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Progress: How far have we come? | Chapter 2

Why Do Some Democracies Survive While Others Fail?

New democracies fail when leaders violate the rule of law and use extraconstitutional actions to stay in power. During the Glorious Revolution, England established a Bill of Rights that limited royal authority and made it clear that maintaining the throne required sovereigns to protect the rights of the people. The US Constitution and Bill of Rights echoed these ideas and ensured the protection of individual liberties.

Credible Commitments: A Key to Economic Progress

England’s Glorious Revolution of 1688 underscores the need for an independent judiciary, an open market, and institutions that protect private property rights. England underwent an economic revolution when changes to the rules governing the behavior of the sovereign meant the government could no longer take private property without consequences. Yet even in modern times, not all nations have learned the lesson. To innovate and flourish, a credible commitment to protect property rights is required, and that requires institutions to check those in power.

The Problem with Wage and Price Controls: Lessons from the 1970s

During an economic decline, the first response from many politicians is to manipulate market-based prices or wages. However, history has repeatedly shown that artificially manipulating prices to in order to solve political problems only leads to detrimental shortages, job losses, and other economic hardships. True market-based prices and wages are vital, as they provide insight into consumer preferences, job skills, and available resources.