Digitized by the Internet Archive in 2007 with funding from Microsoft Corporation http://www.archive.org/details/christianityeconOOcunnrich CHRISTIANITY AND ECONOMIC SCIENCE BY THE SAME AUTHOR. THE GROWTH OF ENGLISH INDUSTRY AND COMMERCE. Vol. I. Early and Middle Ages. 5th Edition, pp. xxvi, 724. 1910. Vol. II. Modern Times. 4th Edition, pp, xxxviii. 1038. 1907. AN ESSAY ON WESTERN CIVILISATION IN ITS ECONOMIC ASPECTS. Vol. I. Ancient Times, pp. vii, 220. 2nd Edition, 1911. Vol.11. Medieval and Modern Times, pp. xii, 300. 2nd Edition, 1910. THE GOSPEL OF WORK, BEING FOUR LECTURES ON CHRISTIAN ETHICS. Pott 8vo. pp. xiv, 144. 1902. CAMBRIDGE UNIVERSITY PRESS. CHRISTIANITY AND SOCIAL QUESTIONS. Crown 8vo. pp. xi, 232. 1910. DUCKWORTH & CO. THE CASE AGAINST FREE TRADE. With a Preface by the Right Hon. Joseph Chamberlain, pp. xvi, 1 .37. 1911. THE USE AND ABUSE OF MONEY. Crown 8vo, pp. xxiv, 219. 1891. JOHN MURRAY, ALBEMARLE STREET, W. CHRISTIANITY AND ECONOMIC SCIENCE BY W. CUNNINGHAM, F.B.A. FELLOW OF TRINITY COLLEGE, CAMBRIDGE, AND ARCHDEACON OF ELY LONDON JOHN MURRAY, ALBEMARLE STREET 1914 .c [ALL RIGHTS RESERVED]. Sherratt and Hughes, Printers, London and Manchester. PREFACE. This volume contains the substance of a course of five Lectures which I delivered last October, at the London School of Economics, on the Influence of Religious Conceptions upon the Historical Develop- ment of Economic Doctrines and Theories. I have been conscious throughout of my indebtedness to the erudite and suggestive work of Dr.Troeltsch, entitled Die Soziallehren der christlichen Kirchen und Grupfen. For the present I have endeavoured to concentrate attention on the history of Thought, but I hope to supplement the discussion at another time by dealing with the part played by Christianity in helping to form the modern conception of Social Duty. W.C Trin. Coll. Camb. ifth March, 1914. CONTENTS. I. Introduction. Changes in external conditions, and in mental habits. Religious influence as embodied in Mediaeval Institu- tions. The religious, and the scientific habit of mind. The recognition of this contrast as a help to interpret the past, and to criticise current opinion in the present i II. Order and Progress. The Creator as the Supreme Owner, and human claims to use His gifts. Communism and exclusive use. Different interpretations of the good of the Com- munity. Enclosures. The encroachment of pro- gressive peoples on primitive races. The appropriate standpoints for studying economic phenomena, in mediaeval and in modern times respectively. Recent reversion to the mediaeval standpoint 9 III. Work and the Maintenance of Labour. The monastery as a unit of industrial organisation. The vitality of the monastic ideal. The Christian conception of work, as a privilege and a discipline. The principle of assigning maintenance to labour of any kind, contrasted with that of remunerating of each man according to his worth in the labour market. The difficulty of reckoning the living wage. The success of Christian Communism. The effectiveness of spiritual forces 21 viii CONTENTS IV. The City and the Nation as Economic Units. The monastery and the town as economic units. The maintenance of commercial morality. The promotion of common interests. Fairs and the commercial spirit. The field of Economic Science. The decay of the towns as centres of well-ordered economic life. The rise of national economic organisation. The body politic and the body economic. Disparagement of national life 38 V. Calvinism and Capital. A reformed Christian polity and royal power. Christian Polity as reconstructed by Calvin. The Old Testament and usury. City Theocracies and commerce. The Scottish National Theocracy and industry. The gain and loss in alliance with Capital. The development of Economic Science - - 58 VI. The Limitations of Economic Science. The means of life and modern civilisation. Mediaeval Life. Dissatisfaction with Modern Civilisation. John Stuart Mill and rational Atomism. The right to equal opportunities. The aggregate of satisfactions. The wholesome and vigorous life of mankind. National life and the life of the citizen - - 76 Appendix. The economic basis of a policy of Universal Peace — Cosmopolitan or International ? - - - 101 Index - - - - 109 I. INTRODUCTION. Economic Science, as formulated by the classical writers of the nineteenth century, appears to be so far apart from Christianity that it is hardly worth while to consider their relations to each other. But after all, the human activities with which Econo- mics deals, lie within the sphere of Christianity. Economic Science has grown up in Christian lands and could not escape the influence of its environ- ment. The relations between religion and econo- mics are well worth discussing even though they are somewhat obscure. The problem of tracing the influences which have gone to shape current opinion on any subject must always be intricate, and the results of such an enquiry are not unlikely to prove inconclusive : there are, moreover, special difficulties in detecting the conditions which have contributed to the growth of Economic Science, since the points of contact with other human activities and interests are both numerous and diverse. Experience of external con- ditions on the one hand, and changes in mental habit on the other, have played a part in the develop- ment of Economic Science; and it is not easy to distinguish the relative importance of the two factors. A change of circumstances has often been the occasion of progress in knowledge; times of adversity have set men a-thinking as to the possi- bilities of doing better, while the prosperitv of rivals has raised the question as to the best means of copying their success. There has also been progress in the art of learning from experience ; unless changes in the power of interpreting it, and in habits of focussing it, are taken into account, any explanation of the progress of science will be very defective. The decline of the intense civic patriotism of the 2; ■ INTRODUCTION Middle Ages, and the free field which has been left for individualism in modern times, have made an extraordinary difference in the treatment of economic questions. However careful we may be, in our analysis of the factors that have contributed to the formation of opinion and the formulating of thought, we can never feel that we have probed the matter to the bottom, and reached bed-rock on which our conclusions can be firmly based. We cannot fail to recognise the enormous influence exercised by some one man, such as John Locke or Adam Smith ; but this is only to throw the difficulty back into a more obscure region ; for the question as to the manner in which personal opinions have been moulded can never be exhaustively treated. Each of us may know, in considering the development of his own mental life, of influences which were very potent, though they have left no outward mark ; while conditions, of which we are unconscious, have also helped to form the atmosphere in which we habitually live. The student may be able, from the materials before him, to put together a connected story to which no excep- tion can be taken ; but there is no means of verifying his conclusions, and of being sure that the analysis is correct and that nothing of import- ance has been overlooked. The evidence is neces- sarily incomplete, and we can only do our best with the materials before us. Under these circumstances it might seem almost hopeless to attempt to enquire into the manner in which religious conceptions have affected the devel- opment of economic doctrines and theories. Christianity has undoubtedly been a powerful influence, which has brought about the enlarging of economic experience as well as the modifying of habits of thought. A religious movement led to the expansion of commerce at the time of the MEDIEVAL AND MODERN 3 Crusades, and religious history in modern times offers a parallel to the individualism which has dominated economic thought; but can we hope to specify the precise importance which ought to be ascribed to this factor? Religion, as a spiritual element, seems to be so elusive that we can hardly work it into its proper place in a chain of cause and effect; it can only be observed in conjunction with other elements, and we cannot separate it so as to treat it by itself. We may think we can note occa- sional instances of actions, or of personal habits of conduct, which could not be accounted for without referring them to Christian motives ; but the ques- tion is not restricted to exceptional incidents, it is concerned with the ordinary habits of society. We wish to discriminate the elements in current thought on economic subjects which are Christian in origin, even if they have entirely ceased to be consciously religious. The problem may, however, be re-stated in a form in which it presents less difficulty, by setting our- selves to compare and contrast social phenomena at two different periods. During the Middle Ages, human activities and intercourse were dominated by religion, while in modern times political and economic life has been secularised. By comparing Mediaeval Christendom with society in the present day, we have a method of estimating religious influ- ence on modern economic thought, and one that is very suggestive and not altogether unreliable. We may see, on the one hand, how the gradual with- drawal of certain human activities from conscious reference to religious duty has helped to define the scope of Economic Science; and on the other we may note the survival or reappearance of habits of thought which were widely diffused throughout the Middle Ages, and which are still current to some extent, though they are not quite congruent with 4 INTRODUCTION our ordinary ways of thinking in modern times. The contrast between the past and the present helps us to detect and to gauge the influence on modern economic doctrine which may be fairly ascribed to Christianity. The contrast between the mediaeval and the modern, on the intellectual side, may be summed up by saying that mediaeval thought was religious, while modern thought is scientific. The distinction, when stated in this bald and unqualified fashion, is one to which many people might take exception ; some are inclined to disparage the religion which was current in the Middle Ages as superstitious, while others might question the claims of present day opinion, which is so easily carried away by sciolists and charlatans, to be in any real sense scientific. But even though platform oratory may abound in hasty generalisations and many other faults of reasoning, it professes to take a scientific basis of fact and to be scientific. In the same way, scholasticism may be despised as barren ; the grossness and cruelty of mediaeval life may be denounced as a scandal to religion, and the modes of worship may be condemned as sensuous, but the men of the Middle Ages were religious in their habits of mind. Science starts from particular facts and groups them and generalises from them, but religion starts from the Universal, — the thought of God ; science is content to discuss the relations of particular phenomena to one another, while mediaeval thought, on all matters of human conduct, was so formulated as never to leave the relation of man to the Will of God out of sight. All the institutions of the Middle Ages, — political, social, and economic, — were permeated with religious habits and exerted authority under religious sanctions, because they were consciously referred to the Will of God, or to the authorities who were believed to represent Him INSTITUTIONS AND CHARACTER 5 on earth and by whom the Divine Will was brought to bear among men ; all aspects of life were discussed in terms of duty. Our whole habit of mind in modern times is different ; the method of procedure is scientific ; we begin with the particular facts, — as to the quotations of prices in the markets, the conditions of production and the prospects of trade. We build up our doctrines from this basis of fact, and form generalisations which hold good more or less widely in space or time ; but we rarely, if ever, reach a principle that can claim to hold good universally, at all times and in all circumstances. This difference in the intellectual standpoint accounts for the mental attitude of men in the Middle Ages in regard to many practical matters; they accepted and valued institutions for forming human character aright. We all recognise that the surroundings in which a man is brought up, — the school and university to which he goes, all the conditions of the life around him and the institutions of the country in which he lives, — do a great deal to form his character. Institutions count for so much, and they mark the deep differences between one nation and another; Godwin and others have held that the evil in the world was mostly due to the depraving effect of bad institutions. There is much to be said for the view that it is of supreme import- ance to maintain and strengthen institutions; but after all, the morality of those who merely conform to the environment in which they live is somewhat shallow. There is more depth in the character of the man whose habits of conduct are the outcome of his own experience and his own determination ; in modern times we desire that the individual should have free play to realise the best that is in him. All the questions as to the relation of the individual to society were set in a different light in the Middle Ages from that in which we view them to-day. 6 INTRODUCTION There is another important point which arises in connection with the highly religious character of mediaeval thought ; the men of these ages always kept before them the thought of a world to come as the ultimate object of human endeavour. S. Augustine rejoiced to recognise that a City of God was rising on the ruins of the pagan world, and Aquinas delineated the lines on which it was framed ; but neither of them would have thought of any earthly community as fulfilling their ideal for man. They looked on the Christian Polity, with all its institutions, as the divinely instituted means of preparing men for the world to come ; the mundane sphere was not regarded as a place for happiness, but for discipline. The conception of a Utopia estab- lished on earth is not mediaeval ; as Troeltsch points out in his monumental work, it is humanistic, and dates from the Renascence. 