THE INDUSTRIAL REVOLUTION created a critical juncture that affected almost
every country. Some nations, such as England, not only allowed, but
actively encouraged, commerce, industrialization, and
entrepreneurship, and grew rapidly. Many, such as the Ottoman
Empire, China, and other absolutist regimes, lagged behind as they
blocked or at the very least did nothing to encourage the spread of
industry. Political and economic institutions shaped the response to
technological innovation, creating once again the familiar pattern of
interaction between existing institutions and critical junctures
leading to divergence in institutions and economic outcomes.
The Ottoman Empire remained absolutist until it collapsed at the
end of the First World War, and was thus able to successfully oppose
or impede innovations such as the printing press and the creative
destruction that would have resulted. The reason that the economic
changes that took place in England did not happen in the Ottoman
Empire is the natural connection between extractive, absolutist
political institutions and extractive economic institutions.