Elizabeth I: The Mother of All Monopolies

Part Nine in a series about copyright in the age of generative AI

This week on The Owner’s Guide to the Future, we are tracing the long arc of copyright from its origins in 17th century England to the modern era. To set that up, we must first consider the achievements of the House of Tudor.

Henry VII, the first Tudor king, was a usurper. He took the English throne by force in 1485 at the battle of Bosworth Field. That conflict marked the end to the Middle Ages in England. The death of Richard III ended the Plantagenet dynasty.

The Tudors expanded their dominion by uniting England with the Principality of Wales and the Kingdom of Ireland. Under Elizabeth I, they began England’s expansion to global empire.

But the Tudor perch on the throne remained precarious. It was a game that required cunning political instincts, diplomacy, force projection and a degree of paranoia.

While the Tudors ruled, continental Europe was consumed by a century of religious wars. These conflicts occasionally threatened to destabilize Tudor monarchs.

The Tudor line of monarchs did their best to avoid getting drawn into European wars, but sometimes that was impossible. It didn’t help that the second Tudor monarch, Henry VIII, had an unpleasant habit of beheading his wives when they failed to produce a male heir. Cutting the head off of a Catholic queen created expensive problems: it pit the Pope and several Catholic kings against England.

Tudor kings were expected to pay for government expenses from their own income, which was vast. But it wasn’t enough.

The increasing technological complexity of warfare, and the frequent clashes with other European powers, along with the expansion of naval warfare, and the resulting inflation, often meant that the costs of running the kingdom exceeded the monarch’s cash flow, which depended in large part on fixed income from Crown lands and tonnage and customs duties.

When the King (or Queen, another Tudor innovation) needed additional supplies to fight a war, it was necessary to turn to Parliament to approve tax measures or to provide funds. This put the monarch in a vulnerable and somewhat humiliating position. 

Keenly aware of this, the nobility and gentry never missed an opportunity to squeeze hard in their effort to extract concessions or impose further limits on royal power. Results varied. Some outspoken members of Parliament were harshly rebuked. Others were executed.

The Tudor kings and queens loathed this process. That’s why they avoided calling Parliament unless it was absolutely necessary. And that’s one reason why the economics of the kingdom were often precarious.

This is where a kind of monopoly, in the form of Letters Patent, fits into our narrative.

To modern ears, the word “patent” sounds like something issued to an inventor for an industrial or scientific innovation. That is accurate today, but it took more than a century for the concept to narrow to that modern meaning.

At the time of the Tudor monarchs, letters patent were written legal instruments that conferred an exclusive right, title or privilege on a person. Much broader than the modern definition of patent.

Later we will examine how the meaning of “patent” evolved from “a privilege granted by a king” to “a time-limited exclusive right to exploit an innovation.”

Tudor monarchs found that granting monopolies to friendly nobles and gentry provided an easy way to generate revenue without relying on Parliament. The merchants got their monopolies and, in exchange, the government collected some money.

The King’s side hustle of granting monopolies bypassed Parliament. It reduced the assembly’s power over taxation and revenue. Eventually this corrupting practice became a major obstacle in the path towards the separation of powers.

The question of limits on the king’s power became increasingly important after Henry VIII became the head of the Protestant Church of England: suddenly the monarch was no longer answerable to the Pope or the clergy.

Who was the King answerable to?

Whether the king was answerable to Parliament or the courts remained ambiguous until the Glorious Revolution ended in 1688. This was the decisive question about the separation of powers in pre-modern England. The Tudors, and the Stuarts after them, insisted on the divine right of the monarch.

A central figure in the struggle to define the power balance between the Crown and Parliament was Henry VIII’s second daughter, Elizabeth.

Elizabeth is a striking figure in English history. She managed to stabilize the nation at a time of political turbulence and economic turmoil. She preserved its independence from the great empires of Europe by remaining willfully unmarried. She prevailed against the Spanish armada in a 19-year war that set England on the path to becoming a formidable naval power and global empire. Like her father, she sought to promote commercial innovation and industry in her realm.

She achieved this despite some formidable hardships. At the age of 2, her father beheaded her mother. Elizabeth was declared illegitimate (four wives later, at the urging of his last wife, Henry finally reconciled with her). After her father’s death, she was imprisoned in the Tower of London by her half-sister, Queen Mary. When Bloody Mary died, she left her successor Elizabeth burdened with massive debts.