1 The interpretation of the Kingdom of God as an earthly Utopia differen- tiates modern Christian Socialists from the writers on Economics in the Middle Ages; the mediaeval thinkers never looked for a perfect mundane Society, and many of them withdrew from the world ; while Socialists speak as if the chief duty of Christianity was to introduce universal happiness here and now. It is important to keep the broad contrast between the mediaeval and the modern clearly in mind; if we allow it to drop out of sight we are in danger of falling into anachronism and misinterpreting the past. To take account of the extraordinary changes, which have occurred in the conditions of life, is far easier than to reckon the allowance that must be made for a revolution in the conscious life of the people. The picture of the extraordinary discom- fort, in which people lived, strikes the imagination ; and the poor must have been destitute of much that 1. Troeltsch. Die Soziattehren, 331, 421. TRADITIONAL SENTIMENTS 7 we should regard as necessary for decent life. We readily recognise the marvel of the achievements of the men of the Middle Ages, when we recall the limitation of their power of overcoming mechanical difficulties, and the lack of facilities for travelling before the era of invention. But it is very difficult for us to think ourselves into the thoughts and to understand the motives and aspirations which influ- enced the men of bygone times. The Articles in which the commons of Lincolnshire and Yorkshire formulated their demands in 1536/ and the griev- ances which the men of Devon and Cornwall put forth as the ground of their rebellion in 1549, are curiously unlike any cry that would rouse an agita- tion in the rural districts to-day. 2 We cannot appreciate the causes which were at work in shaping the course of history, if we are content to look at these occurrences in the light of our own experience of popular feeling in modern times. This is not merely a matter which concerns the historical student, it is of considerable importance in regard to practical affairs as well. The Middle Ages have passed away; but they have left their mark for good or for evil on succeeding generations; it is necessary that we should consider what this surviving influence is worth for our day. Over some minds the mediaeval exercises a strange fasci- nation, and they are ready to idealise it; while others think of the survivals as rubbish which might have been wisely swept away with the rest of bygone habits and usages. There is need of careful criticism to clear our minds ; we are apt to accept traditional sentiments, which are deeply rooted in popular thought, as if they were axiomatic; they have come down to us and we take them for granted without asking on what basis they rest, or consider- i. Rose-Troup. The Western Rebellion of 15JL9, 10. 2. 76., 126. 8 INTRODUCTION ing whether they are so far consistent with the other principles we accept as to form a coherent whole. We cannot find any definite guidance in economic doctrines to-day, unless we are sure that the principles on which they are founded are self-consistent. We are bound to consider how far any traditional sentiment or rule can justify itself, either because it makes for clear thinking, or because it is of real service in dealing with practical affairs. Modern calculations about the mechanism of society are not in the same plane as mediaeval discussions of honesty in secular callings; it is right that considerations of duty should control the working of the social machine and direct it; but when they are introduced haphazard and arbitrarily, they may only put it out of gearing. II. ORDER AND PROGRESS. " The earth is the Lord's and the fulness thereof " was the fundamental principle of mediaeval econo- mics as well as mediaeval politics. Civil authority was thought of as given by God ; no human being could have a right to demand obedience from another because he chose to do so, though he might have the power to enforce it. His rightful authority over others was due to his official character as a magistrate ordained of God to bear the sword and execute the divine Will. The principles of the direct responsibility of the Prince to God, and of divine authority to demand obedience, continued to be widely recognised in the seventeenth century; and during the same period the sense of direct responsibility to God, for the use we make of the things He has created, was still kept clearly in view. An early writer on Vegetarianism urges that by the divine grant to Adam in Paradise, permission was given to man to use the animal creation, and to have dominion over it, but argues that this does not include any right to slay and eat. He contends that to use animals for food was an unwarrantable exten- sion of the divine grant, and asks triumphantly what the owner would say if he found that a friend, to whom he had lent his horse for a ride, had felt at liberty not only to ride the horse but to eat him as well. The belief that God is the one supreme owner underlies the mediaeval treatment of all questions as to the use to be made of goods, and as to the right to appropriate and claim exclusive use. The religi- ous explanation of the grounds on which the human claim to use natural gifts was based, was of pre- dominant interest from the practical side. Con- sumption was the aspect of economic life which R 9 io ORDER AND PROGRESS attracted most attention ; when the means of communication were bad, each town or village had to depend on its own resources for the necessities of life. The chief practical problem was that of making the food supply last till the next harvest; there were no means available for doing much to increase the quantities produced ; these depended almost entirely on the character of the seasons and other natural conditions; human intelligence was only concerned in regulating consumption wisely; and this was the chief practical problem in mediaeval economics. The belief that God was the supreme owner, and had created earthly things for the good of the race as a whole, might have easily been interpreted as giving a religious sanction to communism ; and it has been so interpreted by various sects from time to time ; but this was never the generally accepted doctrine. Utilitarian considerations were brought forward to justify the recognition of private pro- perty as an institution which tended to the advantage of the community as a whole. On the one hand, as Aquinas pointed out, 1 goods are likely to be better cared for and more wisely used if they are regarded as private possessions instead of being held in common ; agricultural improvers at many times have argued that experience confirmed this opinion as to the neglect and loss which arose in connection with common wastes. He also main- tained that the assignment of property in private hands tends to the good order of Society, as each man knows what is his and can refrain from en- croaching on his neighbour : while it was also alleged that there w 7 as much less excuse for quarrel- ling when public opinion secured individuals in the enjoyment of their possessions. On these grounds the institution of private property was regarded as 1. Summa 2», 2ae, q. 66, art. 2. PRIVATE PROPERTY n in complete accordance with the Divine govern- ment of the world. Those who feared the tempta- tions of wealth were able to renounce it and seek the seclusion of a cloister ; but, for those who remained in the world, it sufficed to ask the legal question as to the title by which they held it, and as to the manner in which they discharged the military and other obligations which attached to it. Mediaeval writers had no means of discussing or defending the actual distribution of property, whether it was held collectively or by individuals personally ; when the question was vigorously raised in the later Middle Ages, it almost inevitably took the form of an attack on the authorities of Christendom for lending their sanction to existing conditions. Since the Reformation the sense of personal responsibility has been quickened, 1 and we are no longer satisfied to take this principle of authoritative assignment and legal title as ultimate ; the question is frequently raised as to the manner in w T hich property is used. We are inclined to apply the utilitarian principle, which Aquinas employed to justify the existence of private property as an insti- tution, to test the claims of particular proprietors. Our view of the good of the community is not con- fined exclusively to considerations of order, it also demands that scope shall be left for the possibility of progress. In new countries it is easy to arrange that the two conceptions shall be combined ; the settler has land assigned him, not absolutely, but subject to the condition that he turns it to profitable use. The right to exclusive possession does not rest solely on authoritative assignment, but the owner has to justify his claims by the use he makes of his property. In old countries, however, the two conceptions of the good of the community may come into conflict. The demand of the progressives, — 1. B. S. Phillpotts. Kindred and Clan, 83, 129. 12 ORDER AND PROGRESS that it is right that natural resources should be held by those who can make most use of them, — is inconsistent with the view of those who feel that it is right that the traditional order should be main- tained. Neither in mediaeval nor in modern times is the absolute right of particular proprietors seri- ously urged ; the institution of private property does not rest either on a divine fiat, or on a clear natural right; it rests on utilitarian considerations, and these will wear a different aspect according as the main need of any community is the maintenance of order, or the opening of facilities for progress. As we look back on some of the most disturbed periods of English history we see how these two principles were in conflict; the progressive sense of what was right had hardly been consciously formu- lated ; but it exercised a decided influence on the conduct of the authorities, and helps us to under- stand the ground of their action. Many points have been cleared up in recent years in regard to the history of the enclosures in the fifteenth and sixteenth centuries. Mrs. Knowles x and Mr. Tawney have efiven ample evidence to show that while there was a great expansion of sheep-farming during this period, there was also a steady move- ment for the introduction of agricultural improve- ment which involved the abandonment of traditional methods of land management, and the breaking up of common fields and common waste so that they might be used in severalty. The Crown and parliament were by no means disposed to let things take their own course ; it was long before the days of laissez faire, and there was every readiness to interfere in economic matters. As Mr. Tawney 2 says of these times, ''Public opinion still clings to 1. Cf. Cunningham. Growth of English Industry and Com- merce, 5th ed. 1910, §§119, 150, 151, 152. 2. R. H. Tawney. Agrarian Problem in the XV 1 Century, S07. ENCLOSURES 13 the conception that there is a standard of fairness in economic dealings which exists independently of the impersonal movements of the markets, which honest men can discover, if they please, and which it is a matter of conscience for public authorities to enforce." Nor do the political powers appear to have yielded to the temptation to take the course which was approved by the wealthy and prosperous, and to have neglected the interests of humble folk. Many attempts were made, both by direct legislation and by the imposition of preferential duties, to check the movement for forming large sheep-farms ; these might be profitable to private persons but they were not in the interests of the community, as the land, when devoted to husbandry, provided employ- ment for a larger population, and could be made to raise a larger supply of food. On the other hand, there were a large number of the old-fashioned farmers who were using the land merely for subsist- ence farming, and not endeavouring to grow corn to supply the markets. Much sympathy might be felt for those who were carrying on traditional methods and could not, or at any rate did not, adapt themselves to the practice of convertible husbandry and the improved methods of tillage ; and while an attempt was made to secure them in their legal rights, parliament made no proposal to confer on them any additional security, as they were not making the most of the land in the interest of the community, and were proving an obstacle to agricul- tural improvement. Naturally enough public opinion was sharply divided at the time; More and Latimer and many others can be quoted as believing that it was right that the traditional order should be maintained, while others held strongly that it was right that scope should be given for agricultural improvement, so that the land should be applied to the best purpose and made the most of in the public interest. 14 ORDER AND PROGRESS The contact of progressive societies with primitive peoples has given rise to similar difficulties in modern times; the encroachment of one people on the territory of another is no longer so indefensible as it was in mediaeval times. A cloak was needed then for territorial aggression, though the allegations of hereditary title which sufficed, were sometimes very shadowy. Dante treats the border raids of the English and the Scots as inexcusable disturbances roused by men who were ' impatient of their bounds.' 1 There was probably little difference in the use made of the land whether it was held by one side or the other, and none but themselves were affected; with modern means of communication, however, the world as a whole is concerned in the use made of any part of it. There is loss to the whole if large tracts of territory are allowed to remain as unreclaimed wilderness, where primitive men hunt or graze their cattle, and cultivate crops for their own subsistence, instead of being occupied by a progressive race who are able to make the most of all natural resources. Those who open up a country so that its products are available for distant peoples render a service to the world as a whole. Whatever sympathy we may have with those who only ask to be left alone, and to be allowed to carry on their traditional habits of life on land they have traditionally occupied, it is difficult to see on what grounds they can be protected in a wasteful use of the soil permanently, while others are ready to intro- duce more intensive agricultural production or to develop industrial occupations. According to the modern sense of what is good for the world as a whole, it is right that lands should be controlled and used by those who can make the most of them, and it is difficult to see how any barrier is to be built up which will prevent such encroachment. The 1. Dante, Par. xix, 121. NATIVE RACES 15 modern view explains the principle on which men habitually act in the present day and are likely to act; the mediaeval view cannot be brought to bear to govern action, though it mav remind us of ideals we ought to cherish, and set us a-thinking of correc- tions to the dominant tendency which ought to be introduced. Thinking clearly is essential in the first instance, if we are to do our social duties effec- tively ; to formulate scientific principles as to what is likely to happen in progressive societies is neces- sary in order to enable us to anticipate mischief that may arise, and to modify the operations that produce it. Practical men are not prepared to respect the claims of the traditional occupants to the exclusive use of resources which they are unable to put to the best purpose for the common good of mankind. The best hope of a solution of this difficult problem lies, not in erecting an artificial and permanent obstacle against the advance of progressive societies, but in maintaining temporary conditions which afford to primitive peoples time and opportunity to adapt themselves so as to find a place in a progres- sive society. There is much to be said for the policy of establishing reservations of territory in which the native races may follow their own habits of life, while care is taken to enable them to adapt them- selves to the usages of the society which has sur- rounded and is destined to absorb them. The end in view, — the good of the community — is differently conceived in stationary and in progres- sive communities, and therefore there must be distinct and possibly conflicting opinions as to what ought to be done ; there is no absolute standard by which the good of the community at all times and in all places can be