HElCDNO: 
 
 K 
 
 ORGANISATION 
 
 OF EN 
 
 ^A 
 
 iNi) 
 
 WILLIAM JAMES ASH
 
 THE ECONOMIC ORGANISATION 
 OF ENGLAND
 
 The Economic Organisation 
 of England 
 
 An Outline History 
 
 By 
 
 William James Ashley 
 
 M.A., M.COM., PH.D. 
 
 Professor of Commerce in the University of Birmingham ; 
 
 Late Professor of Economic History in Harvard University; 
 
 Sometime Fellov? of Lincohi College, Oxford 
 
 Third Impression 
 
 Longmans, Green and Co. 
 39 Paternoster Row, London 
 
 Fourth Avenue & 30th Street, New York 
 
 Bombay, Calcutta, and Madras 
 
 1916 
 
 All rights reserved
 
 First Edition, June 1914. 
 New Impressiens, March 1915 and September 1916.
 
 PREFACE 
 
 The following lectures are printed substantially as 
 they were delivered in the fortnight before Christmas 
 1912, as part of the "general lecture system" attached 
 to the Colonial Institute of Hamburg. They are on 
 the lines of a brief course which I have been in the 
 habit of giving for the last few years at the University 
 of Birmingham. 
 
 For the purpose which I have had in view, I hope 
 the brevity of this book will be regarded as a merit. 
 I venture to think it may be of some advantage to 
 those who approach for the first time the subject of 
 English economic history, to be furnished with a 
 narrative which gives them a general notion of a great 
 part of the ground to be covered and of many of 
 the topics they will have to consider. 
 
 Edgbaston, April 1914.
 
 CONTENTS 
 
 LECTURE PAGE 
 
 I. The English Agrarian System : the Manor 
 
 AS Starting Point i 
 
 II. The Stages of Industrial Evolution: the 
 
 Gild as Starting Point . . . -25 
 
 III. The Beginnings of Modern Farming : the 
 
 Break-up of the Manor .... 44 
 
 IV. The Rise of Foreign Trade : the Advent 
 
 OF Capital and Investment ... 68 
 
 V. Domestic Industry and Tudor Nationalism 88 
 
 VI. Agricultural Estates and English Self- 
 
 Government . . . . . . Iig 
 
 VII. The Industrial Revolution and Freedom 
 
 of Contract 140 
 
 VIII. Joint Stock and the Evolution of Capit- 
 alism 173 
 
 Appendix — 
 
 Suggestions for Further Reading . . -193 
 
 Index . 207 
 
 vii
 
 The Economic Organisation 
 of England 
 
 LECTURE I 
 
 The English Agrarian System: the Manor 
 as Starting Point 
 
 In this course of lectures I propose to direct your 
 attention mainly, though not exclusively, to the forms 
 of economic organisation, as illustrated by English 
 development. Economic history, the history of man's 
 economic activity, is the history of the utilisation by 
 man of his environment, to obtain therefrom subsistence 
 and the satisfaction of those material wants which are 
 bound up with subsistence. But his activity in this 
 direction, from the very dawn of history, has never 
 been entirely individualistic ; never altogether the 
 operation of absolutely isolated individuals. Some 
 form of association has always been in existence, it 
 would appear, since man became man ; and this has 
 involved some sort, however rudimentary, of distri- 
 bution of functions — some form, in short, of organi- 
 sation. Economic history is an exceedingly wide 
 and complex subject, even for one nation for a 
 few centuries of its career. We cannot hope to deal 
 
 I A
 
 Economic Organisation 
 
 satisfactorily with it in a short course : much indeed of 
 it is still so imperfectly known to us that we could 
 hardly hope to deal with it quite satisfactorily, in the 
 present state of our knowledge, however many lectures 
 were assigned to it. But by taking for our special 
 theme the forms of organisation and their changes, we 
 may find threads which will guide us, at any rate 
 through that part of the labyrinth which I am going to 
 ask you to tread. 
 
 I shall begin with agricultural conditions ; and this 
 for two reasons. The first is that, like all the rest of 
 western Europe, England, until a couple of centuries 
 ago, was an almost exclusively agricultural country. 
 One of our tasks will be to show the way in which 
 England, from being an agricultural country, supplying 
 itself with food, has become primarily a manufacturing 
 country, dependent upon importation for its sustenance. 
 The other reason is that hitherto the agrarian develop- 
 ment of England has been unique in western Europe. 
 All over western and central Europe, in the twelfth 
 and thirteenth centuries, the land was cultivated by 
 serfs bound to the soil. Outside England, the descend- 
 ants or representatives of these serfs still remain on the 
 land, in all but a few districts ; either as " peasant pro- 
 prietors," owning the acres they till, or as small tenant 
 farmers with something closely approaching in practice 
 to permanence of tenure. In Germany, as a whole, 
 between two-thirds and three-quarters of the land is 
 still owned and cultivated by peasants : peasant pro- 
 perties occupy from two-fifths to two-thirds of the area 
 even of those provinces east of the Elbe which most 
 nearly resemble England in the predominance of large 
 
 2
 
 English Agrarian System 
 
 owners ; while in the south-west of the empire peasant 
 properties monopohse ahnost the whole country. In 
 France large estates are distributed more evenly 
 over the several provinces ; but in that country, also, 
 quite one-half of the whole land is still in the hands of 
 peasant owners. In England, on the contrary, by far 
 the larger part of the cultivable area has come to be 
 owned by comparatively few " landlords." There are 
 still, it is true, a very large number of separate owners : 
 counting urban and rural together, there are said to be 
 as many as a million in England and Wales. But very 
 many of their properties are quite small, and make up, 
 in the aggregate, but an inconsiderable proportion of 
 the total area. Before the recent " agricultural depres- 
 sion," from which the country is now emerging, it was 
 calculated — and no substantial change in the situation 
 has, as yet, taken place — that 4,200 persons owned 
 between them considerably more than half the soil of 
 England and Wales, and that the owners of the other 
 half, so far as it was really agricultural land, numbered 
 no more than 34,000. 
 
 We realise even more distinctly the uniqueness of 
 modern English conditions when we learn that the 
 peculiarity of England extends beyond the actual 
 ownership of the soil. It consists in "the three-fold 
 division of agricultural interests," — the fact, that is, that 
 three classes are usually associated with the cultivation 
 of the land, and expect to derive an income from it 
 — landlords, tenant farmers, and agricultural labourers. 
 The landlord is hardly ever a merely passive receiver of 
 rent : he provides farm houses, barns and sheds, fencing, 
 and usually a good deal of drainage. He charges himself 
 
 3
 
 Economic Organisation 
 
 not only with upkeep, but also, from time to time, with 
 extensive improvements ; and though there are doubt- 
 less impoverished landlords here and there who do 
 very little, the average expenditure for these purposes 
 on what is called a well-managed estate commonly 
 amounts to a quarter or even more of the gross rent. 
 The owner lets the bulk of his land in comparatively 
 large holdings — 150 or 200 acres being perhaps the 
 more usual size in the centre of the country — receiving 
 a rent determined in the main by competition. The 
 tenant farmer provides his own stock and implements 
 and working capital, and, compared with most of the 
 peasant cultivators abroad, is something of a "capitalist ;" 
 and he employs agricultural labourers, who may indeed 
 rent cottages on easy terms, and have the use of gardens 
 or allotments, but nevertheless depend chiefly on their 
 wages. Each of these classes may be paralleled from 
 one or other province of France, Germany, or Italy. 
 In some districts there are great landlords ; but then 
 they usually, as in eastern Germany, cultivate the 
 greater part of their estates themselves, personally or 
 through bailiffs ; or, as commonly in Italy and in cer- 
 tain departments of France, they let them out in small 
 holdings to peasant cultivators, who employ little 
 labour outside their own families. These peasant 
 tenants are very frequently what are known as 
 metayers, paying, in lieu of a money rent, some frac- 
 tion, ordinarily one-half, of the annual produce. 
 There are districts again, as in the north of France, 
 where tenants may be found, superficially not unlike 
 English farmers in their position : but they usually 
 have a smaller command of capital ; they obtain less 
 
 4
 
 English Agrarian System 
 
 from their landlords in the way of repairs and capital 
 expenditure ; and their landlords are frequently towns- 
 men, who are altogether urban in their outlook and 
 chief interests. And, finally, in most districts abroad 
 there are agricultural labourers ; but most of them are 
 engaged by employers who are themselves, whether on 
 a large or a small scale, the proprietors of the land on 
 which they work. Hardly anywhere on the Continent 
 can one find on the same land all three classes, each 
 participating, as in England, in the task of production. 
 And to discover when, and, if it may be, why, Eng- 
 land diverged in this important respect from the rest 
 of Europe furnishes one of the main interests of 
 English economic history, and a reason for beginning 
 with the agricultural side of it. 
 
 The characteristic figure for the last couple of cen- 
 turies, if not longer, has been "the squire" of the 
 village. There are signs, as an eminent English 
 statesman has recently remarked, that the squire is 
 now beginning to pass away. But certainly he has 
 for a long time been firmly rooted in English soil. 
 And for what the squire has meant let us turn to the 
 following description by Lord Eversley of "the ideal 
 of the English land system" — the ideal, that is to say, 
 in the eyes of the land-owning gentry. 
 
 Writing some twenty years ago — and since then 
 things have altered but little — he tells us : — " The 
 ideal of the English land system ... is that of a large 
 estate where the whole of one and often of several 
 adjoining parishes is included in it ; where there is 
 no other landowner within the ring fence ; where the 
 village itself belongs to the same owner as the agri- 
 
 5
 
 Economic Organisation 
 
 cultural land ; where all the people of the district- 
 farmers, tradesmen, labourers — are dependent, directly 
 or indirectly, on the one landowner, the farmers holding 
 their land from him, generally on a yearly tenancy, the 
 labourers hiring their cottages weekly or yearly either 
 from the landowner or from the farmers ; and where 
 the village tradespeople are also dependent largely for 
 their custom on the squire of the district, and hold 
 their houses from him. It is believed that this ideal 
 has practically been attained in more than half the 
 rural parishes of England and Wales, in the sense 
 that all the land and houses within them substantially 
 belong in each to a single owner. In a very large 
 number of cases a single landowner possesses the 
 whole of several adjoining parishes or of several 
 parishes in different parts of the country." 
 
