Abstract: A historical analysis of early modern Western Europe demonstrates that it was the interests of princes and kings, and the forms of government, that mainly determined whether there was economic growth or stagnation—and that these even partly explain the Industrial Revolution. The different parts of the chapter discuss prince- and merchant-dominated city states in pre-industrial Europe, the military revolution (with sections on the decline of Spain, and the stagnation of the Dutch Republic), and the anomaly of Britain as the only nation state that continued to grow its economy under the burden of maintaining the military effort required of an early modern European great power.

Keywords: city states, economic growth, Europe, government, history, Industrial Revolution, kings, military revolution, Netherlands princes, Spain, UK, Western Europe,