at will, something the world had never seen before. The transforming effects of open access in the mid-nineteenth century are manifest in the political and economic developments of the late nineteenth century and twentieth century, including fostering more favorable circumstances for technological progress.

The historical details and specific institutional mechanisms that developed in each specific society were critically important in that society, but neither the specific details nor the specific institutions were the same across societies. The transition was secured in the middle of the nineteenth century by institutionalizing open access for a growing number of citizens who enjoyed impersonally defined rights and were embedded in a set of social arrangements that sustained impersonal relationships. The operation of existing natural state institutions, even institutions with long histories such as the British Parliament, began changing as access opened. Elected assemblies produced different outcomes in the presence of competitive political parties. Economic corporations produced different outcomes in the presence of competitive entry.

The adoption of similar institutions in other societies later in the nineteenth century did not immediately foster transitions in those societies. For example, Latin American countries that adopted constitutions similar to the U.S. Constitution in the nineteenth century and the adoption of general incorporation laws elsewhere in Europe were insufficient in themselves to induce transitions. Elite interests in limiting access societies can easily be served in the presence of elections, representative assemblies, and more sophisticated corporate and other types of organizations. Adopting the institutions of Britain, France, or the United States without securing open political and economic access is insufficient to produce the transition. History shows that adopting better institutions enables the adopting societies to function better as natural states, but transitions do not occur without opening access.

7.3 A New Approach to the Social Sciences: Violence, Institutions, Organizations, and Beliefs

The conceptual framework is more than another political or economic model; it is a fundamentally new approach to social science analysis. It is concerned with the process of change through time. Just how much have we learned about the process of societal change? We can illustrate our contributions through the concepts that have provided the structure of this study: violence, institutions, organizations, and beliefs.

We began with the idea that the systematic creation of rents can induce powerful individuals and groups to refrain from violence. When combined with the simple and powerful idea that the most valuable form of rentcreation in most societies is the ability to form organizations sanctioned and supported by the society, we were a few steps away from the implication that the structure of all social institutions is deeply conditioned by the methods used to address the problem of violence. Because causal beliefs about the behavior of other people depend on the nature of organizations within which individuals act, we can draw important implications about the nature of beliefs in personal or impersonal relations. When societies can support impersonal organizations, they create the possibility of impersonal elite relationships, sustaining a transition to open access, and creating widespread causal beliefs that social relationships can be impersonally based. And when perpetually lived and impersonal economic organizations come into being alongside the consolidation of the military, the society eliminates the need for personal identification with networks of patronage and protection. With all their myriad and sometimes offsetting costs and benefits, open access societies depend for their operation on impersonal identity and the associated beliefs in equality and fairness.

Violence must be near the heart of any explanation of how societies behave. The necessary prerequisite for forming durable large social groups is a way to control violence. Natural states do not deal with violence by consolidating control over it. Instead, utilizing the dispersion of violence in the population, they create a pattern of interlocking economic, religious, political, and social interests that provide powerful individuals with incentives not to use violence. All states are organizations of organizations. Rent-creation combines with the internal structure of organizations with the dominant coalition to limit violence in a natural state.

Approaches to violence that begin with the Weberian assumption that the state is an entity with a monopoly on the legitimate use of violence start in the wrong place. By assuming away the most fundamental problem societies face – managing violence – these approaches misunderstand how most human societies function. In natural states, military assets are dispersed throughout the dominant coalition. To be stable, natural states must give those powerful individuals credible incentives not to use violence but to cooperate. Assuming the state is a single entity eliminates our ability to understand how natural states – and thus most societies in history – contain violence.

Consolidation of the military into one organization can occur only if other nonmilitary elements in the dominant coalition are confident that

they can credibly discipline the military organization if it attempts to abuse its military power. Consolidation of the military must be accompanied by a set of developments in economic and political organizations and institutions that allow economic and political actors to control the military. Mature natural states must maintain a double balance between military and nonmilitary organizations. For a natural state to create consolidated control of the military, it must simultaneously develop powerful forms of economic and political organizations. In the absence of such organizations, the military organization and those who lead it have the power to subvert the privileges of other members of the dominant coalition. This conclusion holds whether or not the administration is nominally civilian. Violence and organizations are intimately connected.

Whether discussing historical or modern developing societies, we must not assume that the state is a single coercive individual with a monopoly on violence. Rather than starting with a specialist in violence and reasoning from there, we have tackled the problem of increasing specialization in violence as an outcome of the structure of the institutions, organizations, and beliefs within the larger society. In short, to understand the control of violence, we must begin with a group of powerful individuals, constrained by a set of self-enforcing arrangements, who manage to increase the degree of specialization within their coalition organization by allowing some members to specialize in violence, some in economic activities, and some in political activities.