gauged. It is also true that the methods of study, which are appropriate to the phenomena of a stable society, are not the most convenient instruments to employ when we come 16 ORDER AND PROGRESS to observe progressive societies. The process of economic life involves the three factors of produc- tion, consumption and exchange. All are necessary elements in any society where money economy is a prevailing characteristic, and none of them can be left out of account ; but they do not each afford an equally convenient vantage ground for viewing the phenomena in their mutual relations. Where human powers of overcoming nature are hardly developed there is little to be gained by concentrating attention on the conditions of production ; but it is the characteristic feature of progressive societies that human powers of controlling natural forces and directing them by mechanical means have such enormous importance both in agriculture and indus- try. Publicists in progressive countries, during the last three hundred years, have viewed economic questions from the point of view of production rather than from that of consumption ; both under the Mercantile System, and under the regime of laissez faire, this was the topic which received the largest share of attention. There must, of course, be a forecast as to the probable effects on the con- suming public of any change, but it is the producer who initiates the actual change itself. He endeav- ours to create a further demand by supplying goods on better terms ; and by the organization of business, or by the introduction of machinery which enables the consumers to be better served, the producer takes the risks and acts. By looking at economic pheno- mena from the point of view of the producer we are in the best position for understanding the reasons of any change and the manner in which it operated ; we can get an inside view of the situation. In recent times, however, there has been a reaction ; a new school of economists has arisen, both in Austria, France and England, who are inclined to revert to the mediaeval standpoint, and to put con- CONSUMPTION 17 sumption in the forefront. There is much to be said for the proposal to recast Economic Science on these lines; consumption is the final end for which all production is undertaken, and it seems wise to keep this final end constantly before us. In dealing with consumption too, we are fixing our attention on something that concerns the whole human race and every member of it. The powers of production and the interests of different individuals and different classes of society are quite distinct; they are separate and may easily conflict ; but in human needs there is something that is common to all mankind, and this opens up the prospect of formulating a science with laws and maxims of universal validity for all times and places. There has been a further and a practical reason for this reversion ; since the era of mechanical invention and the introduction of giant industry, it has seemed as if there were a constant danger of overproduction, while on the other hand there are masses of the population who habitually suffer from the direst want, and live in most miser- able conditions. There is a general impression in the public mind that what we need in the present day is to fix our minds on the distribution of wealth, and not to trouble ourselves further about produc- tion at all. In regard to this last point, however, it is worth while to notice that there is no difference of opinion as to the pressing nature of the problem and the importance of dealing with it effectively ; the real question is as to the best method of approaching it. From the standpoint of the consumer there is only one thing that matters — that goods should be cheap; and suggestions for attaining this object are so general that they are apt to be rather superficial. We may go into the matter much more thoroughly from the standpoint of the producer, since we may consider in what practical ways the conditions of the work of manual labourers can be improved and how 18 ORDER AND PROGRESS their remuneration can be rendered more adequate. Such definite proposals as that of enforcing a mini- mum rate of wages are directly connected with the consideration of production, and we need to see how they would work out practically in different trades. All the improvements in the conditions of work, such as the Factory Acts, which were embodied in legislation during the nineteenth century, were enforced upon the producers and had no obvious connection with consumption at all. In order to deal effectively with any such problem we must endeavour to understand it as well as we can. Dr. Whewell x laid great stress on the importance of appropriate conceptions for the grouping and inter- pretation of facts; this is not merely a matter of convenience, but a condition for thinking clearly, and systematically; and production is the most appropriate conception under which the economic phenomena of progressive societies can be arranged. Plausible though the proposal may be to revert to the mediaeval standpoint and to look at life from the point of view of consumption it is merely specious; its boasted universality is illusory. Con- sumption concentrates attention on the present, and takes little account of the future; in mediaeval conditions this was natural enough, because men could not look beyond the next harvest. But in progressive societies all is changed ; we can take account of the conditions of production for some little time ahead, in industrial pursuits. The pro- ducer is always endeavouring to forecast the future and to adjust his operations to the conditions he foresees. The economist who starts from the stand- point of consumption is tempted to concentrate attention on the goods which have actually been produced and of neglecting to take systematic account of the future at all; there is a danger of 1. Philosophy of the Inductive Sciences, i, 42. vSUMPTUARY LAWS 19 shortsightedness and it is not easy to suggest a corrective. But more than this; the consideration of produc- tion does much to help us to find effective sugges- tions for practical improvement, while any proposal for the regulation of consumption presents grave difficulties and does not afford commensurate results. Sumptuary laws have been a favourite expedient in many eras, but they do not seem to have been very successful in checking extravagance in dress or in retinues. The institution of Fish Days 1 may have done something to encourage the seafaring popula- tion and the Acts for burying in woollen may have benefited the clothiers ; but it seems to have been a cumbrous method of pursuing the object in view, and to have involved somewhat inquisitorial pro- ceedings. The prohibition of the consumption of British goods on the Continent proved an effective weapon in Napoleon's hands for attacking English prosperity, but it recoiled so strikingly on the countries from which he drew his resources that he did not benefit much by using it. There is far more hope of effecting the objects we desire and of avoiding incidental loss if we try to regulate the conditions of production, than if we begin at the other end and try to enforce rules for consumption. Mediaeval life had many religious features which the secularised society of modern times has dis- carded ; religious motives and religious sanctions are no longer so much in evidence; but mediaeval thought on economic subjects was not on such a different plane from modern science that we need have any difficulty in comparing them. The prin- ciples which were laid down for secular affairs were believed to be consonant with the Divine Will, but they had no claim to be Darts of revealed truth ; they 1. 2 and 3 Ed. VI, c. 19. 20 ORDER AND PROGRESS were based on experience and on utilitarian con- siderations; much of the argument on particular points was directly drawn from Aristotle and other non-Christian writers; there was no pretension to lay down absolute standards of right, though much ingenuity was devoted to detecting the elements of unfairness that might lurk in business transactions. In spite of the strong contrasts, the attempt to com- pare mediaeval and modern thinking on economic subjects is very instructive. Modern society has so far outlived the mediaeval that we cannot but look with suspicion on any deliberate attempt to return to it. By starting with the universal — whether it is thought of as the Divine Will for Man or as the common needs of the race — we fail to reach a position from which we can see clearly the interplay of various particular factors in economic prosperity ; we are in danger of being neglectful of the future of the country or of the race, and we are tempted to rely on remedies for existing evil which have been proved to be cumbrous and ineffective. III. WORK AND THE MAINTENANCE OF LABOUR. The monastery was a characteristic institution of the Middle Ages, and it affords an excellent illustra- tion of a type of economic organization which was once very widely diffused and continued to flourish for centuries. In the Dark Ages, when trade was nearly extinct and towns hardly existed, it was inevitable that each of the centres of settled life throughout the country should be, so far as possible, self-sufficing, and able to provide itself habitually with the main requisites of life. The prosperity of scattered households, and of the villages where collective cultivation was carried on and the waste was used in common, depended on their being able to provide themselves with shelter, clothing and implements, as well as with food. The division of labour could not be carried far among men who were not working for a market ; but there was need for many different kinds of labour, and it was neces- sary that they should be organised so as to cooperate to the best advantage. The various arts of life were all represented in well-organised households; the economic problems which had to be faced were those of domestic management — of housewifery and hus- bandry. The monasteries outlived the time when this type of economic organisation was the most advanced that suited the environment, but they help us to appreciate how much it could accomplish at its best. We are not left to judge of this from the opinion of contemporaries, who might easily have exagger- ated achievements with which they had little to compare, since we can see for ourselves. The ruins of monastic building which remain are sufficient to 21 22 MAINTENANCE OF LABOUR prove on what a large scale these communities were organised, and to convince us of the magnificence of the architectural works which the monks designed and executed. These are the crowning proofs of the prosperity of their economic life, and this depended on their success in organising labour of every kind. The story of the first settlements of the monks of the West gives the earliest indications of any reconstruction of civilised life after the terrible devastations which followed the barbarian invasions and the break up of the Roman Empire. It seemed as if fertile territory was relapsing into mere jungle under the rule of conquerors, who were too proud to work, and who were always ready to quarrel on the smallest provocation. 1 The monks were the pioneers in winning back the soil of Western Europe from savagery and barbarism, and they showed a wonder- ful constructive power in planting centres of orderly and settled life in a state of chaos. They were able to preserve and to disseminate the Roman traditions as to the management of land. We know that Gregory the Great was keenly interested in seeing that the cultivation and the cattle-breeding on the large papal estates in Sicily was properly attended to by his agents ; his letters show that he was deter- mined to secure efficient administration; 2 and the monks whom he sent out were doubtless prepared to maintain themselves as colonists while they were carrying on missionary work among the English. It is not possible to say how much of the agricultural practice and how many of the variety of fruit trees and of breeds of cattle which existed in mediaeval England, were introduced in the time of the Roman occupation, and what was due to the monks who preserved and disseminated the tradition of Roman skill. 1. Montalembert. Monks of the West, ii, 314. 2. Cunnningham. op. cit., i, 238 n. MONAvSTIC INDUSTRIES 23 There was also a demand at monasteries for the best that the Age could furnish in connection with the building and furnishing of churches; workers in stone and wood, silversmiths, bell founders and makers of glass all found scope for the exercise of their powers in providing for the carrying on of the services. The legend of S. Dunstan helps to remind us what a large part manual occupations played in the life of the most eminent monks of his time. The royal goldsmith, S. Eloy, created a remarkable industrial community of five hundred members in the monastery he founded at Solignac in 63 1, 1 and at the close of the eleventh century the monastery of Hirschau was generally recognised as a great example of the successful organisation of industrial activities. 2 There were many other centres where building operations were going on almost continually so that they became centres of a tradition of skill in masonry and kindred arts. When order came to Be so far restored over con- siderable areas that intercommunication between distant places was more possible, trade not unnatur- ally centred at points where productive industry was highly developed, and the monasteries began to enjoy facilities for commerce. There seems in retrospect little to choose, between the paganism of the Danes and Norsemen and the nominal Christian- ity of the Frankish kings ; but while the Danes continued to plunder and burn, the Merovingians and Carlovingians exercised a civilising influence, because they encouraged the foundation of monastic settlements, both by endowing them with lands and by granting them trading privileges ; the new oppor- tunities which were thus opened up tended to change the character of monastic life. In so far as it was practicable to purchase goods, it was doubt- 1. Vita S. Eligii, I, cc. xv, xvi in Migne, lxxxvii, col. 493. 2. Christmann. Geschichte des Klosters Hirschau. 58. 