（Britain’s path toward democracy was not guided by any noble or consistent blueprint. The process was a whirlwind of conflicting interests and intrigues involving the king, the gentry, merchants, and others.
It is particularly symbolic that the bursting of the South Sea Company stock bubble in 1720 led to the eventual curtailment of the king’s power and the elevation of the position of Walpole as First Lord of the Treasury (to be called later Prime Minister), who presided over Cabinet meetings, thereby creating a parliamentary cabinet system.
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The source text is “In Search of Lost Modernity” by Akio KAWATO.
The English edition of this book (originally written in Japanese) is on
https://docs.google.com/document/d/1hiRK7kjbX0Hxd2NOxPqtQlVWgjDHgKCr/edit
https://docs.google.com/document/d/1MB0Me9P5Lpa2HGceuJUdMqqQ2CRHQSxa/edit)
(The copyright belongs to the author, Akio Kawato)
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Governance in Modern States
How were modern states—where many people had a strong sense of their rights—governed using the tools described above? Let’s take a look at the process by which modern democratic states were established.
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The Establishment of Democracy in the UK: Not an Idealistic Process
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When a growing number of people develop a strong sense of rights, it can lead to the formation of a democratic political system. In modern Russia and China, for example, even though people’s standards of living and awareness of their rights have risen, democracy has not taken root due to the strict control exerted by the Communist Party and state security forces.
But societies that have been under authoritarian rule for a long time tend to experience chaos when liberalized, as various forces vie for power and interest. Even in Western Europe, the current democratic system was established only after a series of turbulent events.
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In the United Kingdom, the power of the monarchy was gradually curbed, and by the 18th century, political authority had shifted to Parliament, laying the groundwork for a democratic system. When I was young, “British democracy” was often idealized—spoken of almost as if it were sacred. People seemed to believe the British had created such a system because of some inherent superiority.
However, looking at British politics today, it is impossible to believe that democracy is something sacred. The age-old human struggles for power and the pettiness of political maneuvering are there.
Still, the UK developed a constitutional monarchy, a parliamentary cabinet system, a structured party system, and expanded voting rights. These achievements deserve praise.
Britain’s path toward democracy was not guided by any noble or consistent blueprint. Instead, it evolved through cycles of conflict and compromise, with Parliament, the Church, the monarchy, and the gentry often fractured—even internally.
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Parliament’s Early Efforts to Limit Royal Authority
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In the early 17th century, England—under the influence of the Duke of Buckingham—repeatedly attempted to go to war with France but failed. This forms the backdrop to Alexandre Dumas’ novel The Three Musketeers. In 1629, the war with France ended inconclusively. When King Charles I demanded that Parliament fund the expenses, it responded in 1628 with the “Petition of Right,” which repudiated arbitrary arrests, taxation without parliamentary consent, forced quartering of soldiers and unilateral declarations of emergency powers by the king. Buckingham was assassinated that same year.
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During the English Civil War (also known as the Puritan Revolution) starting in 1642, the king’s power collapsed. King Charles I, caught in the conflict among the elites, was executed in what was essentially an extrajudicial process. England then became a republic for 12 years—but this did not mean Parliament took control. Oliver Cromwell, calling himself Lord Protector, established a dictatorship. After his unexpected death from influenza, the monarchy was restored in 1661 with Charles II returning to the throne. But the power struggle between Parliament and the king continued.
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In the Glorious Revolution of 1688, Parliament allowed William of Orange—who had arrived from the Netherlands with 15,000 troops and whose wife Mary had a claim to the English throne—to be crowned as King William III. In exchange, Parliament adopted the “Bill of Rights,” which further separated royal authority from parliamentary power.
At the time, King James II’s army was weak, and many generals had defected to William, who had arrived under the banner of “defending Protestantism.” The transition was nearly bloodless—hence the name “Glorious Revolution.”
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Although the UK is said to lack a formal written constitution, key documents like the Bill of Rights have accumulated to form the foundation of the British political system. The Bill prohibits the king from suspending laws without Parliament’s consent, bans taxation and standing armies in peacetime without approval, and guarantees free parliamentary elections and freedom of debate within Parliament.
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Still, William III continued to wage war against France on behalf of the Netherlands and spent long periods on the continent. Tory members of the British Parliament, seeking to curb royal power further, pushed through a major reduction in the standing army in 1698 and separated royal finances from defense expenditures—effectively forcing the king to keep Parliament in session to fund his wars.
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In 1701, Parliament passed the Act of Settlement, requiring the Privy Council—advisors to the king who were not part of either Parliament or the Cabinet—to explain their advice to Parliament. It also restricted the king’s religious and political freedoms and banned foreign advisors.
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Despite these constraints, William III tried to maintain support from the Tories to continue the war with France. But one day, he fell from his horse after tripping over a molehill and died at the age of 51. Legend has it that this humble mole advanced English democracy—a metaphor, perhaps, for the role of hidden forces (or even spies) in shaping history. At the time, a popular street ballad praised the mole.
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After William’s death, his cousin Anne took the throne. Upon her death, the Stuart line ended, and, under the Act of Settlement, Parliament invited Georg Ludwig, Elector of Hanover, a German descendant of the Stuarts, to become King George I.
This marked the beginning of the House of Hanover, later renamed the House of Windsor to avoid a foreign-sounding royal name. During this period, Parliament gained even more power, since George I spoke little English and spent much of his time in Germany—a pattern repeated by his son, George II.