 It is not my present business to, endeavour to sum 
 up the relative merits and demerits of such an agrarian 
 system from the social point of view. It is sufficient 
 to say that, before it encountered the competition of 
 the virgin soil of the new world, it was associated with 
 methods of agriculture which competent foreign ob- 
 servers held up as models to be imitated by their own 
 countries. There can be no doubt whatever that it 
 did actually promote production. " English agricul- 
 ture, taken as a whole," wrote the highest French 
 authority in 1854, "is, at this day, the first in the 
 world ; and it is in the way of realising further pro- 
 gress." In spite of an inferior soil and climate, the 
 gross produce, he reckoned, per acre was at least twice 
 as great in England as in France. The chief German 
 authority has been equally emphatic. " England, the 
 
 6
 
 English Agrarian System 
 
 country most evidently characterised by large landed 
 estates, was/' he tells us, "justly regarded from the 
 end of the eighteenth to the middle of the nineteenth 
 century, as the High School of agriculture." Moreover, 
 though it is hardly possible to deny the advantages 
 which a country derives from the presence of a 
 peasant proprietary, it is easy to paint the material 
 position of such a class in modern Europe in colours 
 somewhat too rosy. The drawbacks may be easily 
 discerned in what is still the best general account 
 of their position, the two eulogistic chapters in the 
 Political Economy of John Stuart Mill. What we have 
 now to do, however, is simply to trace the origin and 
 development of the modern English system. The 
 basis on which it was built was feudal : it grew out 
 of the manorial system, which was a fundamental 
 part of European feudalism in the period when 
 feudalism reached its highest development. In a 
 sense it is a survival of feudalism ; and England, 
 though it plumes itself on the absence of a noble caste, 
 may be not inaptly described as more feudal to-day 
 than France or Germany. But France and Germany 
 also had their manorial system in the Middle Ages. 
 The remarkable fact is that squiredom in England, 
 though it rested on the feudal basis of the manor, 
 was built up to its modern completeness very largely 
 as the result of forces which we commonly regard as 
 non-feudal, viz. Commerce and the Reformation and 
 Parliamentary Government. How this happened we 
 shall have to see later. We must now look at the 
 foundation, the manorial system itself. 
 
 For this purpose I shall not go further back than 
 
 7
 
 Economic Organisation 
 
 the thirteenth century. It is quite certain that by that 
 time, whatever may have been the case before, the 
 whole of agricultural England was divided into areas 
 known as "manors," though these were of very un- 
 equal size : and over the larger part of England, 
 especially the Midlands and the South, there was a 
 remarkable similarity in their constitution, so that, in 
 reference to these districts at any rate, we are justified 
 in speaking of a "typical " or "normal" manor. The 
 typical manor consisted of a village, with the lands 
 surrounding it which the villagers cultivated. Every 
 manor had a lord, either a lay lord or an ecclesiastical 
 corporation, though sometimes a manor was divided 
 between two or more lords. And the manor was the 
 unit of land management. A magnate might possess 
 scores of manors in various parts of the country ; two 
 of the kinsmen of William the Conqueror, for instance, 
 were given more than four hundred manors, and one 
 almost double that number. But all such great estates 
 were thought of as still made up of a number of sepa- 
 rate manors, each with its own internal arrangements 
 and its own separate system of associated husbandry. 
 There were, it is true, certain large complexes of 
 property, known as " baronies " and " honours." 
 These would be under the supervision of "seneschals" 
 or "stewards," who made periodical circuits to see 
 that the local estate officials were doing their duty. 
 In some cases the several manors sent each year pre- 
 scribed quantities of provisions to the monastery or 
 to the "head manor" where their lord, whether cor- 
 porate or individual, resided. But all this left un- 
 touched the internal working of each several manor, 
 
 8
 
 The Manor 
 
 which continued complete and self-contained within 
 itself. 
 
 The position of affairs, so far as landlordship was 
 concerned, seems at once intelligible to the modern 
 Englishman, because the mediaeval lord of the manor 
 is evidently represented by the modern squire of 
 the village. Many great landlords of to-day own, 
 each of them, all the land of several parishes, 
 which are often widely separated : while in many 
 villages the position of squire is occupied by the 
 Ecclesiastical Commissioners, by the colleges of 
 Oxford and Cambridge, and by the great hospitals, 
 just as that of lord of the manor was held in 
 the thirteenth century by cathedral or monastic 
 foundations. But there are two great differences 
 between the mediaeval and the modern state of 
 affairs — one external, and relating to the theory of 
 landholding ; the other internal, and relating to the 
 methods of husbandry. 
 
 To take the external first. To-day we apply the 
 term " tenants " only to those who have hired land of 
 a landlord ; and whatever may still be the theory 
 of English law, we do, in fact, regard landlords as 
 absolute owners of their land and as tenants of no 
 man. But in the Middle Ages the lords of manors 
 themselves were " tenants." As the Latin original of 
 "tenants" implies, they were "holders" of land from 
 a superior. All land was held ultimately of the king, 
 except of course the king's own estates ; but the con- 
 nection was not necessarily an immediate one. It has 
 been calculated that, at the time of the Domesday 
 Survey (1086), there were about eight thousand lords 
 
 9
 
 Economic Organisation 
 
 of land who were sub-tenants, holding of some lord 
 intermediate between themselves and the king ; while 
 there were only about fourteen hundred persons 
 holding directly of the king — or, as they were called, 
 " tenants in chief " ; many of them, no doubt, great 
 lords, lay or ecclesiastical, but many, also, holders of 
 but one or two manors. Somewhere about one-fifth 
 of the land of the country was then retained in the 
 hands of the crown ; rather more, perhaps three-tenths, 
 was held by ecclesiastics and ecclesiastical bodies ; 
 and the other half was divided between lay lords. 
 Little change in these proportions would seem to have 
 taken place during the Middle Ages. And all the 
 lay holders of manors, at any rate — not to com- 
 plicate the subject by considering the ecclesiastical 
 owners — held their manors on condition of per- 
 forming certain services to their lord, whether the 
 king or some intermediate superior, and of submitting 
 to certain conditions incidental to their tenure. The 
 service due was mainly military service ; so that they 
 were said to be " tenants in chivalry " ; and the chief 
 other " incidents " of this tenure were submission to 
 the lord's rights of wardship over an heir while under 
 age, and of providing for an heiress in marriage — 
 rights which were originally of considerable pecuniary 
 value. The theory of " tenure " was a fundamental 
 part of mediaeval feudalism ; but it has since ceased 
 to have any real meaning. Military service, as a con- 
 dition of landlordship, passed away completely in the 
 seventeenth century, when a paid army came into exist- 
 ence ; it had long been a mere shadow of its former 
 self. And the other incidents of tenure in chivalry 
 
 10
 
 The Manor 
 
 were abolished by the padiaments of the Common- 
 wealth and Charles the Second, and the loss to the royal 
 revenue compensated for by " the hereditary excise." 
 
 The lord of the manor, in the course of his transfor- 
 mation into the squire of the village, has thus been 
 freed from his dependence upon a superior lord. We 
 have now to follow what has happened within the 
 manor itself ; and for that purpose some further de- 
 scription is necessary of its internal constitution in 
 the thirteenth century. 
 
 The usual manor of the Midlands and South of 
 England consisted of a village, or " town," with several 
 hundreds of acres of arable land surrounding it. In 
 this village lived all the cultivators of the soil : the 
 isolated farm-house we are now accustomed to is a 
 comparatively late innovation. Beyond the arable 
 fields lay considerable stretches of pasture and waste, 
 and of woodland where the swine foraged for food : if 
 there were a stream near by, there would also be a 
 tract of permanent meadow. It was an organisation 
 primarily for tillage — for arable husbandry ; pastoral 
 occupations were for a long time altogether secondary 
 and subsidiary ; and the use of meadow and pasture 
 and waste was regarded as " appurtenant " to the use 
 of the arable fields. There have been certain geo- 
 graphers in recent years who have thought that, over a 
 large part of the area of England, tillage was physically 
 a mistake ; and that the laying down of cornfields to 
 pasture, which took place so widely in Tudor times 
 and again in recent years, was but a belated concession 
 to a damp climate. Whether this be so or no, the 
 manorial system, in the complete form which is here 
 
 II
 
 Economic Organisation 
 
 being described, was never thoroughly at home in the 
 western side of England, where pasture farming was 
 dictated by soil and rainfall. This, and not any 
 Celtic origin of its inhabitants, is probably the reason 
 for the absence, over a large part of the western 
 counties, of the compact and substantial village with 
 its wide arable fields — the so-called " nucleated " village 
 — and the presence, in its place, of tiny hamlets and 
 scattered homesteads. 
 
 To return, however, to the normal manor. It had 
 three remarkable characteristics. One was the divi- 
 sion of the whole arable area into two portions — 
 that part (perhaps a third or half of the whole) which 
 was kept in the hands of the lord and cultivated under 
 his direction, or that of a bailiff or reeve representing 
 him, for his direct and exclusive benefit ; and the rest 
 of the land, which was in the hands of tenants. The 
 former part was universally known as the "demesne"; 
 the latter was known by various names, of which 
 "land in villeinage" was the most common. The 
 term " demesne " survives in a somewhat similar sense 
 in Ireland ; and we have no difficulty in thinking of 
 it as similar to the modern " home farm," which a 
 landlord keeps in his own possession and manages 
 himself or through a bailiff ; though the demesne 
 constituted as a rule a far larger portion of the manor 
 than the home farm does of a modern " estate." 
 
 But now we come to a second and more significant 
 characteristic : the fact that the labour necessary for the 
 demesne was provided by the tenants of the rest of 
 the manor. Besides extra services, commonly known 
 as "boondays," at harvest time and other seasons of 
 
 12
 
 The Manor 
 
 exceptional pressure, and also a good deal of com- 
 pulsory carting, the main body of the tenants — those 
 known as " villagers " par excellence (for that is what 
 " villeins " seems originally to have meant) — were 
 bound to work (or provide a substitute) on two or 
 three days a week all the year round on the lord's 
 demesne. This was the so-called " week work " ; and 
 it will be at once realised what an immensely impor- 
 tant factor such an obligation must have been in the 
 whole of rural life. The services can, if we like, be 
 described as the "rent" paid to the lord for the use 
 of the land ; or the use of the land can be described 
 as the " wages " paid by the lord for the villein's 
 services : in truth, neither " rent " nor " wages " are 
 appropriate to the circumstances, since, among other 
 reasons, the arrangement rested much more on custom 
 and status than on competition and contract. It 
 should be added, for completeness' sake, that the 
 tenants were often bound to make certain small 
 periodical payments in kind, such as poultry or eggs : 
 but, by the side of the labour dues, obligations such as 
 these were quite inconsiderable. 
 