24 MAINTENANCE OF LABOUR less advantageous to have access to supplies in larger quantities or of better quality than could be produced on the spot ; but as the monastery ceased to be a self-sufficing community, its prosperity no longer depended solely and entirely on the local organisation of labour. There was an increase in the commodities available, and there was more oppor- tunity for the division of labour; the monks were able to leave the agricultural work to servile or semi-servile dependents, while other branches of manual labour were for the most part carried on by lay brothers; the monks came to devote themselves more and more to transcribing and to literary and artistic work, and ordinary manual occupations ceased to have an essential place in the daily life of the monks. In the eleventh century many of the great Benedictine monasteries had ceased to exhibit a self-sufficing life withdrawn from the world, since they had become the nuclei round which busy mercantile communities had grown up ; these wealthy oligarchies were able to dominate the rest of the townsmen, but had little share in their responsibilities. Still, the old ideal retained its vitality; the foundation of the reformed Orders was an attempt to return to the primitive character of economic life, and the Cistercians in particular were eager to restore labour to its old place as as essential feature in monastic life. The founding of the reformed Orders was a public recognition of the fact that the monasteries had lost much of their first fervour; their very prosperity had spoiled them. The fears that Wesley enter- tained with regard to an inevitable decadence among his followers in the personal religious life, had been justified long before, by experience as to the collec- tive religious life of many of the Benedictine houses. "Religion," he said, 1 "must necessarily produce both industry and frugality, and these cannot but 1. Southey's Life, ii, 522. SPIRITUAL DECADENCE 25 produce riches. But as riches increase, so will pride, anger, and love of the world in all its branches. How then is it possible that Methodism, that is, a religion of the heart, though it flourishes now like a green bay tree, should continue in this state ? For the Methodists in every place grow diligent and frugal, consequently they increase in goods. Hence they proportionately increase in pride, in anger, in the lust of the flesh, the desire of the eyes and the pride of life." The very success of the monasteries as centres of organised economic life, was prejudicial to their religious tone and influence. In spite of this spiritual decadence, and of the grave scandals which were often associated with monastic life, both in early times and in the later Middle Ages, the institution was dominated by definitely religious thought. The persistent vitality of the monastic ideal of life, in spite of the actual failure to realise it and of recurring scandals, is even more remarkable than the long-continued prosperity of these houses as centres of economic organisation. This ideal remained as an attractive spiritual force for centuries ; not only did it inspire the eleventh century movement for reform, but it appealed strongly both to Savonarola and to Luther, as a young man, though he lived to discard it. What- ever blots and blemishes may have attached to them, the monasteries continued to be institutions which embodied Christian ideas of economic life; they present us with a picture of industry organised on a religious basis. We need not puzzle ourselves by trying to deduce, from the Sermon on the Mount, the features of a Christian society struggling in the world, since we can study the details of an indus- trial society, permeated with religious sentiment and designed to express Christian principles, as it is pictured for us throughout long centuries of monas- tic life. The monastery was an industrial organisation and 26 MAINTENANCE OF LABOUR is specially fitted to bring out the importance assigned to Work as an essential element in the religious life. S. Augustine had insisted on it strongly in his book de opere monachorum, and exposed the sophistry of those monks who gave a non-natural interpretation to S. Paul's words, " if any man will not work neither shall he eat." x But the Benedictine Rule, which was frequently recited by the brethren, is even more explicit on the duty of work; and the hours of labour, at different periods of the year, are carefully specified. 2 Insistence on work as a Christian duty rests on two distinct prin- ciples, one of which has reference to God, and one to man. 3 From the one side, work was regarded as the means of giving effect to God's purpose in creating and ruling the world. The Creator was thought of as the Supreme Worker, who had pro- vided all the material and all the conditions under which men work; but man's work was needed in successive generations to bring the divine purpose to full fruition. In the early chapters of Genesis Adam is represented as placed in the garden of Eden to carry out the divine purpose by using natural things for the service of man ; and in the new dispensation Christ claims for Himself a part in the divine working — " My Father worketh hitherto and I work." There is an inspiration in the thought of divine activity which contrasts strikingly with the Oriental conception of the Deity as living apart from the struggles of human life, and uninterested in them. Human work of every sort may be regarded, from a Christian standpoint, as the privilege of sharing with God in His work of carrying out His purpose for Man ; there is no other point of view from which the dignity of work is so fully recognised. 1. Migne, xl, col. 549. 2. Eegula. Migne, Ixvi, col. 703. 3. Cunningham. Gospel of Work. DUTY OF WORK 27 The duty of work has another aspect, however, for it may be regarded from the side of Man as affording opportunities of self-discipline. Christian- ity teaches that idleness is a sin ; it is a form of self indulgence which prepares the way for many temp- tations to vice ; and therefore work was valued as a means of keeping men occupied and well employed so that they were less likely to drift into evil. While the theological principle accentuates the privilege of being called to work, the ascetic prin- ciple insists on the duty of work as a means of escaping temptations, since it checks the baser elements in human nature and gives opportunities of learning self-control. The Christian ideal of a disciplined life of work was embodied in monastic institutions and was markedly different from the aims which have been generally favoured in the ancient world or in modern times. The ideal of cultured leisure, which appealed to the citizens of Greek cities, was definitely dis- carded by those who adopted the monastic life. They deliberately ceased to claim any sort of inde- pendence, and voluntarily undertook an obedience which was stricter than the most exacting master could demand of any slave. In all its external conditions their life was closely assimilated to that of slaves; the buildings in which they lived and worked resembled those of the Roman Villa with its ergastula ; and the dress they wore was very similar to that which was provided for slaves. They voluntarily accepted conditions which appeared particularly despicable when tried by the standards that were accepted in the ancient world. Nor does the mediaeval ideal commend itself to current opinion in the present day ; the modern habit is to regard work as a form of drudgery which men are justified in trying to escape if they can. Our generation is apt to speak of work as if it were in itself an evil, to 28 MAINTENANCE OF LABOUR which men could only be expected to submit because of the hope of reward ; and attempts are made to find palliatives for work, or to render work more acceptable. Whatever pleasure and pride a man may take in his work, there are times when the drudgery and routine become oppressive ; mediaeval teachers regarded work as necessary and therefore as something that men ought to undertake; even though it was disagreeable, it was a duty that ought to be done and that served as a personal self- discipline. The economic prosperity, which the monasteries attained and succeeded in maintaining for centuries, is all the more remarkable when we remember that they did not offer the personal incentives on which we rely to stimulate energy and enterprise. Each individual monk was vowed to poverty; he had no possessions of his own and could not look forward to receiving any profit from using them wisely. Technically the land of the monastery was held, as we see in Domesday Book, by the saint to whom the monastery was dedicated ; and the ambitions of the brethren were impersonal, for the increase of the magnificence and prosperity of the house which was their home. The strong esprit de corps of such great Abbeys as Bury and Ramsey and Ely rendered them very jealous of one another, and the inmates of each were not unwilling to go through a good deal of privation in order to build up the dignity and reputation of the house in the future, and to excel the others. This corporate pride corres- ponded, in celibate communities, to the ambition to found a family even at considerable personal sacrifice, and to the sense of a duty to hand down the possessions of a family intact; in the monas- teries, at all events, there was no scope for personal ambition. In a similar fashion it may be said that the reward for labour was impersonal; the monks MONASTIC FARE 29 received food, shelter and clothing, whatever their work might be ; and no attempt was made to dis- tinguish one from another according to the result of his work ; there was a common table and they fared alike. According to the Benedictine Rule two dishes, with salad or dessert in season, were to form the principal meal, and each monk was to be given a loaf of bread for the day ; while meat and wine were to be allowed at the discretion of the abbot for those who required them, either because of the arduousness of their labours, or on account of physical infirmities. 1 The distinction was not made according to the value of the service rendered, but according to the need of the recipient; from this point of view the man who undertook most drudgery had a claim to indulgence, rather than the man whose employment involved most taste and skill. Partly because of this practice the individual artist had plenty of freedom to do his best in his own way ; there was no need to make a contract or force him to work up to a given standard. He received the food that was going, and there was scope for the crafts- man to follow his own ideas, instead of working out another man's design the cost of which has been calculated beforehand so that the work has to be executed as part of a contract. During the early Middle Ages this principle, of paying the labourer according to his physical re- quirements, and not in accordance with the value of the results of his work, held good, not only within the monasteries but to a considerable extent in the world outside. The household was the ordinary unit of industrial organisation — either the great households of kings and bishops, or the innumerable manors which were scattered throughout the length and breadth of the country. Payment was made to quite a considerable extent in rations and in liveries, 1. Regula. Migne, Ixvi, col. 613, 641. 3 o MAINTENANCE OF LABOUR and there were no means of making fine distinctions; some broad differences could be recognised, but there was very little grading in the ranks of labour. Even in the towns there were few changes in the demand for labour; household organisation lay at the basis of all domestic industry ; a standard rate which was requisite for the maintenance of labour could be approximately settled, and there were no means of attempting to adjust it accurately to personal desert. The main economic significance of the Black Death lies in the fact that it brings into prominence in England a new view of the principle on which the reward of labour should be reckoned. The conception which underlay the demands of the labourers in 1349 might be expressed in modern terms by saying that labour is a commodity, and that its price should be settled like that of other marketable commodities according to the supply and the demand. Owing to the effects of the pestilence, the supply of labour was very short after the middle of the fourteenth century while the demand was unprecedented ; the labourers stood out for the full market rate, while parliament saw no reason why they should not continue to accept the rate which had sufficed for their maintenance before the Plague. The labourers were successful at the time, though it may be doubted whether the benefits which imme- diately accrued were of permanent advantage to the class. The principle on which they unconsciously took their stand in 1349 and 1350 has been generally adopted in modern times; and nineteenth century historians denounced the injustice of authorities who tried to maintain a definite standard rate, and not to pay in accordance with the condition of the labour market. Perhaps the last serious effort to maintain a standard rate which was much lower than the anticipated market rate, occurred after the great fire THE LABOUR MARKET 31 of London, when there was an extraordinary activity in the building trades, and parliament intervened to prevent the artisans from insisting on excessive rates of payment. 1 Modern industrial life is domin- ated by the conception of a labour market ; and it has become possible, not only to settle a rate for each of the different classes of employment, but to endeavour to pay to each man personally what his labour is worth in the market. The demand for the adjustment of individual reward to individual dilig- ence and skill is extending in some directions, and the agricultural labourer is showing a preference for piece-work at harvest time as the method of remun- eration by which he gets the most exact equivalent for what lie has actually done. Indeed this view of the matter is assumed in all our social arrangements. The highly skilled man, and especially the man with great powers of organisation, is paid at rates which have no obvious relation to his requirements for maintenance. Our educational system has been devised and popularised with the view of fitting boys for something better than a life of mechanical drudgery, and enabling them to rise in the world and to obtain highly paid posts. The whole system of modern society rests upon the principle that a man should be paid according to what he is worth personally, in the labour market, and not merely in direct relation to his requirements for maintenance. In recent times however, there has been a reaction ; the market conditions may have given the fourteenth century labourers a dead lift upwards, but at the present time the removal of positive checks to the increase of population has brought about a state of affairs when there is a keen competition for employ- ment in the lower grades of labour; modern conditions of contracting and subcontracting are favourable to the development of sweating, and 1. 19 Charles II, c. 3, §§ 16, 17. 