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 THE 
 
 PROGRESS OF CAPITALISM 
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 THF. MARUZEN-KABUSHIKI-KAISHA 
 
 All rights reserved
 
 THE 
 
 PROGRESS OF CAPITALISM 
 IN ENGLAND 
 
 BY 
 
 W.' CUNNINGHAM, D.D., F.B.A. 
 
 Fellow of Trinity College, Cambridge, and Archdeacon of Ely 
 
 formerly Tooke Professor of Economic Science and Statistics 
 
 in King's College, London, and Lecturer on Economic 
 
 History in Harvard University 
 
 Cambridge : 
 
 o 
 at the University Press 
 
 1916
 
 C&7
 
 TO THE 
 
 HON. W. PEMBER REEVES 
 
 DIRECTOR OF THE LONDON SCHOOL OF 
 
 ECONOMICS AND POLITICS 
 AND TO MY COLLEAGUES ON THE STAFF 

 
 PREFACE 
 
 THE following pages contain the substance of 
 Lectures which were delivered in the London 
 School of Economics and Political Science in the 
 spring of 1915. The School is organised with the view 
 of promoting the study of present day problems, 
 such as the actual economic conditions under which 
 the industry and commerce of our own country are 
 carried on, as well as those of the great overseas 
 dominions in which we exert an influence and of 
 our rivals in trade. There is besides a department 
 of History, which has done a great deal to encourage 
 investigation and research; and this is in itself 
 evidence of recognition of the truth that the present 
 is deeply rooted in the past, and that the anomalies 
 and controversies of the present day only become 
 intelligible when we understand their genesis. These 
 lectures were intended to illustrate the method of 
 treating Economic History which may best meet the 
 requirements of those who are less interested in the 
 economic interpretation of political changes in the 
 past than in obtaining a clear insight into the con- 
 ditions of the present. It is important to arrange 
 the facts so that the bearing of the past on the 
 present may be easily apprehended and fully appre- 
 ciated.
 
 viii Preface 
 
 The substance of these Lectures is now published 
 in the hope that it may prove a useful appendix 
 to my Growth of English Industry and Commerce. 
 Political divisions supply the framework of that 
 book ; and though the subject may be conveniently 
 approached from the political side, we do not reach 
 the main object of Economic History if we are 
 content to study it as subsidiary to the Body 
 Politic. The economic activities of every kind 
 which are co-ordinated for the material prosperity of 
 the community the Body Economic have grown 
 in efficiency and complexity through all the ages, 
 and under many different forms of political con- 
 stitution. The stages of development, and the 
 various economic organisms which have succeeded 
 one another, are worth studying systematically and 
 apart from politics altogether ; and it is possible to 
 accentuate this economic aspect and mark the steps 
 by which Capitalism has come into being in England. 
 We may come to realise that the study of Eco- 
 nomic History gives invaluable help in applying the 
 experience of the past to the solution of the problems 
 of the present day, in every part of the Empire. 
 Due appreciation of the importance of the Body 
 Economic is essential to the wise organisation of 
 the Body Politic. 
 
 W. C. 
 
 TRINITY COLLEGE, CAMBRIDGE, 
 Michaelmas, 1916.
 
 CONTENTS 
 
 PAGE 
 
 PREFACE vii 
 
 I. ECONOMIC HISTORY AND EMPIRICAL 
 ECONOMIC SCIENCE 
 
 (1) The interest of Economists and Historians 
 
 in Economic History .... i 
 
 (2) Political Economy as a branch of Social 
 
 Philosophy, and the disparagement of 
 History 4 
 
 (3) The inadequacy of Social Philosophy as a 
 
 substitute for Empirical Study . . 7 
 
 (4) Recognition of the importance of History 
 
 for present day enquiries . . . 14 
 
 (5) The re-invigorated study of Economic phe- 
 
 nomena ...... 16 
 
 (6) Capital as an Historical Category . . 19 
 
 (7) National Resources and Social Aims . . 22 
 
 (8) The systematic study of Economic History 
 
 and its contribution to History and to 
 Social Philosophy . . . . 26 
 
 II. THE DEVELOPMENT OF THE BODY 
 ECONOMIC IN ENGLAND 
 
 PART I. PRE-CAPITALIST ORGANISATION 
 
 (i) Natural Economy 
 
 (9) Primitive Conditions .... 30 
 (10) Monasteries and the Organisation of work . 31 
 (n) Monastic Commerce . . . . . 33 
 (12) Migratory Households 35
 
 x Contents 
 
 PAGE 
 
 (ii) Subsistence farming and the introduction of 
 Capital in the Management of Land 
 
 (13) Subsistence farming . . . . 38 
 
 (14) The System of Bailiff farming ... 40 
 
 (15) Bailiff farming at its best ... 42 
 
 (16) The Black Death and rural disintegration . 45 
 
 (17) Severalty and Convertible Husbandry . 47 
 
 (18) Farming for the Market .... 48 
 
 (19) Social grievances . . . . . 51 
 
 (20) National economic gain, and incidental in- 
 
 dividual gain or loss . . . . 55 
 
 (21) Checks to rural progress ... 60 
 
 PART II. THE PROGRESS OF CAPITALISM 
 IN MEDIAEVAL CITIES 
 
 (i) Their Economic Prosperity 
 
 (22) The Town as a self-governing group, with 
 
 money Economy .... 62 
 
 (23) Town possessions and policy . . .65 
 
 (ii) The Formation of Capital 
 
 (24) Town Stocks and Merchant Guilds . . 67 
 
 (25) The struggle with alien capitalists . . 70 
 
 (iii) Capitalism and the Organisation of Industry 
 
 (26) Craft Guilds 72 
 
 (27) Municipal Institutions as agents of National 
 
 Administration . . . . . 77 
 
 PART III. THE DIRECTION AND CONTROL OF 
 PRIVATE CAPITAL THROUGHOUT THE COUNTRY 
 
 (i) The Resources of the Country as a whole 
 
 (28) Capitalists and National Direction . . 79 
 
 (29) The aims of Lord Burghlcy . . 83 
 
 (30) The Expenses of Government ... 93
 
 Contents xi 
 
 PAGE 
 
 (ii) Relations to other Countries 
 
 (31) Foreign Commerce 95 
 
 (32) The Increase of Shipping .... 98 
 
 (iii) The Monied Interest 
 
 (33) Monied Men and Credit . . . .100 
 
 (34) The Balance of Trade .... 103 
 
 (35) Discredited regulations . . . .104 
 
 (iv) Laissez Faire 
 
 (36) The abandonment of the Elizabethan 
 
 system ...... 108 
 
 (37) Free play for Capital . . . . 112 
 
 (38) Correctives to laissez faire . . . 114 
 
 III. LESSONS FROM EXPERIENCE 
 
 (39) National Administration . . . . 121 
 
 (40) National Aims . . . . . .122 
 
 (41) The Public Command of Capital . . 123 
 
 (42) Freedom for National Development . . 129 
 
 (43) International Co-operation . . . 131 
 
 (44) The Limitations of Experience . . 132 
 
 BOOKS AND PAPERS ON ECONOMICAL AND 
 
 SOCIAL SUBJECTS . . . . .136 
 
 INDEX ....... 143
 
 I. ECONOMIC HISTORY AND 
 EMPIRICAL ECONOMIC SCIENCE 
 
 (i) Both economists and historians have drawn 
 occasionally upon Economic History, but neither have 
 considered it as more than subsidiary to the work in 
 which they were specially interested, or recognised 
 its importance adequately. 
 
 From its earliest inception Political Economy 
 has welcomed Economic History in the capacity 
 of a handmaid. Economics has been generally re- 
 garded as an empirical science, and economists have 
 been ready to draw on the recorded experience of the 
 past, though their main reliance has naturally been 
 on contemporary evidence. As M c Culloch says, 
 "the economist will not arrive at anything like a 
 true knowledge of the laws regulating the production, 
 accumulation, distribution and the consumption of 
 wealth if he do not draw his materials from a very 
 wide surface. He should study man in every situa- 
 tion ; he should have recourse to the history of society, 
 arts, commerce and civilisation, to the works of legis- 
 lators, philosophers and travellers, to everything in 
 
 c. P. i
 
 2 Empirical Economic Science 
 
 short that can throw light on the causes which ac- 
 celerate or retard the progress of nations ; he should 
 mark the changes which have taken place in the 
 fortunes and conditions of the human race in different 
 regions and ages of the world; he should trace the 
 rise, progress and decline of industry, and above all 
 he should carefully analyse and compare the effects of 
 different institutions and regulations and discriminate 
 the various circumstances wherein an advancing and 
 declining society differ from each other 1 ." 
 
 Adam Smith's Wealth of Nations shows that his 
 mind was saturated with history ; and the eighteenth 
 century writers on particular branches of Economics 
 contributed substantial treatises such as Eden's 
 State of the Poor, and Anderson's Commerce, which 
 show how much they drew on the phenomena of the 
 distant past in their efforts to understand the con- 
 ditions of the present. Malthus' Essay on Population 
 contains a mass of information drawn from many 
 places and ages, and Richard Jones, his successor at 
 Haileybury, insisted that it was only by an inductive 
 method that we could understand the nature of rent as 
 actually paid 2 . The historical investigations of Tooke 
 and Thorold Rogers, were specially directed to the 
 
 1 M c Culloch, Principles, p. 21. 
 
 2 An Essay on the Distribution of Wealth and on the Sources 
 of Taxation, 1831.
 
 Economists and Historians 3 
 
 history of prices. Fleet wood's essay 1 on this subject 
 had been concerned with a modern problem and the in- 
 terpretation of a statutory limitation in regard to the 
 value of a benefice, but in the hands of later investi- 
 gators the main interest seemed to lie in elucidating 
 the conditions of bygone days, and getting clearer 
 light on the habits and resources of men who lived 
 in the distant past. Prof. Thorold Rogers 2 was 
 specially taken up with the economic interpretation 
 of Political History, and does not seem to have 
 regarded the economic development of the country 
 as itself deserving of systematic study. 
 
 Historians in the nineteenth century were, like the 
 early economists, very ready to welcome the fresh 
 light which might be drawn from Economic History. 
 The stately writers, who regarded economic detail as 
 unworthy of the dignity of History, were no longer 
 dominant. Special chapters, which gave the essential 
 setting of political events were commonly introduced ; 
 and popular writers were frankly jealous of the stress 
 which had been laid on Military and Political History, 
 and were anxious that the "real life of the people," in 
 its economic as well as in its other aspects, should be 
 a subject of study; but the ordinary reader finds 
 
 1 Chronicon Preciosum, 1745. 
 
 a The importance for economic studies of the investiga- 
 tion of relative prices in the present and in the past is brought 
 out by Prof. Nicholson, Principles, in. 65. 
 
 I 2
 
 4 Empirical Economic Science 
 
 more interest in the delineation of character and 
 the explanation of policy, than in the recounting 
 of schemes for the development of national resources. 
 There were also those who dwelt on the unity of 
 History and who recognised that primitive man, in all 
 places and times, had similar problems to face in his 
 struggles with nature, and that there were interest- 
 ing analogies in the different methods that had been 
 adopted by different races for engaging in this struggle. 
 Sir Henry Maine called attention to the Village Com- 
 munity as a wide-spread institution; and much 
 interest has been found in noting how other races 
 are passing through experiences that we have ourselves 
 outlived. From these causes Economic History has 
 been generally regarded as having closer affinities 
 with History than with Economics, and it has been 
 developed in directions which seemed to be more 
 concerned with the pedantries of the past than with 
 the problems of the present. 
 
 (2) This less friendly attitude has been specially 
 adopted by those writers who regard Political Economy 
 not as an empirical science, but as a branch of Social 
 Philosophy 1 . The introduction of this habit of thought 
 
 1 For a general criticism of the Social Philosophy which 
 modern Political Economy takes for granted see J. Hutchison 
 Stirling, Secret of Hegel, u. 541 f. For a brief criticism of its 
 most recent form, see my Christianity and Economic Science, 
 p. 90.
 
 Social Philosophy 5 
 
 was partly due to religious teachers; they felt that 
 the principles according to which society was governed 
 were the principles of Divine government. Thus 
 President Weyland regarded science as "a systematic 
 arrangement of the laws which God has established 
 in so far as they have been discovered in any depart- 
 ment of human knowledge. It is obvious on the 
 slightest reflection that the Creator has subjected the 
 accumulations of the blessings of this life to some 
 determinate laws.... Political Economy therefore, is 
 a systematic arrangement of the laws by which under 
 our present constitution the relations of man, whether 
 individual or social, to the objects of his desire, are 
 governed 1 ." A somewhat similar view was taken 
 by Dr Chalmers, who found "a counterpoise to the 
 laws of Nature in what may be termed the laws of 
 Political Economy 2 ." 
 
 An impulse of a similar kind was given by the 
 religion of Humanity, and the Social Philosophy of 
 Comte. The influence of his writings may be traced 
 in chapter after chapter of Mill's Principles; and 
 though Mill continued to treat Political Economy as 
 
 an empirical science 3 , he was conscious of the claims 
 
 1 Elements of Political Economy (1837), p. 3. 
 
 2 Chalmers, Christian and Civic Economy of large Towns 
 (1821), m. 38. 
 
 3 In his treatment of cottiers and metayers Mill was 
 apparently influenced by Richard Jones, the great advocate 
 of empirical study.
 
 6 Empirical Economic Science 
 
 of the new philosophy to constant consideration, and 
 entitled his book Principles of Political Economy 
 with some oj their Applications to Social Philosophy. 
 Economists appeared to popular apprehension 1 to 
 lay undue stress on external conditions, and they 
 certainly gave great prominence to the generalisa- 
 tions of empirical science. It was indeed recog- 
 nised that the laws of .distribution were really 
 dependent on the changing conditions of society, but 
 the principles of production appeared to have all the 
 cogency of laws of the physical order. Economic 
 laws came to be spoken of as formulating what is 
 generally true in society, and as stating what becomes 
 increasingly true as civilisation advances. As this 
 habit of mind obtained a firmer and firmer hold, 
 historical enquiries seemed to be of less importance : 
 if Social Philosophy laid down laws which were uni- 
 versally true, the investigation of phenomena that 
 could not readily be reduced to the realm of law was 
 superfluous, and History was only worth referring to 
 for the sake of illustrations of the principles which 
 Social Philosophy had established 2 . 
 
 1 See p. 113 below. 
 
 2 The students of Economic History in the eighties were 
 not content with the limited role which was thus assigned 
 them. It is seldom worth while to go back on forgotten 
 controversies, but the articles on "A Plea for Pure Theory" 
 in the Economic Review (1892), and on the "Perversion of
 
 Social Philosophy 7 
 
 (3) This new departure in treating Political 
 Economy as a branch of Social Philosophy was not 
 merely antagonistic to the empirical study of the 
 phenomena of the past, but has resulted in the entire 
 re-casting of Political Economy as it had been 
 hitherto understood. The subject matter of the 
 science or art had been habitually confined to 
 external phenomena that could be observed, and 
 by reference to which our generalisations could be 
 tested. Economics, as now re-cast, took internal 
 conditions of motive and satisfaction as its subject 
 matter; and the leading conceptions of the old eco- 
 nomic writers were also modified. Economics could 
 no longer be charged with ignoring human nature 
 altogether, though there was no sufficient recog- 
 nition of the varieties and the changes in human 
 nature. Instead of regarding the conditions of 
 Exchange as the main consideration, the new eco- 
 nomists devoted themselves to an analysis of Utility ; 
 and while they gained some advantage in this new 
 mode of statement and in the simplification of 
 certain problems, they shifted the basis on which 
 
 Economic History," Economic Journal (1892), and Academy 
 (Oct. i, 1892), had an effect in securing freedom for economic 
 research in connection with the Historical School at Cambridge. 
 Since that date there has been no attempt to insist that the 
 teaching of Economic History shall be governed by the 
 desire to illustrate economic laws.
 
 8 Empirical Economic Science 
 
 the truth of economic principles had hitherto rested. 
 Such an attempted revolution was not allowed to 
 pass unquestioned; it had been already admitted 1 
 that economic doctrines, as stated by Ricardo, dis- 
 regarded ordinary phraseology and had little to do 
 with ordinary life, and social philosophers failed to re- 
 cognise that this was a defect. The protest in favour 
 of empirical study was waived aside by those who 
 were treating Political Economy as a branch of Social 
 Philosophy, as a mere whim of men like Schmoller and 
 an advanced German School, which were "arrogant and 
 exclusive in their pretensions 2 ." But it might have 
 been expected that English economists should at 
 least take account of the criticisms which had been 
 pronounced by anticipation, by one of the pioneers in 
 
 1 M c Culloch was probably the author of the critique on 
 Jones's Distribution of Wealth, in which his objections to 
 Ricardo are dismissed on the following grounds. "It will be 
 sufficient to observe here that Mr Ricardo's book is one of 
 principle only, and that it is not to be judged of by a merely 
 practical standard.... He was as well aware as Mr Jones or 
 any one else that the rent, the origin and progress of which 
 he had undertaken to investigate, was not what is commonly 
 called rent." Edinbitrgh Review, LIV. 85. 
 
 2 Keynes, Scope and Method, p. 26. This appreciation of 
 Schmoller personally does not appear to be either well- 
 informed or judicial. In any case a criticism is not necessarily 
 to be ignored because of the eccentricities or unimportance of 
 the persons by whom the criticism has been urged. Dr 
 Marshall, Economic Journal (u. 508), 1892, and Prof. Pigou, 
 Morning Post, i and 3 May, 1916, seem to have fallen into 
 this mistake.
 
 Social Philosophy 9 
 
 presenting in a mathematical form the doctrines which 
 had been generally accepted as part of the science of 
 Political Economy. Whewell's first endeavours in this 
 direction date as far back as 1829; he said, "I am 
 aware that many may at first regard this endeavour 
 as necessarily barren of any practical and rational 
 results. And this opinion would be undoubtedly 
 true if it were intended to make mathematical calcu- 
 lations supply the place of moral reasoning ; or if it 
 were maintained that we could by the use of alge- 
 braical symbols obtain any results of a nature different 
 to those which we can obtain otherwise. It is not, 
 however, with any such views that I now enter upon 
 the subject. But I hope in the course of the following 
 pages to make it appear that some parts of this science 
 of Political Economy may be presented in a more 
 systematic and connected form and, I would add, 
 more simply and clearly by the use of mathematical 
 language than without such help." " For my own 
 part, I do not conceive that we are at all justified 
 in asserting the principles which form the basis of 
 Mr Ricardo's system, either to be steady and universal 
 in their operation, or to be of such paramount and 
 predominant influence, that that and other principles, 
 which control and oppose them, may be neglected in 
 comparison. Some of them appear to be absolutely 
 false in general, and others to be inapplicable in
 
 io Empirical Economic Science 
 
 almost all particular cases 1 ." Twenty years later 
 he wrote, "It would, however, be to take a very 
 erroneous view of the consequences of this application 
 of mathematics to Political Economy, to suppose that 
 it can add anything to the certainty of the funda- 
 mental principles. There is perhaps in some persons 
 a propensity to believe that any subject, when clothed 
 in a mathematical shape, acquires something of 
 mathematical demonstrative character; and that by 
 applying mathematics to assumed principles of know- 
 ledge, we in some measure create a science. I must 
 beg leave very distinctly to repudiate all pretensions 
 of this kind. By stating distinctly our fundamental 
 principles, which such an undertaking as the present 
 requires us to do, we may bring them more clearly 
 under notice and examination than would otherwise 
 be done ; but we add nothing whatever to the evidence 
 of the principles... 2 ." 
 
 "Mathematics," he insists, "is the logic of 
 quantity, and will necessarily, sooner or later, be- 
 come the instrument of all sciences where quantity 
 is the subject treated and deductive reasoning the 
 process employed. I am, however, well aware, that 
 the pretensions of Political Economy to such a 
 
 1 Papers before the Cambridge Philosophical Society, 
 March 2., 1829, p. 2, and April 18, 1831, p. 2. 
 
 2 Ibid. April 15, 1850.
 
 Social Philosophy n 
 
 scientific character, are as yet entirely incapable of 
 being supported. Any attempt to make this subject 
 at present a branch of Mathematics, could only lead 
 to a neglect or perversion of facts, and to a course of 
 trifling speculations, barren distinctions and useless 
 logomachies 1 ." Whewell was perfectly clear as to the 
 empirical character of the truth of economic principles, 
 and seems to go as far as Schmoller in his suspicions 
 of the treatment of Political Economy as a branch 
 of Social Philosophy which rests not on observations 
 but on principles which are spoken of as if they had 
 authority on religious or ethical grounds, and had a 
 superior certainty to merely empirical generalisations 
 about wealth. 
 