 The third characteristic is even more remote from 
 anything with which we are now familiar. It was 
 that the holdings of the villeins were made up, not 
 of compact " fields," each several acres in extent, such 
 as we are now accustomed to, but of a number of acre 
 or half-acre strips, scattered over the whole of the 
 tilled area. This tilled area was divided into two, 
 three, or four — most commonly three — great expanses, 
 known in later times as " open " fields, because over 
 the whole of each there was no hedge or ditch or wall 
 
 13
 
 Economic Organisation 
 
 or fence to obstruct the view, and the strips were only 
 separated by low '' balks " of unploughed turf. The 
 division into two, three, or four " fields " was for the 
 purpose of a systematic fallowing, — one half, third, or 
 fourth, as the case might be, being left untitled each 
 year, — and to permit of a rude rotation of crops. On 
 the three-field plan, which was by far the most usual 
 in the thirteenth and subsequent centuries in England, 
 one of the fields would be sown in the autumn with 
 rye or wheat (the bread crop), one in the spring with 
 barley (the drink crop), or with oats or beans or peas 
 for the cattle ; while the third was left fallow. The 
 rotation in each manor was absolutely compulsory on 
 all sharers in the open field. In Germany, where the 
 open field is still widely prevalent, there is a convenient 
 technical term, Feldzwang, "field compulsion." In 
 mediaeval England there was no similar term, doubt- 
 less because the rule was so much a matter of course 
 that it did not need to be named. 
 
 And in each manor there was, at this time, a usual 
 or characteristic size of villein's holding, known by 
 various significant names, such as "husbandland," 
 *' living," and the like, but most commonly, from the 
 measuring rod or yard (virga), as a "yardland" or, in 
 Latin, as a "virgate." Its size varied from place to 
 place very considerably ; but certainly by far the most 
 usual size was thirty (scattered) acres : in a three-field 
 village the "full villein" would have approximately 
 ten acres in each field, no two being contiguous. The 
 "acre" was seldom of precisely the extent of the 
 modern statute acre, but varied according to local 
 custom, the nature of the soil, and the lie of the land. 
 
 14
 
 The Manor 
 
 Originally an "acre" — as its German equivalent Mor- 
 geii still implies — must have been the area which could 
 be ploughed with the implement and team of the time 
 in one day, or rather in a long morning ; in the after- 
 noon the oxen which drew the ploughs would be driven 
 to the pasture. But in England, as over a large part of 
 western Europe, its shape came somehow to be fixed, 
 at an early date, as that of a narrow rectangle, ten times 
 as long as it was broad. The length was the length of 
 a furrow, hence known as " a furlong " ; and this was 
 commonly forty times the measuring rod or pole. But 
 for a long time there was great variety in the length of 
 the local measuring rod ; and it was only slowly that it 
 came to be generally fixed at 5I times the small "cloth- 
 yard." The breadth of the rectangle was four times the 
 local measuring rod. Inasmuch as a strip forty rods 
 long and one rod wide made up "a rood" (locally 
 known very generally as " a land "), the acre may be 
 described as four roods lying side by side. Yet we 
 may fairly suppose that in stiff soils less ploughing 
 would be got through in a morning than where the 
 soil was lighter. 
 
 There is a further fact to be borne in mind. The 
 great open fields, as we know them in medieval and 
 modern times, were broken up into a number of lesser 
 units, each consisting of a group or, so to speak, a 
 bundle, of acre or half-acre strips, all lying the same 
 way and parallel to one another. These stretches of 
 land were known as shots, flats, or still more commonly 
 as furlongs, doubtless because they were a furrow- 
 length in width. It may be that the expanse known 
 as "a field" was consciously divided, at some time or 
 
 15
 
 Economic Organisation 
 
 other, into these separate stretches (which were then 
 further partitioned into parallel acre strips), in order 
 to obtain as many such strips as possible by fitting 
 them into the shape of the field. Or, as some con- 
 jecture, the furlong (in this sense), composed of a 
 number of strips all lying the same way, may repre- 
 sent the piece of land freshly brought under cultiva- 
 tion, at some particular time, in a single (joint) 
 undertaking ; and thus the later great " fields " may be 
 merely the result of the bringing into cultivation, one 
 after the other, of several pieces of the waste lying in 
 the same direction. But, whatever the origin of the 
 arrangement may have been, it must have been much 
 easier to make most of the acres of a uniform, com- 
 paratively narrow, width, than of a uniform, compara- 
 tively long, length. Accordingly it is in length rather 
 than in width that the customary or nominal acres 
 differed, by excess or defect, from the normal size. 
 But whatever in each manor may have been called an 
 acre, it was, as I have said, thirty of these acres that 
 went, as a rule, to the yardland. With the holding of 
 the whole or a fraction of a yardland went appur- 
 tenant and proportional rights of user in the common 
 pasture and meadow. Where, as was commonly the 
 case, the meadow was limited in area, the hay harvest 
 was frequently apportioned among the tenants by lot 
 or rotation ; and similarly pasture rights, if " stinted " 
 at all, depended on the si^e of the arable holding. 
 
 It should be added that the demesne itself was not 
 apart from the common or open fields. It also was 
 composed, more or less completely, of acre and half- 
 acre strips, lying in the open fields, intermingled with 
 
 i6
 
 The Manor 
 
 the strips of the villeins. The gradual withdrawal of 
 the demesne from the communal system and its con- 
 solidation in compact closes near the manor-house was 
 one of those silent developments of the later centuries 
 of the Middle Ages of which we know very little. 
 
 In order not to complicate the exposition, no men- 
 tion has hitherto been made of the other classes that 
 undoubtedly existed outside the villein-group. There 
 were a certain number of " free-holders " and also of 
 "socmen," who were tenants of the manor, but on 
 conditions which were regarded as more "free" than 
 those of villeins. There were also in some districts a 
 dwindling number of persons who, whether called 
 "slaves" or not, occupied an extremely servile posi- 
 tion. The relations of these classes to the villagers 
 proper or villeins is an exceedingly obscure subject ; 
 but it is pretty clear that, over a large part of the 
 country, they were comparatively subordinate appen- 
 dages to the manorial machinery. There was, how- 
 ever, a more important class, that of " cottars." These 
 were perhaps as numerous as the villeins ; and the 
 compendious classification by Burns of the rural 
 population of the Scotch lowlands, "the laird, the 
 tenant, and the cottar," would have applied equally 
 well to mediaeval England. The cottars held, as a 
 rule, but two or three acres of land— at most five ; 
 and probably many of them worked, for a large part 
 of their time, for the more prosperous villeins. His- 
 torically, the class is of great interest ; for it was cer- 
 tainly one of the chief sources from which has been 
 derived the modern class of " agricultural labourers." 
 But evidently the centre of the whole system was the 
 
 17 B
 
 Economic Organisation 
 
 group of virgate-holders, or " yardlings " ; and it is 
 upon these that we are bound to concentrate our 
 attention. 
 
 The status of the " yardhng " and of the cottar be- 
 neath him is described with sufficient accuracy by the 
 modern term " serfdom." The whole organisation of 
 agriculture, that is to say the organisation of by far the 
 larger part of the economic activity of the time, was, 
 we may fairly say, based upon " serfdom." The word 
 " serf " is, of course, a mere Englishing of the Latin 
 word for slave, viz. servus. But "serfdom" means 
 something very different from " slavery " to a modern 
 ear, and quite properly. We mean by it a condition 
 of dependence, in which the dependant was bound to 
 the soil and subject to onerous burdens, but in which, 
 whether technically "free" or not, he enjoyed an inde- 
 pendent home life, and could not be sold away from 
 his family and his holding ; and in which, also, he 
 possessed rights of property, at least in such movable 
 wealth as he might acquire by his labour. This descrip- 
 tion is sufficiently applicable to the English peasant of 
 the Middle Ages : even though we find it impossible 
 to extract from contemporary lawyers, in any of the 
 mediaeval centuries, a definition of his status, in terms 
 of freedom or unfreedom, which quite fits into the 
 actual conditions of life. Understood as I have ex- 
 plained it, serfdom evidently occupies an intermediate 
 position between slavery and freedom. All sweeping 
 historical generalisations need large qualifications and 
 exceptions to make them exactly accurate : historical 
 evolution never moves quite regularly in any one 
 direction : there are ups and downs, advances and re- 
 
 i8
 
 The Manor 
 
 trogressions. But, in a broad and general way, we may 
 say that in the ancient classical world economic society 
 rested on slavery. Slavery, we may recall, is taken for 
 granted by Aristotle as a necessary constituent of a civil- 
 ised community. And the modern world rests, for- 
 mally at any rate and in theory, on individual liberty 
 and freedom of contract. So that mediaeval serfdom 
 we may regard as representing, on the whole, an ad- 
 vance in social development. 
 
 But when we seek to go behind this generalisation, 
 and to discover how, precisely, mediaeval serfdom came 
 into existence, we find ourselves at once in the midst 
 of controversy. I began with the thirteenth century, 
 because the abundant evidence from that period leaves 
 us in little doubt as to the broad features of villeinage 
 and of the manor as then constituted. And from that 
 secure starting point, we can follow the subsequent 
 development without troubling ourselves, unless we 
 wish, with the question of origins. But I cannot leave 
 so tremendous a problem without at least a few sen- 
 tences of comment. I say "tremendous," because it 
 is one that vitally concerns the whole of western and 
 central Europe ; and it has busily engaged continental 
 historians, and especially German historians, as much as 
 or even more than English. The distinction between 
 the demesne and the rest of the " manor," " seigneurie," 
 or " Rittergut " ; the existence of a normal peasant 
 holding, very commonly of some thirty acres ; the week 
 work of two or three days all through the year ; the 
 compulsory rotation of crops and fallow, — these were 
 as universal and as uniform over the whole of western 
 and central Europe as the theory of feudal tenure, or 
 
 19
 
 Economic Organisation 
 
 the ideas of chivalry, or the constitution of the church : 
 in eastern Germany they survived into the nineteenth 
 century. 
 
