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rudimentary order, and economic incentives are all but
destroyed. The case of Somalia illustrates how the process
of industrialization also passed by such societies. Political
centralization is resisted for the same reason that absolutist
regimes resist change: the often well-placed fear that
change will reallocate political power from those  that
dominate today to new individuals and groups. Thus, as
absolutism blocks moves toward pluralism and economic
change, so do the traditional elites and clans dominating
the scene in societies without state centralization. As a
consequence, societies that still lacked such centralization
in the eighteenth and nineteenth centuries were particularly
disadvantaged in the age of industry.
While the variety of extractive institutions ranging from
absolutism to states with little centralization failed to take
advantage of the spread of industry, the critical juncture of
the Industrial Revolution had very different effects in other
parts of the world. As we will see in chapter 10
, societies
that had already taken steps toward inclusive political and
economic institutions, such as the United States and
Australia, and those where absolutism was more seriously
challenged, such as France and Japan, took advantage of
these new economic opportunities and started a process of
rapid economic growth. As such, the usual pattern of
interaction  between  a  critical  juncture  and  existing
institutional differences leading to further institutional and
economic divergence played out again in the nineteenth
century, and this time with an even bigger bang and more
fundamental  effects on  the  prosperity  and poverty of
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North of the fence: Nogales, Arizona Jim
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South of the fence: Nogales, Sonora Jim West/age
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Consequences of a level playing field: Thomas Edison’s
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1880 patent for the lightbulb Records of the Patent and
Trademark Office; Record Group 241; National Archives
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Economic losers from creative destruction: machine-
breaking Luddites in early-nineteenth-century Britain Mary
Evans Picture Library/Tom Morgan
Consequences of a complete lack of political centralization
in Somalia REUTERS/Mohamed Guled/Landov
Successive beneficiaries of extractive institutions in Congo:
King of Kongo © CORBIS King Leopold II The Granger
Collection, NY
Joseph-Désiré Mobutu © Richard Melloul/Sygma/CORBIS
Laurent Kabila © Reuters/CORBIS
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