 As Whewell had died in 1866 it was simpler for 
 writers in the eighties to ignore him than it would 
 have been to reply to him, but those who have followed 
 him in the mathematical treatment of economic 
 doctrines have not been wise in discarding his warning. 
 Principles which do not rest on a basis of observed 
 fact, are neither to be trusted as giving us accurate 
 knowledge of phenomena nor can we rely on them 
 for practical guidance. As Prof. Edgeworth puts it, 
 " most of the abstract truths of Political Economy are 
 to be regarded only as first approximations to be sup- 
 plemented in practice by concrete circumstances 2 " ; 
 
 1 Ibid. April 18, 1831, p. 43. 2 Economic Journal, xxvi. 225.
 
 12 Empirical Economic Science 
 
 Economic History is just the study of these concrete 
 circumstances, and of the genesis of existing conditions. 
 In order to deal with actual problems in all their 
 complexity we must take account of special conditions 
 in place and time. If Political Economy is treated 
 as a branch of Social Philosophy, it ceases to 
 have to do with external phenomena and becomes 
 instead a doctrine as to the workings of the modern 
 mind, and the play of various subjective motives 
 which do not lend themselves to accurate observation 
 or to careful verification. Statements regarding the 
 working of the modern mind may be very general in 
 form and apply to the inhabitants of Saturn, if their 
 minds are similar to that of the nineteenth century 
 Englishman. But we have no right to assume that 
 we have, in this country or in this decade, attained 
 the final development, either of society or of the 
 individual. Indeed, though the nineteenth century 
 mind survives among us still, there is some reason 
 for thinking that the Social Philosophy of the eighties 
 and nineties is already an anachronism. Social 
 philosophers are in danger of trying to adjust new 
 facts to the old formulae, they have been able to 
 give little light in regard to the problems presented 
 by the war, since they regard it as a mere aberration 
 in which the laws of Political Economy have ceased 
 to apply. The. facts of life are very complex, and there
 
 Social Philosophy 13 
 
 is need of a cultivated judgment in order to discern 
 the main issue in the circumstances of any particular 
 case. Great problems have been raised by the material 
 waste which is due to the war, and as to the sudden 
 readjustment which will be needed when the war 1 
 is over. To regard the main question as one of 
 taxation and of the right application of Adam 
 Smith's principle of equality is an inadequate way 
 of treating the cost of the war. The theory of taxa- 
 tion is important ; but it does not give the means of 
 discussing the wisest course for the country to adopt 
 with regard to the recovery of the country after the 
 war. "The worst use of theory," as Lord Acton said, 
 "is to make men insensible to fact 2 ." The logical 
 objections to regarding Political Economy as a branch 
 of Social Philosophy have been reinforced, so far as 
 the public mind is concerned, by its inability to give 
 guidance on present day affairs. The professors 3 who 
 protested that there could be no change of circum- 
 stance which made it desirable to re-consider the 
 trading policy of this country, did much to discredit 
 the scientific character of the doctrine they taught ; a 
 mode of treatment that is neither fruitful in research 
 nor reliable in practical affairs has little to be said for 
 
 1 Compare my paper on economic problems after the war 
 in Prof. C. Kirkaldy's Industrial Credit of the War, Chapter v. 
 
 2 English Historical Review, I. 40. 
 
 3 Times, 15 Aug. 1903.
 
 14 Empirical Economic Science 
 
 it; and "consumers' rent" and "immaterial capital" 
 may soon be relegated to the Limbo to which planetary 
 influences and the signatures of plants have long since 
 been consigned by the progress of empirical science. 
 
 (4) During the later half of the nineteenth cen- 
 tury the study of Economic History has received a 
 new impulse since it has come to be gradually recog- 
 nised that a knowledge of historical conditions is 
 not an idle pedantry, but is essential for the under- 
 standing of present day problems; and that it is 
 desirable to draw on human experience of every kind 
 in attempting to deal with the complexities of modern 
 life. Richard Jones insisted that the economic 
 development of England was much in advance of 
 that of other countries 1 , and that it was an error to 
 treat the principles, which held good in the special 
 circumstances of England, as true for the world as 
 a whole. His Political Economy of Nations'* fell 
 rather flat in his own country; but a similar point 
 of view 3 was adopted by several German writers who 
 set themselves to investigate the reasons why England 
 
 1 Literary Remains, edited by Whewell, p. 558. 
 
 2 Ibid. 337- 
 
 3 There does not seem to be any direct evidence of depen- 
 dence ; but as List was in Europe in the early thirties, and 
 was making a special study of English economic conditions, 
 it is not likely that he was wholly unaware of Richard Jones's 
 books and teaching.
 
 Present Day Problems 15 
 
 had attained such remarkable industrial success. 
 List's National System of Political Economy led 
 practical men to consider the methods by which 
 English industrial greatness had been built up in the 
 eighteenth century, and pointed out the possibilities of 
 out-rivalling her successfully. Roscher 1 made a careful 
 study of the early literature of Economics in England, 
 and Brentano's essay on Guilds and Trades Unions'* 
 made it clear that it is worth while to take History 
 into account with regard to social institutions, as in 
 considering political schemes. These German writers 
 reacted on English opinion and gradually the im- 
 portance of going back to even more remote times 
 was recognised. According to his son, Mr Seebohm's 
 "historical works were the result of the need he felt 
 to search into the past for a clue to the present 
 environment in which he found himself and in which 
 he was living so full and active a life 3 ." The English 
 Village Community was not merely a remarkable work 
 in itself but it gave an extraordinary impulse to a 
 new generation to devote themselves to historical 
 investigation for the sake of its bearing on present 
 day issues. To Arnold Toynbee and those who came 
 
 1 Zur Geschichte der englischen Volkswirtschaftslehre in 
 Abhandlungen der phil.-hist. Classe der k. sacks. Gesell. d. 
 Wissen. n. Leipzig, 1857. 
 
 2 Die Arbeitergilden der Gegenwart (1871). 
 
 3 Preface to the Spirit of Christianity, by F. Seebohm, p. vi.
 
 1 6 Empirical Economic Science 
 
 under his influence, history was a living thing which 
 could not be relegated to the background by the 
 student of social phenomena; in an old country the 
 experience of the past has been recognised in recent 
 times as an essential element in economic study. 
 
 (5) While social philosophers have busied them- 
 selves with elaborating cosmopolitan theories, there 
 has been continued and increasing activity in the 
 careful study of the economic condition of our own 
 country, and of the oversea dominions. The economic 
 investigations undertaken on behalf of government 
 have been of special interest. A large number of 
 commissions have been appointed and their reports 
 contain masses of observed facts in regard to 
 modern times ; the records of survivals in particular 
 districts, like the Report of the Crofters' Commission 
 and Prof. Scott's Report on the Industries of the 
 Highlands and Islands, are of special interest, as well 
 as the surveys by the Government of India of the 
 economic progress which is made from decade to 
 decade. There has been a great advance of empirical 
 economic science, in the collecting of data ; and these 
 are so complicated that it is necessary to simplify 
 the problems by abstraction and generalisation ; and 
 this process, when verification is possible, enables us to 
 state what is true for limited periods and areas. For
 
 Economic Phenomena 17 
 
 forecasting the future, it is necessary to put forward 
 some hypothesis and deduce from it what is likely to 
 occur in certain assumed conditions ; but even when 
 the conclusions are logically necessary, since they 
 follow from the premises, we should not regard them 
 as stating what is physically necessary in actual life. 
 The laws of supply and demand hold good for all 
 markets, and generally speaking for districts where 
 money economy has come into vogue ; but they have 
 not such absolute certainty as to enable us to predict 
 the future course of affairs with any certainty, or to 
 explain any phenomena of natural economy which 
 survive. 
 
 There have been numerous histories of one or 
 another department of economic activity, as for 
 example merchant shipping, or agriculture, or of 
 particular localities ; but comparatively little progress 
 has been made in surveying the growth of economic 
 activities in their interconnection, and the develop- 
 ment of the Body Economic as a whole. Indeed 
 this involves many difficulties. The mass of influences 
 at work appears to lose all coherence if it is separated 
 from the framework which is given by the political 
 history of one political community or another. There 
 is, however, one purely economic conception which 
 enables us to fix our attention on one thread in the 
 complex economic development. Capital has been 
 
 C. P. 2
 
 i8 Empirical Economic Science 
 
 spoken of as an historical category : it is the charac- 
 teristic feature of modern times that capital has 
 attained complete dominance. If we fix our attention 
 on the conditions of industry when capital was un- 
 known, on the circumstances which rendered the 
 formation of capital possible, and on its effectiveness 
 as a factor which undermined primitive organisations 
 and institutions, we shall find it possible to trace the 
 main changes in economic life and to call attention to 
 the more important survivals, without laying stress 
 on crises which are important for political purposes. 
 The economic history of a country cannot be the story 
 of steady and continuous progress all along the line, 
 for we are forced to realise at what great distances 
 of time the corresponding changes occurred in 
 different callings. The craftsman in a mediaeval 
 town was a small capitalist who worked for a market, 
 while subsistence farming has survived here and there 
 till modern times. The first examples of capitalists 
 who employed many workmen who would remain 
 wage-earners all their lives, are to be found in con- 
 nection with the cloth trade; the struggle between 
 the large master who can procure the best equipment 
 and organisation, and the small master, is com- 
 paratively recent, and has come about with the 
 progress of mechanical inventions. In modern times 
 it becomes possible to trace the rise and decay of
 
 Capital 19 
 
 different social institutions, which are consonant with 
 differences in the possession and employment of 
 capital. 
 
 All economic problems have two aspects, the 
 material resources which constitute the conveniences 
 and comforts of life on the one side, and the aims and 
 purposes which determine human beings in the use 
 they make of these resources on the other. There 
 is a material side, and there is a mental and moral 
 side; we have the best hope of distinguishing their 
 reaction upon one another if we endeavour to keep 
 them apart and not to blend them. The history of the 
 development of material resources, of the settlement 
 of land or the opening up of routes of commerce can 
 often be approximately dated ; and we can also trace 
 the introduction of new aims and ideals and ambitions ; 
 we can distinguish the cases where these aims could 
 be rendered effective by the action of a single human 
 being from those in which they depended for their 
 effectiveness on the working of institutions and 
 associations. By following out these distinctions we 
 may hope to get a scheme of Economic History that 
 is clear and definite, even though it does not borrow 
 the framework from political history. 
 
 (6) The word capital is commonly current in 
 a restricted sense when the questions of labour and 
 
 2 2
 
 2o Empirical Economic Science 
 
 capital are under discussion; but it is important to 
 notice that, for our present purpose, we must use 
 the word in a wider sense as including commercial 
 capital, and as meaning the fund of wealth which 
 is employed with a view to obtaining an income. 
 Capital may be sunk in land, as it was by men who 
 acquired a hoard in the Middle Ages and used it to 
 buy a rent charge 1 , or in more modern times since 
 the knowledge of agriculture has increased, in sinking 
 money in permanent improvements by which the 
 land may be rendered more productive. It is of 
 course convenient for many purposes to treat the land, 
 and questions connected with the land, apart from 
 capital, but it is important that we should remember 
 that cultivated land is what it is because capital has 
 been sunk in it. There is also commercial capital, 
 from which an income is derived by what were known 
 in the Middle Ages as successful ' ventures ' ; and the 
 aim of the merchant is to turn over his capital as 
 rapidly as possible. Industrial capital, and all the 
 developments of machinery and organisation which 
 it has rendered possible, may for convenience be 
 classed as a department of commercial capital and 
 as belonging to monied men. There is also the 
 capital of those who do not use their wealth them- 
 selves, but lend it to other people in return for the 
 1 Ashley, Introduction to Economic History, i. pt. ii. 405.
 
 Capital 21 
 
 promise to pay a regular income. All these are forms 
 of capital, and different social groupings have arisen 
 which would not have been possible unless capital 
 had come into play in these various ways. 
 
 There are of course forms of social organisation 
 which are appropriate to conditions in which capital 
 does not exist at all ; the formation of capital implies 
 the existence of money economy. In countries and 
 in circumstances where natural economy prevails, 
 capital is unknown ; but this helps us to notice what 
 is on the whole the characteristic feature of capital ; 
 it is the factor which makes for progress. It is of 
 supreme importance in all progressive societies; by 
 the gradual introduction of capital in one or other 
 department of economic life communities have, for 
 good or for evil, been drawn out of contentment with a 
 stationary state and led to enter on a path of material 
 progress. In the study of early institutions it is of 
 great interest to notice the precise points at which 
 capital effected an entrance and undermined the 
 social arrangements which were based on natural 
 economy. In more advanced communities the 
 amount of capital available and the methods in which 
 it is used, are limiting conditions which control the 
 development of social institutions. 
 
 The fact that capital has been the main instru- 
 ment in material progress, enables us to distinguish
 
 22 Empirical Economic Science 
 
 its beneficial side clearly, from the incidental evils 
 which have arisen in connection with its growth. 
 Capital has enormously increased the power of man 
 over nature.; it has enabled him to wring far more 
 from the soil, to introduce extraordinary aids in the 
 manufacture of natural products for human use, 
 and to provide the most wonderful facilities for 
 intercommunication. By doing so it has greatly 
 developed the wealth of communities and their oppor- 
 tunities of using that wealth for encouraging cultured 
 human life; but at every stage of material progress 
 there has been social hardship. The introduction of 
 motors has been prejudicial to grooms and coachmen ; 
 and numberless illustrations could be given to show 
 that in the march of progress individuals and classes 
 have been sacrificed. This does not prove that pro- 
 gress is necessarily a bad thing, or that it should have 
 been held back ; but it does give us cause to consider 
 the cost and sacrifice, through which every stage in 
 progress has been attained. It is thus that every 
 age has had its own social problem, in the effort to 
 reconcile the progress of the community with the fair 
 treatment of individuals. 
 
 (7) The story of the growth of capital is the 
 material side of Economic History. It investigates 
 what, at any place or time, were the materials and the
 
 National Aims 23 
 
 resources which were available for organisation ; but 
 we are also called upon to examine the objects and 
 aims with which they were organised, and to enquire 
 as to the ends and purposes which different human 
 beings cherished at different times. Classical econo- 
 mists were content to merge all other human aims in 
 the desire for wealth ; and though this may serve for 
 the most advanced countries in recent times, it is 
 necessary to discriminate, if we would understand the 
 economic life of by far the greater part of mankind in 
 the present day or would follow out the development 
 of any one country. 
 
 It is of course true that strictly economic objects 
 had been in view in connection with a great deal of 
 organisation. The desire to make the most of 
 material resources, and to obtain the greatest result 
 for labour expended has underlain much of the social 
 organisation of all ages ; it has been the dominant 
 aim in institutions for the formation and investment 
 of capital which are such a prominent feature in 
 modern society. Besides organisations for economic 
 purposes institutions have been provided again and 
 again which were intended to give fair play and 
 equality of opportunity within each community . Such 
 were many of the guilds and trading companies of the 
 Middle Ages, or the national arrangements for the 
 assessment of wages, according to the plenty or
 
 24 Empirical Economic Science 
 
 scarcity of the time, which were organised by Elizabeth. 
 The social problems of each day have been different, 
 the means of grappling with them have been different, 
 and we cannot understand the story of the past unless 
 we attempt to realise the precise problems of each age 
 and the success or failure which attended human 
 efforts to grapple with them. 
 
 This preliminary survey is a help to marking out 
 the main divisions of our subject. There will be first 
 of all the pre-capitalist organisation of society where 
 natural economy is dominant. This stage may be 
 spoken of as appropriate to the household; there is 
 a second stage of organisation in cities, a social con- 
 dition where natural economy has on the whole been 
 superseded, and the use of money and the habit of 
 marketing is familiar within the community; but 
 capital has not been formed so generally as to affect 
 the personal relations of the inhabitants to each 
 other. Lastly we have a phase when the possession 
 of capital and the habit of pushing trade has become 
 dominant in all the institutions of society so that we 
 have not only capital, but capitalism, a social organ- 
 isation which implies throughout the possession of 
 capital. The convenience of these divisions, which 
 have been drawn on economic grounds, is at least 
 confirmed when we remember that they are also
 
 National Organisation 25 
 
 appropriate to an important geographical distinction 
 as to the extent of the area which can be controlled. 
 Household organisation applies for the most part to 
 limited areas, or to an aggregate of limited areas. 
 Civic organisation is applicable to a wider extension 
 of territory, and to a highly complex economic 
 life. National organisation can directly control the 
 economic life of all the districts and towns within 
 the realm, while it may indirectly, by international 
 agreement, influence the economic conditions of the 
 world as a whole. In making these divisions how- 
 ever, it must of course be remembered that they 
 are not hard and fast compartments, into which the 
 economic life of a country can be fitted, still less that 
 the one immediately disappeared to make room for 
 another to take its place. They must be thought of 
 as types of organisation towards which actual insti- 
 tutions have tended to conform ; but the transition 
 from one stage to another has, for the most part, 
 been gradual. It is not often that there has been such 
 conscious struggle between the old and the new as to 
 render the term revolution appropriate, still less are 
 we justified in thinking that primitive institutions, 
 when gradually superseded, must necessarily die out; 
 on the other hand we have constantly to notice how 
 long some institution or habit has lingered on after 
 it had ceased to serve its original purpose. The
 
 26 Empirical Economic Science 
 
 complexity of modern society in Europe is due to the 
 fact that there are so many survivals from the Middle 
 Ages which have no analogues in new countries. 
 
 (8) The systematic study of Economic History 
 may justify itself not only by widening the basis of 
 observed facts, on which empirical economic science 
 rests, but by the contribution it can offer both to 
 History and to Social Philosophy. The historian 
 may indeed be scandalised at the readiness of those, 
 who are mainly interested in modern problems, to 
 brush antiquarianism aside, and to concentrate in- 
 terest on the genesis of modern conditions. When 
 Prof. Cannan insists that Economic History should 
 have some practical aim, and that " some moral, some 
 lesson or guidance should be afforded by it 1 ," the 
 pragmatism of the economist will find little response 
 among those who study history for its own sake. But 
 the study of Economic History does after all react on 
 the pursuit of historical investigation and especially 
 on local history, and leads to the discriminating in- 
 vestigation of details which are of national importance. 
 Not only so ; if Economic History can give us a 
 type of the development of the Body Economic, 
 it places us in a position to compare the history 
 of different countries, and to see how, from political 
 
 1 History of Local Rates in England, p. i.
 
 England and Scotland 27 
 
 or other causes, the forms which corresponding insti- 
 tutions take in different places have diverged from 
 the common type. Great Britain and Ireland have 
 been governed by one Crown and one Parliament, 
 but the Economic History of these nations has 
 been remarkably distinct. Though there is much 
 in the progress of England and Scotland that is 
 common to both countries alike, there are also 
 extraordinary differences. It is by comparing these 
 countries with one another that we can most easily 
 note the precise nature of the differences between 
 them ; and we have need to be constantly on our 
 guard against assuming that the likeness is so close 
 that the course of development was practically the 
 same. The rural organisation and methods which 
 were dominant in England seem scarcely to have 
 penetrated to Scotland. The life of the towns and 
 the organisation of foreign commerce were curiously 
 distinct in mediaeval times ; and since the Union, 
 Scotland has enjoyed remarkable economic inde- 
 pendence and has been free to pursue her own 
 banking system and her own economic development 
 in accordance with her own ideas. 
 
 Economic History has also a contribution to make 
 to Social Philosophy. It is important for us to 
 recognise that freedom for the development of the 
 Body Economic is the most elementary of national
 
 28 Empirical Economic Science 
 
 aspirations. It was the great demand of the American 
 colonies at the time when they declared their inde- 
 pendence. The bitterness of the present war has been 
 due to the fact that so many peoples have felt that 
 their economic freedom was threatened by the dom- 
 inance of Germany, and they have formed the 
 determination that they would not submit to be ex- 
 ploited in the interests of her industrial supremacy. 
 Great Britain has learnt to forego the attempt to 
 render the Colonies dependent on herself as parts of 
 one Body Economic, she has granted to each of them 
 freedom for organising their economic activity on 
 the lines which were most promising for their own 
 country, but even this principle has not been com- 
 pletely accepted; Ireland has always been thwarted 
 and hampered in her aim for securing freedom to 
 pursue her own economic prosperity. In the seven- 
 teenth and eighteenth centuries the Whigs were 
 jealous lest Ireland should become so wealthy as to 
 yield a revenue to the Crown over which the British 
 Parliament had no control 1 ; when the Union of 
 England and Ireland took place the laissez faire 
 doctrine had so triumphed that any attempt to 
 provide for the development of the Sister Kingdom 
 seemed out of date 2 . The schemes for promoting the 
 
 1 English Historical Review, I. 291. 
 
 2 Growth of English Industry and Commerce, n. 592.
 
 Economic Independence 29 
 
 economic prosperity of Ireland which are associated 
 with Sir Horace Plunkett's name, have been care- 
 lessly set aside, and the development of the economic 
 prosperity of Ireland has been delayed. 
 
 The outbreak of the present war has awakened 
 a large number of the people of Great Britain to the 
 fact that there is a danger lest the economic inde- 
 pendence of this country should be undermined by 
 a rival nation. Many men in all classes are ready to 
 recognise that it would be well to take the steps that 
 may be needed to preserve the economic conditions 
 of political independence. What we claim for our- 
 selves we should be willing to concede to each of the 
 other countries which form the British Empire. It is 
 vain to think that the Irish will be satisfied with any 
 measure of self-government, as long as the opportunity 
 of developing the economic resources and activities of 
 the country, in accordance with their own aspirations, 
 is withheld.
 
 II. THE DEVELOPMENT OF THE 
 BODY ECONOMIC IN ENGLAND 
 
 PART I. PRE-CAPITALIST ORGANISATION 
 
 (i) Natural Economy 
 
 (9) The most primitive organisation with which 
 we become acquainted in England is the household; 
 there was no buying or selling within the community, 
 but the duties of each member were assigned, and the 
 available food was shared by those who had part in 
 the life of the community. The material possessions 
 of these households were lands, either unoccupied 
 lands which the members of the community could 
 cultivate, or waste lands which they could use for 
 pasturage. The aim and purpose with which this 
 wealth was used differed in different cases. The 
 royal household, and those of other potentates, were 
 organised with a view to effectiveness as a military 
 force; but far more interesting, from the economic 
 standpoint, are the great monastic communities. 
 They were founded with a view to maintaining the 
 service of God and the honour of one of His saints;
 
 Natural Economy 31 
 
 and the resources of the community were devoted to 
 these religious objects. For hundreds of years a great 
 part of the economic vigour of England was directed 
 to purposes which many would now denounce as 
 superstitious : but there was a marvellous development 
 of economic activity which resulted in the erection of 
 magnificent churches and monastic buildings through- 
 out the length and breadth of the land. These 
 monasteries were organised with the hope of present- 
 ing religion as dignified and prosperous, and internally 
 the community spirit was strong; but they were 
 established in surroundings where money economy 
 and capital gradually came into play more and more. 
 Their power of adapting themselves to these changed 
 conditions was limited, and eventually the communi- 
 ties failed to hold their own and were broken up. We 
 may see the steps in this process more clearly when 
 we come to discuss the changes which have taken 
 place in the management of landed property. 
 
