Why Nations Fail Page 0,129

followed a phase of relative stability, first under the somewhat ineffective Directory, between 1795 and 1799, and then with more concentrated power in the form of a three-person Consulate, consisting of Ducos, Sieyès, and Napoleon Bonaparte. Already during the Directory, the young general Napoleon Bonaparte had become famous for his military successes, and his influence was only to grow after 1799. The Consulate soon became Napoleon’s personal rule.

The years between 1799 and the end of Napoleon’s reign, 1815, witnessed a series of great military victories for France, including those at Austerlitz, Jena-Auerstadt, and Wagram, bringing continental Europe to its knees. They also allowed Napoleon to impose his will, his reforms, and his legal code across a wide swath of territory. The fall of Napoleon after his final defeat in 1815 would also bring a period of retrenchment, more restricted political rights, and the restoration of the French monarchy under Louis XVII. But all these were simply slowing the ultimate emergence of inclusive political institutions.

The forces unleashed by the revolution of 1789 ended French absolutism and would inevitably, even if slowly, lead to the emergence of inclusive institutions. France, and those parts of Europe where the revolutionary reforms had been exported, would thus take part in the industrialization process already under way in the nineteenth century.

EXPORTING THE REVOLUTION

On the eve of the French Revolution in 1789, there were severe restrictions placed on Jews throughout Europe. In the German city of Frankfurt, for example, their lives were regulated by orders set out in a statute dating from the Middle Ages. There could be no more than five hundred Jewish families in Frankfurt, and they all had to live in a small, walled part of town, the Judengasse, the Jewish ghetto. They could not leave the ghetto at night, on Sundays, or during any Christian festival.

The Judengasse was incredibly cramped. It was a quarter of a mile long but no more than twelve feet wide and in some places less than ten feet wide. Jews lived under constant repression and regulation. Each year, at most two new families could be admitted to the ghetto, and at most twelve Jewish couples could get married, and only if they were both above the age of twenty-five. Jews could not farm; they could also not trade in weapons, spices, wine, or grain. Until 1726 they had to wear specific markers, two concentric yellow rings for men and a striped veil for women. All Jews had to pay a special poll tax.

As the French Revolution erupted, a successful young businessman, Mayer Amschel Rothschild, lived in the Frankfurt Judengasse. By the early 1780s, Rothschild had established himself as the leading dealer in coins, metals, and antiques in Frankfurt. But like all Jews in the city, he could not open a business outside the ghetto or even live outside it.

This was all to change soon. In 1791 the French National Assembly emancipated French Jewry. The French armies were now also occupying the Rhineland and emancipating the Jews of Western Germany. In Frankfurt their effect would be more abrupt and perhaps somewhat unintentional. In 1796 the French bombarded Frankfurt, demolishing half of the Judengasse in the process. Around two thousand Jews were left homeless and had to move outside the ghetto. The Rothschilds were among them. Once outside the ghetto, and now freed from the myriad regulations barring them from entrepreneurship, they could seize new business opportunities. This included a contract to supply grain to the Austrian army, something they would previously not have been allowed to do.

By the end of the decade, Rothschild was one of the richest Jews in Frankfurt and already a well-established businessman. Full emancipation had to wait until 1811; it was finally implemented by Karl von Dalberg, who had been made Grand Duke of Frankfurt in Napoleon’s 1806 reorganization of Germany. Mayer Amschel told his son, “[Y]ou are now a citizen.”

Such events did not end the struggle for Jewish emancipation, since there were subsequent reverses, particularly at the Congress of Vienna of 1815, which formed the post-Napoleonic political settlement. But there was no going back to the ghetto for the Rothschilds. Mayer Amschel and his sons would soon have the largest bank in nineteenth-century Europe, with branches in Frankfurt, London, Paris, Naples, and Vienna.

This was not an isolated event. First the French Revolutionary Armies and then Napoleon invaded large parts of continental Europe, and in almost all the areas they invaded, the existing institutions were remnants of medieval times, empowering kings, princes, and nobility and

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