Institutions are the rules of the game, the patterns of interaction that govern and constrain the relationships of individuals. Institutions include formal rules, written laws, formal social conventions, and informal norms of behavior. Institutions must also include the means by which rules and norms are enforced. We focus on institutions and emphasize the implication that the same institution works differently in different circumstances. This insight plays a pivotal role in our explanation of the transition process. Institutions that make impersonal elite relationships possible can be created in mature natural states and then used by open access orders, but they will produce different results in the open access order than in the natural state. We have been particularly concerned with how institutions – such as elections, representative legislative bodies, corporations, and political parties – operate differently in the presence of open or limited entry and access.

Greif’s (2006) concept of institutions includes institutions, organizations, and beliefs as institutional elements. We deliberately chose not to adopt such an inclusive definition of institutions, not because we disagree

structures. We do so largely in terms of the intentional actions of individuals, abstracting from the social tools at their disposal. The organizational tools available to individuals not only improved as better legal forms arose for both organizations and their contractual relations but the distribution of those tools throughout society also increased dramatically. Many histories attribute the spread of impersonal rights through the population as the result of changes in large social institutions, such as democracy, and processes, such as economic growth. We have identified how open access to organizational forms can make social institutions such as democracy work much better by sustaining economic and political creative destruction; we have also identified why open access to organizational forms failed to spread through all human societies before the nineteenth century. A challenge for all the social sciences is to redirect their consideration of organizations to the fundamental changes in organizational tools that occurred in the nineteenth century.

The number and scope of new organizations explode when a society undergoes transition. This explosion is not just an incident to the main action of increasing citizen rights, new institutions, or economic growth. Nor does the explosion simply follow from the natural human tendency to truck, barter, and exchange. Instead, the transition provides citizens with new tools, fewer restrictions, and greater scope for impersonal relations, all of which dramatically increase the gains from specialization and exchange while reducing the risk of expropriation. These changes in turn foster the growth of new organizations to exploit new opportunities. The explosion in organizations is thus a direct consequence of the transition.

We documented the emergence of perpetually lived public, private, and religious organizations in Western Europe from 1400 to 1800. These organizations exhibited the logic of the natural state through the creation of elite privileges. The creation of these organizations in natural states was an integral part of the emergence and success of mature natural states at that time. Organizational sophistication lay at the root of late medieval and early modern economic growth in Europe, and it enabled the creation of much more clearly articulated state structures capable of consolidating control of the military after 1600 and exploiting the gains from exchange.

Without a perpetually lived state and impersonal organizations, institutional mechanisms – such as checks and balances between king and parliament or president and congress – cannot operate effectively. Similarly, consolidated control of the military is possible only if perpetually lived, and therefore impersonal organizations in the public and private sphere can be utilized to check the military, as we illustrated with the case of provisioning

the British Navy in the mid-eighteenth century. The newly developed, rich network of impersonal organizations was able to sustain impersonally defined rights for elites. Only then did it become possible for notions of equality to support beliefs about how the real world operated rather than ideas, ideologies, or theologies about how the world should work.

Beliefs about equality cannot be sustained by experience in a natural state; equality can only be an ideal. One of the basic features of an open access order is the prevalence of impersonal relationships that sustain beliefs in freedom and equality. The key is understanding how open access both supports and requires impersonal relationships. Open access is not universal access, but it does require impersonal identity.

We do not have a general theory of belief formation and human cognition, but we have tried to come to grips with two aspects of beliefs. First, beliefs about causal relationships in the world intimately affect people’s decisions. Second, the cultural environment – the political, economic, social context – fundamentally influences beliefs. Social structures that create fundamental inequalities among participants are reflected in the belief system and in forms of social relationships exchange – specifically personal versus impersonal exchange and the forms, types, and access to organizations that the society supports. These organizations range from the family to the church to political, economic, and educational organizations. In large part, beliefs in impersonal identity derive from the structure of organizations and institutions that a society supports and people live within.

Because limited and open access orders control violence and structure organizations in different ways, the two social orders produce differences in the beliefs held by their populations. Controlling violence through rentcreation results in a society based on personal identities and privilege. We emphasize the importance of open access for sustaining beliefs about equality and impersonality. In particular, perpetually lived organizations embody the reality of impersonal identity. Beliefs that impersonal identities can be sustained lie at the heart of beliefs in equality. Equality depends on impersonal identity; for citizens to be equal before the law, for example, the law must treat citizens impersonally. Beliefs that citizens really are equal in some dimensions therefore cannot be maintained unless societies create impersonal identities along those dimensions. Implementing equality in a society requires that the society be able to create and sustain impersonal categories – such as citizens – and then to treat everyone in the same category alike.

The principal reason for superior rule of law in open access orders is that institutions support impersonality and perpetual life. Indeed, these