32 MAINTENANCE OF LABOUR there are numerous employments in which the market rate does not constitute a living wage. Under these circumstances there has been a reaction against the modern method of settling payments, and there is a widespread demand that the principle of providing the necessary requirements for life should be once more taken into account in determin- ing rates of wages. This older principle had been abandoned as impracticable, and had been much overlooked in public discussions; but it has never been wholly forgotten. Mr. Whitbread advocated a minimum rate of wages for agricultural labourers in 1795, 1 and the cotton weavers looked to it as a remedy for the starvation rates they were forced to accept in 18 13. The chief work of Trade Unions, since they became free to develop a policy, has been to struggle for the maintenance of the standard of life, and the principle of a minimum wage has obtained authoritative recognition in many quarters. The principle of relying on market rates is no longer regarded as satisfactory, and current opinion is revert to a position that is in much closer relation to the view which was dominant during the Middle Ages. We ought to remember, however, that the difficul- ties of working out this conception in practical life in the present day are much greater than they could ever be in the Middle Ages, because social relation- ships are so much more complex. In a typical household, such as a monastery, all payments were made in kind, by allowances of food and clothing ; money economy had not penetrated to the manage- ment of the internal affairs of the house; under these circumstances no question need have arisen about changes in the purchasing power of money. It appears to be generally agreed that the purchas- ing power of a labourer's wages has fallen about 1. Pari. Hist., xxxii, 700. DIFFERENT STANDARDS OF LIFE 33 io per cent, or more during the last decade; it is a matter of great difficulty to calculate exactly what the exact change has been under slightly different conditions, and it seems to be almost an insuperable problem to devise any means by which the standard of life may be kept constant in spite of frequent fluctuations in the purchasing power of wages. There is another complication of which account must be taken in modern times. In the mediaeval monasteries there was practically only one standard of life ; there was no grading of the various classes of labour. Even if it had arisen there was no temptation in a celibate community to perpetuate such distinctions. In modern times, where differ- ences of personal ability are reflected in differences in the rate of reward, there come to be many different standards. Further, the opportunity for developing and indulging personal tastes and interests is much greater than it was in old days; there are fewer pageants and festivals that all enjoy together ; and each man's standard of comfort includes personal indulgences that do not appeal to all alike. Few would be content to reckon food, shelter, and cloth- ing as the only elements in their standard of life; some would add tea and tobacco, and some would wish to include a newspaper or a piano. Owing to differences of taste, the standard of comfort for a class is apt to be indefinite, while the problem of fixing the standard of any one grade of labour, relatively to other grades, is one which did not arise in monastic life, and which seems insuperable. There is a general impression abroad that some groups of labourers have been able to secure a rate of reward that seems to be unduly high when com- pared with that of other men on the same social level. A broad difference between the professional man, the skilled artisan and the unskilled labourer might be drawn ; the length of time necessary for 34 MAINTENANCE OF LABOUR training for different callings might give a basis for calculating what differences there were in the standard of life which it was right to recognise; but the minor differences of reward would not be so easily dealt with. The broad distinctions in the standard of life are not arbitrary, but depend on natural distinctions. The division of labour has gone a long way in modern society and is apt to give rise to differences of caste which could not appear in celibate communities; but since the division of labour renders the specialisation of functions possible, it is to the advantage of the community as a whole, and is not likely to be discarded. The surgeon who is well trained and has long experience is likely to be a better surgeon, and the ploughman who is habituated to ploughing is likely to be good at his business ; there would be no advantage in setting anyone to pursue these two avocations alternately. If the principle of division of labour is once admitted for individuals, it is not clear that it is right to aim at giving the same reward to each ; and it is difficult to devise any scheme by which the children of each shall start life with equal opportunities. Perhaps the greatest difficulty in modern society is due to the large number of unemployed ; and there is at least a serious risk that if a standard rate were fixed, there might be a tendency to add to the numbers of those who could find no employment. Unless the standard rate is to be in part an allowance to supplement wages, the question must arise in regard to those who, either from their misfortune or their fault, are quite inefficient, and are not worth the standard rate. They cannot by their work contribute anything of a value equivalent to the payment required to give them adequate means of livelihood. There will be a tendency to leave them altogether without employment ; or else they must CHRLSTIAN COMMUNISM 35 be maintained in some way out of charity, and not as self-dependent members of the community. These considerations are alleged, not from any desire to show that the principle of a living wage is unsound, but because it is important that we should have our eyes open to the nature of the difficulties which have to be faced if it is to be adopted as the basis of industrial remuneration in the complicated conditions of modern society. Monastic life was a Christian Communism, and the remarkable prosperity which it maintained, for something like a thousand years, is at least a proof that communism, when attempted under favourable conditions and on sound lines, is not necessarily such a failure as the history of recent experiments might lead us to suppose. The conditions of economic life in the Dark Ages were favourable to the experiment, nothing more elaborate than house- hold management could be attempted ; and the difficulties which arise in regulating the economic life of a large community, such as a city or a nation, did not need to be faced. In the fourteenth century, when money economy was coming very generally into vogue and society was entering on a progressive stage, the monasteries were quite unable to keep their place as models of industrial organisation or to adapt themselves so as to hold their own in the new conditions. Not only the external conditions of the times but the spirit of monastic life had been favourable to the success of these experiments in Communism. On the one hand the corporate spirit was exceed- ingly strong, and impersonal ambitions for the future of the house were powerful motives ; the danger, attendant on any economic systems which are concentrated on the consideration of immediate consumption, were minimised by this desire to main- tain the dignity of the house. The fact that the 36 MAINTENANCE OF LABOUR monks were vowed to prompt obedience is also an important point ; the difficulties which arise in modern socialistic systems, of deciding to whom the distasteful work, which is necessary for the welfare of the community, is to be assigned, and how any- one is to be compelled to do it, were hardly likely to be felt when there was one master whose authority it was not possible to dispute. It is not easy to see how any personal incentives can be devised in modern times which would be effective for maintain- ing the industrial discipline that was practicable in monasteries. The prosperity of Christian Communism in an unprogressive society does not after all give much encouragement to those who may be trying to organise communistic societies in the progressive conditions of the modern world. But it remains as a standing witness to the effectiveness of spiritual influences in the affairs of secular life. The prin- ciples, as to the duty of work and the maintenance of labour, on which these industrial organisations were founded, were strictly religious in origin and were in conflict with the maxims and habits which had been inherited from the ancient civilisation. They completely justified themselves by their success; and their influence extended beyond the monastic walls to permeate the ordinary practice in the households of lay magnates and in the regula- tions of the towns. The teaching of S. Augustine and of the Benedictine Rule was a leaven which worked gradually ; it eventually created a great polity in which Christian principles moulded all economic relations. The monks did not succeed in setting forth a perfect picture of the life of a Christian society, as our Lord gave a perfect model for the personal Christian life; but they founded institutions which were dominated by Christian habits of thought and set forth Christian economics CHRISTIAN DISCIPLINE 37 in action. In one generation after another they took hold of men who were far from being saints, and moulded them by subjection to a Christian discipline. The influence they exercised on the outside world and their long continued prosperity are pledges of the effectiveness of spiritual forces, and may encourage us to cherish hopes of the regeneration of society that may be accomplished if spiritual influences are systematically and wisely brought to bear on the complicated problems of our own day. IV. THE CITY AND THE NATION AS ECONOMIC UNITS. Vestiges of the wealth in mediaeval cities are striking evidence of their former prosperity, and their history has much to tell us of the inspiring force of civic patriotism. In the later Middle Ages, when the monasteries were ceasing to be economically at their best, there was an extra- ordinary development of urban life and municipal institutions ; the growth of trade, which was under- mining the prosperity of the monasteries as self- sufficing centres of industrial life, afforded the conditions under which towns could spring up and flourish. The characteristic difference between these two types of economic organisation is shown in the architectural arrangements; while the cloister was the centre of monastic life, the activities of the town were ranged round an open market place. Wherever there is a social group, be it large or be it small, in which the industrial activities and facili- ties for trade are consciously regulated so that they may conduce to the prosperity of the community as a whole, that social group maybe called an economic organism ; such social structures are distinguished from one another by the area they control, and their method of framing and enforcing their regulations; and they can be conveniently spoken of as units of economic organisation. The monastery was such a unit ; however diverse the occupations might be, no individual was working on his own account but was consciously contributing to the maintenance of the little community ; the effective desire to increase its prosperity was keenly felt. The internal economy of the religious house was based on natural economy, and could only be definitely described in terms of 38 MONEY ECONOMY 39 services or of kind ; while in the towns the habits of life were entirely different. Money economy was prevalent ; and the conditions of buying and selling, as well as those of production, were regulated and controlled with a view to the continued prosperity of the town. Life in the town was more specialised; it embraced many elements that were independent and in danger of conflicting ; but the common good of the community was kept before the citizens as a conscious aim, and systematic efforts were made to control the various interests so that they might work together for the good of the town as a whole. The recognition of common interests and the force of common sentiment were powerful enough to guide and control the conflicting interests so as to provide the material basis for the life of the community. Considered as an economic unit the town was much more complex than the monastery. The division of labour was carried farther; and the specialisation of functions was perpetuated in the distinction of social grades and classes, with differ- ent rights and obligations as well as with different employments. There had been no occasion to recognise this severance of different elements in monastic life ; but they could not be ignored in the towns, and the problem of urban life was that of inducing or compelling these separate elements to co-operate. The mercantile and the manufacturing interests were certainly distinct, from week to week and month to month, though the prosperity of the town demanded that both should be flourishing and that they should play into one another's hands ; the authorities of the towns were extraordinarily success- ful in bringing about this co-operation of industrv and commerce. The monasteries had only set them- selves to regulate industrial life, but the towns had a far harder task ; they succeeded so well that they continued, like the monasteries, to be flourishing 40 THE CITY AND THE NATION centres for centuries; and it is hardly fanciful to note a similarity in the influence which brought about the decline of these two forms of economic organisation. The monasteries lost their original character of self-sufficing centres of industry when they were drawn into the stream of regular com- merce, and the characteristic institutions of the mediaeval towns succumbed before the inroads of a purely commercial spirit. So long as domestic industry lasted, the towns continued on the scale on which they had been projected in the thirteenth century and were able to meet English requirements for urban life. With the exception of London they hardly found it necessary to cover additional area; it was only in the latter part of the eighteenth century, when mechanical appliances were being introduced and giant industry began to develop that they entered on a new era of municipal expansion. The factors which had done so much to promote the economic prosperity of the monasteries were less effective in the larger and more complex life of the city. The esprit-de-corps was not so strong, and there was no possibility of maintaining such strict discipline; the civic history of the Middle Ages is full of stories of faction fights, and of struggles between different groups of citizens. An impersonal ambition, for the honour of their patron saint, was a conscious element in monastic life; but the pros- perity of the community appealed to the townsmen as a matter of common interest to themselves. In many cases they were bound together by the common possession of land ; this was frequent in Scottish towns which were much concerned for the manage- ment of the ' common good.' In many continental towns the strongest common interest lay in the necessity for building and repairing their walls and for providing military equipment ; but in English inland towns there seems to have been far less sense CORRECTIVE INFLUENCE 4' of any need for providing against external attack. The English townsmen were chiefly concerned in maintaining the privileges and immunities which had been secured to them by charter, especially their freedom from the sheriffs jurisdiction, the right of raising their quota of taxation in their own way, and their rights with regard to markets. These common rights and interests were the very basis of the common life of the towns, and civic patriotism grew up in connection with them. While religious habits and worship had a very large part in the life of mediaeval towns, they existed for secular purposes, and the religious element was not the very essence of their existence as it was in the case of the monasteries. The monastery was a definitely religious institution and had been deliber- ately organised in order to afford men the most complete opportunities of preparing themselves for the life to come ; the economic prosperity of these houses was incidental. But towns had existed long before Christianity came into the world ; they were social groups in which human life was organised for the sake of making the most of natural conditions, and with no direct supernatural aims. Christianity could be brought to bear to leaven town life, but it did not create it. Monastic life aimed at being positively religious and at embodying Christian ideals; but in the towns, Christianity was rather a corrective influence, which aimed at ordering secular life so that it should be not unchristian. Attempts were made to prevent commercial life from being carried on in disregard of Christian requirements, but there was no pretension