 When serious attention was first turned to this 
 subject, some sixty years ago, the creation of the 
 manor and of its continental parallels was explained 
 as due to the depression of village groups of freemen. 
 One widely prevalent view made these supposed origi- 
 nal freemen the corporate proprietors, as a body, of the 
 land which they tilled, and regarded the later lord of 
 the manor as taking the place of a preceding communal 
 ownership. This was the form of the " primitive 
 free man" view which was known as the "mark" or 
 free village community theory ; mark being a German 
 term interpreted as the area owned by the group. But 
 against this view it was urged that over large parts of 
 Gaul the later seigneuries apparently grew, without 
 any break of continuity, out of those estates of large 
 proprietors, cultivated by semi-servile tenants, which 
 we know to have existed in the later centuries of the 
 Roman rule ; and it might therefore be conjectured 
 that its origin was directly, or indirectly by imitation, 
 the same elsewhere. As such an estate was commonly 
 called a villay this may be briefly labelled "the villa 
 theory." It was next pointed out that neither the 
 Teutonic invaders of the Roman Empire, nor the 
 Celtic peoples whom the Romans found in possession, 
 and who may have survived, in greater or less pro- 
 portion, after the Teutonic immigration, consisted 
 entirely of free men : there were probably at least as 
 many slaves as freemen among them. There are 
 accordingly, for what is now England and France and 
 
 20
 
 The Manor 
 
 western Germany, at least four possible groups of 
 factors to be considered : (i) social conditions among 
 the Celtic inhabitants, before and during the Roman 
 rule ; (2) social conditions in the completely Romanised 
 districts ; (3) social conditions among the Teutonic 
 immigrants ; and (4) the forces at work within the new 
 kingdoms of the west, between the period of the 
 Barbarian invasions and the time when our evidence 
 unmistakably shows us full-grown serfdom and mano- 
 rialism. It is probably true to say that no historical 
 scholar of to-day holds either the " mark " view or the 
 "villa" view in an exclusive form. There is likely 
 now to be pretty general agreement in the proposition 
 that the Teutonic (including the Danish) invasions led 
 to the settlement, over large parts of what is now 
 England, of a considerable number of "common 
 freemen," who settled down singly or in small groups 
 to cultivate the land. On the other hand, it is tending 
 to be recognised that the Roman agrarian system, the 
 *' villa" with its slaves or peasants bound to the soil, 
 is not likely to have altogether disappeared in Gaul, 
 and that it may even have survived in parts of Britain. 
 In the process of manorialisation, which was a long 
 one and occupied centuries, the example of the Roman 
 serf-group may conceivably have had a large influence 
 even in the districts which started, in the main, with 
 a quite free population. We are, however, still a long 
 way off the final and satisfactory adjustment, in an 
 intelligible and convincing statement, of all the various 
 elements which are clearly involved in the problem. 
 
 These elements may be summed up under two heads 
 — communal and seigneurial. The communal features 
 
 21
 
 Economic Organisation 
 
 of manorial life were all bound up with the system of 
 intermixed holdings in the open fields : for that inter- 
 mixture itself involved or led to a large amount of co- 
 operation and common action. Because the holdings 
 were intermixed, the several cultivators had to observe a 
 common rotation of crops. For the same reason, and 
 because of the absence of hedges or fences between the 
 strips, the several tenants had to submit to the exercise 
 by their fellows of certain " rights of common." The 
 cattle of all the tenants must be turned out to graze 
 freely over the stubble, as well as over the one great 
 field whose turn it was to lie fallow that particular 
 year. The common pasture or waste remained un- 
 divided, because for centuries it was too extensive to 
 make it worth while to cut it up ; and it was natural 
 that men who were accustomed to act together in the 
 cultivation of their acres should employ in common 
 a village herdsman, shepherd, and swineherd. We 
 may conjecture that the intermixture of holdings was 
 originally designed to bring about a fair distribution 
 of the land among all the occupiers, and to give each 
 tenant his fair proportion of good and bad soil. .And 
 this purpose, we may fairly suppose to have been very 
 distinctly present to men's minds at a time when it 
 was practically impossible to improve poor land. In 
 the absence of artificial grasses there was little hay, 
 and what there was was not supplem_ented by " roots." 
 Accordingly there were few cattle, and these exceed- 
 ingly puny ; so that there was little manure available as 
 fertiliser. We may conjecture further that the stripwise 
 arrangement was the outcome, at some early period, 
 of a system of co-operative ploughing ; acre strips 
 
 22
 
 The Manor 
 
 being naturally allotted to one member of the group 
 after another because an acre was the extent of a day's 
 ploughing. Evidence derived from Wales of a con- 
 dition of things probably prior in development to the 
 manor indicates that each of the villeins came to hold 
 the same number of these scattered acres because each 
 alike contributed a yoke of oxen to the eight-ox team. 
 But why the acres should be of that shape ; why thirty 
 acres should be the common amount of holding ; why 
 the arable fields should so commonly be three — all 
 these points are still obscure. How far they were due 
 to free choice or imitation, going back to pre- 
 manorial or "tribal" times, how much to coercion 
 or pressure of some kind from above, has yet to be 
 determined. 
 
 The seigneurial elements, on the other hand, were 
 those specially bound up with the position of the lord 
 of the manor : his authority over the land and those 
 upon it : in particular the large share he possessed, 
 under the name of demesne, of the tilled land (whether 
 in separate closes or intermixed with the strips of his 
 tenants), and his recognised right to exact labour 
 services from his tenants as the necessary means of 
 getting his demesne cultivated. It was in order to 
 preserve undiminished the labour force upon the manor 
 and tie it to the soil, that restrictions were put upon 
 the personal freedom of the villeins ; and it was in 
 maintaining the due succession of able-bodied tenants 
 and compelling them to render their accustomed 
 services that that important part of the system which 
 can only be barely alluded to here, the manorial court, 
 found its most constant occupation. 
 
 23
 
 Economic Organisation 
 
 It is clear that an open-field husbandry could have 
 existed without any such division of the use of the 
 land between lord and tenants as is found in the 
 manor ; and, on the other hand, that lords could have 
 exercised a large authority, could indeed have exacted 
 labour rents, even had there been no open-field system. 
 This analysis of the manorial organisation may perhaps 
 indicate the directions in which we shall have to look 
 for a solution of the problem of its origin. In any case, 
 it will be a help in following the history of its decline. 
 
 24
 
 LECTURE II 
 
 7Vie Stages of Industrial Evolution : the Gild 
 as Starting Point 
 
 As, in tracing the history of the agricultural side of 
 EngHsh Hfe, I began with the thirteenth century in order 
 to avoid controversy, so with the same object I shall 
 begin an account of the manufacturing or industrial 
 side with the fourteenth century. Long before that 
 time a number of towns had firmly established them- 
 selves ; and in those towns trade and manufacture 
 were carried on to an extent considerable in itself, 
 though still quite small in comparison with agricultural 
 employment. And, towards the end of that century, 
 the men who carried on the several industries were 
 organised, in every town, in what it has become usual 
 to speak of as " the gild system." Starting as late as 
 this, I am compelled to omit much that is of extreme 
 interest. The gild system, as I have already stated, 
 was characteristic of industry in the towns ; and in- 
 deed, with the exception of the arts of the village miller 
 and the village blacksmith, and here and there a little 
 mining and quarrying, all economic activity that was 
 not directly agricultural was now, and for some time 
 to come, centred in the towns. We ought, therefore, 
 did time allow us, to deal with the tangled problem of 
 the origin of the towns and of their constitution. The 
 
 25
 
 t 
 
 Economic Organisation 
 
 growth of the towns means the appearance of non- 
 feudal and non-agricultural forces in society ; the rise 
 of a non-servile middle class ; the appearance of ideas 
 of contract as opposed to custom, and of payment in 
 money as contrasted with payment in kind or in service. 
 And developments like these had a significance not 
 limited to the towns ; they exercised, as we shall see 
 later, a slow but profoundly disintegrating influence 
 on the feudal society of the "open country " around. 
 
 One would like, therefore, to point out the origin of 
 many of our English towns in the needs of defence ; 
 the county town being the central fortress and garrison 
 for the surrounding shire or county. The whole o 
 the Midlands must, at some time or other, have been 
 artificially cut up into sections — for "shire," like 
 "section," means simply a piece shorn or cut off — 
 and in the midst of each section was planted a strong- 
 hold. Other towns sprang up owing to the presence 
 of the king's court, or the needs of a great cathedral or 
 monastic establishment, or the great fairs at places of 
 religious pilgrimage. I could like to enter into the 
 question of the origin of the municipal constitution, 
 whether in the manorial organisation or in market 
 privileges, whether unconscious or conscious, gradual 
 or rapid ; and to consider how it was that the body 
 of burgesses were able to acquire certain rights of 
 self-government, and to establish their own municipal 
 tribunals. And after insisting on specifically munici- 
 pal characteristics, I should have to comment on the 
 surprisingly agricultural character, after all, of many of 
 the smaller towns down to a comparatively late period ; 
 so that the burgesses often continued to be almost as 
 
 26
 
 The Gild System 
 
 much interested in open fields and rights of common 
 as ordinary villagers. 
 
 All this, however, I have now to pass over. I can 
 only just touch upon one development which was 
 especially bound up with town life, and that is the 
 beginnings of commerce as distinguished from manu- 
 facture. Earlier by a generation or more than the 
 appearance of any numerous body of English crafts- 
 men, a good deal of trading had sprung up in such 
 native products as wool and woolfels, or in luxuries, 
 such as fine "cloth or silks or spices or wine imported 
 from abroad. In every town the men who engaged 
 in such trade were organised, as early as the twelfth 
 and thirteenth centuries, in what were known as " mer- 
 chant gilds." The one exception, curiously enough, 
 was London. A document has indeed recently come 
 to light which implies that in the capital also there was 
 once a gild merchant. Yet the phrase here used is 
 probably only the repetition of a current formula ; and 
 we have no other trace of the existence of such a body. 
 But this was probably only because its objects were 
 obtained there in other ways. The merchant gilds 
 doubtless contributed largely to the formation of the 
 mediaeval municipal government ; a trace of this influ- 
 ence remains in the common designation of the town 
 hall in our older boroughs as the "guildhall." And 
 the organisation of the merchant gilds probably served 
 as a model for the earlier craft gilds. But the exact 
 nature of the relations between the merchant gild and 
 the craft gilds is still a subject of controversy ; and I 
 am reluctantly obliged to content myself with a bare 
 allusion to a large and fascinating field of inquiry. 
 
 27
 
 Economic Organisation 
 
 Craft "gild" and "gild system" have become the 
 common modern terms for the industrial organisa- 
 tion of the later Middle Ages ; and they are satisfac- 
 tory enough if we understand just what they stand for, 
 and realise that, in the sense in which we now use 
 them, they are modern and not contemporary expres- 
 sions. By the end of the fourteenth, or early in the 
 fifteenth century, every occupation involving even a 
 slight degree of skill gave rise to a systematic grouping 
 of the men engaged in it ; and a corporate organisa- 
 tion grew up, substantially similar in its main features 
 in every industry and every town, which played a large 
 part in the life of the time and was destined to exert 
 a real influence for centuries later. But in the four- 
 teenth and fifteenth centuries these groups were 
 commonly known as " crafts," or, by a word of 
 Anglo-French origin which had originally nothing 
 " mysterious " about it, as " misteries " (French : 
 metiers), which had precisely the same meaning. The 
 " craft " or " mistery "of " cappers," or makers of caps, 
 for instance, in fourteenth century speech, meant not 
 only the skill of the cappers, but also and more im- 
 mediately the group of cappers themselves, looked 
 upon as a body possessing certain common rights 
 and responsibilities, and capable of acting together. 
 
