In studying the economic history of the last two centuries, I am struck by the fact that the various revolutions of the 19th and 20th centuries by and large did not produce improvements in economic governance. Most traditional societies adapted to economic change perfectly adequately, whereas post-traditional societies have shown themselves vulnerable to dictatorship and government bloat, both seriously detrimental to economic health. In the very long run, our modern ideals of how to organize government may be flat-out wrong.

From an economic perspective, the principal purpose of government is, as John Locke put it in 1690, to secure “life, liberty and property.” Without secure property rights, no economic transaction is safe from the looting of political or business opponents, or of power-mad or fanatical bureaucrats. As President Trump has discovered in New York and Elon Musk in Delaware, without secure property rights nothing else is safe, and decades of successful work may be liquidated at a bureaucrat’s whim.

The classic example of economically sound government that respected property rights is Britain between 1784 and 1830, the era of William Pitt and Robert Banks Jenkinson, 2nd Earl of Liverpool. Property rights had been established a century earlier, notably by the Tenures Abolition Act of 1660, which abolished feudal dues and made land freely tradeable and mortgageable. Even the nebulous area of intellectual property had been secured by the Monopolies Act of 1624 (patents) and the Copyright Act of 1709 (copyrights). Government took property rights very seriously, elevating them above all other questions such as taxation, monetary policy and trade policy. Consequently, British property owners were exceptionally secure and the immensely wealth-producing activities of the Industrial Revolution were exceptionally encouraged. The story of British government since 1830 is one of first gradual, then accelerating decline from the high standards of this period.

The British government system of 1784-1830 was however highly traditional. While the British monarchy had been subjected to a civil war in 1642-49, an Interregnum in 1649-60 and a faction-led “Glorious Revolution” in 1688, its legitimacy by the 1780s was undoubted, while the electoral system of that period dated back to 1295 and the House of Lords was equally long-established and stable. With government being both highly legitimate and competent, even the economic distress and revolutionary forces of the 1790s were unable to shake it. Thus, the “rules of the game” were rock-solid. Only after 1830 did first electoral manipulation, then constitutional manipulation, then two hugely expensive world wars, bloating a bureaucracy that was never pared back thereafter and finally destruction of the legal system (by Tony Blair) remove the protections for property and cast British businesses back into a state of nature, in which life was “nasty, brutish and short.”

My admiration for the British government of 1784-1830 has been expressed many times; however, the traditional “absolutist” regimes of 1750-1850 in many countries bear favorable comparison with both their immediate and their long-term successors. Traditional regimes had two great advantages: (i) they were wholly legitimate, being hereditary monarchies in direct descent for hundreds of years with broad public support for that reason, and (ii) their corruption and cruelty was generally limited, since the monarch had been accumulating family loot for centuries, and thus had a low marginal utility for more loot (he also had a clear interest in restraining ministers and other hangers-on). As for cruelty, there were for example only 7 prisoners in the Bastille in 1789, far fewer political prisoners than in many modern regimes including nominal democracies.

In France, the pre-1789 government was economically backward, for two reasons: its capital had been squandered by the Mississippi Company folly of 1716-20 and its rulers had then been seduced by the physiocrats, who while admirably free-market in many ways, believed that manufacturing and services were mere appendages to the agricultural sector, hence should be disadvantaged by the tax system. The Terror regime was a statist folly, while Napoleon I was a looting protectionist, who notably failed to establish conditions for economic success (the Directory in between was somewhat better, albeit horribly corrupt).

After 1815, France’s Restoration regime was nearly as good as that in Britain, although working with a poorer and more primitive economy – after all as well as legitimacy and popular support it had Jean-Baptiste Say advising it. Given time, it could have built the French economy into a stable international powerhouse, gaining legitimacy as the war period retreated. Alas, it was ousted in 1830 by an unforgivable liberal coup, lacking all public support beyond the Paris mob. The Orleanist and Second Empire regimes that followed were both usurpers, hence unstable and unreliable, although Napoleon III was at least economically literate, unlike his uncle or Louis-Philippe. After 1870, a combination of socialism, war and political instability meant that France always underperformed the economic potential of its magnificent intellectual endowment.