that all the affairs and activities of life were regulated with direct reference to supernatural aims as a spiritual discipline. In so far as the municipal regulation of trade had a definitely religious character, the authorities were only endeavouring to insist on what the current 42 THE CITY AND THE NATION conscience regarded as a standard of honest dealing. They endeavoured to put down the kind of transac- tions by which a man made money at the expense of someone else, without rendering any real service to the community. The familiar story of the Merchant of Venice illustrates the fashion in which a trader might come to be wholly in the power of a neighbour, and it was felt to be desirable that no one should have the power of driving such a bargain. It was the duty of a Christian man to avoid placing himself in such a position as to be tempted to be an extortioner; and the terms on which money was lent were •carefully scrutinised, so that no legal claim could arise for an extortionate demand from an impoverished man. If anyone chose to lend money to a friend he was doing a kindness, and of course he ought to be repaid what he had lent ; but if he began doing the same sort of thing as a matter of business he was likely to place himself in a false position. If he had really been put to inconvenience by allowing his friend the use of his money, or through a failure to return it on the appointed day, it was right he should be reimbursed, but in making a definite contract to this effect there might be danger of unfairness; the lender bargained for freedom from risk, and certainty of gain. To enter into a temporary partnership with a merchant and to agree to share risks and profits was perfectly fair, but to bargain for gain for certain, and to leave it to the merchant to take all the risks himself, was a very one-sided agreement. It might mean that the unfortunate man who had lost a ship would not only have to return the capital, but to pay away a share in profits which had been anticipated but never realised. The man who laid himself out for money lending as a business was not really regarded as promoting enterprise or benefiting the community ; and as a matter of fact the great expansion of JUST PRICE 43 English commerce during the reigns of Elizabeth and James was organised by Joint Stock Companies in which risks and profits were shared by all the members, and not by adopting any form of agree- ment which mediaeval morality would have con- demned. A similar principle as to fair dealing entered not only into monetary transactions but also into deal- ings in goods. There was a firm feeling that every commodity had a just price l at which it ought to be exchanged, and the problem for mediaeval moral- ists was that of finding how this just price could be detected. In some cases it might be authoritatively laid down by the ' good men of the trade/ who knew what was the standard rate of wages and could tell the amount of labour embodied in any of the wares exposed for sale ; the whole of the regulation of reasonable prices by public authorities or craft guilds, was an attempt to lay down the just or reasonable price which the seller ought to give and the maker to receive. But when this method was inapplicable, either because the w r ares had been brought from a distance or for any other reason, ' common estimation ' afforded the best approxima- tion to the just price ; and common estimation was indicated by the prices offered and accepted in the open market. On the whole and so far as possible, efforts were made to secure that the labourers' stan- dard of life should be provided for and that the prices at which wares were sold should be adapted to this as a first charge. The standard of life was the dominating influence in the determination of the price of wares. There was indeed much civic regulation which did not depend on considerations of morality, or on the distinctions between right and wrong which were drawn by mediaeval casuists; the townsmen were 1. Ashley. English Economic History, I, i, 133. 44 THE CITY AND THE NATION concerned to promote the economic interests which were common to the community as a whole. Their general policy was dictated by the consideration for the consumer. If one of them made a good bargain with a man who was foreign to the town, other townsmen had a right to claim a share of the pur- chase, at the same favourable rate. It was a matter ot primary concern that the markets should be plentifully supplied, that people who could only afford to buy in small quantities, should have their chance as well as the large dealers, and especially that those who were buying wares for their own use should have a preference over any trader who wanted to buy because he saw his way to sell again later on at a profit. All the market regulations about fore- stalled and regrators were meant to be in the interests of the townsmen generally, as consumers of commodities exposed for sale in the market. But consumption was not the sole consideration ; the townsmen were quite alive to the importance of keeping up the reputation of the town as a place where wares of good quality w r ere produced. All sorts of rules, as to the conditions in which work should be carried on and the supervision to which craftsmen should be subjected, were laid down with the view that wares should be made of good materials by skilled workmen, who exercised their calling under proper conditions. In mediaeval towns, where domestic industry was in vogue, the regulation of industry was inseparably connected with home life; and the system of apprenticeship was not merely regarded as providing technical training in some craft, but as a school of life as a townsman. The material prosperity of the towns was due to their recognition of the fact that con- sumption and production are interdependent, and to their success in securing that trade and industry should co-operate together for the common weal. CIVIC PATRIOTISM 45 This was the basis on which civic pride in prudent self-government on the part of the citizens ultim- ately rested. While we recognise the wealth and power to which some of the mediaeval cities attained, we are apt to disparage civic patriotism as very narrow, and locally self-centred ; the jealousies and rivalries of neighbouring towns seem to us rather contemptible. But after all there is reason to doubt whether the times were ripe for any economic organisation on a larger scale; the English towns were hardly conscious of any aims which were common to each and all . The conditions of seamanship defined to some extent the directions in which the merchants of each particular town would wish to prosecute their trade. Exeter and Bristol looked to the South and West, while Newcastle and York had connections with Flanders and the Baltic. Further there was no central autho- rity that was strong enough to exercise an effective control over economic activities throughout the length and breadth of the country ; that only became possible in Tudor times, when civic institutions had proved their inadequacy, and the Crown attained to its greatest power. Civic patriotism was thoroughly public-spirited within a narrow circle, and it was the best type of citizenship that was compatible with the circumstances of the times. There must have been much personal self-sacrifice in the discharge of common responsibilities, and in efforts to enforce that which was for the common good ; the tradition of keeping the interest of the community, even though it was a comparatively small community, in view, has been a noble heritage, as it is a constant witness to the possibility of subordinating economic interests to the maintenance of a well-ordered social life. The regulations laid down by civic authorities were of course only applicable within the limits of 46 THE CITY AND THE NATION their jurisdiction : many economic activities were uninfluenced by them altogether. The mason's craft, which seems to have been highly organised in the fourteenth and fifteenth centuries, was apparently extra-municipal, as the masons were much employed on ecclesiastical and royal buildings with which the town authorities had no right to interfere. Similarly, the largest gatherings for commercial purposes lay outside their jurisdiction. In the twelfth and thir- teenth centures we hear of the establishment of many fairs to which foreign merchants resorted ; there were better opportunities for purchasing goods of various kinds at these occasional gatherings than at any of the permanent centres of regular trade. Some of them were held on the sea shore or at convenient points for transit, and they may have contributed to the origin or at least to the growth of towns such as Yarmouth and St. Ives. Others were held in the neighbourhood of existing towns, and the profits of Stourbridge fair went to the Cambridge townsmen ; but however closely con- nected they might be, the fair was regarded as an exceptional incident and not as a regular part of the life of the town ; the period during which it might last was carefully limited, so that it should not inter- fere with the ordinary conditions of life; and the regulations which were laid down had reference to facilities for trade and had no bearing on the interests of the inhabitants of a locality or the conditions of their life. At a fair the authorities were concerned to maintain peace and to see that there were suitable arrangements for the speedy execution of justice and the recovery of debts; these were the conditions which were important for the merchants who visited the fairs ; and if they came in numbers and the trade was active the profit from the fair would be all the larger. It was, however, a purely commercial institution in which the commercial spirit had free TRADE AT FAIRS 47 play. All sorts of people met together from many different places ; the dealers traded in various goods, and not merely in wares which they had personally produced and which they could therefore guarantee ; the merchants would wish to realise their goods for the best price obtainable during the fair, so as not to have to pack up their stock for sale elsewhere ; the prices which were offered and accepted had direct reference to the conditions of supply and demand ; but the conditions of production, and the require- ments of the producer, did not necessarily come into consideration at all, and could be left entirely in the background. It was the business of a merchant at a fair to push his trade and try to create a demand for the goods he had brought, while the rates at which the craftsmen in the towns could sell his wares were determined by the facilities of production, and these could not be readily altered to meet an in- creased demand. The fair was an exceptional institution in which pecuniary considerations were paramount, while every buyer and every seller was free to consider his own interests and was not called upon to take account of the common welfare. In these mediaeval fairs we have institutions where commercial transactions were isolated, and carried on apart from the ordinary routine of life; they present us with an early example of the phenomena which Economic Science studies systematically. Since that time the commercial spirit has obtained more and more free play ; the conditions, which were only tolerated as exceptional, have become normal. The methods of determining price, which were characteristic of fairs, gradually extended to towns; and the civic institutions for maintaining stable relations between trade and industry and for securing the standard of industrial life broke down in consequence. Certain purely commercial towns, such as Antwerp, flourished because they were 48 THE CITY AND THE NATION regulated as permanent fairs, and offered unparal- leled opportunities for regular trade. In the seven- teenth century the machinery for regulating trade, so that it might react on the personal welfare of the craftsmen, had broken down everywhere in England; and the commercial spirit came to dominate economic activities of every kind both in town and country. There are many features of this change which we cannot but regret; but we may at least recognise that it has opened up the way for a great advance in knowledge. We have a larger field for empirical study; economic activities can be examined much more systematically and thoroughly than was poss- ible when the special requirements and aims of each locality had to be taken into account separately ; we can train ourselves in clear thinking as to the causes of the wealth of nations. In old days it was only possible to deal with each problem blindly and by rule of thumb ; but conclusions based on wide experi- ence can now be reached as to the best methods to adopt for promoting the welfare, material and moral, of any community. Clear thinking is the first condition without which wise action is impossible ; and Economic Science provides the means and the terminology for describing economic phenomena accurately, and for measuring economic forces; it gives us the means of arranging the facts of human experience systematically, and of generalising as to what is likely to hold good over a considerable range in space and time. It is only by studying the work- ing of the commercial spirit that we can learn by what means and at what expense it can be corrected, wherever we feel that correction is needed. Mediaeval townsmen were fully aware that the commercial spirit, if it was left unregulated, was antagonistic to the best interests of the community as they conceived them. Not only were they anxious to keep the fairs within strict limits, but they SUSPICION OF JEWS 49 were keenly suspicious of those neighbours who were absorbed in considerations of pecuniary gain, and did not attempt to take the good of the community habitually into account. This was the fundamental reason for the antagonism to the Jews in mediaeval towns; they did not belong to the community in which they lived, and they could not be expected to put its interests in the forefront. So far as the Angevin kings were concerned, they served a useful purpose, for they facilitated the collection of revenue at a time when there was comparatively little money in circulation ; they formed little colonies within the towns and were ready to push their trade in a thoroughly commercial spirit, while other dealers were under restrictions imposed in what was believed to be the interest of the com- munity as a whole. It is not necessary to pay too much attention to the allegations of contemporaries that the thirteenth century Jews pushed their trade by dishonest means, or to discuss the suggestion of modern writers that the success of the Jews was due to their greater abilities. They worked upon a different standard, which has come to be generally accepted in modern times, though it was not in accordance with the mediaeval conception of 'honest' callings, since their activities were not consciously controlled and regulated by consideration for the interests of the community as a whole. This was quite enough to account for the hostility and suspicion with which they were regarded, and there is no need to enquire too closely whether they actually lived down to the low standard of morality that was imputed to them as aliens and outcasts. Though the Jews were expelled by Edward I., the townsmen were not able to resist the encroachments of the commercial spirit. The changes consequent on the Black Death had impoverished the towns and disorganised the machinery for regulating 50 THE CITY AND THE