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The Emergence of Political Parties
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It was during this period that political parties began to take shape in Britain. Even today, I find it hard to define what a political party is. I’ve always believed it’s better to discuss things openly and reach consensus. Why form factions when you can just talk things over, like at a town hall meeting?
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But when hundreds of elected representatives from across the country need to make decisions in a democracy, political parties become necessary to coordinate their views. I was working in Russia in 1992, right after the collapse of the Soviet Union, and at that time, political parties in the Russian parliament were still forming. Members would just shout their individual opinions, trying to get TV airtime to impress their local voters. That’s when I learned an important lesson: “In a democratic parliament, political parties are essential. Without internal party consensus, cross-party debate, and structured voting, nothing gets done.”
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Political parties in Britain only gradually took shape. At first, they weren’t based on economic classes—like capitalists versus workers or farmers—but were instead collections of ruling-class factions. Only in the 19th century, with the rise of the middle and working classes after the Industrial Revolution, did political parties become organized around class and occupation.
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In the late 1600s, two main factions emerged: the Tories, aligned with the monarchy and the Anglican Church, and the Whigs, who were more critical of royal power. Charles II, after being restored to the throne in 1660, leaned toward France and sought to promote Catholic interests, opposing Parliament in the process. This gave rise to these early factions.
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During the Glorious Revolution, the Tories and Whigs cooperated to remove Charles II. The post-revolution government was a blend of both factions. These factions weren’t yet formal parties but loose alliances based on kinship, blood ties, and loyalty to influential leaders.
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As William III continued his wars, tensions with the Parliament deepened. Between 1695 and 1713, Britain held nine elections for the House of Commons. Party identities began to solidify. The Tories, supportive of the king and Church, often won more seats, but real power tended to lie with the Whigs, who often produced more capable leaders.
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By the late 18th century, parliamentary party secretaries emerged, and formal party organizations began to take shape. While the Tories came to represent smaller landowners and the Whigs large landowners and industrial interests, both were still dominated by the gentry. At the end of the 17th century, members of parliament did not necessarily act as a unified bloc based on party affiliation.
Today, in our post-industrial, increasingly diverse societies, traditional party foundations are eroding. Strong-willed individuals now form new parties and build support through social media. As the nature of representation evolves, we must consider why political parties exist and whether there are alternative mechanisms that could replace them.
However, let us first look at how party politics came into being in 18th-century Britain.
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The South Sea Bubble prompted the parliamentary cabinet system
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In 1714, as mentioned earlier, Georg Ludwig, Elector of Hanover, was invited from Germany to become King George I of Great Britain. Seven years later, in 1721, Robert Walpole, leader of the Whig Party, became First Lord of the Treasury—a role equivalent to prime minister—and held the post for the next 21 years.
Walpole assumed real political power from George I. The king was not fluent in English, rarely attended cabinet meetings, and often returned to his homeland in Hanover. As a result, the cabinet effectively became accountable to Parliament, laying the foundation for today’s parliamentary cabinet system. Here’s how that came about.
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The cabinet had begun in the late 17th century as a small gathering of the king and selected members of the Privy Council. It functioned as the nation’s highest decision-making body. Walpole rose to power by exploiting the missteps of his Tory rivals—particularly during the South Sea Bubble, a financial scandal that echoed across British society. It went as follows:
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–In 1711, Robert Harley, a leading Tory and then First Lord of the Treasury, established the South Sea Company with the goal of eliminating Britain’s enormous national debt—about 30 million pounds at the time (equivalent to roughly $11 billion today). The plan was to support the company’s stock price by giving it the rights to trade in the Caribbean, including involvement in the slave trade (additional rights had been acquired from Spain as a result of a war). The government used those shares to buy up government bonds held by wealthy individuals. The concept was modeled on France’s Mississippi Company, which was in vogue at the time.
Another motive behind the scheme may have been to create a Tory-backed financial institution to compete with the Bank of England, which had been established under Whig influence. Indeed, when the Bank of England was founded, some in Parliament had criticized it as favoring Whig interests.
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In 1720, the Mississippi Company’s stock collapsed in France, and its promoter, the Scottish financier John Law, fled the country. French investors, desperate for alternatives, rushed to buy shares in Britain’s South Sea Company, further inflating its bubble.
Soon, a flurry of unauthorized stock issues emerged, and the share prices of the Bank of England and the East India Company also surged. In June 1720, the British government stepped in to impose regulatory restrictions. As with Japan’s financial bubble in 1991, the introduction of controls burst the bubble.
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The fallout hit Britain’s political elite hard. It was rumored that the king, queen, and many influential politicians held South Sea Company shares. Notably, Isaac Newton—discoverer of the law of universal gravitation—lost a fortune in the crash, while composer George Frideric Handel made a well-timed exit and used the profits to help establish the Royal Academy of Music (different from today’s one).–
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Walpole, an expert in financial affairs and a prominent Whig, was the ideal figure to lead the recovery. He worked to contain the damage, even shielding the royal family’s involvement by ensuring that key witnesses—like one who had fled to Belgium—were never called to testify. In doing so, Walpole earned a debt of gratitude from King George I.
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As I’ve mentioned before, democracy was not established through clean, principled reforms. It was carved out of the messy, self-interested struggles of elites—driven by money, power, and survival—even in the development of the parliamentary cabinet system.
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By the early 18th century, kings had stopped attending cabinet meetings, so the power of the “prime minister”—who chaired them—grew even more. Walpole’s long tenure helped institutionalize the modern cabinet system.
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