 (10) Our knowledge of the early periods of 
 monastic life in Europe is mostly derived from the 
 Benedictine Rule and from legends. It is not easy 
 to apply modern economic distinctions with any 
 precision, but we shall not be far wrong if we think 
 of the early monasteries as communities in which 
 each inmate was assigned his special task and where all
 
 32 The Body Economic 
 
 shared alike in common meals. There was no attempt 
 to distinguish one brother 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 . 
 No distinction was made according to the value of 
 the service rendered, but modifications were permitted 
 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. The good 
 management of the monastery, on its material side, 
 consisted in getting each labourer to do his allotted 
 task thoroughly and well; and the atmosphere of 
 exacting labour was far more analogous to that of a 
 Roman villa with its slave labour and ergastula, than 
 to a modern business, where each man is free to try to 
 get what he is worth and where increased pay is 
 offered to stimulate to more diligent labour. 
 
 Though the monasteries engaged in great under- 
 takings, such as the clearing of their lands and the 
 1 Regula, Migne, Ixvi. col. 613, 641.
 
 The Household 33 
 
 building of churches, they had not any capital, as we 
 understand the term; they might agree to assign 
 some of their income regularly to permanent improve- 
 ments, and this would serve the purpose of capital; 
 but they had not a "fund of wealth" which was 
 available for continued operations. In any bad year, 
 not to mention times of famine, they would have 
 no surplus income, and building operations would 
 necessarily cease. 
 
 (n) From the ninth century onwards, however, 
 we come across traces which seem to show that certain 
 monastic communities, in their corporate capacity, 
 were in possession of capital; they were engaged in 
 distant commerce and owned ships. The articles 
 which they imported were not entirely for sale, but 
 were used instead to replenish their own stores ; still 
 the monasteries were regularly engaged in the shipping 
 business. There is evidence that in 779 Charlemagne 
 freed the factors and the ships of the Abbeys of St 
 Germain-en-Laye from toll in Rouen, Amiens, Utrecht, 
 and other towns, while the privilege of having a free 
 ship was accorded to the Abbey of St Mesmin near 
 Orleans by Clovis 1 . English monasteries do not seem 
 to have been so actively engaged in shipping, but we 
 
 1 Ernest de Freville, Memoire sur le Commerce maritime 
 de Rouen, i. 55. 
 
 c. P. 3
 
 34 The Body Economic 
 
 hear more about trade in Scotland. The monks of 
 Scone received a letter of protection for a ship 
 belonging to them from Alexander II 1 , and a con- 
 siderable trade seems to have been done by the monks 
 of the Isle of May 2 . Abundant evidence shows that, 
 in the thirteenth century, English monks, especially 
 the Cistercians, did an enormous business in the sale 
 of wool 3 ; they do not, however, seem to have engaged 
 in shipping themselves, but to have sold fleeces to 
 Flemish or Italian merchants. 
 
 There are also signs of the introduction of 
 industrial capital. In the eleventh century the old 
 tradition seems to have been retained. The great 
 monastery at Hirschau, Wiirtemberg, was regarded 
 as a model establishment where industry of every 
 sort was carried on, apparently on a basis of 
 natural economy, by the monks themselves and the 
 associated lay brothers 4 . But though the monks 
 maintained a great building tradition 5 it does not 
 seem that many of them continued to work as crafts- 
 men. The monastery began to employ hired labour. 
 The stone which was required in 1067 for the building 
 
 1 Liber Ecclesiae de Scon (Bannatyne Club), p. 45. 
 
 2 Chalmers, Caledonia (1782), n. 51. 
 8 Growth of English Industry, I. 629. 
 
 4 C. D. Christman, Geschichte des Klosters Hirschau, 58. 
 
 * William of Sens was chosen at Canterbury in 1174, 
 after a great consultation of artificers (Gervase of Canterbury, 
 R S. I. 6).
 
 The Household 35 
 
 of St Augustine's at Canterbury was imported ready 
 worked from Caen 1 . When we come to the fifteenth 
 century there is documentary evidence that money 
 payments had come into vogue at Canterbury ; while 
 we find that new works of any importance were under- 
 taken by contractors who found the staff of men, or 
 'artificers of the Lodge/ that were temporarily 
 employed. These masons, who moved from place to 
 place according as stone buildings were being executed, 
 were organised as a migratory national craft, and 
 differed in many of their rights and privileges from 
 the municipal craft guilds 2 . 
 
 (12) In contrast to the monastic households we 
 have the royal and baronial households, which were 
 not organised for purposes of production so much as 
 with a view to consumption. The King and his court 
 had their duties in the government of the realm and 
 its defence, and were settled in castles; though the 
 royal household itself, which was organised with a 
 reference to the maintenance of the King and his 
 officers, was constantly migratory, as were those of 
 
 1 Ada S. S., May 26, 401 f. 
 
 2 The Goldsmiths' craft had been so closely connected 
 with the issue of coins that it had also something of this 
 migratory character. For fuller details see my notes on the 
 " Organisation of the Masons' Craft in England " in Proceedings 
 of the British Academy, vi. 
 
 32
 
 36 The Body Economic 
 
 the nobles who did not maintain one settled residence 
 like a monastery. When there were few roads it was 
 easier to take the family to the food and to eat up the 
 stores that had been accumulated in different places 
 than to collect all the food for one centre. Men with 
 great estates in different parts of the country, bishops, 
 barons, as well as the King himself, worked out the 
 calendar for the year and stayed at the castle on one 
 of their estates for as long a time as the produce 
 of that estate would allow. Robert Grosseteste has 
 drawn up some interesting rules for household manage- 
 ment which are based upon this as the best method 
 of management 1 . The economic necessity for con- 
 stant migration explains one reason why the King 
 with his household was so frequently upon the move 
 as the dates of charters show. It also helps to ex- 
 plain why episcopal palaces were so numerous. The 
 Bishop of Ely had one palace at Wisbech, another at 
 Downham, another at Ely, and another at Balsham, 
 and the bishop moved from one palace to another as 
 his household ate up the products of one estate and 
 then went on to the next. 
 
 These migratory households, especially the royal 
 
 household, must have done something to diffuse a 
 
 money economy in their various environments. In 
 
 the East the caravans are a sort of migratory market, 
 
 1 Walter of Henley, edited by E. Lament, p. 122.
 
 The Household 37 
 
 which sell goods and buy supplies at any point where 
 they halt. In a similar fashion the royal households 
 were constantly needing to supplement supplies 
 which they procured from the royal estates. Among 
 the officials in the tenth and eleventh centuries were 
 moneyers, who furnished the coins with which pur- 
 chases could be made, and all through the Middle Ages 
 we hear of purveyors and their exactions. They went 
 about demanding goods, and if they paid for them at 
 all they rarely paid full market prices. It was only 
 after the Restoration that the practice was brought 
 to an end and it was not formally abolished till 1780. 
 It is thus that these two types of household have 
 left behind them the beginnings of two different forms 
 of economic organisation. In the monastery, stress 
 was laid on the organisation of work ; the hours of work, 
 and the conditions of maintenance assigned to labour. 
 In the royal household on the other hand, attention 
 was directed to the prevention of waste and the condi- 
 tions of purchase ; the Assize of Bread and Ale, and 
 the regulation of Weights and Measures would be of 
 great importance to a migratory household which 
 was accustomed to rely on the purchase of supplies.
 
 38 The Body Economic 
 
 (ii) Subsistence farming and the introduction of 
 Capital in the Management of Land 
 
 (13) Agricultural occupations lend themselves 
 most naturally to natural economy; household 
 organisation was deeply rooted in the management of 
 land, so as to hold its own as an active, and latterly 
 as an obstructive agent. The change from the 
 natural economy which existed at the time of the 
 Conquest, to the capitalist system which had come 
 into complete possession at the beginning of the nine- 
 teenth century, is spread over a period of eight 
 centuries. The agriculturist in the early Norman 
 times was occupied in securing a subsistence, and 
 agriculture was organised with a view to subsistence 
 farming. The land management of the nineteenth 
 century aimed at working for an outside market, and 
 was, therefore, engaged in improvements which 
 rendered the land productive of the crops for which 
 there was a sale. It was compatible with a constant 
 effort at improvement, while subsistence farming had 
 given no similar stimulus to economic progress. 
 
 There was also a great social or constitutional 
 difference between the agricultural organisation at the 
 earlier and at the later time. The agricultural com- 
 munity of the early Middle Ages was controlled by the 
 lord of the manor and his officials, though the villeins
 
 Subsistence Farming 39 
 
 had also a voice in regard to certain matters. As 
 time went on the direct interference 1 of the lord and 
 his officials in the management of land diminished, 
 and the part played by the community seems to have 
 become relatively more important, at all events in 
 retarding economic changes. In the nineteenth 
 century the business was conducted on capitalist 
 lines ; part of the capital was sunk in land or buildings 
 by the landlord, whilst part belonged to the tenant 
 farmer who worked the land; and the disabilities 
 from which the labourers suffered at the time of 
 the Swing Riots and later 2 , were troubles that could 
 only have arisen under a regime of capitalism. 
 
 In the revolution, which occurred through the tran- 
 sition from the household organisation of the twelfth 
 century to the capitalist system of the nineteenth, 
 we may distinguish several stages, and even illustrate 
 them and date them approximately. Further inves- 
 tigation will doubtless render it possible to charac- 
 terise each stage more fully, and to date the dominance 
 of each more precisely for different parts of the 
 country ; but this will serve, at all events, as a useful 
 working hypothesis. 
 
 1 "On the office of Steward." J. Smyth, Lives of the 
 Berkeley s, i. Preface, p. ii. 
 
 2 Growth, ii. 687. For the last revolt in 1830 see Ham- 
 mond, Village Labourer, p. 240.
 
 4O The Body Economic 
 
 (14) The eleventh century manor, as it is de- 
 scribed in the Domesday Book and as its organisation is 
 detailed by later authorities, such as the Hundred Rolls 
 and numberless bailiffs' accounts, was not only a unit 
 for fiscal purposes and the collection of taxation, but 
 a unit for the organisation of agriculture. The agri- 
 culture had two sides, one or other of which might be 
 more developed in different parts of the country ; but 
 attention to both was necessary, and they played into 
 each other's hands. The maintenance of stock on 
 the waste was necessary, not only to plough the land, 
 but also as the chief means of procuring manure; 
 while the aftermath on the stubble assisted in the 
 maintenance of the stock during the autumn and 
 winter months. The lord and the villagers formed 
 one community and co-operated together ; the centre 
 of all the operations was the domain farm, which was 
 managed for the lord by his bailiff. This consisted 
 of strips in the open field, the produce of which was 
 devoted to the lord's use ; and the work on these fields 
 was done by the villeins with their teams, who were 
 remunerated by the possession of other arable strips 
 which they could work in their own time. There 
 seem at first 1 to have been no money payments 
 between the villeins and the lord, although as time 
 
 1 Growth, I. 76, 79. " Rectitudines Singularum Persona- 
 rum," in Thorpe, Ancient Laws, i. 432.
 
 Bailiff Farming 41 
 
 went on a larger and larger proportion of the actual 
 services appear to be discharged in money. 
 
 Besides these services, the tenantry were required 
 to make certain small payments in kind, as eggs or 
 poultry ; and those at least who owned any part of a 
 plough-team, had pasture rights for their stock on the 
 waste and in the assignment of meadow, which were 
 respected. The lord of the manor had very large 
 powers over the land in which the village was situated ; 
 this power was not arbitrary, however, as the custom 
 of the village could not be easily set aside; and 
 the same rotation of crops, which usually consisted 
 of wheat, barley and fallow, was practically main- 
 tained, both on the domain farm and on the tenants' 
 holdings as well. The whole of the open fields were 
 worked on the same system, while all the stock, belong- 
 ing either to the lord or his tenants, was free to run 
 upon the common waste. Such was the primitive con- 
 dition of affairs, which seems to have held good in its 
 main features throughout the greater part of England. 
 During its dominance there was little opportunity for 
 change or improvement. The population increased 
 but slowly, and there was little means of giving em- 
 ployment to increased labour and little incentive to 
 obtain larger crops. Agriculture was on the whole 
 stationaty ; and it appears that the system of fallowing, 
 which was probably inherited from the time of the
 
 42 The Body Economic 
 
 Roman occupation, together with the manure procur- 
 able from the stock, rendered it possible to continue 
 this system from decade to decade with comparatively 
 little exhaustion of the soil 1 . In regard to such matters, 
 however, there must have been great differences in 
 different parts of the country. It seems that in 
 Scotland fallowing was but little practised until the 
 seventeenth or eighteenth century 2 ; and it also appears 
 that the domain farm occupied a much less important 
 place in Scottish husbandry than in England generally. 
 It may be doubted whether there was any class of 
 villeins on Scottish estates who were responsible 
 for the regular week work on domain farms; the 
 local institutions were not so highly developed as to 
 be an obstacle to a general change after the Union, 
 and there do not seem to have been any communal 
 rights to hamper the efforts of Napier of Merchiston 3 
 and of other seventeenth century improvers north of 
 the Tweed. 
 
 (15) The thirteenth and early fourteenth cen- 
 turies were a period of extraordinary economic pro- 
 gress in England ; the Crusades had given a stimulus 
 to commerce, and a number of towns had extended 
 
 1 T. Stone, Huntingdonshire, p. 9. 
 
 2 Scottish Historical Review (January, 1916), L. 180. 
 
 3 M. Napier, Memories of John Napier, p. 284.
 
 Bailiff Farming 43 
 
 their borders, while others had been founded. The 
 development of commerce and industry seems to have 
 reacted upon agriculture, and to have opened up 
 markets for agricultural produce. Tillage and pasture 
 farming were carried on less exclusively for subsistence 
 than before ; there were opportunities for sale, which 
 rendered the lords of the manors anxious to manage 
 their lands on the best methods and thus obtain better 
 produce and a larger income 1 . A very full account 
 of the habits of the improvers of the time is given in 
 the Lives of the Berkeleys. Thomas the second, lord 
 of Berkeley (1281-1321) used to go in progress from 
 one of his manor and farm houses to another scarce 
 two miles asunder, making stay at each of them and 
 then back to his standing house, where his wife and 
 family remained 2 . His wife, Joan, spent much of her 
 time in supervising her dairy affairs, passing from 
 farm house to farm house and sometimes taking 
 account of the smallest details 3 . The tradition of 
 minute care was maintained by their successors. 
 Thomas the third, lord of Berkeley (1326-1361), 
 farmed on a gigantic scale 4 . Few or no great fairs or 
 
 1 Hubert Hall, Pipe Roll of Bishopric of Winchester , 1207-8, 
 p. xxv and App. 
 
 2 J. Smyth, Lives of the Berkeleys, I. 164. 
 
 3 J. Smyth, op. cit. i. 206. 
 
 4 Mr R. E. Prothero (English Farming, p. 45) summarises 
 his operations thus. He kept in his own hands the domains of
 
 44 The Body Economic 
 
 markets were in these parts whereat this lord was not 
 himself, as at Wells, Gloucester, Winchcomb, Tetbury 
 and others ; where also he now bought or changed the 
 several grains that sowed his arable lands 1 . Inci- 
 dental evidence from other districts shows that there 
 were great landlords who could organise the carrying 
 of their produce to distant markets. The abbot of 
 Ramsey appears to have supplied the London markets 
 by road 2 , and also to have sent corn for shipment at 
 Lynn. During this period, though there was no great 
 change in the knowledge of the arts, the profit from 
 
 upwards of 75 manors stocking them with his own oxen, cows, 
 sheep and swine ; on no manor did the flock of sheep number less 
 than 300, on some it reached 1500. At Beverston in Gloucester- 
 shire in the seventh year of Edward III, he sheared 5775 
 sheep. From these manors his supplies were drawn to feed 
 each day at his "standing house" 300 persons and 100 horses. 
 Thence came every year geese, ducks, peacocks, capons, hens 
 and chickens 200 of each kind, many thousands of eggs 
 and a thousand pigeons coming from a single manor stores 
 of honey, wax and nuts and "uncredible" number of oxen, 
 bullocks, calves, sheep and lambs, and vast quantities of 
 wheat, rye, barley, oats, pease, beans, apples and pears. 
 All was accounted for with minute care by the stewards, 
 reeves, and bailiffs. Their accounts for the manors and for 
 the household show what amount of corn remained in the 
 granary from the previous year; how much was each year 
 reaped and winnowed, sold at markets, shipped to sea ; 
 how much was consumed in the lord's house, in his stable, 
 in his kennels, in the poultry yard, or in the falcons' mews ; 
 how much was malted ; how much was given to the poor, 
 to friars and other religious orders by way of yearly allowance. 
 
 1 J. Smyth, Lives of the Berkeley s, i. 300. 
 
 2 Cart. Monaxt. de Ramseia, R.S. n. 17; in. 302.
 
 Rural Disintegration 45 
 
 farming seems to have increased greatly on the estates 
 of the Bishop of Winchester 1 . This improvement 
 was apparently due to the increased area taken into 
 cultivation, and possibly to enclosures in severalty 2 , 
 and to the care and attention which were given to 
 bailiff farming, in the effort to cater, not merely for 
 the lord's subsistence, but for outside markets. The 
 various books which were compiled on the subject of 
 husbandry, as well as the masses of ministers' accounts 
 which survive, help to show how widely this increased 
 interest was diffused. 
 
 (16) The period of prosperity appears to have 
 come to an end with the Black Death. There were 
 great difficulties in obtaining labour and in maintaining 
 the system of bailiff farming ; owing to the diminished 
 population there must have been a decreased demand 
 for corn so that it would be less remunerative to send 
 it to market; and farming came once more to be 
 mainly practised with a view to subsistence. The 
 lords of the manor were no longer ready to take a 
 personal interest in the management of the land, but 
 were glad to commute all obligations from their 
 tenants for money payments, and to sell their own 
 privileges, for pasturage and the like, on the best terms 
 
 1 Hall, op. cit. p. xx. 
 
 2 Smyth, Lives of the Berkeley's, i. 113.
 
 46 The Body Economic 
 
 they could get. Bailiff fanning fell into disuse, and 
 this seems to have had a serious effect on the standard 
 of agriculture throughout the country. The lords 
 found their interest, not in maintaining a high con- 
 dition of tillage but in securing money rentals from 
 their estates. From the Peasants' Revolt "began 
 the times to alter and he with them (much occasioned 
 by the insurrection of Wat Tyler and generally of all 
 the Commons in the land). And then instead of 
 manuring his domains in each manor with his own 
 servants, oxen, kine, sheep, swine, poultry and the 
 like, under the oversight of the Reeves of the manors 
 ...this lord began to joyst and take in other mens 
 cattle into his pasture grounds by the week, month, 
 and quarter : and to sell his meadow grounds by the 
 acre.... And after, in the time of Henry IV, let out by 
 the year still more and more by the acre as he found 
 chapmen and price to his liking 1 ." 
 
 It is probable that during the fifteenth and six- 
 teenth centuries there was a deterioration of arable 
 fields owing to the exhaustion of the soil, and it is 
 certain that there was neglect on the part of the lords 
 and their agents in regard to the common pastures. 
 In some few cases this may have been counteracted 
 by activity on the part of tenants in the manage- 
 ment of the waste, but the very occasional evidence 
 1 Smyth, Lives of the Berkeleys, n. 5-6.
 
 Severally 47 
 
 which survives does not lead us to suppose that this 
 was very frequently the case; though we read of a 
 summons to a town meeting in I368 1 , and of a com- 
 mittee of six 2 being selected for ordering the affairs of 
 the community 3 . But it does not appear that these 
 complicated matters were properly taken in hand 
 generally, though in the time of Elizabeth and James I 
 there were villages in Cambridgeshire which were at 
 considerable expense in obtaining legal powers for the 
 management of the common waste and the stock upon 
 it 4 . In the seventeenth century generally it appears 
 that through want of regulation and organisation, the 
 facilities for pasturage on the common waste were not 
 as valuable as they had formerly been. 
 
 (17) The remedy, which was probably adopted 
 by enterprising individuals in self defence, was re- 
 commended for general introduction by Fitzherbert, 
 
 1 Halimota Prioratus Dunelmensis, Surtees Society, LXXXII. 
 70. 
 
 2 Ibid. p. 82. 
 
 3 This would include questions as to the amount of 
 pasturage available for the tenantry (ibid. p. 12), questions as 
 to the right to put stock on the common (p. 17), questions 
 of meadow closes and separate pastures and questions of 
 the treatment of horses and oxen. There was a common 
 course of cultivation at Willington (p. 105), and a common 
 fold at Aycliffe (p. 104). 
 
 4 "Common Rights at Cottenham and Stretham in Cam- 
 bridgeshire," in Camden Miscellany, xn. 178.
 
 48 The Body Economic 
 
 who published his book on Surveying in I523 1 . He 
 recommends the withdrawal of the husband who would 
 thrive from the common fields and common pasturage 
 altogether, and shows that he would be in every way 
 better off if he had separate closes which he could use 
 as he liked for maintaining his stock and for growing 
 crops. By convertible husbandry he could keep his 
 cattle separate from infection by other stock, and could 
 look after them properly ; while he could also save the 
 manure and use it for his own fields. In this way the 
 small capitalist, who had withdrawn from the custom 
 of the village because his own land was enclosed, was 
 able to make his keeping of stock and his growing of 
 corn work together for a better result. Those who 
 were able to adopt this system were also able to take 
 advantage of the facilities for the sale of agricultural 
 produce which became increasingly frequent in the 
 sixteenth century. 
 
 (18) The Elizabethan period was a time of revival 
 of trade and industry in many ways, and this once 
 again, as in the thirteenth century, reacted on agri- 
 culture. There were facilities for export of which 
 Burghley was anxious that the realm should take 
 advantage 2 ; but even more striking is the increase of 
 
 1 Growth, i. 553. 
 
 2 Ibid. ii. 87.
 
 Farming for the Market 49 
 
 internal communication and the regulation of a corn 
 trade within the realm. Towns in their earlier days 
 had obtained their main supplies from their own fields 1 , 
 but this was no longer possible for London at any rate ; 
 and the demand of London ramified for a considerable 
 distance. Farnham 2 became a local centre where 
 corn was sold, which ultimately found its way to the 
 London market ; and the building of corn exchanges 
 and new market halls in such towns as Shrewsbury 
 shows that the business was at least being conducted 
 on a larger scale. The regulations, which were made 
 by the Council for the clerks of the market 3 for 
 corn bodgers, and other persons engaged in the trade, 
 show how widely it was diffused ; and it is probably 
 true to say that in England generally agriculture 
 passed, in Elizabeth's time, from being an occupation 
 which was mainly pursued for the sake of subsistence 
 and became a trade which was carried on by capitalists 
 who looked for their profit to prices in the market. 
 