NATION industrial Hfe, and it seems as if the commercial spirit had captured the old institutions, not only in London but in other towns as well, during the fifteenth century. The cleavage between the capit- alist element and the craftsmen became more pronounced ; civic government fell more and more into the hands of little oligarchies which did not obviously subserve common interests or the good of the community as a whole. The burden of taxation, which had been imposed upon them in more prosperous days, was too heavy for the towns to bear ; capitalists were trying to push their trade from the town as a centre, and industry began to migrate to suburbs and villages where there were fewer restrictions on the manner in which it was carried on. The time had gone by when it was possible to regulate industry and commerce so that they should co-operate locally for the common weal of the inhabitants of a town. The old method of subordinating economic activities to the require- ments of life was out of date, and the civic community had ceased to discharge its function as a well-ordered unit of economic organisation. The attempts of Queen Mary to galvanise the corporate towns into life were unsuccessful ; and under Queen Elizabeth systematic efforts were made to regulate the economic activities of the country by a centralised machinery and with reference, not merely to the special interests of particular towns, but, with a view to the common interests of the realm as a whole. Throughout the Middle Ages the English Kings had exercised considerable super- vision over commerce ; they recognised how much they might profit by an increase of Customs, and they were ready to encourage the settlement of skilled artisans within the kingdom. Much had been done to improve the facilities for internal trade by providing supplies of coinage, and by attempting NATIONAL RESOURCES 51 to insist on a uniform standard of weights and measures throughout the country, as well as by creating an official machinery for certifying the character of the cloth, which had become the most important of English exports. But the centralised power which came into the hands of Elizabeth and her advisers enabled them to go much farther, and to organise industry and commerce in every part of the realm with a view of making them co-operate for the promotion of national interests and the development of national life. The old commercial morality was maintained ; the distinctions and pro- hibitions which had been intended to prevent moneyed men from enriching themselves through the necessities of their neighbours were enforced by statutes of the realm. Most of the arrangements which had been devised by London authorities for maintaining the character of industry were taken over bodily in the Statute of Apprentices; but the prosperity of the rural districts was not left out of sight, while special pains were taken to foster the fishing trades and to promote the increase of the mercantile marine. For the first time all the resources of the nation, agricultural, industrial and maritime were carefully taken into account, and detailed regulations were laid down and systematic- ally enforced, for bringing them to work together for the prosperity of the whole realm. The royal advisers were doubtless anxious to increase the pecuniary resources of the Crown ; they did not, however, regard the matter as a question of the increase of wealth, so much as of the develop- ment and expansion of national life. The new machinery was more readily accepted, and could be got more easily into working order, because the nation had at last become conscious of national aims which were for the common interest of all alike. It was obviously of importance to Englishmen, in 52 THE CITY AND THE NATION every part of the country, that they should be secured against the aggression of Spain, and be able to preserve their national independence. There was a very strong religious element in this repug- nance to be absorbed in the Spanish system ; during the reign of Queen Mary a deep impression had been made by the measures which were taken to bring England back into subjection to the papacy ; Spain was at once an overweening political power and the champion of reaction. The religious settle- ment under Elizabeth was not very popular ; it went too far for some and not far enough for others, but it did serve as the means of rallying the English people to a sense of a common danger and a deter- mination to protect themselves against it. The difficulty of superseding local by national patriotism was smoothed away by the sense of common national danger, and the willingness of the people to suport the national government was quickened by the fear of Spanish encroachments. The feeling of antagonism to Spain did not merely rest on the general determination to preserve national independence, it appealed particularly to the more enterprising elements, in all parts of the country; they were ambitious that England should have a share in the opportunities of expansion which had been opened up by the discovery of the new routes to the East and of the New World. The seafaring population denied the claim of the Pope to portion out these enormous territories between the Spaniards and the Portuguese, and they resented the attempts of the Spaniards to put his decision in force. Stories of the conquest of Mexico and Peru, were heard with indignation, and the treatment which English traders received at the hands of Spanish authorities drove it home; this experience gave point to the feeling which had been roused in the reign of Queen Mary and diffused a sense of NATIONAL AMBITION 53 horror at Spanish rule and at the form of Christian- ity which they maintained. Drake and other Elizabethan seamen felt that it would be a crime against humanity to leave these great areas, populated by an inoffensive race, to the tender mercies of the Spaniards; these men cherished the desire of planting Christian civilisation in its English form on the other side of the Atlantic, not only as an ambition but as a duty. This sense of mission played a very important part in the national life of the Elizabethan times, and the religious element should not be overlooked when we are enumerating the influences which shaped national ambitions and ^ave solidarity to the nation as a unit of conscious economic life. The economic life of the nation has been organ- ised on a far larger scale than that of the monastery or the town ; it is more complex, and it is also much more complete. In the monastery the pursuit of agriculture and of various forms of crafts were in conscious co-operation, but commerce was almost a disturbing element. In the towns commerce was regulated so as to co-operate with industry for the good of the community; but little attention was given to agriculture in many of them and there were no means of regulating distant trades. In national life on the other hand, economic activities of every sort play a part; all must be brought to work together for the common good in a national economic organism. Common national interest requires that foreign commerce should be promoted, that the most should be made of rural resources and that the prosperity of towns as centres x>f industry should be fostered. Further, in modern times when the government depends on taxation for the main part of its revenue, the interest of the rulers is bound up with the prosperity of this national economic life; there was much excuse for jealousy of the 54 THE CITY AND THE NATION monasteries and their self-centred prosperity, and there was frequent antagonism between the towns- men and territorial potentates. But there is not the same excuse for want of harmony between the national life as organised for political, and the national life as organised for economic purposes. There is no reason apparent why the nation as a unit for economic regulation should be outlived and superseded, so long as there is need to exercise any control over the commercial spirit and the free play of private interests. In any area where a conscious national life has been developed, there will be a desire to employ national resources and activities for the maintenance and development of national life; and as one political power governs the whole area, the means of exercising the necessary control lie to hand, whether this is directed to pecuniary objects like the collection of revenue, or to humani- tarian objects, such as the preservation of health and the maintenance of the standard of life. In the sixteenth century the national life of England was organised not only in its political but in its economic aspects, and this example has been generally followed in one area after another. Alexander Hamilton consolidated the United States into one organisation for economic purposes, and thereby rendered it possible for three separate states to become an effective political power in the world. In Europe local interest and local patriotism were strong enough to delay the development of a national economic life ; not till after the French Revolution and the rise of the German Empire, were the cities and provinces, which were living indepen- dent lives of their own, welded into one body economic. The oversea dominions have been attracted in the same direction ; they are ambitious of controlling their own economic activities as a necessary element in true national life, and of NATIONAL ECONOMIC POLICY 55 regulating the agriculture and commerce and indus- try of their territories so that they shall co-operate to promote the prosperity of the new nations. Economic consolidation reacts on political power; each organised nation is a foundation for building international agreements by which the dangers of open rupture may be diminished, 1 and for bringing a civilising influence to bear on territories which are occupied by primitive peoples. It may perhaps be doubted whether a true national life can be developed on its political side, unless it is developed on its economic side as well ; and it is at least instructive to consider the case of Ireland in this connection. At the time of the Union there was a very general desire throughout the country that Ireland should not be treated as a part of the British economic system, but should be free to pursue her own economic development in her own way. The enthusiasm with which this view was taken up and acted upon by the Parliament in Dublin at the close of the eighteenth century was the chief reason why English statesmen were anxious to force on a parliamentary union for economic and political purposes. At present there are very few common economic interests for the whole of Ireland, and the representatives of separate interests and of different parts of the country do not appear to hold that these would increase in prosperity by being brought into closer co-operation. The agricultural population were eager for Home Rule in Parnell's time, but even they seem to have lost much of their enthu- siasm for the measure, while the industrial and commercial classes are generally opposed to it. The English supporters of the proposal are for the most part Free traders who would be very suspicious of any attempt to develop Irish national life on its economic side by means of tariffs. The fact that 1. See below, p. 103. 56 THE CITY AND THE NATION there is no longer a united demand on the part of the Irish to have the means of pursuing their own economic development in their own way is the most striking difference between them and the men of the self-governing dominions overseas. Monastic life, despite the high aims which in- spired it became sadly corrupt; and the civic life of the Middle Ages, though permeated by the principles of Christian morality, degenerated till the wholesome influence of civic patriotism was completely sapped. English national life was consolidated under an impulse which was mainly religious, but the organisation of economic life on a national basis has been defective in many ways. Throughout the history of national economic regu- lation there has always been some clashing of interests ; and it is easy to assert that the parties in power at any period were merely seeking their own advantage, and eager politicians do not consider how far the objects of their attack were really pursuing the good of the community as they under- stood it. There is plenty of room for fault finding if we cultivate that habit of mind : it is easy to dwell on the horrors of war, and plausible to ascribe them to national vanity or national selfishness, and to speak as if national patriotism were the root of every kind of evil. Such disparagement of national life is idle, and it becomes mischievous if it encourages the supine in their unwillingness to give time and trouble to the duties of citizenship. It has its basis in the particularism which recognises the value of individual lives, but treats the very conception of national life as a mere illusion. Anti-patriotism has an affinity with the habit of mind which regards individual self-development as the supreme aim of life, and takes an attitude towards society that is indistinguishable from anarchy. Writers who have a passion for sweeping generalisation contend that NATIONAL ORGANISATION 57 monastic institutions, and great municipalities, have passed away in their turn, and that the time is ripe for national organisation to be superseded; but before we condemn national life and the national organisation of economic life as worthless, we would do well to see what we can hope to put in its place. National organisation is the most powerful instru- ment that has ever been created for controlling the use of economic resources and the exercise of economic activities. We dare not discard it till we find some instrument ready to hand which can be used as effectively and lends itself less readily to the danger of misuse. The political authorities in the nation have the widest power within the realm of putting down any proved evil which can be adequ- ately and safely dealt with by compulsion ; and they have also extraordinary opportunities of bringing pressure to bear on half civilised or savage peoples without resort to armed intervention. While these influences are so great it is not even plausible to argue that national life is worn out and done with. Bad workmen complain of their tools; but it is incumbent on democratic citizens of any state to fit themselves to use, unselfishly and wisely, the powers they possess for directly promoting the welfare of the community, and for indirectly benefiting other communities as well. V. CALVINISM AND CAPITAL. Latin Christianity had exercised a remarkable influ- ence in leavening economic life. The monasteries had furnished a great example of an industrial communism founded on a religious basis and inspired by religious motives. In the towns indus- try and commerce had been brought to co-operate for the maintenance of a well-ordered civic life, and Christian principles of right and wrong in monetary transactions had been successfully enforced under religious sanctions. This authoritative method of bringing Christian influence to bear had, however, been proving less and less effective during the fifteenth century, and in the sixteenth it suffered a mortal injury. At the Reformation a great stretch of European territory threw off the papal allegiance and rejected the authority by which Christian morals had been enforced at active centres of economic life; the old method of exercising a religious influence on civic authorities was no