20 years later, Elizabeth was manipulated by her advisors into authorizing the execution of her cousin, Mary Queen of Scots, allegedly for plotting an insurrection. The consequences of a Protestant Queen killing a Catholic Queen were immediate. Forever after, Elizabeth lived in continuous peril of assassination and rebellion. Elizabeth was condemned by the Pope, who instructed her Catholic subjects to rise up against her. The Pope also urged the Spanish king to launch the armada against England.

As if the family drama weren’t enough, there were also physical hardships to bear. Though she is famous for her iconic appearance and lavish wardrobe, these carefully crafted trappings masked some severe personal difficulties. Shortly after ascending to the throne, Elizabeth nearly died from smallpox. After she recovered, her face was scarred. That is likely the reason she adopted the practice of wearing thick white makeup. That white makeup is suspected of giving her lead poisoning. Her famous red hair? A wig. She was bald. Also, having used honey (and later white sugar) to clean her teeth, in her elder years she suffered from rotted and blackened teeth that emitted a foul odor. Eventually she lost so many teeth that her speech was unintelligible to many. Life in the 16th century was tough, even for the richest lady in the world.

In spite of the hardships and the adversity, she understood that monarchy is a theatrical performance. She conducted herself with regal flair, hosting courtiers and noble guests at her 60 palaces, impressing them with her extravagant wealth, regaling foreign visitors in the four languages she spoke fluently, and cultivating the arts and theater. She took an avid interest in the economy and industrial innovation.

Elizabeth cranked the business of selling Letters Patent into overdrive. She was a prolific granter of royal patents, and remained famously aloof to Parliament’s attempts to contain her.

She never hesitated to issue monopoly grants to her favorites across many other areas of manufacturing, trade, and commercial sales.

She also issued licenses to Sir Humphrey Gilbert and Sir Walter Raleigh to raid Spanish colonies and create colonies in the Americas for England. These expeditions ended in failure, but on the last day of 1600, she made a momentous decision: she granted an exclusive charter to a company of English merchants for exclusive trading rights in the East Indies, which was an immense expanse that spanned from Africa’s Cape of Good Hope to South America’s Cape Horn: this grant formed the basis of the English East India Company, the most notorious monopoly in world history.

We could say that Elizabeth outsourced industrial policy and empire to the private sector.

Elizabeth’s use of monopoly grants turned into a kind of patronage system, whereby the Queen bestowed economic favors on her preferred nobles and revoked them from those who fell from grace. This was a canny way to manage the rival factions in court, and it kept a long line of hopeful suitors at her disposal. She managed to compromise many members of Parliament with such privileges.

Late in her reign, Elizabeth defended this practice to Parliament, saying, “yt is lawefull for our kingly state to grant guiftes of sundrie sorts of whome we make election.”

When Elizabeth ascended to the throne in 1558, the crown was rich in power but poor in funds. Her predecessor Mary had depleted the treasury and left the kingdom nearly 300,000 pounds in debt ($200 million today). One of Elizabeth’s signal achievements was to leave the kingdom on firmer financial footing by controlling expenses and avoiding the need to hire a standing army. Notably, she managed to pay down the realm’s vast debt just before war broke out against Spain and the arrival of the vast fleet of 130 warships in the Spanish Armada.

Turning to Parliament to raise funds was an unappealing option because it meant accepting constraints on her power and listening to questions about her unmarried status. Selling patents of monopoly enabled Elizabeth to bypass Parliament, and play one faction off another.

Elizabeth intended the monopolies to promote business and expand the economy. Her personal motive may have been money or independence; but it did not always work out as she hoped. The crown ultimately gained little economic benefit from her many grants of royal patents.

The licensees, however, took full advantage, fleecing the English townspeople with inflated prices for products that previously were readily available from multiple vendors. In the towns across England, anger grew as prices rose and some products grew scarce.

Parliament protested vigorously. In 1571, Robert Bell complained in Parliament that ‘by lycenses a fewe were enriched and the multitude impoverished’.

During the 1601 Parliament, lawyers in the lower house launched a sustained campaign against crown monopolies. Numerous Members brought in evidence that the ‘principallest commodityes ... are ingrossed into the handes of these bloodsuckers of the commonwealth’, and attacked monopolies as ‘the whirlepoole of the prince’s profittes’.

The charges rang true. Elizabeth’s project may have begun with the honest intention of fostering innovation but by the end of her reign it had devolved into a corrupt scheme that enabled proto-capitalists to bleed the English people.