 Dymock, an agricultural expert of the seventeenth 
 century, looked back to the time of Elizabeth as the 
 beginning of improved husbandry 4 ; and the capital- 
 ists, who farmed land in severalty apart from the 
 common custom, were not only able to do better than 
 
 1 F. W. Maitland, Township and Borough, p. 52. 
 
 2 O. Manning, Surrey, in. 131. 3 Growth, n. 94. 
 4 Ibid. ii. 100, but sec p. 43 above. 
 
 c. P. 4
 
 50 The Body Economic 
 
 their neighbours with their corn growing and their 
 
 stock, but they were also able to introduce any new 
 
 crops that seemed likely to answer well. Intercourse 
 
 with the Low Countries led to the adoption of many 
 
 improvements from Flanders. Experiments were 
 
 made in root crops 1 ; though clover and artificial 
 
 grasses were strongly recommended, they did not 
 
 come into general use till a much later period. The 
 
 process of improvement which had been noticeable 
 
 in the sixteenth and seventeenth centuries was 
 
 carried on with great enthusiasm in the eighteenth, 
 
 by Townsend and Jethro Tull. Bakewell 2 improved 
 
 the breeds of cattle; and more attention was given 
 
 to the rotation of crops and the cultivation of the 
 
 special varieties which were suitable to each soil. 
 
 King George III, the Duke of Bedford, and Mr Coke 
 
 of Holkham, were all great enthusiasts in regard to 
 
 practical farming and set an example which found 
 
 many imitators among the members of the Royal 
 
 Agricultural Society. 
 
 All these steps were taken by men who had 
 capital to invest, and none of them were possible 
 so long as the customary tillage and customary 
 neglect of the common waste were allowed to go on. 
 Arthur Young and the agricultural writers of the times 
 felt strongly that common fields and common custom 
 1 Growth, ii. 546. 2 Ibid. n. 551.
 
 National Gain 51 
 
 were a bar to improvement of any kind, and that no 
 real advance in agriculture could be expected until 
 there was a general enclosure. There can be no doubt 
 whatever that, through these successive changes, an 
 extraordinary economic gain has come about, and that 
 infinitely more is made of the landed resources of the 
 country than was the case at the time of the Norman 
 Conquest. This is true both as regards the production 
 of corn and the feeding of sheep or of cattle ; through 
 the exertions of these generations of improvers there 
 has been an enormous increase of national wealth. 
 This plain fact is sometimes ignored or forgotten 1 by 
 those who look at the story from the other side, and 
 lay stress on the incidental loss which has accompanied 
 these changes. That incidental loss has been a real 
 thing ; it is well that we should face it and see clearly 
 the price we have paid for these economic improve- 
 ments; we shall then be in a position to estimate 
 whether we have paid too dearly for them or not. 
 
 (19) It is important to look at this transition not 
 only from the economic side, but from the social point 
 of view as well. Government recognised the advantages 
 that came economically, and measures were passed for 
 giving a better market for corn in Elizabeth's time, and 
 
 1 Hammond, Village Labourer, p. 26. 
 
 42
 
 52 The Body Economic 
 
 also by the Corn Bounty Act of William and Mary 1 ; 
 but the government also realised that there were social 
 difficulties against which it was necessary to give 
 some protection. There had been extensive social 
 legislation in the period of disintegration and neglect 
 which followed the Black Death; an attempt was 
 made to check those who were taking advantage of 
 a national calamity in order to obtain excessive pay- 
 ment for their services ; and the machinery for the 
 assessment of wages, which lasted in one form or other 
 till 1814, had its beginning at this time. There was 
 also a strong feeling against depopulators 2 , and those 
 who gave over their land to the maintenance of large 
 flocks, so as neither to supply food stuffs, for the 
 flocks were chiefly kept for their wool, nor to give em- 
 ployment. Numerous laws were enacted, and various 
 commissions collected evidence and endeavoured to 
 redress the grievance which arose in this connection. 
 The improvers, like Fitzherbert, were inclined to argue 
 that the change to convertible husbandry in severalty 
 was beneficial all round, and that the only persons 
 who lost by enclosing were the shiftless and idle ; but 
 this was not true in the eighteenth century, and it is 
 not likely to have been true at an earlier period ; the 
 impression remains that in many cases the enclosure 
 was carried through in a high-handed manner, without 
 
 1 Growth, n. 541. z Ibid. n. 102 n.
 
 Social Grievances 53 
 
 sufficient consideration of the expense in which the 
 smaller farmers were involved, and without due regard 
 for the position of the very poor. 
 
 There were, however, not a few measures which were 
 intended to give relief to the sufferers by the change. 
 The Elizabethan movement for preventing the build- 
 ing of cottages, unless four acres of ground should be 
 assigned 1 them, and indeed all the machinery for the 
 employment of the poor, were called into being by the 
 social mischiefs that accompanied the process of en- 
 closure. That these measures of redress did not deal 
 adequately with the social problems which had arisen 
 is true enough, but it is clear that Parliament made 
 an effort to minimise the social mischiefs which were 
 occasioned by the material progress of the nation. In 
 retrospect it may be doubted whether it would have 
 been wiser to stop material progress in order to 
 enable those who were habituated to an improvident 
 tradition to continue in their old ways 2 . 
 
 Enquiries as to the social effects of enclosure are 
 complicated by the mischief which was due to other 
 causes, such as the industrial changes of the early 
 
 1 31 El. c. 7. 
 
 2 Rural progress in the eighteenth century appeared to 
 have been extraordinarily different in Scotland and England. 
 In Scotland, where we hear little or nothing of a common 
 custom, there was far less difficulty in pressing forward 
 improvements.
 
 54 The Body Economic 
 
 nineteenth century and the dying out of village indus- 
 tries. In the sixteenth, seventeenth, and eighteenth 
 centuries, there seems to have been a considerable 
 diffusion of manufacturing industry in rural districts. 
 The spinning of wool and the weaving of cloth were 
 practised in many counties, so that the village house- 
 holder had two strings to his bow; the result of the 
 invention of the power loom and the spinning-jenny 
 was the withdrawal of the opportunity of industrial 
 employment from the rural population ; they had to 
 depend entirely upon what they could earn from the 
 land and they could no longer eke out their income by 
 manufacturing. The invention of machinery denuded 
 the rural districts of what had been profitable occu- 
 pations, and subsequent changes have told against the 
 village tradesman, and have put industry and retail 
 dealing more entirely into the hands of townsmen. 
 These changes have made a considerable difference to 
 rural life; though they synchronised with the rapid 
 progress of enclosure after the passing of the General 
 Act, they are not to be regarded as evils which were 
 incidental to this particular change, and must not be 
 included in summing up the cost paid for material 
 progress in agriculture. On the whole the rural 
 history illustrates the enormous power of capital in 
 bringing about the increase of material wealth, while 
 it also gives illustrations of the social cost in the
 
 National Gain 55 
 
 decay of the yeomanry which was involved in this 
 material progress. 
 
 The process of enclosure, and the transition from 
 the old subsistence farming of the yeomen to farming 
 for the market, went on for more than a century. The 
 special motives for enclosure at any particular time, 
 and the manner in which it was carried out, can only 
 be thoroughly discussed as a matter of local history. 
 Cambridgeshire offers an extraordinarily good field 
 for these investigations as the process of enclosure 
 was belated, and took place at the end of the eighteenth 
 century and beginning of the nineteenth 1 . We have 
 besides remarkably accurate information as to the 
 nature of the agricultural changes and the effects on 
 the population, and these were put on record by 
 skilled observers. Detailed information in regard to 
 this one district helps us to see more clearly what had 
 been going on in other counties in regard to which we 
 have scantier records. 
 
 (20) That there was a national economic gain is 
 undoubted, and this national economic gain was also 
 a persona] gain to the land-owning classes of the com- 
 munity. The fact that the soil of the nation was put 
 to better uses and rendered more and more produc- 
 tive, is often left out of sight ; and the landlords are 
 
 1 Cambridgeshire Materials for the History of Agriculture in 
 Proc. ofCamb. Antiq. Soc. No. LXVIII.
 
 56 The Body Economic 
 
 represented as if they were thinking merely of their 
 personal gain and were careless about everything else. 
 It certainly appears as if this was true in the sixteenth 
 century, when so many parishes were depopulated and 
 sheep farming gradually extended at the expense of 
 tillage 1 . The production of wool was remunerative 
 to a large number of the gentry, but it was not bene- 
 ficial to the nation, as it neither provided opportunities 
 for the maintenance of a large population on the land 
 nor contributed to the national supply of food to any 
 considerable extent. Parliamentary and royal au- 
 thority combined to pass and enforce measures which 
 should be unfavourable for the operations of depopu- 
 lators ; but the matter was entirely different when any 
 enclosing was undertaken for the purposes of improved 
 husbandry, and those who were bringing about a 
 definite increase of national resources were not con- 
 demned for making personal gain through their intro- 
 duction of a public improvement. Improving land- 
 lords in the seventeenth century had the duty of 
 public spirited action constantly impressed on them 
 in a way that is little known in the present day. 
 In so far as the desire of increased rental was a 
 principal motive in the eighteenth century, it was 
 blended with a public spirited desire to do the best 
 thing for the country. 
 
 1 Growth, ii. 88, 102.
 
 Incidental Loss 57 
 
 There seems to be little doubt that the yeoman 
 farmers and peasantry suffered by the change and 
 were reduced to poverty. In some cases they appear 
 to have been the victims of legal chicanery, both in the 
 sixteenth 1 and the eighteenth centuries 2 , and to have 
 been ousted from their hereditary possessions by 
 wealthy land grabbers. Where wrongs of this sort 
 were done, there is no excuse ; and the economic gain 
 cannot be rightly regarded as palliating the injustice. 
 It seems likely that these cases were frequent enough 
 to give rise to the bitterness between class and class 
 which we find in the early nineteenth century. But 
 there are cases which are more doubtful, where the 
 impoverishment and decay of the small tenants was 
 the direct result of the removal of the obstacle to 
 better farming. The combining of strips in the open 
 fields into several holdings was a difficult task, as both 
 the quality and quantity of land had to be taken into 
 account, and the valuation of the pasture rights on 
 the waste attached to each holding was also a com- 
 plicated business. The whole process was exceedingly 
 difficult and the smaller tenants had not the means 
 of paying their quota of the expense or of making the 
 necessary outlay for fencing. The change may have 
 
 1 Ashley, Introduction to English Economic History, I. ii. 
 
 275- 
 
 2 Growth, ii. 558.
 
 58 The Body Economic 
 
 been remunerative to wealthy men in places where 
 many of the tenants could not afford the preliminary 
 expenses of the change. 
 
 That the labourers suffered is generally recognised ; 
 their rights on the common waste were for the most 
 part insignificant when calculated in terms of money, 
 though the cows' grass had been of inestimable value 
 in the maintaining of the family. It was also true 
 that for many of the advantages which labourers 
 possessed, they could show no proper title; their 
 privileges had been carelessly allowed to grow up 
 during the century when the regulation of commons 
 had fallen into disuse. But the fact that these privi- 
 leges might depend on customs of no long standing 
 did not diminish the sense of grievance in being 
 deprived of them. Another difficulty, which told 
 against the poorer classes, was the fact that land when 
 improved could be put to better uses, and that this 
 necessitated changes of occupation on the part of the 
 rural population. This was most obviously true in 
 the Cambridgeshire fens and in Lincolnshire, where 
 the inhabitants had been to a large extent their own 
 masters 1 and spent their time in fishing and fowling 
 and horse breeding. The change by which they were 
 forced to adapt themselves to the routine of agricul- 
 ture was not a popular one ; it may be doubted in some 
 1 Growth, ii. 115.
 
 Enclosure 59 
 
 cases whether those who pushed on this movement 
 were well advised economically. The enormous cost 
 at which the change was carried through and the loss 
 of the old products of the fens must be taken into 
 account when the gain either nationally or personally 
 is reckoned up. In such cases it may be possible 
 to weigh the economic gain, and to ask the question 
 whether it was really worth while to force on those 
 stalwart races a change of occupation. In many 
 parts of the country in the eighteenth century, changes 
 of occupation of a less striking character were very 
 frequent. The progress of enclosure was forced on 
 from a desire to increase the corn supply of the country 
 and corn growing. The small fanners were for the 
 most part occupied, so far as the markets were con- 
 cerned, in dairy farming and stock raising 1 , though 
 they might do a little subsistence farming for them- 
 selves. The tendency was for corn growing to be 
 developed, and those who had maintained themselves 
 as small farmers in the old days had neither the capital 
 nor the skill to adapt themselves to the new conditions 
 except by being merged in the ranks of the labourers. 
 This was the most serious of all the social changes ; it 
 seems to have taken place in connection with en- 
 closing 2 as the line between the capitalist farmer and 
 
 1 H. Levy, Large and Small Holdings. 
 
 2 Prof. Conner (Common land and Enclosure, p. 396) shows
 
 60 The Body Economic 
 
 the labourer who worked for wages was drawn more 
 definitely than before, and the rural labourer was not 
 only deprived of independence as his own master, but 
 also of the opportunities which he had had for rising 
 in the world. 
 
 Just because the introduction of capitalism in land 
 management was so gradual and so long continued, 
 it is specially instructive. The introduction of new 
 machinery and the organisation and the re-organisa- 
 tion of textile or other industries proceed very rapidly 
 and almost by a series of crises. The gain to the 
 nation and to the capitalist, by the introduction of 
 machinery, is more obvious than it was in the case of 
 enclosing, while the loss can be represented as merely 
 transitory and something that is soon defrayed by the 
 expansion of business. But the gain from the inter- 
 vention of capital in the management of land was less 
 obvious and the loss of status to certain classes of the 
 community has been permanent. It is not wise to 
 try to stop the march of progress, but it is important 
 that we should see as clearly as possible what the 
 march of progress costs. 
 
 (21) It would be a mistake, however, to suppose 
 that even though there has been such long continued 
 
 that the material loss of the labourers has been exaggerated, 
 but the loss of opportunities is an evil that cannot be 
 estimated.
 
 Checks to Progress 61 
 
 progress on the part of capitalism, subsistence farming 
 is even now wholly extinct; there are elements of 
 subsistence farming which survive among the holders 
 of allotments and small holdings who do not seek a 
 market for their produce, but who use their land to 
 provide vegetables for the household or food for 
 poultry. Even in large farms the household is often 
 provided with dairy produce, and there are many parts 
 of the country where those who do not keep a cow are 
 unable to procure milk for their own consumption. 
 The conditions of farming also involve much less 
 fluidity of labour than the industrial wage earner 
 expects ; the farmer must rely on having men on the 
 spot to look after the stock, and accommodation in 
 cottages is in consequence assigned to responsible 
 labourers. The relation between the master and the 
 man cannot be satisfactorily expressed as a mere cash 
 nexus. 
 
 While these elements of subsistence farming and 
 the household organisation of work still survive, there 
 has been, during the last half century, a great check 
 to the conditions which attracted capital to land and 
 stimulated agricultural progress. In the seventeenth 
 century much attention was paid to the facilities for 
 marketing corn, but there has been no similar care for 
 tillage in the present day. Owing to the changes of 
 communication, which became noticeable in the last
 
 62 The Body Economic 
 
 decades of the nineteenth century, the home market 
 has been greatly affected by American competition; 
 and the corn grower is not able to count on getting a 
 remunerative price. Facilities for communication and 
 railway rates have also acted prejudicially in regard 
 to potatoes, green vegetables and fruit, while at the 
 same time the burden of taxation has greatly increased; 
 this has been largely due to the increased obligations 
 in regard to education, roads, and provision for the 
 aged and the poor. But this means that there is great 
 difficulty in making land a profitable investment. 
 The old system of subsistence farming has almost 
 entirely disappeared; but in so far as a new system 
 of small holdings has been introduced, it has not been 
 able to command the conditions which would make 
 for the good management of the soil. 
 
 PART II. THE PROGRESS OF CAPITALISM IN 
 MEDIAEVAL CITIES 
 
 (i) Their Economic Prosperity 
 
 (22) The life of mediaeval cities has been invested 
 with many elements of romance ; the civic culture of 
 the Italians is among the most important features of 
 the Middle Ages, and when we look at the relics which 
 survive, we feel that the towns were an important 
 feature in Mediaeval England. London has suffered
 
 Mediaeval Cities 63 
 
 from the devastation of the Great Fire, so that there 
 is little which remains to help us to picture its magnifi- 
 cence in the fourteenth century ; but the town of York 
 still gives us a conception of a great centre of wealth 
 and power. It has a Castle and a Cathedral and 
 Abbey, and it was also protected by magnificent walls ; 
 its Guildhall suggests that its mayors lived in great 
 state; and the Hall of the Merchant Adventurers 
 indicates the importance of its trade. Norwich and 
 Ipswich, Exeter and Coventry, have vestiges which 
 tell of their long continued importance and prosperity. 
 
 The city as a social organism had two main features, 
 which distinguish it from the household. Natural 
 economy had been practically superseded, and money 
 economy had become habitual within the group itself, 
 not only, as in the case of monasteries, in its relation 
 with the outside world ; but besides this the inhabi- 
 tants enjoyed self-government. The aim which they 
 set before themselves was the continued prosperity of 
 the town itself, and the householder had a status as 
 a member of this self-governing community. 
 
 These characteristic features distinguish the fully 
 developed city from pre-capitalist types, but they are 
 not so precise that we are able to classify all the towns, 
 in their various stages of development, with perfect 
 certainty ; it is enough to say that the towns approxi- 
 mated to a type of organisation that was appropriate
 
 64 The Body Economic 
 
 to capitalism. So far as economic life is concerned, 
 the household of each free townsman still retained 
 many of the features of natural economy, though it 
 was no longer independent since it was absorbed in 
 the larger life of the town. The servants and appren- 
 tices boarded with the master, and received the main 
 reward of their work in kind, though the master bought 
 his materials and sold his goods for money. It is still 
 harder to draw a hard and fast line in regard to self- 
 government. The constitutional history of different 
 towns shows how long the struggle for self-govern- 
 ment continued and how step by step the towns 
 obtained charters 1 which gave them additional 
 freedom from the control of manor or royal officers. 
 Such a town as Manchester obviously enjoyed a great 
 deal of practical self-government under a manorial 
 constitution 2 . The turning point probably consisted 
 in the obtaining of such economic independence as 
 enabled them to pursue a policy of their own, so as to 
 manage their affairs with reference to the prosperity 
 of the town itself, and not in subordination to the 
 needs of any other social group, like the castle and its 
 lord, or the monastery under the shadow of which the 
 town had originally grown. Lay lords appear on the 
 whole to have been willing to sell their powers for 
 
 1 Growth, I. 211. 
 3 Ibid. i. 214.
 
 Corn Supply 65 
 
 definite rentals, but a resident body such as a monas- 
 tery does not seem to have been so ready to refrain 
 from interfering with the community that had grown 
 up at its doors. The era of the Crusades was the 
 great period when towns obtained charters from kings 
 and nobles, but the bitter struggles between the towns- 
 men and the monks at Norwich and Bury and Reading 
 lasted long after this time 1 . One of the grievances 
 which led to the Peasants' Revolt was that the monks 
 of St Albans 2 were refusing to allow the townsmen 
 to use hand mills, and thus were interfering with the 
 economic independence of the inhabitants of the town, 
 and treating them as tenants who were thirled to the 
 lord's mill. 
 
 (23) The early town, as we come across it in 
 the twelfth and thirteenth centuries, had important 
 material resources. Many had large fields from which 
 important supplies could be drawn and they were for 
 the most part agricultural communities 3 . The early 
 history of many towns seems to turn on the privileges 
 of the landed men and the attempts of other in- 
 habitants to shake off their dominance 4 . Many of the 
 early towns had also facilities for trade, either from 
 their position on navigable rivers or the sea. It was 
 
 1 Growth, I. 210. " Ibid. i. 400. 
 
 3 Ibid. I. 174, 215. * Ibid. i. 215, 229. 
 
 c. P. s
 
 66 The Body Economic 
 
 the aim of the townsmen to make the most of these 
 resources so that the town might continue to flourish, 
 and that the trade in which they engaged should react 
 on the prosperity of the town itself. They aimed at 
 freedom to pursue their own economic prosperity, and 
 this freedom seems to have been symbolised by the 
 possession of a Guild Merchant. The townsmen had 
 no authority to regulate affairs over an extended area 1 , 
 but they did their best to foster the prosperity of the 
 place over which they had jurisdiction. From this it 
 followed that in the Middle Ages there was a great 
 development of municipal regulation and inter- 
 municipal commerce; comparatively little attempt 
 was made to survey the prosperity of the realm as a 
 whole or to make the various places cooperate for 
 the common weal. The towns were of course bound 
 to make payments to the Crown, and they might 
 be willing at times to agree to large payments for 
 national purposes ; still, their policy was not dictated 
 by any national objects, but by the consideration of 
 the needs of the town itself, or of those who lived 
 in it. 
 
 1 Power was given to the Scottish Merchant Guilds to 
 exclusive commercial rights over a much larger area than in 
 the case of English boroughs. Scottish Historical Review, 
 L. 168.
 