 As the fifteenth century went on, these bodies came 
 more and more to be designated by the term that 
 has clung to them ever since in London, viz. "com- 
 panies." Some of them, like the companies of 
 weavers in several towns, were, it is true, of very 
 early origin, and dated from as far back as the first 
 half of the twelfth century. These early craft bodies 
 
 28
 
 The Gild System 
 
 had been actually known originally as "gilds," and kept 
 the word as part of their official and formal title. 
 But by the fifteenth century the word itself, as applied 
 to craft companies, had passed out of popular use ; 
 and in the sixteenth it was applied, almost if not 
 quite exclusively, to religious fraternities. 
 
 The controversy which has raged, and has not yet 
 come to an end, as to the origin of the gild system, 
 refers almost entirely to the earlier craft "gilds," 
 actually so called. Their influence on the subsequent 
 development has, I cannot help thinking, been some- 
 what exaggerated. By any one who looks dispas- 
 sionately at the evidence of the fourteenth century, 
 the appearance and universal extension of the craft 
 organisation is seen to issue spontaneously out of the 
 conditions of the time, and to require no explanation 
 from earlier and obscurer periods. The gild system 
 of the fourteenth and fifteenth centuries, speaking 
 broadly and generally, was no result of a sudden 
 uprising, of a class-conscious effort on the part of the 
 craftsmen to secure autonomy, or even of a selfish 
 striving after the gains of monopoly ; it was the 
 gradual and almost unconscious result of the coales- 
 cence of two groups of forces — forces from below, 
 tending towards association and union, and forces 
 from above, especially the pressure of the municipal 
 government, tending towards corporate responsibility. 
 Both these forces need some further explanation. 
 
 It was the universal practice for the men of each 
 particular occupation in mediaeval towns to live close 
 together in the same quarter, practically monopolising 
 particular streets and localities ; this is sufficiently indi- 
 
 29
 
 Economic Organisation 
 
 cated by the street names of our older towns. They 
 therefore naturally attended the same parish churches. 
 And just as rich individuals created endowments to 
 provide for religious ^services on the anniversaries of 
 their deaths, endowments known as " chantries," so it 
 became the practice for the men of particular crafts, 
 accustomed to stand or kneel in the same corner of 
 their churches, to form " brotherhoods " or " frater- 
 nities " to provide for services on the occasion of the 
 death of one of their number, or for the commemo- 
 ration of all their departed on the festival of their 
 patron saint. Such fraternities were simply religious 
 clubs, and may be briefly described as " co-operative 
 chantries" : in essence they were just like the nume- 
 rous other religious brotherhoods formed by their side 
 by other groups of men not all belonging to the same 
 craft. It is easy to understand how a religious frater- 
 nity, when composed of most of the men of the town 
 following a particular trade, would come to interest 
 itself in purely trade affairs. It is not impossible that in 
 some instances the fraternity was, from the first, a con- 
 scious veil for trade purposes ; but the main explanation 
 of the fraternities within the crafts is to be found in the 
 religious usages of the age and in local propinquity. 
 
 In an age which laid so much stress on the religious 
 duty of almsgiving, these religious clubs would natu- 
 rally assist their members in distress. Moreover, when 
 the practice grew up of performing pageants or re- 
 ligious plays in the streets of the towns on certain 
 great festivals of the Church, the craftsmen would, of 
 course, desire to take a part. It became usual for 
 the men of each craft to charge themselves, year after 
 
 30
 
 The Gild System 
 
 year, with the performance of part of the sacred story ; 
 if possible of that particular episode which was most 
 akin to their own daily occupation. Thus the vintners 
 would present the Marriage at Cana, the chandlers the 
 Star in the East, and the shipwrights the Building of 
 the Ark. Some of the " mistery plays," as they came 
 to be called from being performed by misteries or 
 crafts, have come down to us, such as those of York 
 and Chester and Coventry. They are among the 
 sources of the drama which flowered so rapidly under 
 Elizabeth. And the long lists of the plays show how 
 numerous were the occupations carried on in every 
 town of any size. 
 
 But while these religious and social impulses 
 were spontaneously drawing the several groups of 
 craftsmen together, they were being made conscious 
 of their community of interests in another and very 
 different way. There was a strong public opinion 
 in favour of protecting purchasers against fraudulent 
 or defective workmanship. Occasionally, though 
 perhaps not frequently, the men of a particular 
 trade, finding that their craft was " badly put in slan- 
 der," as it was said, by the roguery and falsehood of 
 its members, themselves went to the town magistrates 
 and asked for the appointment of authorised "over- 
 seers " or " assayers." But whether the men of the 
 several misteries were desirous of regulation or no, 
 the municipal authorities came to insist with more 
 and more emphasis that there should be an adequate 
 supervision, or, as it was then called, a "view," of 
 every craft, in order to detect and punish " false " 
 work. Accordingly we find group after group of 
 
 31
 
 Economic Organisation 
 
 workmen admonished by the municipal authorities to 
 choose from among themselves persons who should 
 be responsible for the work and behaviour of their 
 fellows. From time to time general directions were 
 issued to the same effect, as in the following London 
 ordinance : — 
 
 " It is ordained that all the misteries of the City of 
 London shall be lawfully regulated and governed, each 
 according to its nature in due manner, that so no 
 knavery, false workmanship, or deceit shall be found 
 in the said misteries, for the honour of the good folk 
 of the said misteries and for the common profit of the 
 people. And in each mistery there shall be chosen and 
 sworn four or six, or more or less, according as the 
 mistery shall need ; which persons, so chosen and 
 sworn, shall have full power from the Mayor well and 
 lawfully to do and to perform the same." 
 
 Being obliged in this way to come together and elect 
 overseers or wardens, the crafts took the opportunity to 
 draw up rules for the government of the trade. These 
 rules were at first of the most modest character, and 
 did little more than prescribe certain simple standards 
 of honest workmanship. But they soon went on to 
 regulate apprenticeship and admission to the trade. 
 The " Articles," " Ordinances," or " Points " were 
 then presented to the Mayor and Alderman for confir- 
 mation and enrolled in the municipal registers. The 
 edifice was completed in the fifteenth century and 
 subsequently by the acquisition of charters from the 
 crown, definitely "incorporating" the bodies which 
 had thus gradually and almost insensibly constituted 
 themselves. 
 
 32
 
 The Gild System 
 
 The history of the several trades shows very con- 
 siderable divergencies between one craft and another, 
 and between one town and another, and the separate 
 institutional elements are hard to disentangle. In 
 some cases, the craft, as such, provided for religious 
 services and for the relief of sick or impoverished 
 members. In other and more numerous instances, 
 we can clearly trace the separate organisation of a 
 religious fraternity within the industrial group, but 
 apart from the trade machinery. But, in every case, 
 both spontaneous tendencies towards religious and 
 social co-operation and compulsory regulation by the 
 municipalities contributed towards the creation of a 
 sense of craft solidarity. And the result, by the middle 
 of the fifteenth century, was a substantial uniformity 
 both in craft organisation in all English towns, and in 
 the municipal constitution which rested upon it. This 
 uniformity, like the uniformity of the manorial system, 
 extended to the whole of western Europe. The craft 
 societies of London, Paris, Nuremberg, and Florence 
 were fundamentally alike in form and functions ; and 
 the same is true, with necessary qualifications, of the 
 smaller urban centres. The more backward countries 
 of the north and east did, indeed, imitate their wealthier 
 neighbours — Scotland following England, and Poland 
 and eastern Germany following the Rhineland. But I 
 do not know that there was much direct copying among 
 the peoples of western Europe, nor do we need it to 
 account for the facts. Apparently the same institutions 
 everywhere grew up in much the same way, owing to 
 the operation of the same causes. These causes were 
 the uniform intellectual, social, and economic condi- 
 
 33 c
 
 Economic Organisation 
 
 tions. Everywhere industry could only secure shelter 
 and could only create a market in the towns ; every- 
 where natural gregariousness drew the men of each 
 craft together ; everywhere public opinion demanded 
 supervision and regulation ; everywhere production 
 was on a small scale ; everywhere it was carried on 
 in small workshops, by from one to four persons, 
 without the aid of machinery ; everywhere skill and 
 reputation were more important than capital. The 
 gild system would seem, indeed, to be a neces- 
 sary stage in the development of industry ; and 
 the Chinese gilds of to-day show the ideas and 
 machinery of the gilds of mediaeval Europe still 
 actively at work. 
 
 Much labour has been spent, and profitably spent, 
 on the attempt to distinguish between stages in in- 
 dustrial evolution. I say profitably, because one of the 
 best ways to penetrate into the essential characteristics 
 of a particular state of affairs is to have some other 
 state of affairs with which to compare it. We must 
 take care not to allow our classification to become too 
 rigid ; but that ought not to be difficult. Allowance 
 must be made for the possibility, and indeed the pro- 
 bability, of transitional and intermediate arrangements. 
 And of course we must not suppose that every country, 
 or even every occupation, must necessarily pass through 
 all the several stages. New countries, like our own 
 colonies, will naturally begin at the stage reached 
 already in old countries, if the necessary conditions 
 are present ; and new industries, as we shall see later, 
 like the cotton industry, will begin their career with 
 the organisation which the contemporary but older 
 
 34
 
 Stages of Industrial Evolution 
 
 industries have reached only after long centuries of 
 development. 
 
 With these cautions we may roughly distinguish four 
 stages in the history of industry during mediaeval and 
 modern times. It will be wiser for the present to leave 
 the ancient world out of account. 
 
 First, there is that stage of affairs when there is no 
 ■separate body of professional craftsmen at all ; where 
 all that can be called " industry," as distinguished from 
 agriculture, is carried on within the household group, 
 for the satisfaction of its own needs, by persons whose 
 main business is the cultivation of the land or the care 
 of flocks. The main activities of all except the fighting 
 class are still in this stage preponderatingly agricultural; 
 but the cultivators of the soil make their own clothes 
 and furniture and utensils, and there is practically no 
 outside " market " for their manufactures. It repre- 
 sents a long step in evolution when professional crafts- 
 men come into existence : men who, though they may 
 have small holdings of land which they cultivate, and 
 may indeed receive their remuneration in the shape, to 
 some extent, of these holdings, are yet primarily crafts- 
 men — primarily, for instance, weavers or smiths. Such 
 a specialisation alike of agriculture and industry affords 
 one of the earliest and most striking examples of 
 division of labour, and it brings with it some of the 
 advantages which Adam Smith sets forth in his cele- 
 brated chapter. Production in this stage is still on a 
 small scale ; it takes place either at the customer's 
 home or in a small workshop or room or shed within 
 or adjoining the craftsman's own dwelling : and there 
 is no intermediary between producer and customer. 
 