Patent monopolies were granted across a wide range of industries, from the sale of salt, grains, wine, and coal, clothing and cloth exports, the manufacture of a wide range of goods, and even mining and the production of saltpeter. Many of these schemes were economic failures that caused markets to shrink.

The patent holders egregiously abused their monopoly privileges. Prices rose, quality declined. Innocent merchants were raided and ruined, and many workers were barred from their traditional professions.

That’s not all. Penalties for infringing a royal patent were unimaginably cruel, involving maiming, dismemberment and death.

As Adam Smith later wrote a century later in The Wealth of Nations, the process of enforcing royal patent monopolies could be brutal:

Like the laws of Draco, these laws may be said to be all written in blood . . . the exporter of sheep, lamps, or rams, was for the first offence to forfeit all his goods for ever, to suffer a year’s imprisonment, and then to have his left hand cut off in a market town upon a market day, to be there nailed up; and for the second offense to be adjudged a felon, and to suffer death accordingly.

No surprise, these spectacular abuses fueled resentment and sparked a backlash across the realm.

Animated with justifiable outrage, Parliament was nevertheless unable to accomplish much in terms of curtailing the Queen’s power. That’s because Elizabeth I was a canny manipulator of Parliament. She convened Parliament only 13 times in the 45 years she reigned. During the long Parliament that lasted from 1572 and 1581, Parliament was prorogued 54 times by the Queen, with the result that Parliament convened a total of only 17 weeks.

In 1601, a standoff over “odious monopolies” between the aging but stubborn Queen and a restive Parliament led to a compromise: the Queen revoked some of the most harmful monopolies, and both parties agreed to turn the power to administer patents over to the common law courts. This was a meaningful step in the centuries-long march towards the separation of powers.

Through a combination of guile, charm and just a few concessions, Elizabeth managed to thwart Parliamentary efforts to curtail her ability to grant patents; but her successor was far less proficient.

By the time James ascended after Elizabeth’s death in 1601, monopolies had fallen into great disfavor. Decades of abuse under the Queen left a lingering distrust that James managed to inflame by ignoring judicial decisions that overturned monopolies.

He shared the late Queen’s dislike of Parliament, writing to his son Henry in Basilikon Doron, “"Hold no Parliaments but for the necesitie of new Lawes, which would be but seldome".

James inherited debts of 400,000 pounds, mainly from the war in Ireland. Inept financial management amidst inflation added further economic instability during his reign. Eventually the prospect of war with Spain forced James’ hand.

By 1624 James could no longer avoid calling Parliament. That’s when the nobility made a decisive move. Their goal was to curtail the King’s boondoggle by ending the abuse of Letters Patent. They nearly succeeded.

The resulting 1624 Statute of Monopolies was a significant milestone in the separation of powers, but it was not complete. It succeeded in repealing and eliminating most of the royal patents; but it left open loopholes for “corporations, companies… or societies of merchants” that would soon be abused by the next ruler.

According to Wikipedia:

The statute did not stop the monarch issuing such patents in return for money; after James I's death, Charles I continued issuing them and avoided having to obey the law by having any cases heard in the conciliar courts, such as the Star Chamber. In response to this abuse and others, the Star Chamber was abolished by the Habeas Corpus Act 1640.^[31] After the English Restoration, these activities largely ceased because of the dominant power of Parliament and the Bill of Rights 1689, which completely abolished the king's ability to disobey or alter statute.

In a more positive light, the Statute of Monopolies established the concept that a monopoly pertaining to an innovative new method of manufacture could be granted, but only for a limited time of 14 years. This is widely viewed as an important milestone in patent law. It seems awfully close to the modern concept of a patent. Some consider this the beginning of Britain’s long ascent to the pinnacle of industrial innovation as the world leader in advanced manufacturing a century later.

The Statute depended largely on judicial process to function properly. This marked the another milestone in modern intellectual property law, namely the separation of power to the judicial branch to make decisions about the validity and applicability of patents to specific circumstances.

The judicial process took time. More then a century of litigation followed before a comprehensive legal doctrine of patent law was established.

The struggle to attain a fine balance between the rights of IP owners and the interests of the public would persist long into the next century.

The Statute of Monopolies also carved out an exception for printers which is important for our understanding of copyright.

This is where our story turns to the Worshipful Company of Stationers. We will go there tomorrow.

Note: some readers have asked me about my images. The pictures that accompany this article were generated by Midjourney.