Long before the industrial revolution, Medieval peasants were actively establishing many of the institutions that would ultimately trigger it.

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Why are some countries richer than others? This is one of the oldest questions in economics and also one of the most contentious.

One explanation which has gained in popularity in recent years is that theft and colonial domination are the main drivers of national prosperity. While this theory does have appeal if you’re trying to find a substitute for original sin, the evidence that conquest is a reliable method of becoming lastingly rich is scant. Producing some of history’s most rapacious conquerors did not transform Mongolia into a centre of development and South Korea’s lack of colonies hasn’t prevented it overtaking Britain in GDP per capita.

Another explanation is geographic factors allowing for early industrialisation. Those regions blessed with easily accessible coal seams such as Britain and the low countries were able to benefit from first mover advantage. It is undeniable that the Industrial Revolution and its consequences have hugely enriched the world and that some countries have been able to take earlier advantage than others but this is not the whole story. Even in 1600, long before industrialisation and Empire, Mughal India’s GDP per capita is estimated to have only been 60 per cent of Britain’s. This and other data would suggest the industrial revolution widened a pre-existing gap between the ‘West and the Rest’ rather than creating it. To understand how this gap emerged we must look back beyond the 18th century.

I recently interviewed Dr Robert Portass ([link removed]) , a historian of medieval economics at Lincoln University, whose work provides a fantastic insight. Using evidence from charters (essentially contracts and deeds of exchange) he sheds light on the relations between peasants in northern Spain from the 9th to 11th century. He finds evidence for a thriving market in land between peasants as well as evidence for them producing surpluses for sale. This contradicts both the notion that the entrepreneurial instinct only emerged in the early-modern period and that peasants would only aim for subsistence when left to their own devices.

These charters also contain over 100 references to peasants owning watermills or, in some cases, shares in multiple mills. This is significant as building a mill required a substantial investment of time and resources. In order to justify the initial outlay peasant owners must have been reasonably sure they would enjoy the benefits of their investment for a protracted period of time. The fact that they did build mills in such numbers is evidence that property rights were already deeply entrenched – why bother investing in a mill if a lord can just come along and seize it?

Less written evidence survives outside Spain but is clear that across much of western Europe mills were widespread and often owned by common people. The Domesday Book records over 6,000 in England alone. It has been convincingly argued that this greater density of immovable capital in the medieval West allowed it to surpass the Middle East, where property rights were less secure.

The idea that strong property rights lead to greater investment in capital which leads to prosperity should not be particularly controversial. But when so many wish to turn economics and history into a morality play it’s a case we must keep making.

Daniel Freeman

IEA Managing Editor
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Medieval Economy: Peasants and Entrepreneurship ([link removed])

Daniel Freeman interviews University of Lincoln Senior Lecturer Dr. Robert Portass, IEA YouTube ([link removed])

A peasant surprise… Long before the dawn of merchant republics or industrial capitalism, Medieval peasants led the way on establishing property rights, contract law, and commerce.
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** The Future of African Trade ([link removed])
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From corruption at the border to weak property rights, trade across the African continent faces a range of stubborn challenges. With the implementation of the African Continental Free Trade Area on January 1st 2021, African states have an opportunity to break free from the shackles of economic nationalism that have plagued large swathes of the continent for centuries.

As a project of the Institute of Economic Affairs and the Vinson Centre for the Public Understanding of Economics and Entrepreneurship at the University of Buckingham, The Initiative for African Trade and Prosperity (IATP) is guided by a core belief that free trade is the most effective way to alleviate poverty, promote individual liberty, and advance prosperity.

The IATP works with a plethora of local actors advocating for free trade on the ground. Check out the Meet the IATP Partners ([link removed]-) series to learn more!


** What Drives Tanzania's Economic Freedom? ([link removed])
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Evans Exaud, Liberty Sparks ([link removed])

Tanzanian entrepreneurship… In the first episode of our Meet the IATP Partners ([link removed]-) series, discover how Liberty Sparks is advocating for free trade and less burdensome regulation, and why it is crucial for a prosperous Africa.
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** The Solution to Burundi's Economic Problems ([link removed])
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Burundi’s future… Discover how CDE Great Lakes is fighting for free trade and against corruption in Burundi.