 35
 
 Economic Organisation 
 
 The producer either works on the customer's own 
 materials ; or, if he buys his own material and has not 
 only " labour " but a " commodity " to sell, he deals 
 directly with a small neighbouring circle of patrons. 
 There is a " market " in the modern business or econo- 
 mic sense, but it is a small and near one, and the pro- 
 ducer is in direct touch with it ; though, indeed, it may 
 sometimes consist not of the ultimate consuming public, 
 but of fellow artisans in some other mistery. The next 
 stage is marked by the advent of various kinds of com- 
 mercial middlemen, who act as intermediaries between 
 the actual makers in their small domestic workshops 
 and the final purchasers : the widening of the market 
 being both the cause and the result of their appearance. 
 And, finally, with the advent of costly machinery and 
 production on a large scale, we have the condition 
 of things to which we are accustomed in our modern 
 factories and works, where the owners or controllers 
 of capital not only find the market, but organise and 
 regulate the actual processes of manufacture. To these 
 several stages it is difficult to give brief designations 
 which shall not be misleading. It is common to speak 
 of them as (i) the family or household system, (2) the 
 gild or handicraft system, (3) the domestic system or 
 house industry, and (4) the factory system. But we 
 can dispense with labels if we can remember the 
 essential traits. Of the third and fourth we shall have 
 much to say at a later point. For the present we 
 have to do with the second, where there is a separate 
 industrial class and a market or group of customers, 
 though but a limited and local one. " Gild system " 
 will indicate it accurately enough if we bear in mind 
 
 36
 
 Stages of Industrial Evolution 
 
 that the gild was merely the form of organisation that 
 was bound to be assumed under the conditions of the 
 time, as soon as there came to be a number of pro- 
 fessional craftsmen and these craftsmen were prac- 
 tically all collected in the towns. 
 
 Let us look now more closely into the company 
 organisation. The craft company was not simply an 
 association among men of a town engaged in a parti- 
 cular occupation ; it was the association, in idea and 
 approximately in fact, of all the men so engaged. That 
 means that, as soon as the company was solidly estab- 
 lished, no man who did not belong to it could carry 
 on the trade in the borough. Compulsoi-y member- 
 ship was the necessary consequence not merely of 
 self-interest but also of the public duties which were im- 
 posed upon the group ; the representatives of the several 
 trades could only be expected to be responsible for the 
 good behaviour of those who had placed themselves 
 under their authority. Compulsory membership is the 
 same thing as monopoly. But — as this way of putting 
 it implies — the character of such a monopoly depends 
 on the ease or difficulty with which competent persons 
 can secure admission. Undoubtedly in later centuries 
 the craft companies used their privileges in the worst 
 sense of monopoly. We all know, for instance, how 
 in the middle of the eighteenth century James Watt was 
 prevented by the Corporation of Hammermen from 
 establishing himself as an instrument-maker within the 
 town of Glasgow, and found refuge in the precincts of 
 the University. But it does not seem that in the 
 earlier periods of their history the craft companies 
 were exclusive in any markedly harmful sense. Quite 
 
 37
 
 Economic Organisation 
 
 early, indeed, they may have put obstacles in the way 
 of men entering the occupation who came from other 
 towns as adult craftsmen. But then in those periods 
 there was, in fact, very little desire to move from one 
 town to another. 
 
 Within the ranks of those occupied in the several 
 industries there grew up in England, as elsewhere in 
 western Europe, a sharp division into three orders. 
 There were first the " masters," i.e. the full members 
 of the society, who were authorised to set up shop 
 on their own account. These were not necessarily 
 masters in the modern sense, i.e. employers, since very 
 many of them worked by themselves and employed 
 no one. There were the " apprentices " (French : 
 apprentis) ; boys and young men who were learning 
 their trade, and whose term of service came to be 
 generally fixed at seven years, in accordance with 
 "the custom of London." This institution of a 
 uniform and relatively long period of apprenticeship 
 for all trades seems to be characteristic of England ; 
 certainly it was not found in France. And then there 
 were the "journeymen," i.e. men paid by the day 
 (French : Journee), and not, like the apprentice, bound 
 for a long period of indenture. Gradually the rule 
 grew up that even to work as journeyman a man 
 must have served a seven years' apprenticeship. It is 
 the less necessary to dwell upon these distinctions, 
 because the terms apprentice and joiirneynian, and the 
 ideas associated with them, have survived in some 
 occupations and places down to our own time, in spite 
 of profound changes in the general situation. But it 
 is perhaps well to make it quite clear that in none of 
 
 38
 
 Stages of Industrial Evolution 
 
 the mediaeval craft companies was there anything in 
 the nature of a joint-stock or any associated trading on 
 the part of the craft as a body. The nearest approach 
 to it was the rule in some crafts that opportunities of 
 buying material on advantageous terms were to be 
 shared by all the members who cared to benefit by 
 them. With this exception, the several masters were 
 left free to carry on their trade each on his own 
 stock and responsibility and for his individual profit : 
 the gild authority •' regulated " — to use a term promi^ 
 nent in a later age^individual enterprise, and did not 
 replace it. 
 
 In the midst of the labour troubles of the nineteenth 
 century there have been many who have looked back 
 with regret to the gild system of the Middle Ages and 
 have dreamt of its restoration. The gild system, as 
 we shall learn later, was half destroyed in the six- 
 teenth century by the advent of capital and the 
 extension of the market, and its ruin was completed 
 in the eighteenth by the introduction of machinery 
 and, with it, of the factory system. Its restoration 
 was economically impossible. Not only was this so : 
 the admirers of the past have undoubtedly viewed the 
 mediasval handicrafts in much too romantic, and even 
 sentimental, a spirit. There was a good deal more 
 selfishness about than is commonly allowed for, and 
 more friction between the immediate interests of 
 various classes; and occupations. Yet no one can 
 turn over the gild records from the fourteenth to the 
 sixteenth centuries without seeing that a fair ideal did 
 float in a vague sort of way before the more reflecting 
 men of the time. This ideal we may sum up as the 
 
 39
 
 Economic Organisation 
 
 maintenance of just and reasonable conditions of pro- 
 duction and sale, in the interests alike of producers 
 and consumers. The master craftsman combined, in 
 many trades, the functions of the manufacturer with 
 those of the merchant ; or, if " merchant " be too fine 
 a term, of the manufacturer with those of the dealer 
 or shopkeeper. He bought his own materials, and his 
 apprentice offered for sale to the public as they passed 
 by in the street the goods made inside the shop, 
 as Sir Walter Scott depicts in The Fortunes of Nigel. 
 Of course there were some trades where, from the 
 nature of the case, this was impossible, e.g. the build- 
 ing trades. The master craftsman, again, usually com- 
 bined the functions of employer and skilled workman : 
 when he employed apprentices or journeymen or 
 both, he commonly worked by their side on the finer 
 parts of the job, when not engaged with a customer. 
 What the public desired, above everything else, 
 was that the wares should be of good or standard 
 quality. This was the main purpose of the whole 
 system of regulation by gild wardens and town autho- 
 rities. And many of the regulations which remind 
 us of our modern humanitarian factory legislation, 
 such as the prohibition of working at night, were 
 designed, not in the interests primarily of the worker, 
 but in the interest of the public ; in order, that is, 
 to facilitate the necessary supervision or to prevent 
 a public nuisance. It does not seem that regulation 
 extended, as a rule, to the determination of prices; 
 but it was a fundamental article in the moral teaching 
 of the church of the time, and in the opinion of the 
 governing classes in the towns, that for every article 
 
 40
 
 Stages of Industrial Evolution 
 
 there was a "just price," which ought neither to be 
 fallen short of nor exceeded. And when there seemed 
 to be need, as in the case of the bakers and innkeepers 
 and vintners, to protect the public, the public authority 
 did not hesitate to step in and enact a scale of prices 
 not to be exceeded except under severe penalty. 
 
 As to entry into the trade : we must bear in mind 
 that, throughout the Middle Ages, population was only 
 very slowly expanding. So long as the industrial 
 workers increased only in the same proportion as the 
 general population, and did not outstrip the purchas- 
 ing power of the community, the average apprentice 
 might expect, as a general thing, after he had served 
 his articles and had worked for a few years as a 
 journeyman, to be able to set up for himself and 
 to earn the kind of livelihood that was commonly 
 felt to be appropriate to his class. Meanwhile the 
 ^ relations between employer and employed, within the 
 small shops, were of a family or patriarchal character. 
 We cannot say that there was in fact any complete 
 and universal practice of fixing journeymen's wages 
 by regulations of the gild or of the municipality. But 
 that was simply because it was not found to be 
 necessary. The principle, however, that wages should 
 be just or reasonable — the belief that for each kind 
 of labour there was some just or appropriate remu- 
 neration which could be ascertained, and, if need be, 
 enforced — was as universally held as the principle 
 of "just price," of which, indeed, it was but a part. 
 And the craft authorities, with the approval of the 
 municipalities, or the municipality alone when the 
 craft was slow to act, did, as a matter of fact, inter- 
 
 41
 
 Economic Organisation 
 
 vene and regulate the wages of journeymen in a good 
 many particular instances. 
 
 Can we say that there already existed a "labour 
 question " ? That depends altogether on what we 
 mean by "labour question." If we mean the problem 
 how best to adjust the relations between a large num- 
 ber of persons who have only their labour to offer 
 and a relatively small number of persons who employ 
 them, in circumstances in which the successful carry- 
 ing-on of production involves the presence of con- 
 siderable quantities of capital of which the employers 
 alone have the control — if that is what we mean by 
 labour question, then, speaking broadly and generally, 
 we may say it did not exist in the Middle Ages. But 
 obviously in another sense it did exist, or existed in 
 germ ; for there must be a labour question, in a sense, 
 as soon as one person comes to be employed by another. 
 And in that sense, we may say that the gild system, so 
 far and so long as it was true to its ideals, "solved 
 the labour question." 
 
