The new book edited by Naomi R. Lamoreaux and John Joseph Wallis offers a rich collection of studies with important insights about the transition from “limited access” to “open access” societies. The conceptual background comes from Violence and Social Orders (2009), by Douglass North, John Joseph Wallis, and Barry R. Weingast. In limited-access societies, rules for forming organizations are based on identity and controlled by elites. In contrast, in open-access societies, rules are impersonal and apply in an unbiased way. The transition to open access involves three key conditions: (1) rule of law for elites, establishing credible enforcement of the identity rules prevailing in limited-access orders; (2) the creation of perpetually lived organizations, enabling credible commitments about the future; and (3) consolidated control of the military, required to limit violence. These conditions are necessary but not sufficient, which makes the transition complex and contingent.
Lamoreaux and Wallis offer a great introduction that neatly lays out the conceptual framework and underscores the unifying theme: the study of the transition to open access. The chapters study different organizations, in different countries, at different times, but they all hint at the contingency and nonlinearity of the transition to open access. A shift toward open access in one sector or region does not always prompt accompanying shifts in others. A movement toward open access might induce subsequent movements in the same direction, but it could also be followed by stagnation or create resistances that push the process backward.
While most chapters offer empirical case studies, two of them delve into the history of economic thought. Weingast reconstructs Adam Smith's ideas on violence and development. The feudal system was a violence trap where constant violence deterred investments. The key breakthrough was the alliance between kings and towns, which secured property rights against feudal lords. The town acted as an “organization of organizations,” with its charter offering an umbrella for various organizations, leading to a qualitatively different system of governance. Jacob T. Levy shows that political thinkers such as Montesquieu, Smith, Benjamin Constant, and Alexis de Tocqueville considered the power of corps intermédiaires (e.g., towns, nobles) as key to preventing monarchical power from becoming despotic. It was a model of “pluralism with privilege,” in sharp contrast with the model of open-access societies. Those great minds could not see what open-access societies would look like, which is consistent with the transition's complex and nonlinear nature.
The rest of the chapters offer detailed insights about the transition to open access in a number of different contexts. Dan Bogart studies the case of the East India Company from 1600 to 1813, illustrating how hard the transition to open access was in England. Long after the Glorious Revolution, the system was still governed by identity rules—the rule of law could not be taken for granted and personal relationships were key to maintaining established rents. Qian Lu and John Joseph Wallis study the transition to open access in Massachusetts banking. For decades, a faction of the elites used bank charters to favor supporters. But in the early nineteenth century, contingent circumstances prompted a shift toward open access, which led to a surge of new entrants to the banking sector.
Eric Hilt examines the history of general incorporation laws for manufacturing firms in the United States, which highlights that the move to open access was not uniform or linear. After New York in 1811, three states followed suit but subsequently repealed the laws. The big wave only came in the 1840s and 1850s. The politics of each state affected the timing and the contents of the laws, which displayed significant differences across states. Ruth H. Bloch and Lamoreaux reconstruct the history of legal constraints on corporate rights of voluntary associations in America from 1750 to 1900. While rights to associate were broad, the rights of associations to adopt the corporate form were controlled by each state and often withheld from groups that challenged the social order. Richard Brooks and Timothy W. Guinnane observe a similar logic in their detailed description of regulations curtailing the right of people to associate in Prussia and France. The rights of associations, particularly those of civil-society organizations, were also sharply constrained.
Victoria Johnson and Walter W. Powell compare two initiatives to establish botanical gardens in New York City: a failed one in the early 1800s and a successful one in the 1890s. The key difference was that in the 1890s there was a more mature open-access society and thus a richer set of private and public organizations providing support. This suggests that a critical mass of organizations may be a precondition for the emergence of some other organizations, pointing to the presence of feedback loops in the development of civil society. Margaret Levi, Tania Melo, Weingast, and Frances Zlotnick study the transition to open access for labor organizations in the United States. The legitimacy of unions and collective bargaining required credible commitments from unions and businesses to refrain from violence—commitments that were hard to maintain. The transition was difficult and took much longer than for firms, illustrating that advances in one segment do not automatically bring about advances in others.
The rich collection of case studies in this book demonstrates that the transition to open access is a complex process. At the same time, the reader finds many concrete insights about the transitions that occurred in different contexts. While there may be contingent elements that cannot be fully grasped analytically, the book shows that empirical research can improve our understanding of these manifold transformations. Thus, it is not only an important contribution in itself, but also a compelling invitation to further study.