longer available. The full results of this change did not appear at first, and there is so much evidence of gross corrup- tion in the decadent Church of the fifteenth century that it seems almost paradoxical to regard the papacy as a moralising influence in any department of life ; but when papal authority was once set aside, there was no power that was strong enough to offer effective opposition to the advances of the commer- cial spirit, or to suggest suitable correctives. In this, as in other matters, it is necessary to distin- guish the aims of the reformers, from the changes which occurred in consequence of their action. Luther and Calvin paved the way for a thorough- going individualism both in Church and State, but 58 TRADITIONAL STANDARDS 59 neither of them set it consciously before him as an ideal. In England, at all events, there was no conscious departure from the traditional conception of a Christian polity which the Prince was called upon to administer in accordance with the Divine Will. Henry protested that the Spirituality within the realm we're learned enough to advise him as to recognised Christian doctrine, while appeal was made to the Bible as a negative test, to point out elements of traditional practice or doctrine for which it gave no support and which might therefore be condemned as unnecessary or mischievous. Mon- astic institutions had ceased to be beneficial econo- mically ; they had no obvious scriptural justification, and they were swept away. There was much, however, in the Bible about the danger of greed and oppression on the part of wealthy men ; and the traditional doctrine of right and wrong in regard to monetary dealing was maintained, in the expectation that it could be enforced by the Crown. Earnest attempts were made in the time of Elizabeth, James I., and Charles I. to maintain traditional Christian standards by means of a national ecclesiastical authority supported by the power of the Crown, and to insist on the duties of capitalist employers towards their workmen. It is idle, though tempt- ing, to speculate how the course of affairs, political and social, might have been affected if these eccles- iastical attempts to maintain the old standards of commercial morality, in all their precision, had been crowned with success and usury had been kept in check. The modern system of borrowing has proved an enormous power; and it is not easy to assess the good and evil, respectively, which have arisen in connection with it. Trading on borrowed capital has enabled enterprising men to take imme- diate advantage of some opening and has thus made for progress; but it has tended to increase the 60 CALVINISM AND CAPITAL fluctuations of business, and there would probably have been fewer facilities for speculation if trade had been conducted on other lines. The new system of finance supplied government with the means for carrying on the great military struggles which culminated at Blenheim and Waterloo; public credit enabled England to champion resistance to French Absolutism and Imperialism, but it has saddled after-generations with a heavy burden of debt. As a matter of fact the seventeenth century attempts to restrain the commercial spirit and to regulate the national economic life were quite unsuccessful ; the ecclesiastical courts in which action could be taken were highly unpopular, and the failure did much to discredit the prestige and undermine the authority of the Crown. Calvin and the extreme Protestants did not abandon the traditional aim of constructing and maintaining a divine polity ; they had not lost sight of the aspiration after a kingdom of God upon earth, though they had a new view of the principles on which it should be ordered. Some of them may have been influenced by the Humanist dream of an earthly Utopia, and looked for a Christian polity which should be a realisation of a perfect community on earth, and not merely discipline for preparation for the world to come; or they were prepared to establish in their own day the Messianic Kingdom for which Israel had hoped so ardently. Puritanism aimed at creating a Theocracy ; its leaders would have repudiated the notion that religion is a private matter to be cultivated by each individual in his own way ; all parties were at one in desiring to organise Christian society both in its political and its religi- ous aspects. They cherished a vision, such as S. Augustine had put on record, of a City of God, and continued to aim at the establishment of a Divine Polity upon earth. They protested most vigorously PURITAN CONSISTENCY 61 that Latin Christendom had failed hopelessly, and so they set themselves to construct a Theocracy on wholly different lines. Calvin and his followers held that there must be an entire breach with the past ; they believed that the whole scheme of civilised society had gradually drifted away from the Christian conception, till it had become utterly corrupt, and that it must be built up anew in close accordance with the instructions that came direct from the Scriptures. In England there was no complete breach with the past at the Reformation, and Scripture was only appealed to with the view of correcting defects in the traditional practice ; but by the Calvinists, Scripture was treated as a positive guide to the Divine Will for the constitution of human society for all time. Presbyterianism and Puritanism were schemes for creating a new Theo- cracy by means of Scriptural instructions. There is much misapprehension on this point and it has given rise to a charge which is frequently repeated against the Puritans, though it seems to me to be unfounded. Surprise is sometimes ex- pressed that the New Englanders, after leaving their own country to escape persecution and to obtain "freedom to worship God," should have been so intolerent of varieties of religious opinion and practice in their new home. But there was no real inconsistency. The struggle of the earlier part of the seventeenth century was being waged between men who advocated different types of Divine Polity ; all were intensely interested in endeavouring to create or maintain a Christian society, but there was no plea for freedom for the individual. The Puritans who emigrated to America took strong- exception to the professedly Christian society which had been organised in England ; they desired to change it, and when they found that this was impracticable they separated themselves from it, 62 CALVINISM AND CAPITAL so that they might be able to organise a new polity on what they believed to be really Christian lines. To them it was a duty to endeavour by means of a strict ecclesiastical discipline, to maintain the purity of the community framed on a strictly scriptural model and dominated by scriptural prin- ciples. These men had objected strenuously to one type of Christian polity and they were trying to institute another ; but they had never claimed free- dom for individuals, and they would have been untrue to their conviction as to the Divine Polity if they had granted freedom to individuals to upset the ordered life of their new societies. Calvinists retained the traditional aim of estab- lishing a Divine Polity on earth, but they not only rejected the authority of the Pope as an adminis- trator as had been done in England, but the whole interpretation of Christian duty which had been formulated under the papal regime : they professed to find a scriptural basis for every detail of life in an organised Christian society, and they would have none other. This proved the fundamental weakness of their position ; there are many matters of great importance, commercial, social and political, about which the Christian Scriptures give us no direct fight at all. Even in regard to ecclesiastical organ- isation the New Testament does not supply us with guidance that is plain and unmistakable. The scheme of Church government described in the Acts of the Apostles was obviously transitional, and Calvin's pronouncement as to the permanent elements appears to be arbitrary. The conditions of early Christianity, as a persecuted sect in a heathen Empire, render it impossible that the Epistles should give us instruction that is appro- priate to the position of a free citizen in a Christian community. The duties of a ruler lay outside the scope of the practical matters on which the Apostles USURY 63 were called upon to advise their flocks ; and the New- Testament has nothing to say about civil or criminal procedure, the organisation of defence from foreign foes, or the protection of persons and property within the realm. On these questions, and still more on economic matters of every kind, the New Testament fails to lay down any rules; and hence the Calvinists fell back on the Will of God as declared in the Old Testament. During the Middle Ages the blanks in gospel teaching had been filled up by reference to the stores of natural wisdom which were collected and formulated in the writings of Aristotle; natural reason was used, much as S. Paul had appealed to the natural conscience, 10 confirm and supplement the dicta of Christian morality. But the Calvinists discarded the great body of acute thought which had been raised on this double basis, and sought for direct guidance in the code which had been laid down for the ancient people of God. By so doing they insensibly and unconsciously eliminated anything that was specific- ally Christian from their scheme of social morality, and fell back on the Old Testament and the Jewish standards of commercial dealings. The main difference between the Jewish and the Christian standard of commercial dealing in mediaeval towns had arisen in connection with the practice of usury; the Jew felt that it was quite allowable to lend money on usury to a Christian, 1 while Christians regarded it as grasping conduct, by which a man laid himself out to evade the risks of honest business and to gain at the expense of his neighbour. In the sixteenth century, however, the feeling of upright business men had undergone a considerable change; new opportunities for invest- ing in profitable ventures were opening up. To the merchant, it was a great advantage to get the com- ]. Deut., xxiii, 19, 20. 64 CALVINISM AND CAPITAL mand of capital which he could use to advantage; and the neighbour, who had saved some money, was glad to lend it at comparatively low interest rather than keep it lying idle in his chest. Instead of going into a temporary partnership for risks with the prospect of a high rate of profit, the man who was not himself a merchant preferred to agree to accept a low rate of profit for certain, and to under- take no risk at all ; while the high profits which the merchant could hope to obtain, on capital borrowed at a comparatively low rate, made him ready to accept the accumulated risk. The practice of trading on capital borrowed at a low rate was no longer felt to involve any elements of unfairness; and the term usury began to be interpreted in its modern sense of excessive interest. Business men contended that there was no breach of Christian charity in lending at low rates of interest, and that this practice was perfectly allowable. A further difficulty in maintaining the old standard arose from the fact that new methods of doing business were coming into vogue, and that the practice of dividing risks by insurance was developing ; l under these circumstances the mediaeval distinctions were ceas- ing to be easily applicable to actual transactions, and there was need that the safeguards against hard bargaining on the part of moneyed men should be defined afresh. Calvin, when appealed to for his opinion as to the lawfulness of usury, was in great difficulty about his decision ; but, as he did not definitely condemn it, the effect of his pronounce- ment was to add the weight of his opinion in favour of regarding the practice as allowable in a Christian community, and as a matter for the private con- science and not for ecclesiastical discipline. Calvin and his followers do not, however, seem to have made any very serious attempt to discuss the 1. Ashley. English Economic History, I, ii, 440. OLD TEvSTAMENT MORALITY 65 temptations of the moneyed man in such a way as to give him help to decide where his own personal duty lay. Richard Baxter warns landlords against the evil of oppressing their tenants, but does not seem to fear that moneyed men may be tempted to drive hard bargains. He argues that the prohibition of Usury does not hold good in the Christian dispensation, 1 whatever may have been its force among the Israelites. In the first half of the seven- teenth century the authoritative attempt to bring Christian influence to bear on moneyed men within the realm, for the use of their wealth, practically ceased; the ecclesiastical authorities in England were still trying to enforce restrictions which the ordinary conscience felt were out of date, while the ecclesiastical authorities in Scotland saw no need to deal with the matter at all. Calvinism allowed free play to the commercial spirit. The attitude of Calvinism to commercial life was ultimately due to the deliberate acceptance of the Old Testament as the rule for conduct in a Christian society ; but the connection was strengthened by the conditions of the community in which Calvinism was first planted and the atmosphere in w F > 53- S.Augustine (of Canterbury), Dublin, 55 Carlovingians, 23. Charles the Great, 81. Charles I., 59. Cistercians, 24. Comtism, 95. Continental System, 19. Cornwall, 7. Crusades, 81. S. Dunstanj Dutch, 69. 80. Baltic, 45. Baxter, Richard, 65, 82 n. Benedictines, 24. See also ^ wa ' r( j j 23- Rule. S. Bernard, 81. Beza, T., 65. Black Death, 30, 49. Blenheim, 60. Bristol, 45. Bury S. Edmunds, 28. Calvin, J., 58, 60, 63, 65. Cambridge, 46. Canada Company, 98 East, routes to, 52. Eden, 26. 49. Elizabeth, Queen, 43, 50, 5i» 59- S. Eloy, 23. Ely, 28. English, 14, 40, 52, 56. Exeter, 45. Factory Acts, 18. Fish Days, 19. Flanders, 45. Florence, 65. 109 no INDEX France, 66, 69. Free Traders, 55. French, 54, 60, 66. Genesis, 26. Geneva, 65, 66. German Empire, 54, 107. Godwin, W., 5. Granada, 81. Greece, 96. S. Gregory the Great, 22, 80. Hamilton, Alexander, 54. Henry VIII, 59, 66. Hirschau, 23. Home Rule, 55. Huguenots, 66. Humanism, 6, 60. India, 97. Ireland, 55. Israel, 60. James I, 43, 59. Jews, 49, 63, 69, 82. Joint-Stock Companies, 43. Judaism, 69. Knowles, Dr., 12. Knox, John, 66. Latimer, H., 13. Lincolnshire, 6. List, F., 107. Locke, John, 2, 76. London, 31, 40, 50, 51, 73. Luther, 25, 58. Marshall, Dr. A., 93. Mary I, Queen, 50, 52. Melville, Andrew, 66. Mercantile System, 16. Merchant of Venice, 42. Mercy, Order of, 82. Merovingians, 23. Methodism, 25. Mexico, 52. Mill, J. S., 85, S 7i 89. More, Sir T., 13. Moslim, 81. Napoleon, 19, 84. Netherlands, 69. Newcastle, 45. New England, 52, 61. Nicholson, Prof. J. S., 77 n. Norsemen, 23. Old Testament, 63, 65, 68. Orders, 24, 82. Paradise, 9. Parnell, Mr. C. S., 55. S. Paul, 26, 63. Peru, 52. Petty, Sir W., 73. Phillpotts, B. S., 11 n. Pigou, Prof. A. C, 90 f. Pope, 52, 62. Portuguese, 52, 81. Presbyterianism, 61, 66 f., 70 f. Proverbs, Book of, 68. Puritanism, 60, 69. INDEX in Queen Regent (Mary of Tawney, R. H., 12. Guise), 66. See Elizabeth, S. Thomas, see Aquinas, etc. Ramsey, 28. Trade Unions, 32. Trinitarians, 82. Reformation, 11, 58, 61, 65. Troeltsch, Dr., 6. Truce of God, 70. Turkey, 79. Renascence, 6. Rhodes, Cecil, 97. Roman Empire, 22, 96. Rose-Troup, F., 7 n. Rost, Dr., 70 n. Royal Society, 72. 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