 But if, after stating these ideals, we turn to the actual 
 history, and expect to find some well-marked epoch 
 during which they were effectively realised, we are 
 likely to meet with disappointment. The gild organisa- 
 tion itself was of slow and irregular formation. It was 
 a long time before the necessity of apprenticeship, the 
 sharp distinction between apprentice and journeyman, 
 the regular election of wardens and the systematic 
 supervision of processes, took quite clear and definite 
 shape. And almost as soon as they did so, the little 
 groups of masters began to show an inclination towards 
 monopoly, and friction began to arise between them 
 
 42
 
 Stages of Industrial Evolution 
 
 and the journeymen. Hardly, we are inclined to say, 
 has the gild system been perfected before it begins to 
 break down. It is perhaps more accurate to say that 
 the gild ideals were in constant process of realisation 
 and decay throughout the fourteenth, fifteenth, six- 
 teenth, and even seventeenth centuries. And that is 
 because of the width and variety of the field of their 
 operation. New industries were growing, old indus- 
 tries decaying, and the smaller towns were constantly 
 catching up with the larger ones and repeating their 
 experience. Hence the spirit of monopoly might very 
 well make its appearance in some gilds long before 
 there was anything seriously at fault in others. In this 
 sense, therefore — as a policy which, for varying, periods 
 in varying trades and varying towns, did actually 
 succeed, to a large degree, in controlling industrial 
 activity to the general satisfaction alike of the general 
 public and of " the workers " — we may fairly say that 
 the gild ideal was actually realised. 
 
 43
 
 LECTURE III 
 
 The Beginnings of Modern Farming : the 
 Break-up of the Manor 
 
 We must now return to the condition of the agricul- 
 tural population. It must be carefully borne in mind 
 that, interesting as is the early development of manu- 
 factures and trade, England continued, until well into 
 the eighteenth century, to be mainly an agricultural 
 country ; and the fortunes of its peasant cultivators 
 form, until quite recent times, the centre of its econo- 
 mic history. We must concentrate our attention on 
 the changes in the position of the yardlings and cottars, 
 who constituted the bulk of the rural population. What 
 we shall say will apply primarily to central and southern 
 England ; of the eastern counties and the western it 
 will be true only with modifications. 
 
 The conditions under which most of the land was 
 held by its peasant cultivators were, as we have seen, 
 determined not by definite contract or bargain but by 
 custom. They held indeed " in villeinage " or " in 
 bondage," as the manorial records put it, but "according 
 to the custom of the manor " ; and while lawyers were 
 perplexing themselves with the theory of their status, 
 the essence of the real position of affairs is indicated by 
 the introduction and spread of the term " customaries " 
 or " customary tenants " as their everyday designation. 
 
 44
 
 Beginnings of Modern Farming 
 
 Now mediasval " custom " is rather a deceptive thing : 
 it is difficult to give it enough weight in our thoughts 
 without giving it too much weight. On the one side 
 there was certainly a strong and constant tendency to 
 get into a groove ; on the other hand changes were in 
 actual fact made from time to time ; and when once 
 made, the new arrangement tended, in a curiously short 
 time, to be itself regarded as of immemorial antiquity. 
 And so we find that, though custom and habit were con- 
 tinually operating to keep things as they were, changes 
 did take place — at first sporadically and slowly, and 
 then generally and quickly — which profoundly modi- 
 fied the whole situation. For, by about the middle of 
 the fifteenth century, that vitally important feature of the 
 manorial system, the services of the customary tenants 
 for the cultivation of the lord's demesne, had almost 
 entirely passed away, and their place had been taken 
 by money payments. 
 
 This is the largest and most widespreading and most 
 significant example of the transition which has been 
 conveniently expressed in German as a movement 
 from N atiiralwirthschaft to Gcldwirthschaft. For this 
 antithesis we have no satisfactory translation, for 
 " natural economy " and " money economy " can 
 hardly be called English ; we can only more clumsily 
 speak of a transition from a condition of things in 
 which economic relations take the form of services 
 and payments in kind to one in which they take 
 the form of payments in money. But however we 
 formulate it, the transition was of the utmost im- 
 portance in the history of mankind. For it not only 
 brought about, as we shall see in a moment, an 
 
 45
 
 Economic Organisation 
 
 improvement in production ; it prepared the way for 
 the complete break-up of the old organisation. The 
 use of a currency may indeed go on side by side for a 
 long time with the dominance of custom : the force of 
 usage may be so strong as to prevent, for an indefinite 
 period, any modification of prices and wages which 
 have once been arranged : but the inherent tendency 
 of the use of a currency is to weaken custom. For it 
 suggests valuation, in a way that the customary render 
 of commodities or labour will never do. It prompts the 
 inquiry whether a satisfactory value is being given or 
 obtained ; and accordingly it strengthens any disposi- 
 tion to change there may happen to be on either side 
 of a connection. 
 
 The process of " commutation " of services for money 
 is worthy of careful study, in relation both to its con- 
 ditions and to its motives. The conditions were, first, 
 that the manorial lord and manorial tenants should be 
 familiarised with the idea of money payments. This 
 was brought about by the extension of trade — first in 
 the great fairs and in the towns, and then in the 
 markets which sprang up during this period in every 
 substantial village. It is significant that the earliest 
 account rolls, drawn up by the bailiffs in charge of 
 the demesnes, date from the middle of the thirteenth 
 century. They show that the selhng of produce and the 
 hire of labour to supplement the villein services were 
 becoming ordinary parts of a bailiff's work. Secondly, 
 it required the actual existence of a sufficient and suit- 
 able metallic currency ; such as was furnished by the 
 issues and mint reforms of Henry III, Edward I, and 
 Edward III. Thirdly, it needed a power on the part of 
 
 46
 
 Beginnings of Modern Farming 
 
 the customary tenants to obtain some surplus produce 
 from their fields over and above what was necessary 
 for their own subsistence, which they could take for 
 sale somewhere so as to obtain the coins to be offered 
 to their lords. Fourthly, it involved the presence of a 
 demand for this surplus produce, such as the towns 
 were coming to furnish as their population grew beyond 
 the resources of the fields just outside their own walls. 
 The commutation of peasant dues for money is only 
 explicable as the reflex result of a contemporary growth 
 of industry and commerce. And, accordingly, it took 
 place early in precisely those parts of western Europe 
 where trade and town life first flourished. That it 
 should take place early in England was due in the last 
 resort to the causes which brought about an early 
 growth of trade — not very considerable, perhaps, when 
 compared with the Rhineland or the Netherlands or 
 northern Italy, but considerable in comparison with 
 central or eastern Europe. Among these causes are to 
 be reckoned not only the physical advantages possessed 
 by England, such as the abundance of harbours and 
 navigable rivers, but even more the peace and order 
 secured by the strong government of the Norman and 
 Angevin kings. 
 
 So much, then, for the conditions or prerequisites of 
 commutation. Now for its motives. Why did people 
 want to pay money or to receive money instead of 
 services ? Much light is thrown on this problem by 
 what happened in times much nearer our own in 
 other parts of Europe. Labour services, precisely 
 similar to those we have observed in England in the 
 thirteenth century, continued to be rendered over a 
 
 47
 
 Economic Organisation 
 
 large part of eastern Germany down to the later years 
 of the eighteenth century, and in Poland, Hungary, and 
 Russia down to the middle of the nineteenth. The 
 effects of compulsory service (Frohnden) were ob- 
 served and commented on by many an agricultural 
 expert of the time. The opinion of all of them was 
 that it exercised the worst possible influence upon 
 production. This was most clearly evident in modern 
 times to the landlords. A peasant who was called off 
 from his own holding to work upon demesne land, in 
 the produce of which he was not to share, was " natur- 
 ally," said intelligent observers, a "reluctant labourer." 
 " When long prescription has engendered a feeling that 
 he is a co-proprietor, at least in the spot of land which 
 he occupies, the reluctance to be called from the care 
 of it to perform the task of forced work elsewhere is 
 heightened by a vague sense of oppression, and he 
 becomes dogged and sullen." It was alleged, with per- 
 haps a certain exaggeration, that "in Austria in the 
 eighteenth century the labour of a serf was equal to 
 only one-third that of a free hired labourer." And 
 though things were not so bad on the peasant's own 
 holding, since there he had the stimulus of self-interest, 
 the prior claim of the lord on two or three days of 
 every week, and an additional claim just at those 
 seasons, such as harvest time, when the tenant would 
 be most anxious to get in his own crop, must have had 
 a very depressing effect. It should, indeed, be remarked 
 that the obligation did not always rest upon the tenant 
 personally : his duty in England, at any rate in the 
 fourteenth century, was defined, not as that of appearing 
 himself, but as that of " finding a man to labour." Still, 
 
 48
 
 Beginnings of Modern Farming 
 
 a great many peasants were probably so circumstanced 
 that they had to furnish the labour with their own arms ; 
 and in any case the obligation would be an irksome 
 and irritating one. 
 
 Such were the conditions and motives of commuta- 
 tion of labour obligations for money payments. And 
 this commutation we can trace in England from its 
 early and slow beginnings in the thirteenth century, 
 through all its stages — " from the stage," as Maitland 
 has put it, " in which the lord is beginning to take a 
 penny or a halfpenny instead of each (day's) ' work ' that 
 in that particular year he does not happen to want, 
 through the stage in which he habitually takes each year 
 the same sum in respect of the same number of works, 
 but has expressly reserved to himself the power of ex- 
 acting the works in kind whenever he chooses, to the 
 ultimate stage in which there is a distinct understanding 
 that the tenant is to pay (a round sum as) rent instead 
 of doing work." Or rather, I would add, to the final 
 stage when not only the week work but the extra services 
 or " boons " in harvest times and other busy seasons — 
 which were long retained after the week work had been 
 parted with — are all ultimately exchanged for cash. 
 