 Guilds Merchant 67 
 
 (ii) The Formation of Capital 
 
 (24) In the mediaeval cities we can notice a stage 
 when goods were hoarded. It is a step towards the 
 formation of capital ; the town authorities were con- 
 cerned to see that there was an adequate corn supply, 
 especially in cases where the corn was obtained by 
 trade and was not the produce of home fields. The 
 corn policy of the towns involved the hoarding of 
 considerable stocks 1 which were sold to meet the 
 requirements of the citizens, but it does not appear 
 to have been pursued with the object of making an 
 income by these transactions ; and so these granaries 
 are properly regarded as hoards and not as capital. 
 There was need for a similar municipal policy in regard 
 to fuel. London regulated the prices of billets and 
 Dublin laid up a stock of coals. In the seventeenth 
 century London became much more dependent on 
 sea-borne coal from Newcastle than it had been in 
 earlier times. The right to have a share in the stocks 
 which the town laid up, must have been one of con- 
 siderable importance ; in later times the stock seems 
 to have been sold at special rates for the good of the 
 poor. But in early days we find that great import- 
 ance was attached to membership of the Guild 
 Merchant ; and though this institution is in many ways 
 
 1 Ashley, Introduction to Economic History, i. ii. 33. 
 
 52
 
 68 The Body Economic 
 
 obscure, it seems, in such an English town as Shrews- 
 bury, to have consisted of all the townsmen who were 
 concerned in buying and selling, not merely of 
 capitalists who made an income from trade 1 . Among 
 the privileges which it offered was the right of cavel 
 or sharing in the town purchases; this practice of 
 buying of stock, to be subsequently shared, appears 
 to have been maintained by many bodies throughout 
 the Middle Ages ; possibly with some of the religious 
 guilds it came to be a form of investing capital which 
 could be subsequently realised at a profit instead of 
 lying idle. 
 
 We have not sufficient data to trace the beginnings 
 of capital with any clearness; the accumulation of 
 a hoard is the first stage, and the use of these hoards 
 to obtain an income is a second stage. By far the larger 
 number of craftsmen through the Middle Ages would 
 hardly be conscious of any return on capital itself, 
 but would have thought of their stock in trade as 
 something to be constantly replenished so that they 
 might be able to live by their work. It was by 
 his work that a man lived ; his stock in trade was 
 subsidiary ; the materials might often be supplied by 
 the customer, as was the case both in the tailoring, 
 
 1 Growth, i. 221. On the other hand the Merchant Guilds 
 in Scotland were apparently composed of men engaged in 
 trade. Royal Hist. Soc. Trans. 3rd Ser. vn. 4.
 
 Fairs 69 
 
 the building, and the goldsmith's trade ; and it seems 
 to have been in dealing in wares, that the capitalist 
 began consciously to look for a profit on money 
 expended and to be eager to realise his stock at a 
 profit. This is as true of the petty dealer or pedlar 
 who carries wares of many kinds in a pack, as of the 
 shipman who ventures across the sea. A vast amount 
 of the commerce of the Middle Ages was carried on at 
 fairs ; these institutions were frequented by foreigners 1 
 and were places where consumers had the best oppor- 
 tunities of purchasing goods, and there were abundant 
 facilities for the enforcement of contracts and the 
 recovery of debts. At the fair each buyer and seller 
 was acting on his own account and influenced by 
 pecuniary considerations; and the habit thus en- 
 gendered survived in the conception of the freedom 
 of the individual to buy and sell as he likes, a freedom 
 which strongly asserted itself in James I's reign when 
 monopolies and chartered companies were so much 
 under discussion. 
 
 1 The principle of restricting the alien was more successfully 
 carried out in Scotland, where there do not appear to have 
 been fairs which foreigners frequented, and where they were 
 obliged to sell to native merchants at their place of landing 
 (Scottish Historical Review, L. 170). But even in England, 
 despite the large customs which alien merchants paid, and 
 the favour with which they were regarded by the Crown, 
 the townsmen were, on the whole, successful in restraining 
 them from competing in the retail trade.
 
 70 The Body Economic 
 
 (25) The history of English towns in the thir- 
 teenth and fourteenth centuries is to a large extent 
 the story of a struggle against the encroachment of 
 the alien capitalist in internal trade, and especially 
 in trade within the towns themselves. Englishmen 
 of the thirteenth century could not pretend to any 
 considerable part, either in the export of native pro- 
 ductions, or in the import of foreign wares 1 . Foreign 
 trade was entirely in the hands of aliens, especially 
 in those of the great Italian houses ; but the townsmen 
 were anxious to keep the profits of retail trade 
 entirely in their own hands. The importers from 
 abroad were necessary as wholesale dealers, but there 
 seemed to be no occasion for them to compete in 
 retailing goods. With the townsmen this was not 
 wholly a question of opportunities of pecuniary gain, 
 but to some extent a question of principle, and of 
 facilities for enforcing a trade policy which was 
 favourable to the prosperity of the town; a social 
 and communal interest was recognised apart from 
 private gain, and public spirit had a real place in civic 
 regulation. The tradition of the subordination of 
 private interest to public welfare, which found expres- 
 sion in the regulation of mediaeval towns, survived 
 to become dominant on a larger scale, partly under 
 
 1 Growth, I. 197, 628.
 
 Civic Regulation 71 
 
 royal and partly under Parliamentary influence, in 
 the mercantile system. 
 
 In some of the economic regulations, which were 
 necessary for early town life, the towns had been 
 anticipated by the royal household and the monas- 
 teries. The royal purveyors had devised regulations 
 which were of importance for the purchaser and the 
 consumer ; the assize of bread and beer and the regu- 
 lation of weights and measures, might have been taken 
 over bodily by the towns. But the towns were not 
 merely interested in the consumption of wealth ; the 
 prosperity of many of them depended on continued 
 production, and the regulation of industry occupied 
 much of their attention ; the rules as to hours of work 
 and conditions for the maintenance of labour must 
 have already become traditional in the great monas- 
 teries and the armouries of mediaeval castles. Thus 
 the two chief phases of mediaeval regulation of 
 towns may possibly have been derived from the 
 social groups which they superseded. 
 
 The end of the fourteenth, and beginning of the 
 fifteenth century marked a further step of progress, as 
 Englishmen had become ambitious of competing with 
 the alien in foreign trade. In the time of Edward IH 
 Parliament had been content that English wool should 
 be shipped abroad in foreign bottoms 1 , and that 
 1 Growth, i. 415.
 
 72 The Body Economic 
 
 imports should be brought by foreign fleets; but 
 in the subsequent reigns there was a change, and 
 deliberate efforts were made to encourage English 
 shipping at the expense of foreigners. The founding 
 of the Merchant Adventurers marks one stage in 
 the progress ; and the rise of great ship-owners, like 
 William Canynges 1 shows that there were English 
 capitalists who were ready to take advantage of their 
 opportunities. The Venetian galleys ceased to visit 
 England in the early sixteenth century, and the trade 
 was eventually taken up by the Turkey Company. 
 The struggle with German rivals was long and em- 
 bittered ; the Hanseatic League obtained a new status 
 under Edward IV 2 , and it was not till the reign of 
 Elizabeth that they were really ousted from their 
 importance in the carrying trade, and that the foreign 
 trade of England came to be done in English ships. 
 
 (iii) Capitalism and the Organisation of Industry 
 
 (26) Each of the master craftsmen in an 
 ordinary mediaeval town was in a sort of way a capi- 
 talist; he catered for the wants of the public in a 
 market, and by the sale of his wares got the means for 
 buying materials and providing tools to carry on his 
 work. But the organisation of industry was not 
 
 1 Growth, I. 387. 
 
 2 Ian D. Colvin, The Germans in England, pp. 117 f.
 
 Craft Guilds 73 
 
 capitalistic: each craftsman was generally speaking 
 his own employer, and did not depend on any one else 
 for the requisites of production. The distinguishing 
 feature of the capitalist organisation of industry is 
 the possession of the materials by the employer, who 
 engages the workman and pays his wages ; he subse- 
 quently makes a profit by the sale of the goods, and 
 it may be convenient that he should provide the place 
 of work and the implements of work, as well as the 
 materials. The intrusion of capital may not make 
 much apparent change in the conditions under which 
 work is done, but it makes a tremendous change in the 
 personal relations of the workman to his fellow men 
 when he is reduced to a position of dependence. 
 
 The craftsman who works on the domestic system 1 
 is independent, but his methods and hours of work 
 
 1 This term is used in the sense in which it was current 
 in Yorkshire at the beginning of the nineteenth century 
 (Reports, 1 806,111. 1058). MrG. Unwin (Industrial Organisation, 
 p. 4) defines the terms quite differently and opposes the guild 
 to the domestic system, as separate and successive phases 
 of development ; but this does not seem to me to apply 
 to English history. I prefer to say that the domestic system 
 existed from the earliest times, but that it has been gradually 
 superseded by capitalism, and that the craft guild was a 
 form of regulation which was appropriate to the domestic 
 system. Some of the fifteenth century London companies were 
 capitalist in character and so, generally speaking, were the 
 seventeenth century companies. Trade Unions as associa- 
 tions of wage-earners testify by their very existence to the 
 severance of classes, which is partly the cause and partly the 
 effect of capitalistic organisation.
 
 74 The Body Economic 
 
 need not be unregulated : the craft guilds afforded a 
 method of mutual supervision by the good men of 
 the trade. 
 
 The origin of craft guilds, like other origins, is 
 obscure, it may even have been anticipated by the 
 organisation of dependents near castles or monasteries. 
 It is quite possible that in Italy and France a practice 
 which was widely extended in the Roman Empire 
 survived in mediaeval times; but though there is 
 much room for difference of opinion as to the origin 
 of craft guilds, there is ample evidence as to their 
 character and powers. In England the craft guild 
 appears to have been an institution which obtained 
 powers from the town to regulate a certain industry 
 for the common good 1 . On its economic side it 
 aimed at supplying a known market, by meeting 
 the wants of the townsmen themselves and of others 
 who visited it for the purpose of buying; it strove, 
 besides, to maintain a high quality of wares, the good 
 training of the workmen, and favourable conditions 
 for work ; but the whole institution was subordinated 
 to the good of the town, and to the steady growth of 
 a material prosperity in which all could share. The 
 mayor and public authorities were quite ready to 
 disallow any ordinances which seemed to be in the 
 selfish interest of a trade and inconsistent with the 
 1 Growth, I. 338.
 
 Capitalists in Cloth Trade 75 
 
 welfare of the community. The craftsman who had 
 served an apprenticeship obtained a status in London, 
 and the system was more important because of the 
 social status it conferred in the life of the town than 
 because of the technical training it provided. But 
 the system was not so hard and fast as is sometimes 
 supposed, for the London citizen was free to work 
 at any calling whether he had been apprenticed to 
 it or not 1 , so long as he kept to the rules that 
 regulated that calling. 
 
 The whole of this system served admirably for 
 the regulation of industry under suitable conditions, 
 but it made no allowance for growth; and in the 
 fourteenth and fifteenth centuries there appears to 
 have been a rapid growth, especially in connection 
 with the manufacture of cloth for distant markets. 
 Those who, as dealers, had formed some capital and 
 were accustomed to handle it, began to invest their 
 capital in industry and to compete with those who 
 were craftsmen by training. The dealers might be 
 dealers in raw material, or dealers in the finished pro- 
 duct ; but in either case they did not count to make 
 an income by their own work, but by the wealth they 
 had invested in buying materials and tools and used 
 for paying wages. The capitalist system in the cloth 
 trade appears to be as old as the incursion of Flemish 
 1 Growth, I. 345.
 
 76 The Body Economic 
 
 weavers under Edward IIT, and it certainly had 
 reached a high stage of development in the sixteenth 
 century, when men like Jack of Winchcomb and 
 Stump of Marlborough flourished 1 . These men did 
 not manufacture with reference to a market on the 
 spot, but with reference to the requirements of a 
 distant market, sometimes a market in foreign coun- 
 tries. They had an interest in manufacturing on as 
 large a scale as possible, and turning over their capital 
 rapidly so as to enable them to push their trade and 
 get the command of a larger market 2 . It is obvious 
 that institutions which were built up by small crafts- 
 men, each with his stock in trade, to meet a known 
 market were unsuited to the industry as developed 
 by large capitalists. The regulations, which had been 
 maintained in the old corporate towns, were proving 
 inconvenient in the fifteenth century, and industries 
 migrated from the towns to the rural districts. In 
 other cases the burden of taxation appears to have 
 been oppressive to the old communities, while it is 
 likely enough that some of them had never recovered 
 from the ravages of the Black Death. At any rate 
 
 1 Growth, i. 523. 
 
 2 Mr R. H. Tawney has made an excellent point by 
 showing that in the cloth manufacture the wages authori- 
 tatively fixed were a minimum, not as in most employments 
 a maximum. Vierteljahrsschrift fur Social- und Wirthschaft- 
 liche Geschichte, xi. 542.
 
 Civic Patriotism 77 
 
 we see that, in the middle of the sixteenth century, 
 the institutions, which had served to regulate the 
 industry of the towns in the Middle Ages, were no 
 longer effective for their purpose. 
 
 (27) The towns thus lost their importance as 
 organised centres of economic life 1 and they also 
 ceased to be regarded as important units for political 
 purposes 2 . There had been a time when the pay- 
 ments that they made, for the enjoyment of self- 
 government, and occasionally to meet special demands, 
 were of great importance to the Crown, and the 
 maintenance of the prosperity of each town was a 
 matter of public concern; this feeling prevailed as 
 late as the time of Philip and Mary; but it appears 
 that from that time onwards governmental measures 
 were rather directed to fostering the prosperity of 
 the realm as a whole than to maintaining the 
 economic activity of particular towns. But during 
 
 1 The Scottish towns had very little organisation for 
 industrial purposes till the eve of the Reformation, and 
 their municipal life was not so highly developed as that 
 of England. The Scottish boroughs pursued a policy which 
 was laid down for all by the Convention of Boroughs, and do 
 not appear to have been so particularised as English towns. 
 
 2 The early part of the seventeenth century appears to 
 have been the time when the common good of the Scottish 
 boroughs began to be much mismanaged by grants in severalty 
 on terms which were advantageous to individuals, but injurious 
 to the town in the long run.
 
 78 The Body Economic 
 
 the seventeenth century old payments 1 had, with 
 the alteration of the value of money, become almost 
 nominal and had often been redeemed. The town 
 privileges of self government had ceased to give sub- 
 stantial advantages ; the capitalists, who had settled 
 in suburbs or in the country, were developing a pro- 
 fitable business ; the joint stock companies gave 
 increased opportunity in the investment of capital 
 on lines which lay outside municipal authority; by 
 1689 the towns were no longer seeking so much to 
 preserve an independent life of their own, but were 
 more content to have their share in the general 
 prosperity of the country. 
 
 In the present century there has been a certain 
 revival of town life, but this revival has been directed 
 and controlled by national authority. New duties of 
 many sorts have been undertaken by municipalities 
 in connection with lighting, sanitation, education and 
 other matters ; and this has brought about a greatly 
 increased burden on the rates. There have also been 
 many schemes of municipal trading especially in 
 public services, such as the supply of gas and 
 water. For many of these public works a town 
 has found it necessary to rely on its credit and 
 borrow the capital it requires, but in all matters of 
 economic management the State overhauls municipal 
 1 Webb, English Local Government, n. 287.
 
 The Realm as a whole 79 
 
 affairs and determines the conditions and period for 
 which loans may be raised. Municipal public spirit 
 and revived civic patriotism have done much for the 
 welfare of urban populations, but there has been no 
 tendency to revive the particularism of mediaeval 
 towns or to break up the solidarity of the nation. 
 
 PART III. THE DIRECTION AND CONTROL OF 
 PRIVATE CAPITAL THROUGHOUT THE COUNTRY 
 
 (i) The Resources of the Country as a whole 
 
 (28) The beginning of the reign of Elizabeth, when 
 Burghley came into power, marks a great turning point 
 in the economic history of England ; since this was 
 the beginning of an endeavour to treat the whole 
 realm as a unit for economic purposes and to organise 
 and stimulate the economic activities of the nation. 
 It was a limited area that the household controlled ; the 
 cities of the Middle Ages had not an extended juris- 
 diction, though the influence of the custom of London 
 and of some other ancient cities was felt in many 
 towns ; but in the Tudor times the Royal Council was 
 sufficiently in touch with all parts of the country to 
 attempt to control the economic conditions in every 
 district, and to frame all the arrangements on one 
 model. This would hardly have been attempted
 
 80 The Body Economic 
 
 unless a time of disintegration had intervened, when 
 the old manorial system had broken up and many of 
 the old corporate towns decayed. The social organ- 
 isms of the past were ready to be superseded in Tudor 
 times; and the royal administration made vigorous 
 efforts to supersede them effectively. 
 
 The solidarity of the realm, which is noticeable 
 from Tudor times onwards, is chiefly due to the fact 
 that the government had come to derive its main 
 income not from private estates but from public 
 taxation. The development of agriculture had pro- 
 vided a fund from which subsidies, and later the land 
 tax, could be drawn ; while the increase of commerce 
 had brought about the possibility of collecting a large 
 revenue from customs. The interest of the govern- 
 ment thus came to be bound up in the prosperity of 
 the community as it had never been before. A great 
 constitutional struggle was waged over the question 
 whether the national interest, of the government and 
 the governed, should be controlled in the last resort 
 by the Crown, or by the representatives of the people; 
 and this was practically settled by the issue of the 
 Civil War. It is far more difficult to trace the steps 
 by which the administration was adapted to modern 
 conditions, and organised departments took the place 
 of personal officials 1 . But the organisation of the 
 1 The customers of mediaeval times had a very free hand,
 
 The Realm as a whole 81 
 
 Economic Activities of the country has gradually been 
 brought under popular control, both as regards the 
 policy to be pursued, and the machinery by which it 
 is to be put into effect. Since Elizabethan times 
 there has been no retrogression; the nation is the 
 unit of economic life, and there has been an increase 
 in the solidarity of the realm. The personal monarchy 
 has passed away, and the administration is no longer 
 confined to the king and his advisers ; Parliament has 
 come to the front as the body which shapes the eco- 
 nomic policy of the country, by Navigation laws, 
 Corn Bounty laws, and such like enactments which 
 have been subsequently repealed by the authority 
 which framed them . Commissions of enquiry and com- 
 missioners with executive powers have been created 
 to deal with local or subsidiary matters, but the realm 
 has been treated as a whole ; and it has no longer been 
 possible for one municipality to aim at making regula- 
 tions which it could enforce so as to hurt the trade of 
 another. 
 
 but were brought more and more under the supervision of 
 the Exchequer. Recourse was had very frequently to the 
 alternative system of farming the customs, but the farmers 
 were suspected of serious frauds. Mr Hubert Hall has called 
 my attention to a paper of 1641, which describes some of the 
 malpractices by which there was a loss of revenue. After the 
 Civil War, there was no great improvement till 1671. when a 
 new board reinforced by new officials was constituted. From 
 that time onwards the Customs became a true Revenue De- 
 partment, and a branch of State finance under the Treasury. 
 
 c. P. 6
 
 82 The Body Economic 
 
 National organisation may be contrasted on the 
 economic side with the institutions which preceded 
 it. It assumes the existence of capitalists, both in 
 agriculture and industry. Subsistence farming was not 
 yet extinct when national control was beginning to 
 make itself felt ; but much of the tillage of the country 
 was carried on by men who worked for a market, and 
 who were employers of labour ; the same was true of 
 the economic conditions which held good in the old 
 corporate towns, as well as in the new districts into 
 which manufacturing had spread. Everywhere the 
 main responsibility for the economic life of the country 
 lay in the hands of private capitalists ; and the problem 
 of any government, which desired to devise a system 
 for the whole realm, was that of controlling and 
 directing private capitalists 1 . It is on this account 
 that we may feel in the Elizabethan era that we are 
 at last in sight of modern habits of thought and modern 
 problems ; the age of invention gave us immensely in- 
 creased power over the mechanical forces, but it did 
 not introduce much that was wholly new in regard to 
 personal relationships. The scale on which business 
 was conducted in Elizabethan times was different 
 from that with which we are familiar, it was mostly in 
 
 1 In Scotland encouragement was given to private 
 capitalists, and there was little attempt to control them. 
 Christianity and Politics, p. 80.
 
 National Policy 83 
 
 the hands of quite small men. The wealthy capitalist 
 was exceptional ; the combination of many industrial 
 capitalists into one great association with a joint stock 
 was only beginning 1 . But despite these differences 
 the practical problems of extending the market, and 
 the disputes between capital and labour, were similar 
 to those which have recently taken such gigantic pro- 
 portions. There is no need to try and trace the course 
 of events in any particular industry, it will suffice to 
 offer a few illustrations of the changes. 
 
 (29) The aim of Lord Burghley, in devising a 
 national policy, appears to have been that of making 
 the most of the economic resources of the realm as a 
 whole. He was wonderfully successful in reducing 
 the waste which had come to be so generally current 
 in the fifteenth century. This aim was doubtless 
 strengthened by the political ambitions of Englishmen 
 to hold their own against continental powers and to 
 make a mark in the world. Tentative efforts to 
 check this or that abuse, and to introduce this or that 
 improvement may be noticed before this time, but it 
 is under Lord Burghley that systematic attention is 
 given to all the resources of the realm and their 
 
 development. 
 
 1 An excellent account of early joint stock companies, in 
 extractive and other industries, is given by Prof. Scott, The 
 Constitution and Finance of English, Scottish and Irish Joint 
 Stock Companies, n. 383. 
 
 62
 
 84 The Body Economic 
 
 The rural districts were taken in hand by the 
 Statute of the fifth of Elizabeth which regulated the 
 conditions of agricultural labourers who were to be 
 hired by the year. The previous regulations for 
 wages had been definitely intended to fix a parlia- 
 mentary maximum, but the Elizabethan machinery 
 was more flexible, as it gave scope for the justices to 
 assess the rates according to the plenty or scarcity 
 of the time 1 . There was in this enactment a definite 
 endeavour to do the fair thing for the community as 
 a whole, and to do away with the excuse of the depopu- 
 lators that they could not get labour for reasonable 
 rates, as well as to remove the ground for the servants' 
 complaint that they could not get reasonable wages. 
 The organisation of the work of the household lay at 
 the background of this national scheme, though the 
 form which it took was suited to a capitalist society 
 and a money economy. Besides this, every effort was 
 made to improve the facilities for the sale of corn. It 
 appears that the internal corn trade had suffered 
 from the decay attending facilities of communication, 
 both by road and water, during the fourteenth century. 
 But in the sixteenth century there seems to have 
 been a great revival of the internal corn trade 2 . The 
 middlemen in this trade were under careful regulation, 
 and the interests of the local poor, in getting their food 
 
 1 Growth, II. 39. 2 Ibid. II. 195.
 
 National Policy 85 
 
 cheap, appear to have been regarded ; but the regula- 
 tions for the corn bodgers and for the clerks of the 
 market show how widespread market institutions had 
 become. The need for supplying London drew agri- 
 culturists, at some distance from the metropolis, into 
 the circle of commerce ; and it is evident that farm 
 produce other than corn was becoming more regularly 
 marketable. The great fairs of the Middle Ages had 
 for the most part been frequented by the dealers in 
 imported goods and those who wished to buy from 
 them ; and these fairs appear to have declined, while 
 London increased in importance as a depot for foreign 
 goods ; but from the beginning of the fifteenth century 
 onwards we hear of the multiplication of other fairs 
 at which cattle or horses were offered for sale. Some 
 of these fairs obtained a new importance by being 
 utilised as the opportunities for hiring labour, and of 
 making arrangements for the agricultural economy of 
 the year. 
 
