning the empire or re-creating effective political institutions along the lines of the Roman Republic. Marcus Aurelius, for all his successes, was followed by his son Commodus, who was more like Caligula or Nero than his father.

  The rising instability was evident from the layout and location of towns and cities in the empire. By the third century AD every sizeable city in the empire had a defensive wall. In many cases monuments were plundered for stone, which was used in fortifications. In Gaul before the Romans had arrived in 125 BC, it was usual to build settlements on hilltops, since these were more easily defended. With the initial arrival of Rome, settlements moved down to the plains. In the third century, this trend was reversed.

  Along with mounting political instability came changes in society that moved economic institutions toward greater extraction. Though citizenship was expanded to the extent that by AD 212 nearly all the inhabitants of the empire were citizens, this change went along with changes in status between citizens. Any sense that there might have been of equality before the law deteriorated. For example, by the reign of Hadrian (AD 117 to 138), there were clear differences in the types of laws applied to different categories of Roman citizen. Just as important, the role of citizens was completely different from how it had been in the days of the Roman Republic, when they were able to exercise some power over political and economic decisions through the assemblies in Rome.

  Slavery remained a constant throughout Rome, though there is some controversy over whether the fraction of slaves in the population actually declined over the centuries. Equally important, as the empire developed, more and more agricultural workers were reduced to semi-servile status and tied to the land. The status of these servile “coloni” is extensively discussed in legal documents such as the Codex Theodosianus and Codex Justinianus, and probably originated during the reign of Diocletian (AD 284 to 305). The rights of landlords over the coloni were progressively increased. The emperor Constantine in 332 allowed landlords to chain a colonus whom they suspected was trying to escape, and from AD 365, coloni were not allowed to sell their own property without their landlord’s permission.

  Just as we can use shipwrecks and the Greenland ice cores to track the economic expansion of Rome during earlier periods, we can use them also to trace its decline. By AD 500 the peak of 180 ships was reduced to 20. As Rome declined, Mediterranean trade collapsed, and some scholars have even argued that it did not return to its Roman height until the nineteenth century. The Greenland ice tells a similar story. The Romans used silver for coins, and lead had many uses, including for pipes and tableware. After peaking in the first century AD, the deposits of lead, silver, and copper in the ice cores declined.

  The experience of economic growth during the Roman Republic was impressive, as were other examples of growth under extractive institutions, such as the Soviet Union. But that growth was limited and was not sustained, even when it is taken into account that it occurred under partially inclusive institutions. Growth was based on relatively high agricultural productivity, significant tribute from the provinces, and long-distance trade, but it was not underpinned by technological progress or creative destruction. The Romans inherited some basic technologies, iron tools and weapons, literacy, plow agriculture, and building techniques. Early on in the Republic, they created others: cement masonry, pumps, and the water wheel. But thereafter, technology was stagnant throughout the period of the Roman Empire. In shipping, for instance, there was little change in ship design or rigging, and the Romans never developed the stern rudder, instead steering ships with oars. Water wheels spread very slowly, so that water power never revolutionized the Roman economy. Even such great achievements as aqueducts and city sewers used existing technology, though the Romans perfected it. There could be some economic growth without innovation, relying on existing technology, but it was growth without creative destruction. And it did not last. As property rights became more insecure and the economic rights of citizens followed the decline of their political rights, economic growth likewise declined.

  A remarkable thing about new technologies in the Roman period is that their creation and spread seem to have been driven by the state. This is good news, until the government decides that it is not interested in technological development—an all-too-common occurrence due to the fear of creative destruction. The great Roman writer Pliny the Elder relates the following story. During the reign of the emperor Tiberius, a man invented unbreakable glass and went to the emperor anticipating that he would get a great reward. He demonstrated his invention, and Tiberius asked him if he had told anyone else about it. When the man replied no, Tiberius had the man dragged away and killed, “lest gold be reduced to the value of mud.” There are two interesting things about this story. First, the man went to Tiberius in the first place for a reward, rather than setting himself up in business and making a profit by selling the glass. This shows the role of the Roman government in controlling technology. Second, Tiberius was happy to destroy the innovation because of the adverse economic effects it would have had. This is the fear of the economic effects of creative destruction.

  There is also direct evidence from the period of the Empire of the fear of the political consequences of creative destruction. Suetonius tells how the emperor Vespasian, who ruled between AD 69 and 79, was approached by a man who had invented a device for transporting columns to the Capitol, the citadel of Rome, at a relatively small cost. Columns were large, heavy, and very difficult to transport. Moving them to Rome from the mines where they were made involved the labor of thousands of people, at great expense to the government. Vespasian did not kill the man, but he also refused to use the innovation, declaring, “How will it be possible for me to feed the populace?” Again an inventor cam
e to the government. Perhaps this was more natural than with the unbreakable glass, as the Roman government was most heavily involved with column mining and transportation. Again the innovation was turned down because of the threat of creative destruction, not so much because of its economic impact, but because of fear of political creative destruction. Vespasian was concerned that unless he kept the people happy and under control it would be politically destabilizing. The Roman plebeians had to be kept busy and pliant, so it was good to have jobs to give them, such as moving columns about. This complemented the bread and circuses, which were also dispensed for free to keep the population content. It is perhaps telling that both of these examples came soon after the collapse of the Republic. The Roman emperors had far more power to block change than the Roman rulers during the Republic.

  Another important reason for the lack of technological innovation was the prevalence of slavery. As the territories Romans controlled expanded, vast numbers were enslaved, often being brought back to Italy to work on large estates. Many citizens in Rome did not need to work: they lived off the handouts from the government. Where was innovation to come from? We have argued that innovation comes from new people with new ideas, developing new solutions to old problems. In Rome the people doing the producing were slaves and, later, semi-servile coloni with few incentives to innovate, since it was their masters, not they, who stood to benefit from any innovation. As we will see many times in this book, economies based on the repression of labor and systems such as slavery and serfdom are notoriously noninnovative. This is true from the ancient world to the modern era. In the United States, for example, the northern states took part in the Industrial Revolution, not the South. Of course slavery and serfdom created huge wealth for those who owned the slaves and controlled the serfs, but it did not create technological innovation or prosperity for society.