The idea of economic decline has been with us for a very long time. The notion that human societies are bound to follow the cyclical patterns of nature – birth, life, decline and death – is found from the Greek philosophy of Plato to the Arab philosophy of Ibn-Khaldun. Only late Renaissance and Enlightenment Entzauberung – demystification – of the world picture view freed mankind from the cyclical vicissitudes of the blindfolded goddess Fortuna and opened up for rational economic policy to prevent booms and bust. During the last century the theory of decline in the Westmanifested itself in German Kulturpessimismus with Oswald Spengler's Decline of the West (1918), in the United States with Paul Kennedy's The Rise and Fall of the Great Powers (1987), but also as harsh reality in the Great Depression of the 1930s.

The combined effects of the present economic crisis, which started as a financial crisis in 2007, and the rise of Asia – particularly China – have again put the subject of economic decline on the agenda in Western countries. In a now virtually forgotten economic bestseller, Institutions Politiques, German Economist Jacob Bielfeld (1717– 1770), an advisor to Frederick the Great of Prussia, has a very comprehensive and – as opposed to Spengler's generalisations 150 years later – very concrete, detailed and specific list of the factors which cause the decline of nations. This paper brings the first ever English translation of this chapter with a brief discussion arguing for a renewed relevance not only of the factors and mechanisms pointed to by Bielfeld, but also of Bielfeld's fact-based and taxonomic approach to economic understanding. An important reason for republishing Bielfeld's chapter on the decline of nations is that it compares so favourably with the narrow focus of modern economic theory on the subject, exemplified in Daron Acemoglu and James Robinson's Why Nations Fail.

Europe at the time of Bielfeld presented a large number of nations from which to draw experiences. The 1648 Peace of Westphalia had produced around 400 independent states in Germany alone, although by 1760 the number had decreased considerably. Due to his position at the Court of Frederick the Great and in Prussia's Foreign Service, Bielfeld had unique access to information from many nations. Precisely because of this privileged access to information, Bielfeld's correspondence was published and translated (from French) also into German and English.