 In the Middle Ages wool and wool-fells and hides 
 were the only articles of rural production which were 
 regularly exported, but in Elizabeth's reign account 
 was taken of an export trade in corn as well. From 
 the time of Elizabeth onwards there was an increasing 
 tendency to give encouragement to growers at home 
 by offering facilities for exportation, and this policy 
 culminated in the Corn Bounty Act of William and
 
 86 The Body Economic 
 
 Mary 1 . It seems probable that the government aimed 
 at competing with the men of Zeeland and the Hanse 
 Towns 2 , who carried on a lucrative trade in supplying 
 the Iberian Peninsula and Mediterranean lands with 
 Baltic corn. However this may be, it is clear that 
 from the reign of Elizabeth onwards there was an 
 increasing market both at home and abroad for agri- 
 cultural produce. 
 
 The development of agricultural resources led also 
 to a considerable amount of permanent improvement, 
 as in the draining of the fens, and to the plantations 
 of sparsely inhabited districts within the realm. King 
 James had been interested in the adventures of the 
 Gentlemen of Fife who endeavoured to migrate to 
 the island of Lewis 3 , as well as in the attempts 
 to settle the Grahams in Connaught 4 and the MacDon- 
 nells in Antrim 5 , before the great scheme for the 
 plantation of Ulster 6 was devised and carried through 
 with the help of the London Companies. These 
 experiments at home prepared the way for the more 
 extensive undertakings which had the definite political 
 
 1 There was an experiment in this direction under Charles 
 II; 25 C. II. c. i, 31, Gras, Quarterly Journal of Economics, 
 xxiv. 419. 
 
 2 Growth, ii. 87. 
 
 3 ^E. Mackay, Fife and Kinross, 105. 
 
 * G. Hill, Plantation of Ulster, p. 228 n. 
 
 6 G. Hill, Macdonnells of Antrim, p. 207. ' Growth, n. 362.
 
 National Policy 87 
 
 aim of establishing a counterpoise to Spain. In the 
 New World, the English settlements in Virginia, the 
 West Indies, and the North American coast were 
 definitely plantations to which settlers went with the 
 purpose of raising products from the soil. The Dutch 
 were chiefly concerned in establishing commerce, 
 while the main motive of the Spaniards appears to 
 have been the prosecution of mining. But the 
 character of the English settlements, as an extension 
 of English soil inhabited by Englishmen, is sufficiently 
 marked by the term, which was habitually applied to 
 them, of plantations. The political problem, which 
 was to emerge at a later date, had to do with the 
 question of continuing to treat them as plantations, 
 and as subsidiary to the country to which they 
 were adjuncts, or of recognising their claims to an 
 independent life of their own. 
 
 Burghley also made systematic efforts to remedy 
 neglect with regard to the mineral wealth of England ; 
 something had been done in the Middle Ages in mining 
 for silver and the lead with which it was frequently 
 associated. But Burghley was actively interested in 
 reviving or re-introducing metallurgical industries and 
 in working up useful metals, especially those which 
 were necessary for providing ordnance and munitions 1 . 
 1 Growth, ii. 58.
 
 88 The Body Economic 
 
 Keswick, Somersetshire, and Monmouthshire, were the 
 scenes of mining operations ; and it is clear enough 
 that an extensive mining industry was beginning. 
 Though the fuel employed in the iron smelting in the 
 Forest of Dean and the Sussex Weald was wood, coal 
 mining received a certain impulse from the increased 
 dependence on this form of fuel for domestic purposes, 
 and more capital was sunk in pumps for coal mines 
 during the seventeenth century than in almost any 
 other industrial mechanism 1 . 
 
 Burghley was not only concerned to make the 
 most of the land itself but he also interested himself 
 in the harvest of the sea; it was his main project to 
 encourage the fishing trade by insisting upon an in- 
 creased consumption of fish. The keeping of fish days 2 
 had been in vogue on religious grounds before the 
 Reformation, and Cecil desired to see the old practice 
 maintained with increased rigour. The fishing trades 
 were a school of seamanship, the political importance 
 of having mariners who could defend the realm was 
 recognised, and the interests of commerce were also 
 borne in mind ; but the economic character of fishing, 
 as both giving employment and adding to the food 
 supply, marked it out as an industry to be specially 
 encouraged. The subsidiary employments in the 
 1 Growth, ii. 529. 2 Ibid. n. 68.
 
 National Policy 89 
 
 preservation of wood for shipbuilding 1 and the supply 
 of hemp and sailcloth engaged attention, and pains 
 were also taken in making enquiries as to the state 
 of havens 2 and devising means for the improvement 
 of them 3 . 
 
 Besides attending to the organising of existing 
 industries Burghley also encouraged the planting of 
 new employments. There was a long standing tradi- 
 tion as to the wealth which had been brought to the 
 country by foreign artisans in the time of Henry I 
 and again under Edward III. Steps were taken to 
 encourage the settlement of foreign weavers in the 
 eastern counties, at Stamford and elsewhere. The 
 fulling mill at Colchester and the ancient factory at 
 Dedham are monuments of a new development which 
 was not always very welcome at the time, but which 
 proved highly beneficial in the long run. The indus- 
 trial impulse that was given at this time was not 
 confined to urban districts but came to be widely 
 diffused throughout the counties where weaving was 
 taken up by some of the men; spinning offered a 
 remunerative occupation to women and children. 
 
 1 Growth, ii. 64. 2 Ibid. n. 66. 
 
 3 It is noticeable that the settlement of Newfoundland, 
 which was one of our earliest colonies, was undertaken with 
 a view to developing the fishing industry there far more than 
 with any intention of planting.
 
 go The Body Economic 
 
 It seems to have been in the latter part of the sixteenth 
 century that spinning came to be diffused so widely 
 in many of the counties of England as to form an im- 
 portant by-occupation, the loss of which was seriously 
 felt at the time of the industrial revolution 1 . 
 
 The planting of these manufactures was one of 
 the efforts which were made for dealing with the social 
 problems of unemployment. In the period of Edward 
 VI and the early years of Elizabeth this problem had 
 reached enormous proportions; it was a period of 
 transition; the increase of sheep farming doubtless 
 led to the eviction of some of the peasantry and the 
 progress of agriculture tended towards the impover- 
 ishment of others. Attempts to induce the vagrant 
 population to settle on the wastes were a somewhat 
 doubtful expedient, but the 'providing of facilities for 
 work and training in new forms of work was an un- 
 doubted boon. Parishes were encouraged to buy a 
 stock of wool or flax by which they could set the poor 
 on work and this seems to have been a more success- 
 ful method of relieving poverty than the granting of 
 
 1 In the eighteenth and nineteenth centuries we hear a 
 good deal of the improving landlords in Scotland who intro- 
 duced by-occupations of different kinds into their villages. 
 This had probably been accomplished at an earlier period 
 in England and in the eighteenth century manufacturing 
 was a subsidiary occupation in many districts though in 
 some counties it was little developed.
 
 National Policy 91 
 
 relief by the overseers. To whatever cause it may 
 have been due it appears that the Elizabethan system 
 was at last successful in restraining pauperism within 
 the limits in which it was possible to deal with it 
 effectively 1 . And in the early part of the seventeenth 
 century England appears to have been extraordinarily 
 well organised as a realm, both as regards the con- 
 ditions of employment and the maintenance of the 
 unemployed. 
 
 Similar undertakings were being pushed on with 
 great rapidity in France where Henry IV was taking 
 active measures for the improvement of the prosperity 
 of a realm that had suffered terribly from long 
 continued wars. In France the initiative came chiefly 
 from the Crown or the royal officers ; and many public 
 works, especially for internal communication, were 
 undertaken at public expense. The English Crown was 
 not able to carry out improvements in this way, but 
 endeavoured to enlist the co-operation of subjects by 
 appealing to their sense of duty, or by holding out hopes 
 of ultimate pecuniary reward. It was by such means 
 that the City Companies were induced to undertake 
 the planting of Ulster, and that adventurers were 
 found to sink their wealth in the draining of the fens. 
 Because the improvements were introduced incident- 
 ally, there was never the same systematic government 
 1 Leonard, Early History of English Poor Relief, p. 21.
 
 92 The Body Economic 
 
 organisation as has been generally accepted in France, 
 while on the other hand the ultimate gain accruing 
 from these improvements has passed very largely into 
 the private hands of the heirs of those who co-operated 
 in the adventure. There has never been a great 
 bureaucracy in this country, as statesmen have for 
 the most part been content to direct and control the 
 employment of private capital. 
 
 The corporate towns had evidently fallen on evil 
 days and we hear of many complaints with regard to 
 their decay in the time of Henry VIII and of Philip 
 and Mary. The guilds which had been the main 
 instruments of regulating industry were attacked on 
 their religious side, and forfeited such of their property, 
 together with trust property, as was devoted to religious 
 objects; and it appears that their industrial activities 
 were for the most part superseded. Measures very 
 similar to those which they had enjoined in regard to 
 the production of wares, for the good of the reputation 
 of a town, were now enacted by parliamentary au- 
 thority for the whole of the realm. The custom of 
 London with regard to the training of apprentices for 
 many callings during the long period of seven years 
 was now in force throughout the country 1 ; and the 
 arrangements with regard to the conditions of ap- 
 prenticeship and the payment of labourers became 
 1 Growth, ii. 30.
 
 Solidarity of the Realm 93 
 
 a matter of national, not merely of local significance. 
 The local companies, even though their main economic 
 functions were undertaken by national authorities, did 
 not always die out. In not a few cases they were 
 restored or re-established by royal authority or by act 
 of Parliament 1 , but this revival seems on the whole 
 to have been due to a desire to discriminate against 
 aliens, sometimes against foreign Protestants and 
 sometimes against Scots. The municipal companies 
 do not seem to have played an active part in 
 the regulation of industry or to have made a 
 serious resistance to the encroachment of national 
 organisation. 
 
 (30) Further evidence of the solidarity of the realm 
 is afforded by the increased reliance of the government 
 on taxation. The Crown could not be well off unless 
 the community were prospering ; the interests of the 
 Crown and the subjects were more at one. During 
 the Middle Ages the king had lived " of his own " ; the 
 management of the Crown estates had little to do 
 with the public at large, and Parliament was called 
 upon to supplement the necessities of the king, not as 
 a regular rule but on special occasions. In modern 
 times, when the realm is considered as a whole, 
 the expenses of government have ceased to be a 
 
 1 Growth, II. 37.
 
 94 The Body Economic 
 
 distinct item contributed out of special resources, but 
 have been merged in the other charges on the economic 
 activities of the country. The defence of the realm 
 by land or by sea, and the expenses of police and 
 internal government, are on the whole defrayed by 
 means of taxation. As soon as taxation came to be the 
 main resource on which the government relied, a con- 
 stitutional demand arose on the part of those, who 
 contributed to the expenses, for the control of the 
 government. The struggle during the reign of 
 Charles I was a mark of the new dependence of the 
 Crown on revenue collected from the people, and 
 therefore on popular support. The government had 
 been accustomed to avoid direct appeals for support on 
 particular issues by means of borrowing. Capitalist 
 classes had met the necessities of the Crown under 
 Edward III as well as in the beginning of the seven- 
 teenth century. The turning point in this matter 
 came in the time of Charles I when he found himself 
 unable to borrow in the city without associating 
 Parliament with himself to give security to his 
 creditors 1 . He was thus forced to assent to the 
 measure which deprived him of the power of dissolving 
 the Long Parliament; and popular consent was re- 
 quired, not only for the granting of taxation, which 
 was chiefly drawn from the landed classes, but also 
 1 Growth, ii. 411.
 
 Foreign Commerce 95 
 
 for temporary accommodation from the monied men 
 as well. It was thus that the Crown ceased to be an 
 independent economic interest within the realm, and 
 that the expenses of government came to be the con- 
 cern of the public at large. The change thus effected 
 had a decided effect on the economic administration 
 of the realm; taxes could be most easily collected 
 from the landed classes, and as a consequence it 
 became a matter of administrative importance that 
 rents should be high. It was also desirable that 
 trade should expand so that Customs duties might be 
 considerable; while direct dealings with the monied 
 classes developed and became a matter of not only 
 occasional help but of permanent assistance. 
 
 (ii) Relations to other Countries 
 (31) The attempt to view the realm as one 
 economic whole brought into clearer light the question 
 of the relations of the English realm to other realms. 
 Mediaeval regulation, like mediaeval commerce, had 
 been to a large extent intermunicipal, concerning the 
 trade between particular places or the trade in com- 
 modities. These were now to be merged in the 
 consideration of the trade of the country as a whole ; 
 this meant as a practical thing that the trade of 
 London came more to the front 1 , and that of the 
 
 1 The great regulated and joint stock companies were 
 mostly London companies ; on the relations with out ports see
 
 g6 The Body Economic 
 
 out ports relatively declined ; but both the Crown and 
 Parliament were endeavouring to aim at measures 
 which would benefit the whole, and in the early seven- 
 teenth century they had shown little favour for the 
 abnormal growth of the great city at the mouth of 
 the Thames 1 . 
 
 Burghley had no doubts about the benefit which 
 accrued from promoting the material prosperity of 
 the country and its shores; but the question was 
 more complicated in regard to foreign commerce. In 
 the Middle Ages, and in the sixteenth century, the 
 ordinary articles of export and import had a very 
 different character from the exports and imports 
 of this country in the present day. The exports 
 were for the most part materials which could be 
 used in industry, such as wool and hides or useful 
 metals, such as lead and tin. There was compara- 
 tively little benefit to the community in supplying 
 these things to foreigners instead of getting the good 
 of them at home. On the other hand the imported 
 goods consisted chiefly of fine manufactures, and 
 wines ; they were articles of luxury, and it had been 
 the interest of the Court and the wealthy that they 
 
 Miss M. Sellers, Merchant Adventurers of Newcastle; a great 
 deal of evidence in regard to West Country trade, in the latter 
 part of Elizabeth's reign, is given in a document printed by 
 Gras, Development of English Corn Trade, App. J. p. 429. 
 1 Growth, n. 311.
 
 Foreign Commerce 97 
 
 should be plentiful and cheap, as was seen especially 
 in the time of Edward III. But the diffusion of these 
 things at cheap rates among the people did not make 
 for the prosperity of the country in the long run. In 
 this way it was possible to identify exportation with 
 the sale of raw materials which might be manufactured 
 at home, and importation with luxurious expenditure. 
 Burghley was not inclined to give much encouragement 
 to foreign commerce as such ; there was need for dis- 
 crimination 1 . Foreign commerce seemed to him an 
 evil, in so far as it increased luxury, but he regarded 
 it as beneficial in so far as it gave a vent for English 
 commodities and therefore an encouragement to eco- 
 nomic activities at home. Exploration and discovery 
 which opened up new markets, were very beneficial 
 from his point of view ; but frequent communication 
 with countries that were more advanced than ourselves 
 was not a thing to be regarded with enthusiasm. 
 Commerce has been the means of initiating the 
 progress of industries and the growth of capitalism. 
 Burghley was not a sentimentalist who regarded ma- 
 terial progress as a bad thing 2 ; but he was anxious 
 that the steps in material progress should be really used 
 in such a way as to contribute to the prosperity of the 
 
 1 Growth, n. 71. 
 
 2 Reactionaries who idealise a country in a stationary 
 state, like China, give little help in guiding material progress 
 wisely, so as to get rid of its incidental evils. 
 
 c. P. 7
 
 98 . The Body Economic 
 
 realm, and not merely for the benefit of individuals ; 
 and still more that material progress should not cause 
 disadvantage to any portion of the community. 
 
 At that time it seemed possible to take a rough 
 and ready index which served to show whether the 
 effect of any branch of commerce was beneficial to 
 the community or not. If the value of the com- 
 modities exported to any country exceeded the value 
 of the commodities imported from that country, there 
 was a balance to be paid by that country in bullion. 
 This bullion, whether hoarded by the Crown as 
 treasure or invested as capital, was a gain to the 
 country as a whole ; and in this way the balance of 
 trade was taken as an index for distinguishing hurtful 
 from profitable commerce. This doctrine, which was 
 clearly stated by Lord Burghley, dominated English 
 policy in regard to foreign trade during the seventeenth 
 and eighteenth centuries 1 , though it underwent some 
 modification ; it shows us the main motive which 
 underlay the special jealousy of the French trade 
 which is so noticeable in the period after the Restora- 
 tion and in the eighteenth century. 
 
 (32) Though the benefit of foreign commerce was 
 a matter of debate, there was a general agreement as 
 to the importance of maintaining English shipping. 
 1 Growth, II. 395.
 
 English Shipping 99 
 
 The parliament of Edward III had been quite content 
 that foreign trade should be carried on by foreigners 
 and that they should bear the risks of loss and piracy 
 at sea. But Englishmen of the sixteenth century 
 were inclined to make light of these risks, and to 
 regard English shipping as of prime importance for 
 the prosperity of an island realm. The coasts suffered 
 from the raids of pirates, whether from the north of 
 Europe or, as in the time of Charles I, from Algerians 1 . 
 Ships were the best defence against such raiders, or 
 against any threatened invasion from France or 
 Flanders. Whatever rendered shipping plentiful gave 
 facilities for repelling invasion and attacking foes, 
 and from these political motives the development of 
 shipping came to be recognised as an element of 
 supreme importance in the economic policy of the 
 realm. The good and evil of various methods for 
 encouraging shipping was a matter of dispute. The 
 policy of granting special concessions to the owners 
 of ships engaged in particular trades was much 
 criticised in the time of James I ; but the policy of 
 confining English trade to English ships, which had 
 been fitfully tried from the fourteenth century 
 onwards, was deliberately adopted in the time of the 
 Council of State 2 and persistently maintained by 
 subsequent parliaments. 
 
 1 Growth, II 173. 2 Ibid. II. 359. 
 
 72
 
 ioo The Body Economic 
 
 (iii) The Monied Interest 
 
 (33) The eighteenth century was marked by the 
 continuance of the scheme of national policy which 
 had been devised at the time of Elizabeth, but it 
 showed some very marked differences. In Elizabeth's 
 time the Crown had obtained extraordinary power 
 and prestige, and the whole administration in regard 
 to economic conditions was in the hands of royal 
 officials and representatives. But the Civil War 
 made an extraordinary difference in diminishing the 
 effectiveness of royal power; Parliamentary claims 
 to authority were practically admitted during the 
 Restoration Period, and came to be patently acknow- 
 ledged from the time of the Revolution onwards. 
 It is even more striking that while the Elizabethan 
 regulation was primarily concerned with land and 
 employment, in the eighteenth century the question 
 of external trade, which was in the hands of the 
 monied interest, seemed to dominate other sides of 
 national life. 
 
 In the eighteenth century the special problems 'of 
 rural disintegration and depopulation were not so 
 prominent as in the sixteenth 1 , and the Corn Bounty 
 Act appeared to give a regular and sufficient market 
 for corn. We hear comparatively little of disputes 
 
 1 See p. 52, above.
 
 Monied Men 101 
 
 about wages, possibly because so many men had some 
 independent source of income, and received wages as 
 a by-occupation 1 . The machinery which had been 
 established for the settlement of wages seems to have 
 been in operation after the Civil War 2 , but at the end 
 of the eighteenth century it appears to have been 
 practically forgotten. Nor were there fresh legislative 
 experiments about the provision for the unemployed. 
 The Act of Charles II, by denning the places at which 
 any individual had the right of demanding relief 3 , 
 interfered seriously with the fluidity of labour and 
 gave occasion for much costly legislation. There was 
 no uniformity in the administration of relief through- 
 out the realm, and the differences of local custom 
 were an obstacle to any general improvement on the 
 Elizabethan system. The progress of enclosing and 
 of agricultural improvement was going on slowly 
 but steadily, and this was apt to tell against the 
 stability of the labourers' position; though these 
 changes improved the pecuniary position of the land 
 owners relatively to their neighbours, they were losing 
 'their exclusive influence in the affairs of State. 
 
 On the other hand the improvement of another 
 side of economic activity was coming more and more 
 
 1 R. H. Tawney, Vierteljahrsschrift fur Social- und Wirth- 
 schaftliche Geschichte, xi. 537. 
 
 2 Ibid. xi. 327. 3 Growth, n. 570.
 
 IO2 The Body Economic 
 
 to the front; we hear much, in the seventeenth and 
 eighteenth centuries, of the political importance of 
 the monied men and they came to be a much more 
 striking factor than formerly in economic life. The 
 foundation of the Bank of England, and of the 
 numerous Provincial Banks which followed its lead, 
 gave an immense impulse to the forming of capital. 
 We see in the stories of men like Pepys how difficult 
 it had been for private persons to know what to do 
 with their hoards 1 . But the Bank of England enabled 
 the private person to obtain an interest on his money 
 while the money could be still more remuneratively 
 employed in loans to government or to private persons 
 who were in need of capital. By opening up oppor- 
 tunities for obtaining an income, the eighteenth 
 century did a very great deal for the investment of 
 hoards as capital. Still greater prominence came to 
 the owners of capital through the recognition of the 
 power of credit. By means of its credit the govern- 
 ment was able to obtain funds to be used for special 
 emergencies. By means of their credit, as the reci- 
 pients of a large income from government, the Bank 
 of England was able to obtain command of large sums 
 of money, and lend them to those who had the pro- 
 spects of trading successfully; and hence during the 
 
 1 Diary of Samuel Pepys, 12 Nov. 1666, 13 and 19 June 
 1667, and 10 Oct. 1667.
 
 Balance of Trade 103 
 
 eighteenth century the practice of borrowing money 
 to meet emergencies and of trading on borrowed 
 capital came to be general, not only by merchants 
 and manufacturers, but by agriculturists as well. 
 The question of the direction of this capital into the 
 most profitable channels, so that the country might 
 prosper as much as possible, was the main economic 
 problem of the eighteenth century in England. 
 