In German-speaking countries the traditional order, the Holy Roman Empire, was structurally unable to undertake reforms after Maximilian’s state-of-the-art constitution making of 1495. Hence by the 18th century it was bedeviled by a tariff system that operated between each of its 1,800 principalities, making it impossible for modern industry to emerge at scale. After 1815, most German countries were well run, and takeoff occurred in Germany proper once the Zollverein customs union had been signed in 1833 at the instigation of Friedrich List. List also drew up a plan for the German railways in 1833, so from 1834 to 1848 Germany took off economically with new companies formed that would become behemoths in the decades to come. After 1848, progress continued rapid as Germany unified, so that by 1910 the German economy was second only to that in the United States, well ahead of the now sluggish Britain. Alas thereafter, wars destroyed the Second Reich’s traditional German government (which had only been in place since 1871) and led to post-war socialism, although Konrad Adenauer did a magnificent job of restoring both legitimacy and economic health from the chaos of 1945.

In other countries, the story is similar, if not even more pronounced. Can anyone doubt that the best Russian government was not the Communists, nor the drunken Boris Yeltsin nor the autocratic Vladimir Putin, but the better Czars, notably Alexander II, who freed the serfs in 1861? Even Nicholas I, thought of as a dozy autocrat, brought railways and industrialization to Russia, though stopping short of ending serfdom. Unlike Putin, the Czars’ cruelty was predictable and institutionalized (and much of it justified by Russian standards) while their wealth had been built up over centuries, so they did not need to become multi-billionaires over a couple of decades, like modern rulers.

In China, too, the traditional Qing Dynasty Emperors ruling before 1911 were thought of as retrograde and opposed to economic progress, but modern scholarship has corrected this. In the early Qing, the Kangxi Emperor (ruled 1661-1722) and the Qianlong Emperor (ruled 1735-96) were both intelligent developers of China’s economy, though being Manchu not Han Chinese they lacked some legitimacy in the eyes of the Chinese people. More remarkably, the Dowager Empress Cixi (effective ruler 1861-1908) presided with great skill over a period of rapid modernization, amid intense pressure from ruthless, more militarily advanced foreign powers. Ten years ago, one would have claimed that the post-Mao Zedong Communist regime had moved towards capitalism and thereby enriched China beyond the dreams of the Dowager Empress Cixi; today that success is much more questionable, while the current regime’s cruelty and repression are far worse than her relatively mild rule.

Modern democratic governments have several disadvantages compared with their traditional dynastic-royal predecessors. The bureaucracy bloats and perpetuates itself. Taxation rises without limit, while budget deficits also soar, as the bureaucracy’s demand for resources is insatiable. Inflation is perpetual, because modern bureaucratic government cannot bear to give up its hidden seigniorage revenues from creating new money – hence the worst excesses of money-printing and coinage debasement are universal. The courts become corrupt; no longer correctives against a miscreant King, they become enforcers of bureaucratic orthodoxy against those who seek change. Kleptocracy is generally rampant, because every politician has only a short career in which he can accumulate wealth, by fair means or foul. Property rights are nugatory, subject to every bureaucratic or political whim.

At the local level, modern democratic government is even worse, because the young, foolish and fly-by-night concentrate in the largest cities, imposing fashionable pro-criminal theories of urban management. When Tucker Carlson praises the Moscow metro, he is not praising the unspeakable Stalinist terror regime that created it as a prestige project, he is noting that, even 70 years later it is well-maintained and free from filth and crime. In contrast, subway systems in New York, Washington, London and even Paris are subject to foolish Western big-city leftist ideas of urban governance and are hence cesspits.

We abandoned traditional systems of government a century ago, even two centuries ago, led by Whiggish dreams of popular representation. That abandonment has caused us to lose the benefits of those traditional systems of government, notably stable and well-protected property rights. We cannot return; centuries of history cannot be recreated overnight. Still, perhaps by realizing what we have lost, we may be able to evolve towards a synthesis that works better than the present mess.

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)