Page:Encyclopædia Britannica, Ninth Edition, v. 19.djvu/371

Rh POLITICAL ECONOMY 355 in furthering artificially the attainment of the several ends thus proposed as desirable. If we consider the contemporary position of affairs in western Europe, we shall have no difficulty in understand ing how these tendencies would inevitably arise. The discoveries in the New World had led to a large de velopment of the European currencies. The old feudal economy, founded principally on dealings in kind, had given way before the new &quot;money economy,&quot; and the dimensions of the latter were everywhere expanding. Circulation was becoming more rapid, distant communica tions more frequent, city life and movable property more important. The mercantilists were impressed by the fact that money is wealth sui generis, that it is at all times in universal demand, and that it puts into the hands of its possessor the power of acquiring all other commodities. The period, again, was marked by the formation of great states, with powerful Governments at their head. These Governments required men and money for the maintenance of permanent armies, which, especially for the religious and Italian wars, were kept up on a great scale. Court expenses, too, were more lavish than ever before, and a larger number of civil officials was employed. The royal domains and dues were insufficient to meet these require ments, and taxation grew with the demands of the monarchies. Statesmen saw that for their own political ends industry must flourish. But manufactures make possible a denser population and a higher total value of exports than agriculture ; they open a less limited and more promptly extensible field to enterprise. Hence they became the object of special Governmental favour and patronage, whilst agriculture fell comparatively into the background. The growth of manufactures reacted on commerce, to which a new and mighty arena had been opened by the establishment of colonies. These were viewed simply as estates to be worked for the advantage of the mother countries, and the aim of statesmen was to make the colonial trade a new source of public revenue. Each nation, as a whole, working for its own power, and the greater ones for predominance, they entered into a com petitive struggle in the economic no less than in the politi cal field, success in the former being indeed, by the rulers, regarded as instrumental to pre-eminence in the latter. A national economic interest came to exist, of which the Government made itself the representative head. States became a sort of artificial hothouses for the rearing of urban industries. Production was subjected to systematic regulation with the object of securing the goodness and cheapness of the exported articles, and so maintaining the place of the nation in foreign markets. The industrial control was exercised, in part directly by the state, but largely also through privileged corporations and trading companies. High duties on imports were resorted to, at first perhaps mainly for revenue, but afterwards in the interest of national production. Commercial treaties were a principal object of diplomacy, the end in view being to exclude the competition of other nations in foreign markets, whilst in the home market as little room as pos sible was given for the introduction of anything but raw materials from abroad. The colonies were prohibited from trading with other European nations than the parent country, to which they supplied either the precious metals or raw produce purchased with home manufactures. It is evident that what is known as the mercantile doctrine was essentially the theoretic counterpart of the practical activities of the time, and that nations and Governments were led to it, not by any form of scientific thought, but by the force of outward circumstance, and the observation of facts which lay on the surface. And yet, if we regard the question from the highest point of view of philosophic history, we must pronounce the universal enthusiasm of this second modern phase for manufactures and commerce to have been essentially just, as leading the nations into the main avenues of general social development. If the thought of the period, instead of being impelled by contemporary circumstances, could have been guided by sociological prevision, it must have entered with zeal upon the same path which it empirically selected. The organization of agricultural industry could not at that period make any marked progress, for the direction of its operations was still in the hands of the feudal class, which could not in general really learn the habits of industrial life, or place itself in sufficient har mony with the workers on its domains. The industry of the towns had to precede that of the country, and the latter had to be developed mainly through the indirect action of the former. And it is plain that it was in the life of the manufacturing proletariat, whose labours are necessarily the most continuous and the most social, that a systematic discipline could at a later period be first applied, to be afterwards extended to the rural populations. That the efforts of Governments for the furtherance of manufactures and commerce were really effective towards that end is admitted by Adam Smith, and cannot reason ably be doubted, though free trade doctrinaires have often denied it. Technical skill must have been promoted by their encouragements ; whilst new forms of national pro duction were fostered by attracting workmen from other countries, and by lightening the burden of taxation on struggling industries. Communication and transport by land and sea were more rapidly improved with a view to facilitate traffic ; and, not the least important effect, the social dignity of the industrial professions was enhanced relatively to that of the classes before exclusively dominant. It has often been asked to whom the foundation of the mercantile system, in the region whether of thought or of practice, is to be attributed. But the question admits of no absolute answer. That mode of conceiving economic facts arises spontaneously in unscientific minds, and ideas suggested by it are to be found in the Greek and Latin writers. The policy which it dictates was, as we have shown, inspired by the situation of the European nations at the opening of the modern period. Such a policy had been already in some degree practised in the 14th and 15th centuries, thus preceding any formal exposition or defence of its speculative basis. At the commencement of the 16th century it began to exercise a widely ex tended influence. Charles V. adopted it, and his example contributed much to its predominance. Henry Till. and Elizabeth conformed their measures to it. The lead ing states soon entered on a universal competition, in which each power brought into play all its political and financial resources for the purpose of securing to itself manufacturing and commercial preponderance. Through almost the whole of the 17th century the prize, so far as commerce was concerned, remained in the possession of Holland, Italy having lost her former ascendency by the opening of the new maritime routes, and Spain and Germany being depressed by protracted wars and internal dissensions. The admiring envy of Holland felt by English politicians and economists appears in such writers as Raleigh, Mun, Child, and Temple ; and how strongly the same spectacle acted on French policy is shown by a j well-known letter of Colbert to M. de Pomponne, ambas sador to the Dutch States. Cromwell, by his Navigation Act, which destroyed the carrying trade of Holland and founded the English empire of the sea, and Colbert, by his whole economic policy, domestic and international, were the chief practical representatives of the mercantile system. From the latter great statesman the Italian