 (34) It seemed to the men of the time as if the 
 whole of the varied prosperity of the country could be 
 summed up under one formula and gauged by means 
 of the balance of trade 1 . Activity in the improve- 
 ment of land or breeding of cattle would give larger 
 produce to be exported and would therefore result in 
 a more favourable balance of trade. Similarly the 
 increase of manufacturing, which enabled us to 
 dispense with goods of foreign production or to 
 compete with more success in outside markets, would 
 diminish imports and increase exports and thus bring 
 about a more favourable balance of trade. A study 
 of the balance, and the encouragement of trades which 
 contributed largely to the balance, and the discourage- 
 ment of others which showed an unfavourable balance 
 was the constant study of economists and financiers. 
 But as time went on it came to be apparent that this 
 1 Growth, II. 396.
 
 104 The Body Economic 
 
 criterion was not really reliable, and that legislators 
 were not justified in following it blindly. The result 
 was much confused by the possibilities of three- 
 cornered trade ; it was also affected by the movements 
 of capital for investment in any country or by loans to 
 government. As early as the beginning of the seven- 
 teenth century it had been pointed out that the export 
 of a little treasure to India might bring about the 
 importation of quantities of goods which could be 
 sold in Europe so as to bring in a far larger quantity 
 of bullion than had been originally exported 1 . It was 
 not, however, till the Wealth of Nations was published 
 that the British public came to recognise that the 
 balance of trade was illusory as a criterion of the 
 national gain to be derived from different trades. 
 Adam Smith endeavoured to restate the doctrine and 
 discriminated the advantage of emplo3dng capital in 
 one way or another according to the amount of labour 
 it set in motion. But this criterion was cumbrous ; 
 and on the whole the public were content to believe 
 that it was unnecessary to look behind private gain, 
 and that capital that was employed for a profit to the 
 owner was somehow or other beneficial to the public. 
 
 (35) Partly on practical grounds of adminis- 
 trative difficulty in enforcing them, and partly 
 
 1 Growth, ii. 257.
 
 Discredited Regulation 105 
 
 because of uncertainty about the aim which should 
 be kept in view, the nationalist regulations for agri- 
 culture, industry and commerce fell into discredit and 
 found few defenders. 
 
 The fifteenth century, when manorial and muni- 
 cipal institutions were disintegrating and decaying, 
 appears to have been a time of increasing poverty, 
 apart from the advance of the cloth trade; but the 
 eighteenth century was a time of more general advance, 
 and the system of regulation, which was falling into 
 decay, could be represented as hampering rather 
 than favouring progress on the line which it was 
 now taking. The commercial companies, which had 
 been organised to carry on trade that should react 
 favourably on industrial life at home had been dis- 
 credited as interfering with the most energetic traders ; 
 the interlopers had on the whole won the day ; and 
 joint stock companies, with their large capital, had 
 triumphed over the associations of smaller men who 
 dealt as members of regulated companies. In in- 
 dustry, too, there was a tendency to organise on a large 
 scale which rendered division of labour more possible ; 
 while the improved implements and machines were 
 adding to the importance of the capitalist factor in 
 manufacturing, and the labourer was being reduced 
 to a position of greater dependence. Even in agri- 
 culture, the capitalist, who worked for foreign markets,
 
 io6 The Body Economic 
 
 could afford to pay a higher rent than the yeoman 
 class who maintained the traditional subsistence farm- 
 ing. While on the one side we see increased facilities 
 for the formation and investment of capital, on the 
 other everything was tending to give greater promi- 
 nence to capital as an element in national prosperity ; 
 and there seemed to be sufficient justification for 
 assuming that if the capitalists were gaining, the 
 affairs of the country were prospering as well. 
 
 During the last quarter of the eighteenth century a 
 doubt began to arise in men's minds as to whether it 
 was ever worth while to take account of the wealth 
 of the nation as a political unit, or whether there was 
 any ground for distinguishing it from the wealth of 
 the private persons who composed the State at any 
 given time. Private persons who prospered could 
 be counted upon to contribute to the expense of the 
 State in whatever way they made their money. After 
 the independence of the American colonists had been 
 secured, when it was found that trade with the 
 American plantations was as profitable as it had been 
 before, the whole colonial system was called in ques- 
 tion ; Sir John Sinclair and others bitterly inveighed 
 against the policy of extending our territory 1 . When 
 the land of the country and the development of 
 landed resources had been the chief consideration, 
 1 Growth, ii. 850.
 
 Discredited Regulation 107 
 
 there seemed to be little doubt about the advantage 
 of extending possessions abroad and of resources which 
 the nation could control. But when the nation lost 
 control economically over the plantations, and it was 
 found that in their political independence they afforded 
 a good market for English goods and supplied com- 
 modities of which England had need, the question 
 assumed a different shape. The victory of Trafalgar, 
 and the consequent establishing of the unrivalled 
 maritime power of Britain, seemed to render it un- 
 necessary to pay any special attention to the political 
 aspects of national wealth or to raise any question 
 as to what trades were good for the community. All 
 ground for interference on the part of the State with 
 the manner in which a man employed his capital 
 seemed to be taken away, and when the nineteenth 
 century opened public opinion was inclined to leave 
 the capitalist perfectly free to employ his wealth in 
 any enterprise he chose, and to regard the profit which 
 he secured as the best proof that his enterprise was 
 beneficial to the State. This had been the view which 
 was practically adopted by Scotsmen from the begin- 
 ning of the seventeenth century, and it was now 
 accepted in England as well.
 
 io8 The Body Economic 
 
 (iv) Laissez Faire 
 
 (36) There were remarkable contrasts between 
 the opening of the seventeenth and of the nineteenth 
 centuries not only in the enormously increased amount 
 and power of capital, but in the attitude towards it 
 which was taken by public opinion and the State. 
 Capitalism in the seventeenth century was suspected 
 as a power which might be used merely in private 
 interests, unless it was directed authoritatively towards 
 public purposes. The public purposes might be poli- 
 tical, such as the encouragement of shipping with a 
 view to the defence of the coast ; or they might be 
 social in keeping a watch on capitalism and pro- 
 tecting the weak from the strong and the poor from 
 the rich. But things had so far changed that the 
 public, in the early nineteenth century, were inclined to 
 accept capitalism as in itself sufficient and satisfactory 
 for public purposes. There seemed to be no need to 
 direct it ; and if there were no need, any direction, 
 which necessarily involved restriction, was hurtful. 
 The capitalist was regarded as the enterprising person 
 who saw what was best for his own business and who 
 necessarily took the course that favoured the most 
 rapid progress of the nation. In the early nineteenth 
 century it was clear that material progress was a good 
 thing, that it opened up possibilities for welfare of
 
 Laissez Faire 109 
 
 every kind both for individuals and for the nation, 
 and the high rate of profit, which stimulated private 
 enterprise, was generally taken as a criterion of 
 national prosperity 1 . 
 
 It thus came about that the public were inclined 
 to trust to the private capitalist for the organisation 
 of economic activities on the best possible lines ; and 
 during the first half of the nineteenth century the 
 provisions which had been made for economic objects 
 of national importance were ruthlessly swept away 
 without any attempt to supply a substitute. 
 
 (a) The great industrial code which had been 
 established during the reign of Elizabeth to secure 
 the good training of workmen, was abolished. The 
 seven years' apprenticeship was proving unnecessarily 
 long; in certain cases, it interfered with the rapid 
 expansion of some of the textile trades, and during 
 the wars a strain was put upon it which seemed to 
 involve a temporary suspension in order to avoid 
 injustice to good workmen who were not legally 
 qualified as weavers 2 . In order to meet this case, 
 
 1 High rents had been taken as an index of opportunity to 
 raise revenue, when taxation was chiefly levied on the land ; 
 and the balance of trade had been regarded as showing 
 favourable conditions of commercial and industrial activity ; 
 but both of these were superseded by reckoning the profitable- 
 ness of investments. 
 
 2 Growth, ii. 658.
 
 no The Body Economic 
 
 however, the whole system was swept away on the 
 supposition that the capitalist might be trusted to 
 maintain a standard of good workmanship among the 
 men he employed. The experience of a century, and 
 the outcry about technical training at the present 
 time, show that even if the old system of apprentice- 
 ship was out of date, the training of workmen could 
 not be wisely left to take care of itself. 
 
 (b) In the same way the Elizabethan machinery 
 for the authoritative settlement of wages was swept 
 away altogether. The practice of apprenticeship 
 appeared to be so firmly rooted in most trades that 
 it could be argued that there was no need for authori- 
 tative backing, but on the other hand the assessment 
 of wages appears to have fallen into disuse and there 
 seemed to be serious practical difficulties in reviving 
 it. The weavers and others insisted on the necessity 
 of taking some action of the sort, but parliament 
 regarded it as impractical and left wages to adjust 
 themselves 1 . The experience of the nineteenth cen- 
 tury, and the revival of attempts to fix a sliding scale 
 and to settle disputes between capital and labour, have 
 shown that whatever amendment may have been 
 necessary in the old practice, it was not wise to leave 
 the relations of employer and employed to be a matter 
 
 1 Growth, ii. 628.
 
 Laissez Faire in 
 
 of private bargaining between individuals. Con- 
 ditions of trade which marked the early nineteenth 
 century, with its sudden fluctuations of demand, and 
 the facilities of supply which were afforded by the 
 introduction of machinery, put the employers in a 
 position of economic strength; so that the standard 
 of life of the workman was in danger of being seriously 
 and permanently lowered 1 . 
 
 (c) The chief measures which had been taken for 
 the security of the realm were also abandoned. It 
 was held that this was adequately provided for by 
 private enterprise. The Corn laws had directed 
 capital into the improvement of cultivation for the 
 growth of additional supplies of corn; and though 
 the kingdom had ceased to be self-sufficing and im- 
 ported a considerable amount of food-stuffs, it was 
 still argued that it was politically important to have 
 food grown at home so that there should be at all 
 events a large stock of corn upon which the public 
 could rely, apart altogether from the risks of con- 
 veyance by sea. This position was definitely aban- 
 doned in 1846 when the Corn laws were abolished 
 and the food supply of the country was treated as a 
 
 1 Owing to these conditions the iron law of wages was 
 more nearly true for England then, than it has been either 
 before or since. Growth, n. 741
 
 ii2 The Body Economic 
 
 matter of private enterprise ; while similar steps were 
 taken in regard to the mercantile marine by the 
 abolition of the Navigation Acts in 1850. 
 
 (37) This new principle of relying on the private 
 capitalist was adopted by many who regarded them- 
 selves as keenly interested in the prosperity of the 
 country. They held that laissez faire was the best 
 policy for promoting the material progress of this 
 country; and not only so, but that it would sooner 
 or later be recognised by every other country as the 
 best means of promoting its own material prosperity. 
 It was in this way that free play for capital came to be 
 recognised as not only superseding all need for eco- 
 nomic regulation within the realm, but as providing the 
 best conditions for the world at large and superseding 
 any attempt to regulate the economic relations 
 between one country and another. This was the 
 doctrine which has been popularised by Cobden; it 
 secured a victory at the repeal of the Corn laws so 
 far as our own country was concerned ; and the system 
 of commercial treaties, which was soon afterwards 
 inaugurated, was hailed as a step in securing its 
 general acceptance throughout the world. 
 
 This acquiescence in organisation by private capi- 
 talists as a satisfactory system had a direct result on 
 thought and discussion in economic subjects. To
 
 The Dismal Science 113 
 
 have them all brought under one simple formula, by 
 the exclusive attention which was now given to 
 private capital, was a simplification of the problems 
 in regard to the resources of the country and the 
 development of commercial relations. The state- 
 ment of a few laws appeared to give an adequate 
 account of many matters which had hitherto been 
 puzzling through their complexity ; and the chaos of 
 political and social affairs was reduced to order by 
 the enunciation of a few principles. There were 
 indeed some doubts expressed even then as to the 
 one-sidedness of the science. It was the Political 
 Economy of private capital, and of hoards of material 
 wealth, and the motive of the capitalist in the use 
 of his money was simply that of getting wealth. 
 There were economists who protested that Economic 
 Science only dealt with one side of life and did not 
 profess to be a guide to duty; but the prejudice 
 against economics as a dismal science was not allayed 
 by such assurances ; on the one hand it was denounced 
 as materialistic since it was wholly concerned with 
 the increase of material wealth ; and on the other it 
 seemed to render human life merely mechanical and 
 to discuss the play of great economic forces, which 
 operated upon men and which could not be controlled 
 by human beings. 
 
 c. P.
 
 ii4 The Body Economic 
 
 (38) During the latter half of the nineteenth 
 century it came to be generally admitted that 
 though laissez faire had many advantages in regard to 
 the production of material wealth, it was not altogether 
 satisfactory from a social point of view. Capital is 
 a great power ; but capitalism, the social system which 
 gave it free scope, was fraught with many evils. In 
 the forties, fifties and sixties legislative enactments 
 which limited the free play of private capital were 
 regarded as mere exceptions ; but in the seventies and 
 still more in the eighties, they were generally accepted 
 as beneficial legislation for which no excuse or apology 
 was necessary. Before the end of the century, social- 
 istic enactments of many kinds in regard to internal 
 affairs were carried through in complete disregard of 
 the principles of laissez faire. The correctives had 
 been advocated by philanthropists, and though the 
 capitalist was strongly opposed to them and argued 
 that they would do more harm than good, one limi- 
 tation after another on the power of the capitalist to 
 organise his own business in his own way was carried 
 through. 
 
 The roots of modern philanthropy can be traced 
 to the earlier part of the reign of George II 1 , in the 
 provision for the sick which was made by the founding 
 of hospitals in so many counties, and the institution of 
 
 1 Christianity and Politics, p. 154.
 
 Philanthropists 115 
 
 the Royal Humane Society. But the philanthropists, 
 and those who desired to improve the condition of the 
 poor, felt that they could do but little without State 
 backing. Clarkson and Wilberforce brought the power 
 of the State to bear on the merchants who were engaged 
 in shipping slaves to the West Indies 1 , and from this 
 time onwards there was a steady progress on the part 
 of the State in the protection of apprentices whether 
 as chimney sweeps or in factories, and in regard to the 
 employment of women in factories, mines and fields. 
 The reconstruction of the Poor Law in 1833 is an 
 indication that the nineteenth century was endeavour- 
 ing to struggle more effectively against evils for which 
 remedies had been sought in the sixteenth century; 
 and the change of administration, which became 
 uniform throughout the country, seems to have been 
 a very great gain. 
 
 The State also took up new functions which had 
 hardly been admitted during the sixteenth or seven- 
 teenth century. The advance of medical knowledge 
 rendered it possible to insist on sanitary measures 
 both as regards work and as regards the conditions 
 of housing which would never have been thought 
 of in the olden days; and the State had never 
 regarded itself as responsible for the education of 
 children till it came to co-operate with the pioneers 
 
 1 Growth, ii. 607. 
 
 82
 
 n6 The Body Economic 
 
 of education in I833 1 and organised a system of 
 national education in 1870 including compulsory 
 attendance at school. The Franco-German War so 
 impressed the English public as to render the country 
 anxious to follow the German lead, and to see that all 
 the citizens had obtained at least the elements of 
 education. As is often the case, however, with 
 imitators, the English educational reformers were 
 not very successful in reproducing the best features 
 of the system they held up to admiration. Since 1870 
 there has been continual discussion in every part of 
 the country about the relative importance of one 
 subject or another, and about the advantages of 
 various methods of instruction; but it seems to be 
 assumed by all parties that the aim in view is that of 
 enabling the individual to make the most of his 
 opportunities and to get on in life. The aim in 
 Germany has been entirely different, as it has been a 
 constant endeavour to train the child to realise his 
 part in the life of the community and to be fit to 
 render useful service to the community. The com- 
 petition of individuals for honours or for pecuniary 
 rewards is not nearly so prominent in Germany as it 
 is in our educational system, which does little to 
 encourage patriotism or to accentuate the communal 
 element in personal life. We have need to remember 
 1 Growth, ii. 750.
 
 Trade Unions 117 
 
 that "every disposition of mind, every word, every 
 conception is the result not of an individual, but of 
 a social process. The greatest genius even, thinks 
 and feels as a member of the community; ninety 
 per cent, of what he possesses is a trust conveyed to 
 him by forefathers, teachers, fellowcreatures, to be 
 cherished and conveyed to posterity. The majority 
 of everyday persons are little more than indifferent 
 vessels into which flow the feelings and thoughts of 
 contemporary millions 1 ." Religious education may 
 help a child to realise his place in a supernatural 
 kingdom ; but it is the communal spirit in the secular 
 sphere that ought to be cultivated, if England is to be 
 saved from the narrow selfishness that arises from 
 concentrating attention on the training of individuals 
 to take part successfully in the struggle for existence. 
 
 Besides the action of the State in taking over 
 education and other new functions, there was another 
 force which was still more directly opposed to the 
 claims for unfettered action which were put forward 
 by capitalists. The growth of Trade Unions is the 
 most noticeable feature of the nineteenth century in 
 England. In 1802 they were treated as criminal 
 associations, while in 1904 they had attained such 
 
 1 Schmoller, "The Idea of Justice in Political Economy," 
 in Annals of the American Academy, iv. 708 (March 1894).
 
 n8 The Body Economic 
 
 power and influence that they were able to secure 
 remarkable privileges and were set free from the 
 penalties which had been imposed upon them in 
 disputes in the Civil Courts 1 . 
 
 Socialist legislation and Trade Union action has 
 gone on increasingly within the realm, although 
 
 1 It does not appear that the immunity which was granted 
 to Trade Unions has been altogether justified. The dangers 
 to the welfare of the community which were anticipated by 
 Sir John Walton (4 Hansard, cliv. 1295), have been at least 
 illustrated by the action of the Welsh miners and other strikers 
 during the war. The power of the Trade Unions in securing 
 such a position is very remarkable, and the Trade Union Con- 
 gress of 1916 showed a disposition to learn to use this power 
 rightly. Trade Unionists from the first have set themselves to 
 improve the standard of life of the labourer ; this includes not 
 merely wages, which shall be adequate for his maintenance, but 
 such regularity of employment and conditions of work as shall 
 give him greater status in the community and render him less 
 liable either to sudden disturbances or to long depression. A 
 great improvement has come over the position of the workman 
 in these respects. For many years economists argued that it 
 was impossible to obtain these advantages by combination, 
 while now there are some who allege that the advantages would 
 have come anyhow in the progress of society apart altogether 
 from the action of Trade Unions. Whatever the truth of the 
 matter m ay be, it is the general belief among the working classes 
 that they never would have improved their bargains with 
 capital if the practice of individual bargaining had been main- 
 tained, and that it is only by the collective action of men, who 
 are associated together for this object, that the standard of life 
 has been improved. It is at least something that there should 
 be a general recognition that the standard of life does not 
 depend merely upon the play of mechanical forces, but that it 
 is something which can be raised, and which in many classes 
 of the community ought to be raised.
 
 State Interference 119 
 
 the principles of laissez faire have been strongly 
 maintained in regard to the external relations of the 
 country, but this exception cannot be maintained. 
 The doctrine of laissez faire and the principle 
 of free exchange explain the rapid progress which 
 takes place in a community of enterprising men ; but 
 it implies that there is a constant struggle between 
 the various elements of which society is composed, 
 a competition of individual with individual, of class 
 with class, and of nation with nation. And this is 
 not an ideal state of affairs. However injurious State 
 interference may have been in the past, by checking 
 individual enterprise, the experience of the nineteenth 
 century has convinced the British public that State 
 interference is sometimes necessary. It is admittedly 
 desirable in matters of hygiene and education; and 
 it is coming into vogue increasingly in connection 
 with industry, since State regulation is the most 
 effective means of preventing either capitalists or 
 associated labourers from pursuing their own interests 
 to the injury of the community. It is, however, 
 much to be regretted that in our time the necessary 
 interference with the individual should appear to be 
 haphazard and arbitrary, instead of depending on a 
 carefully thought out policy as to what is good for 
 the country as a whole, both in its moral and material 
 aspects.
 
 I2O The Body Economic 
 
 The material interests of the country are a matter 
 of public concern, for apart from other considerations 
 they give us the opportunity of securing the welfare 
 of the inhabitants. Any country which neglects 
 them, sacrifices the opportunity of making the most 
 of her own population, and of doing her best for 
 people within the sphere of her influence. 
 
 It can no longer be assumed that the free play of 
 private interests gives us a result which is identical 
 with the public interest ; and the material prosperity 
 of the community is a thing which must be safe- 
 guarded and fostered. Nor can it any longer be 
 assumed that the industrial rivalry of nations will be 
 kept in check by an increased sentiment of brother- 
 hood, so that each will prosper alike side by side. 
 The nation which is not at pains to develop its own 
 life, on the material side, has little prospect of making 
 progress in welfare at home or in influence on the 
 world.
 
 III. LESSONS FROM EXPERIENCE 
 
 (39) At first sight it may seem as if the history 
 of the past had been a mere flux in which one form of 
 economic organisation after another had been dis- 
 credited in turn, and passed away. But this is not the 
 case ; each of the organisations of economic activity, 
 which we have viewed in turn, has served its purpose 
 for a time, each has been more effective than that 
 which it superseded, each has given man a greater 
 command over the comforts and conveniences of life. 
 From each we may derive some experience that may 
 be of use in facing the future. What is most striking, 
 during this time of war, is the power and effectiveness 
 of the newly created economic organisation. It has 
 turned all the activity of the country into one direction 
 in order to enable the armies and navies, which we have 
 organised and maintained on an unheard of scale, to 
 win the victory. To this one national object the 
 systems of communication both internal and external, 
 and the industries of the country, have been directed ; 
 never before was there a time when the nation showed 
 the same energy and success in organising the activities 
 of the country for one common purpose.
 