** What are the barriers to Ghanaian trade? ([link removed])
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Franklin Cudjoe, IMANI Centre for Policy and Education ([link removed])

Ghanaian trade… Franklin Cudjoe discusses how free trade and lower taxes can kickstart Ghana's economy.
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Subscribe to the IATP Newsletter ([link removed])

IEA Latest.
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A vital message… Economic growth must not become an afterthought. It is essential to creating and maintaining human flourishing.
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In vino veritas… To most people, the idea of getting more for your money is a good thing. But new research recommending a ban on 250ml wine glasses seems to disagree.
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Matthew Lesh interviews IEA Trustee Christian Bjørnskov, IEA YouTube ([link removed])

A key ingredient… Economic freedom closely correlates with basic indicators of prosperity like high life expectancy, economic growth, and educational standards.

Last week, Christian co-authored a tribute to James Gwartney ([link removed]) , the founder of the annual Economic Freedom of the World ([link removed]) index who passed away on 7th January.
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Wrong target… The solution to high rents is more housebuilding, not counterproductive regulations.
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Damaging and unfair… Inheritance tax compounds the misery of grieving families, while discouraging saving and investment.
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A lost decade… Poor economic growth, culture wars, and political polarisation defined the 2010s.

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** IEA at the Economics Society Conference
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Education Coordinators Matthew Prescod and Megi Cara participated in the Economics Society Conference and were joined by Reem Ibrahim and one of our new interns, Jeanie Lee. The conference was held collaboratively by University College London, London School of Economics, and Warwick University.

At the conference, which drew over 150 students, the team promoted the IEA’s student programmes and distributed publications, including An Introduction to Economic Inequality ([link removed]) and The New Great Inflation ([link removed]) .


** Book Club with Jennifer Burns
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Milton Friedman was one of the most influential economists of the twentieth century. His work was instrumental in the turn toward free markets that defined the 1980s, and his full-throated defences of capitalism and freedom resonated with audiences around the world.

In Milton Friedman: The Last Conservative, Stanford University historian Jennifer Burns tells Friedman's extraordinary story with the nuance it deserves. Join the IEA book club later this month when Professor Burns discusses her new book with Executive Director Tom Clougherty.
RSVP (mailto:[email protected]?subject=IEA%20Book%20Club%20with%20Jennifer%20Burns&body=Hello%2C%20please%20may%20I%20attend%20the%20IEA%20Book%20Club%20event%20with%20Jennifer%20Burns%3F)

Date: Monday 29th January

Time: 17:30 drinks, 18:00 discussion start

Location: IEA (2 Lord North Street, Westminster, London, SW1P 3LB)

Topic: Milton Friedman: The Last Conservative

Speakers:
* Tom Clougherty (Executive Director at the Institute of Economic Affairs)
* Professor Jennifer Burns (Author of Milton Friedman: The Last Conservative)


Format: Drinks reception & panel discussion

Dress code: Business casual or smart casual

RSVP: Please RSVP to [email protected] (mailto:[email protected]) or call 020 7799 8910


** The Future of UK Trade Policy After Brexit
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What impact has Brexit really had on UK trade? Could new trade agreements – like the UK’s accession to CPTPP, a trade bloc covering 11 countries and over 500 million people – have a significant long-term impact? And what do changing attitudes towards globalisation – the rise of what The Economist calls ‘homeland economics’ – mean for the future of UK trade policy?

Join us at the IEA for a discussion of these and other trade-related issues.
RSVP (mailto:[email protected]?subject=The%20Future%20of%20UK%20Trade%20Policy%20After%20Brexit&body=Hello%2C%20please%20may%20I%20attend%20The%20Future%20of%20UK%20Trade%20Policy%20After%20Brexit%3F)

Date: Tuesday 30th January

Time: 17:30 drinks, 18:00 discussion start

Location: IEA (2 Lord North Street, Westminster, London, SW1P 3LB)

Topic: ‘The Future of UK Trade Policy after Brexit’

Speakers:
* Tom Clougherty (Executive Director at the Institute of Economic Affairs)
* Catherine McBride (Fellow at the Centre for Brexit Policy)
* John Springford (Associate Fellow at the Centre for European Reform)
* Julian Jessop (Independent Economist and Economics Fellow at the Institute of Economic Affairs)


Format: Drinks reception & panel discussion

Dress code: Business casual or smart casual

RSVP: Please RSVP to [email protected] (mailto:[email protected]) or call 020 7799 8910
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