 122 Lessons from Experience 
 
 The nation has been able to accomplish this task 
 because of its credit and the consequent command of 
 capital ; partly by works carried on as departments 
 of government, and partly by entering into partner- 
 ship with private capitalists and associations of 
 capitalists, it has succeeded in attaining this result. 
 All that the government could do in the sixteenth and 
 seventeenth centuries was to try to direct private 
 capital into the lines that were beneficial to the 
 public, through the attractions of concessions and 
 bounties ; but now it has the means, as it never had 
 before, of undertaking public services itself, and thus 
 turning the energies of the nation into the fields where 
 they are wanted. The experience of last century has 
 shown the possibility of improving the public ad- 
 ministrative system. The Royal Council under the 
 Stuarts had no conspicuous success in dealing with 
 the problems of rural, industrial, and commercial 
 life, even on the small scale on which they were 
 presented ; but during the nineteenth century, 
 governmental departments and inspection have been 
 developed in such a fashion as to give constant help 
 in regard to improved legislation. 
 
 (40) We can also profit by the experience of the 
 nineteenth century in our conception of the aim which 
 the nation should keep in view ; the aim of Elizabeth
 
 The Standard of Life 123 
 
 and the Stuarts was chiefly that of preventing the 
 
 waste of the resources of the realm, and developing 
 
 
 these resources. But the nineteenth century has 
 
 made us realise that the State is not merely concerned 
 with material resources, but with human beings as well ; 
 and that it is possible to aim not merely at preventing 
 the strong from doing injustice to the weak, but at 
 maintaining and improving the standard of life in the 
 poorer classes of the community. The effort has been 
 most successfully made by skilled artisans, though 
 even they have relied upon the assistance of the State ; 
 and it is most desirable that the State should turn its 
 attention to the improvement of the standard of life 
 in rural districts. The sixteenth century legislators 
 were greatly concerned about obtaining an increased 
 food supply and improving the practice of agriculture. 
 That is a problem in the present day ; but there is also 
 need to attack the questions of the housing of the rural 
 poor and of maintaining them in wholesome conditions 
 of life. There is reason to hope that the improvement 
 of the standard of life in rural districts would check 
 the migration towards the towns, and thus tend to 
 check overcrowding in urban districts and to limit com- 
 petition for employment among unskilled labourers. 
 
 (41) The importance of raising the standard of life 
 and giving better opportunities to the rural population
 
 124 Lessons from Experience 
 
 is generally admitted. The best means for realising 
 this aim is a question for experts, who are fitted 
 to guard against practical difficulties, and who can 
 estimate the cost of bringing about a real revolution 
 in the condition of the rural labourer. Elizabethan 
 economists recognised that the best means of en- 
 couraging tillage lay in making the profit of the plough 
 as good as that of the fleece, and the problem of 
 making the status of the rural labourer, who is a 
 highly skilled man, as good as that of the artisan, 
 seems to a large extent to be a question of money. 
 Unless rural products obtain a remunerative price 
 in the markets, neither the capital sunk in land, 
 nor the capital which gives employment on land, nor 
 the labourers who work the land, can obtain adequate 
 remuneration; it is idle to attempt to improve the 
 condition of any one, merely at the expense of other 
 factors in rural production. Recent attempts to 
 improve the condition of the labourer by allowing him 
 to rent small holdings, have involved him in respon- 
 sibilities which he is not always able to undertake. 
 Unlike the small holder of the Middle Ages, he does 
 not practise subsistence farming, but farms for a 
 market. There are very few commodities which he 
 has an advantage in marketing as compared with the 
 large producer; he is less able than the large pro- 
 ducer to hold his own in bad seasons, and there is
 
 Rural Labourers 125 
 
 a greater risk of his attempting to go on producing 
 crops, while he starves the land and gradually exhausts 
 it. Men of exceptional thriftiness and energy may 
 battle successfully with untoward circumstances ; but 
 in order that a class of small holders may be main- 
 tained and perpetuated, it is necessary that they should 
 have the reasonable expectation of remunerative 
 prices. There was in the eighties and nineties a large 
 area of land in England which went out of cultivation 
 altogether, while millions of acres are not as productive 
 as they might be 1 . The improvement of agricultural 
 skill has rendered it possible to obtain an average of 
 some thirty or forty bushels per acre steadily, without 
 exhausting the soil, if the land is properly farmed; 
 but it cannot be properly farmed unless the price 
 which is obtainable renders high farming remunera- 
 tive ; and therefore for the full utilisation of the rural 
 resources and the maintenance of the standard of 
 comfort of the rural labourer it is essential that the 
 State should ensure a price of corn which is higher than 
 that which has ruled since the eighties. The com- 
 petition of the great wheat growing areas in the west 
 of the States, and in Canada, has rendered it impossible 
 to maintain the efficiency which English agriculture 
 had reached in the sixties and seventies. The most 
 
 1 Middleton, Recent Developments of German Agriculture 
 [Cd, 8305] p. 6.
 
 126 Lessons from Experience 
 
 hopeful expedient for enabling the agriculturist, 
 whether he has a large estate or a small holding, to 
 obtain the necessary capital for carrying on his work 
 is that facilities should be given which render it pos- 
 sible for him to borrow prudently from the State ; and 
 the certainty of obtaining a remunerative price would 
 be the most important element in enabling him to 
 borrow and to do his land justice. 
 
 The State is in an advantageous position for 
 realising its aims, both with regard to the develop- 
 ment of the material resources of the country and for 
 improving the moral welfare of the people, by the 
 use of its credit. The government of this country 
 has failed to demonstrate that it can organise business 
 better than the individual employer, or that it has 
 greater enterprise than the individual capitalist ; but 
 the intervention of the State may be advantageous, 
 not only because it reduces the wastes of competition 1 , 
 but because the State by its credit can obtain capital 
 more cheaply than any individual can. The British 
 government has frequently used its credit to obtain 
 capital for unproductive expenditure in war; it is 
 much to be desired that, like other public authorities, 
 it should engage in works of public utility, and in 
 
 1 See my article on the " Progress of Socialism in England," 
 Contemporary Review, xxiv. 879.
 
 Individual Enterprise 127 
 
 stimulating peaceful industry as well, by the use of 
 its credit. 
 
 State actions of this kind need not supersede 
 individual energy. Private hoarding and accumulation 
 would still go on; they would be essential in order 
 that the public might have money and be able to 
 take up government loans ; State borrowing involves 
 the existence of private capitalists, just as taxation 
 involves the existence of individual proprietors. 
 Matters might indeed be managed so that additional 
 enterprise was called forth ; and that men who have 
 no capital of their own, might get their chance of 
 showing their capacity. It has sometimes been 
 remarked that the Scottish banks with their system 
 of Cash Credits, have done a great deal to foster the 
 diligence and capacity of young tradesmen in Scot- 
 land 1 . There is at present a danger lest the beginners 
 in any industry should be crushed by giant capitalists 
 or great associations 2 . We may learn from Germany 
 how public credit can be employed, so as to stimulate 
 and foster industrial enterprise. 
 
 At all events as a lender of capital the State would 
 be able to lay down conditions as to the use made 
 of that capital by landlords and others, and thus to 
 secure very real control over the management of land 
 
 1 Growth, ii. 454. 
 
 2 Sir B. C. Browne in Times, 9 Sept. 1916, pp. 5 and 7.
 
 128 Lessons from Experience 
 
 and the welfare of the rural population. It would have 
 power to enforce that those who, as capitalists, employ 
 labour in rural districts should provide cottages that 
 would suffice for the labour which they set in motion. 
 The State could make the granting of loans conditional 
 on suitable arrangements being made in regard to 
 game. The policy of granting loans on a large scale 
 has already been tried in Ireland ; and there seems no 
 good reason why a similar scheme should not be intro- 
 duced into England also. It might be possible to 
 preserve the local knowledge and personal interest, 
 which is only possible under individual management, 
 with the supervision and control which the State 
 might rightly exercise over the use made of the 
 capital which it had provided. 
 
 The introduction of such State-cooperation with 
 private industrial enterprise would appear to tend in 
 favour of a greater measure of stability in business, 
 and the consequent reduction of fluctuations; in so 
 far as this was the case, one great cause of industrial 
 unrest would be removed. It is the speculative 
 element in business, and the large gains which are 
 sometimes made by private individuals at the expense 
 of other individuals, or of the public that rouse the 
 sense of social injustice; exceptional profits in times 
 of national stress are not unnaturally viewed with
 
 National Policy 129 
 
 suspicion. There may be no immunity from labour 
 disputes and strikes in government departments and 
 factories, but owing to the fact that they are public 
 affairs, there is less room for personal jealousy; the 
 extension of the practice would lead to a distinct 
 diminution of the causes of mutual irritation. The 
 exceptional profits and the windfalls made by in- 
 dividuals are most likely to rouse jealousy; and the 
 more State possession of capital introduces regularity 
 into the conditions of employment the less likely are 
 such disturbances to be of frequent occurrence. 
 
 (42) In the middle of the nineteenth century the 
 question was raised whether the competition of 
 individual capitalists, which was the normal condition 
 of business in England and America, was spreading so 
 rapidly in other lands that it could be conveniently 
 taken for granted as approximately true for the world 
 as a whole 1 . In the present day this condition has 
 to a great extent ceased to hold good even in England 
 and America. Capital ousted the independent work- 
 men from many industries in the eighteenth century, 
 and since then the small capitalist has been more and 
 more ousted from business, by the competition of 
 great associations and trusts. If these associations 
 are to be controlled, there is need of a national policy 
 1 Literary Remains of Richard Jones, Preface, p. xiv. 
 c. P. 9
 
 130 Lessons from Experience 
 
 which takes account of national interests. An eco- 
 nomic science which merely considers individual pos- 
 sessions and the play of individual interests is hardly 
 capable of stating these national interests at all. 
 It is difficult to take account of the security of 
 personal property in the nation, by adding up the 
 importance of which each individual is conscious in 
 the preservation of his personal property. The 
 progress of the nation is sure to be, for a time at least, 
 injurious to certain individuals; and the wealth and 
 capital of the nation is to be reckoned as an important 
 factor in the organisation of economic activity. The 
 nation can do much for the development of its own 
 resources by providing facilities for communication, 
 by making permanent improvements in the land, by 
 planting industry, and by training the population of 
 the country to take their part in its economic life. 
 
 It is well that each nation should be free to control 
 such matters in accordance with its own traditions 
 and ambitions, and it is thus important that it should 
 preserve economic independence. Germany is not 
 perhaps to be blamed if she has pursued German 
 interests and consciously exploited other countries 
 for her own advantage 1 , but any country is to be 
 
 1 Englishmen certainly have no right to blame her: 
 List pointed out that England had habitually endeavoured 
 to render other peoples subservient to the progress of her
 
 Economic Independence 131 
 
 blamed which consciously submits to accept such a 
 condition of economic dependence and tamely con- 
 sents to sacrifice its own future development. This 
 principle, which was neglected in the eighteenth 
 century, is now generally adopted in the British 
 Empire; each of the overseas dominions is now 
 regarded as responsible for its own development, and 
 is free from any duty of remaining economically 
 dependent upon the Mother Country. 
 
 (43) Freedom for economic development is, how- 
 ever, not inconsistent with the recognition of the 
 advantages which may arise from international co- 
 operation. Countries differ in climate and soil and in 
 the nature of their productions. There are some which 
 have special advantages, there are others which can 
 supplement the special disabilities and defects of 
 their neighbours. It is desirable that so far as 
 possible countries should consciously co-operate for 
 each others' good. Where the political connection is 
 permanent, as between Great Britain and the various 
 parts of the Empire, such conscious co-operation 
 may be devised without serious difficulty ; and the 
 Allies, through temporary emergencies, have been 
 brought together to see that conscious co-operation 
 
 industry and that in adopting Free Trade there was no 
 change of policy in this respect. National System of Political 
 Economy (ed. Nicholson), pp. 33, 70. 
 
 92
 
 132 Lessons from Experience 
 
 in meeting the special wants induced by the special 
 conditions of war, may be most advisable ; the growth 
 of such economic co-operation, consciously aimed at 
 and pursued, will be more stable and lasting than the 
 haphazard intercourse, with its incidents of glutted 
 markets and occasional interruptions, which arise 
 when international commerce is left entirely to be 
 conducted by private capitalists. 
 
 (44) Indefinite progress in the improvement of 
 social conditions lies within our reach, if we will only 
 be in earnest about developing the Body Economic 
 in every part of the Empire, and encourage the co- 
 operation of economic activities, while being ready to 
 respect the efforts of every other country to foster its 
 economic life. So long as we are careful to make the 
 most of our own resources, material and personal, the 
 prosperity of our neighbours need rouse no suspicion 
 or jealousy; but the alleged friendship of our indus- 
 trial rivals can never be an adequate reason for letting 
 things drift, by neglecting our own resources and by 
 being content to leave our economic activities un- 
 organised. There is always another step forward 
 which can be taken in putting down injurious con- 
 ditions at home or in the countries under our 
 influence ; and for such gradual improvement we 
 have command of sufficient knowledge and of a
 
 Natural Progress 133 
 
 most powerful agency for bringing it into effect. In 
 the old days a well managed household could only 
 deal with a limited area, and side by side with it 
 there 'might exist centres of tyranny and misrule. 
 The burgesses of the city could only take a narrow 
 view of prosperity and were suspicious of opulent 
 men and jealous of other cities; through national 
 organisation we have the means of dealing with the 
 country as a whole ; while there is the opportunity of 
 devolving power on various local authorities, in those 
 cases where knowledge of local detail is essential to 
 good administration. There has besides been an 
 enormous increase of knowledge as to the causes of 
 physical evils, such as ill health; we speak with 
 surprise of the indifference of the eighteenth century, 
 but it must be remembered that ignorance as to the 
 possibility of finding a remedy for many of the 
 admitted evils of the human lot, was one excuse for 
 the failure to make the attempt. The State has now 
 the power to improve material conditions in many 
 ways, and by legislative enactment and improved 
 administration can put down admitted evils in the 
 conditions of work and the conditions of life. 
 
 We may see our way to indefinite progress on the 
 material side; but it is important to remember that 
 social welfare depends, not merely on the externals 
 of life, but on human character as well; so long
 
 134 Lessons from Experience 
 
 as we look only at external phenomena we get little 
 help in seeing how to bring about an improvement 
 in human beings themselves. There are sentimen- 
 talists who believe that by playing on material con- 
 ditions they can build up improved sentiments ; as in 
 the eighteenth century many Englishmen believed 
 that by forcing the colonists into a position of economic 
 dependence they could foster the sentiment of loyalty 
 towards the Mother Country. Similarly it has been 
 hoped that mere contact and opportunities of frequent 
 intercourse would break down racial jealousies and 
 induce a feeling of human brotherhood; but this 
 opinion has not been justified by experience, either 
 in Ireland or in India. There are other social philo- 
 sophers who hold that men are entirely guided by 
 conscious interest, and that the consciousness of 
 common interest affords the basis on which social 
 peace may be established ; but the fact that capital 
 and labour engaged in industry have interests in 
 common has not sufficed to bring them into perfect 
 accord. It is not by looking at the phenomena of 
 human life in the past and fixing on one factor alone 
 that we can initiate progress in human life itself. 
 There is need to recognise the limitations of experi- 
 ence in order to get beyond it 1 , and to set forth 
 
 1 Compare Nicholson. Principles, in. 426.
 
 Transcending Experience 135 
 
 ideals which have not been given in the experiences 
 of the past, but which we may hope to realise in the 
 future. 
 
 Ideals for the life of the individual man arise 
 when he comes to be conscious that he has a share in 
 a larger life than his own. The ideal of being a worthy 
 citizen of a great State, and of fitting himself to take a 
 part in the work of that State, is one which has inspired 
 many patriots in the past, and may be most effective, 
 not only in the special emergencies of war, but in the 
 conduct of civil affairs as well. It can have a certain 
 definiteness and concreteness, because the great States 
 of the world have left material records of their achieve- 
 ments, which appeal to the imagination ; but if we 
 would secure some inspiration that is universal in 
 place and time, and applies to all ages and to all 
 peoples, we must pass beyond the limitations of the 
 kingdoms of this world and their conflicting interests 
 and jealousies. It is only in religion, and in the 
 acknowledgement of an overruling God to whom 
 every man is responsible, that we find the condition 
 which is most favourable to the creation of a federation 
 of the world.
 
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 INDEX 
 
 Acton, Lord 13 
 Alexander II 34 
 Amiens 33 
 Anderson, Adam 2 
 Antrim 86 
 Aycliffe 47 n. 3 
 
 Bakewell 50 
 Balsham 36 
 Bedford, Duke of 50 
 Berkeleys, the 43 f. 
 Beverston, Gloucestershire 
 
 44 n. 
 
 Brentano, L. J. 15 
 Burghley, Lord 48, 83, 87 ff., 
 
 97 f. 
 Bury 65 
 
 Caen 35 
 
 Cambridge 6 n. 2 
 Cambridgeshire 55, 58 
 Canada 125 
 Cannan, Prof. 26 
 Canterbury 34 n. 5, 35 
 Canynges, William 72 
 Chalmers, Dr 5 
 Charlemagne 33 
 Charles I 94, 99 
 Charles II 86 n. i, 101 
 China 97 n. 2 
 Clarkson, Thomas 115 
 Clovis 33 
 
 Cobden, Richard 112 
 Coke, T. W. 50 
 Colchester 89 
 Comte 5 
 Connaught 86 
 Coventry 63 
 
 Dean, Forest of 88 
 Dedham 89 
 Downham 36 
 Dublin 67 
 Dymock 49 
 
 Eden, Sir F. M. 2 
 Edgeworth, Prof, n 
 Edward III 44 n., 71, 76, 89, 
 
 94. 97. 99 
 Edward IV 72 
 Edward VI 90 
 Elizabeth, Queen 24, 47, 49, 
 
 51, 72, 79, 84 ff., 90, 
 
 100 
 
 Ely, Bishop of 36 
 England 14 f., 27, 30 ff., 
 
 53 n. 2, 69 n., 72, 74, 77, 
 
 87, 90 f., 102 ff., 117 ff., 
 
 128 ff. 
 
 Europe 31, 104 
 Exeter 63 
 
 Farnham 49 
 Fitzherbert 47, 52 
 Flanders 50, 99 
 Fleetwood 3 
 France 74, 91 f., 99 
 
 Gentlemen of Fife, the 86 
 George II 114 
 George III 50 
 Germany 28, 116, 127, 130 
 Gloucester 44 
 Conner, Prof. 59 n. 2 
 Grahams, the 86 
 Grosseteste, Robert 36 
 
 Hall, Hubert 81 n. 
 Hanse Towns 86 
 Henry I 89 
 Henry IV 46, 91 
 Henry VIII 92 
 Hirschau 34 
 
 Iberian peninsula 86 
 India 16, 104, 134 
 Ipswich 63 
 
 Ireland 27 L, 128, 134 
 Italy 74
 
 144 
 
 Index 
 
 Jack of Winchcomb 76 
 James I 47, 99 
 Jones, Richard 2, 5 n. 3, 
 8 n. i, 14 f. 
 
 Keswick 88 
 
 Lewis, island of 86 
 Lincolnshire 58 
 
 List, F. 14 n. 3, 15, 130 n. 
 
 London 49, 67, 75, 79, 85, 
 
 92, 95 
 Lynn 44 
 
 MCulloch, J. R. i, 8n. i 
 MacDonnells, the 86 
 Maine, Sir Henry 4 
 Malthus, T. R. 2 
 Manchester 64 
 Marlborough 76 
 May, Isle of 34 
 Mill, J. S. 5f. 
 Monmouthshire 88 
 
 Napier of Merchiston 42 
 Newcastle 67 
 Newfoundland 89 n. 3 
 Nicholson, Prof. J. S. 3 n. 2 
 Norwich 63 
 
 Pepys, Samuel 102 
 Philip and Mary 77, 92 
 Plunkett, Rt Hon. Sir H. C. 
 
 29 
 Prothero, R. E. 43 n. 4 
 
 Ramsey 44 
 
 Reading 65 
 
 Ricardo 8 f . 
 
 Rogers, Prof. Thorold 2 f. 
 
 Roscher 1 5 
 
 Rouen 33 
 
 St Albans 65 
 
 St Germain-en-Laye, Abbey 
 
 of 33 
 
 St Mesmin, Abbey of 33 
 Schmoller 8, n 
 Scone 34 
 
 Scotland 16, 27, 34, 42, 
 53 n. 2, 68 n., 69 n., 77 nn., 
 82 n., 90 n., 127 
 
 Scott, Prof. 1 6 
 
 Seebohm, F. 15 
 
 Shrewsbury 49, 68 
 
 Sinclair, Sir John 106 
 
 Smith, Adam 2, 13, 104 
 
 Somersetshire 88 
 
 Stamford 89 
 
 Stump of Marlborough 76 
 
 Sussex 88 
 
 Tawney, R. H. 76 n. 
 Tetbury 44 
 Tooke, J. H. 2 
 Townsend 50 
 Toynbee, Arnold 15 
 Trafalgar 107 
 Tull, Jethro 50 
 Tyler, Wat 46 
 
 Ulster 86, 91 
 
 United States 28, 87, 125, 
 
 129 
 
 Unwin, G. 73 
 Utrecht 33 
 
 Virginia 87 
 
 Walton, Sir John n8n 
 Wells 44 
 
 West Indies 87, 115 
 Weyland, President 5 
 Whewell, Dr 9 flf. 
 Wilberforce, William 115 
 William and Mary 52, 86 
 William of Sens 34 n. 5 
 Willington 47 n. 3 
 Winchcomb 44 
 Winchester, Bishop of 45 
 Wisbech 36 
 
 York 63 
 Yorkshire 73 n. 
 Young, Arthur 50 
 
 Zeeland 86 
 
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