 Commutation was frequent but not general when 
 the great Plague devastated the country in 1349, and 
 returned, though with less virulence, in 1361 and 
 1369. In 1 38 1 took place the Peasants' Revolt. The 
 connection between Plague and Revolt is frequently 
 misunderstood. A conjecture of Thorold Rogers in 
 his earlier works became a confident assertion in 
 his later, and was made the basis of William Morris' 
 Dream of John Ball, It was to the effect that, com- 
 
 49 D
 
 Economic Organisation 
 
 mutation having taken place, over the country generally, 
 a generation or so before, and the Black Death having 
 brought about a rise of wages, so that the commutation 
 payments no longer purchased anything like the same 
 amount of free labour, the lords of land sought to 
 compel their tenants to return to labour rents, and 
 thereby awakened an indignation which ultimately 
 broke out in revolt. The revolt, in this view, was the 
 reply of the tenants to an attempt of the lords of land 
 to reverse the process of agrarian development. But 
 for this view there is no evidence ; and, besides, it 
 implies that commutation had taken place on a much 
 larger scale than we now know to have been the case. 
 What happened was rather this. The Great Mortality 
 made the tenants more conscious than before of the 
 value to the lords of their services. Where — as was the 
 usual case — the services had not yet been commuted for 
 money, if the lord could not retain his tenants and their 
 works he could not get his demesne cultivated at all. 
 Made aware that they were indispensable, they began 
 to press for the relaxation of their labour dues, or for 
 the complete substitution for them of small round 
 sums of money. But to such demands the landlords 
 did not feel themselves in a position to accede. Free 
 hired labour, as a result of the Black Death and the 
 consequent dearth of available hands, had permanently 
 risen in price some fifty per cent. This was in spite 
 of the Proclamation which had been issued by the 
 government directly after the Mortality and of the 
 Statute passed in the next year, making it an offence to 
 pay or demand more than the previously accustomed 
 wage, and of the elaborate machinery of local "justices 
 
 50
 
 Beginnings of Modern Farming 
 
 of labourers " which was called into existence to enforce 
 the statute. The lords were likely, on the contrary, to. 
 cling only the more firmly to any labour still custom- 
 ably due ; and where commutation was still recent, 
 and the lord had expressly - reserved to himself the 
 option of labour, — which, as we have seen, was some- 
 times the case, — he would doubtless exercise it. And 
 in their need for cash the lords would certainly use 
 any decent opportunity that presented itself for getting 
 ready money. Such an opportunity was given them 
 by the manorial courts in which the tenants were 
 bound to appear, and in which they could be fined 
 for real or supposed breaches of duty. Under these 
 circumstances the tenant peasants became more and 
 more restive. This was the more natural because the 
 doctrine of human equality was in the air. Popular 
 preachers, chiefly of the Franciscan and Dominican 
 orders, were going about asking : 
 
 "When Adam dalf and Eve span 
 Who was then the gentleman ? " 
 
 Among such popular orators are certainly to be 
 included Wyclif's "poor preachers." These were 
 likely enough to make a very rough and ready use of 
 their master's famous doctrine of " Dominion founded 
 on Grace." All dominion or lordship, said Wyclif — 
 and that included the authority of a manorial lord 
 — was granted by God in return for service to Himself — 
 that service which was involved in being in a state of 
 grace. It was easy for the hearers of Wyclif's popular 
 preachers to draw the conclusion that lords of land 
 who refused to grant their demands could hardly be 
 
 5^
 
 Economic Organisation 
 
 in a state of grace, and that tenants were justified 
 in refusing to carry out their usual obHgations. What- 
 ever the impulse, there is no doubt that a large number 
 of the peasants did " withdraw their services " ; and the 
 coercive measures which followed led to the Revolt. 
 
 The Revolt brought about no sudden change ; but 
 in the years which closed the fourteenth century and 
 during the early decades of the fifteenth, commutation 
 went on much more rapidly than before, and that on 
 terms favourable to the peasants ; since it usually took 
 place at the prices for the several works which had been 
 customary before the Pestilence. And the reason was 
 that, unless they consented to grant favourable terms, 
 the lords could not keep their tenants ; and, if the 
 tenants went away, the lords would be left without 
 either services or rent. The wholesale desertion of a 
 village, at that stage of agrarian history, still involved, 
 as for centuries before, the total destruction of the 
 value of the estate ; and, short of that, every single 
 tenant lost and not replaced diminished its value pro- 
 portionally. The situation was very different from 
 what it came to be a century later. Then, as we shall 
 find, the landlords were often only too glad to get rid 
 of their customary tenants, because it left more scope 
 for the extension of sheep-farming ; and as this was a 
 general movement on the landlords' part, a tenant who 
 lost his holding in one manor was unlikely to find 
 one elsewhere. But now the arrival in a village of 
 a peasant willing to take up land would usually be 
 welcome ; so that a lord knew that, if he lost a tenant, 
 some other lord would be glad enough to shelter him. 
 Moreover, there was often room for newcomers in the 
 
 52
 
 Beginnings of Modern Farming 
 
 growing industries of the towns : we learn of fugitive 
 serfs who became tailors, shoemakers, weavers, and 
 tanners. The outcome of the forces, not initiated but 
 strengthened by the Pestilence, was, therefore, by about 
 the middle of the fifteenth century, the practical dis- 
 appearance, over the larger part of the country, of 
 labour dues, and the substitution of money rents which 
 soon, in their turn, became fixed by custom. This 
 meant a heightened sense of personal dignity and 
 independence on the part of the peasants, and the 
 increased efficiency of all rural labour. And this latter 
 improvement not only meant greater comfort to tenants 
 and cottars ; it furnished, also, the food required by a 
 growing urban population. 
 
 But of almost equal importance was another change 
 that we find taking place. During the last half of the 
 fourteenth century occasionally, and during the fifteenth 
 century with greater frequency, we find it becoming 
 the practice of manorial lords to let their demesnes 
 for a short term of years, together with the rights and 
 perquisites connected therewith, including the peasants' 
 services or rents. Hitherto, so far as any individuals 
 could be said to direct the traditional agriculture of 
 the country, it was the lords of land who did so, 
 personally or through their agents, their stewards and 
 bailiffs. From this task, if it was a task, they begin 
 now to extricate themselves, and the actual conduct 
 of farming operations gradually passes out of their 
 hands. The historical significance of this development 
 was obscured to us until recently by our having 
 forgotten the sharp and clear distinction in the typical 
 manor between the demesne on the one side and the 
 
 53
 
 Economic Organisation 
 
 villein or customaiy land on the other. A fixed pay- 
 ment in lieu of varying receipts or profits was known 
 in the Middle Ages as a " ferm " (Latin : firma) ; and 
 the lessee of a demesne for a term of years was accord- 
 ingly known as a "firmar," "fermor," or "farmer." 
 In the fifteenth or sixteenth century we may say with 
 some confidence that "farmer," when used in an 
 agricultural sense, most commonly meant a person who 
 had taken on lease a demesne or part of a demesne ; 
 it was much later that it was extended to include every 
 person in charge, on his own account, of an agri- 
 cultural holding. Now, as we have already said, the 
 characteristic of English agriculture in recent centuries 
 has been the position of the capitalist farmer — the man 
 cultivating as tenant a relatively large holding and 
 himself supplying at least that part of agricultural 
 capital that is necessary for the ownership of the stock 
 and farming implements and for the payment of his 
 labourers. In the farmers of the demesnes in the 
 fourteenth, fifteenth, and sixteenth centuries we find 
 one of the chief historical sources of the modern 
 farmer class. But they differed at first from modern 
 farmers in that they did not possess anything like so 
 much capital. And the reason was that they were often 
 men who had themselves acted as bailiff or reeve of the 
 manor. Now that, with the increase of wages, the culti- 
 vation of the demesne had become much less profitable, 
 it might naturally seem that a man on the spot, who 
 had the incentive of personal interest and a minute 
 knowledge of the capacities of the land, could make 
 more out of it. Some such enterprising reeves might be 
 relatively well-to-do : the reeve described by Chaucer 
 
 54
 
 Beginnings of Modern Farming 
 
 was a better business man than his lord, had quickly 
 put together a Httle capital (" ful riche he was a-stored 
 pryvely ! "), and knew how to get his lord's thanks by 
 lending him what was really his own. But few such 
 men could at once find the stock required for so large 
 a holding as a whole demesne ; and it was the most 
 natural thing in the world that at first the lord's stock 
 on the demesne should be let with the land itself and ^ 
 the other appurtenances. Such an arrangement seems 
 to have gone on and the lease been renewed from time 
 to time for about half a century after the plan had been 
 adopted on any particular estate. This suggests that 
 in about fifty years the farmers of the demesne lands 
 usually managed to acquire sufficient capital to buy 
 their own stock. By that time, also, the larger de- 
 mesnes were probably getting broken up into smaller 
 holdings, which would not call for so large a capital. 
 
 It is to Thorold Rogers that we owe our knowledge 
 of this stage in English agrarian evolution. He realised 
 that " farming capital," of which we are accustomed 
 to speak so easily as a thing that explains itself, requires 
 to be historically accounted for ; and he perceived 
 that what he called " land and stock leases " furnished 
 the earliest opportunities for its creation. But his 
 comparison of such a lease with the metayer system 
 of the Continent has proved misleading. With that 
 system the only feature it had in common was the 
 provision of stock by the landlord ; and under the 
 metayer plan even that was neither universal nor 
 uniform. The "farmer" of the English Middle Ages 
 contracted for a fixed money rent ; the essential feature 
 of metayer tenancy is the payment to the landlord 
 
 55
 
 Economic Organisation 
 
 of an agreed or customary proportion of the produce, 
 commonly a half (whence, indeed, the name). More- 
 over, the Enghsh "farmer's" holding was from the 
 first comparatively large ; that of the metayer has 
 almost universally been small. The former, in fact, 
 replaced the lord on the demesne ; the latter developed 
 out of (or occupied the place of) the small, villein, 
 tenant. And close as may seem the connection be- 
 tween giving the landlord half of the serf's produce 
 and giving half of the serf's working week (whichever 
 may be the earlier), I know of no evidence for a 
 metayer stage in this country. 
 
 In the second half of the fifteenth century began a 
 movement altogether different from anything that had 
 been seen before. Since the advent of skilled weavers 
 from the Low Countries in the reign of Edward III, 
 England had ceased to be dependent upon the Con- 
 tinent for its supply of the better sorts of woollen 
 cloth, and the manufacture had begun to grow with 
 rapidity. This caused a more widespread demand 
 for wool ; and as hired labour continued to be dear, 
 and pasture farming required far fewer hands than 
 tillage, a movement began in the direction of sheep- 
 farming, which soon went far to change the face of the 
 country. For the keeping of sheep involved the fencing 
 of the lands on which they were turned out to feed ; 
 and as those lands, whether tilled fields or pastures, had 
 hitherto lain open, the process became known as " en- 
 closure." In some counties there was plenty of stone 
 at hand wherewith to build walls ; but in the centre 
 and south of the country no stone was easily obtain- 
 able, and the enclosures took the form of hedges. And 
 
 56
 
 Break-Up of the Manor 
 
 it was then that rural England began to acquire its 
 present aspect. 
 
 Now the introduction of sheep might be the work of 
 several different sets of people — of small freeholders, or 
 even of the larger customary tenants ; but our evidence 
 makes it clear that it was chiefly the work of the manorial 
 lords. Again it might take place on different parts of a 
 manor : if it took place on the common pasture it might 
 possibly hamper the tenants in the enjoyment of their 
 own customary rights, but do no more. But, under 
 the circumstances of the time, it could hardly take place 
 on a large scale without encroaching on the arable fields. 
 These usually stretched for hundreds of acres immedi- 
 ately around every village ; and if they had to be left 
 undisturbed, the remaining available land would often 
 be insufficient and difficult of access. Many of the 
 acres scattered up and down the open fields still in many 
 places belonged to the lord's demesne ; in earlier times, 
 as we have already seen, the bulk or even the whole 
 of the demesne had lain intermixed with the yardlands 
 of the tenants in the open fields. By the middle of 
 the fifteenth century the lords had succeeded, in large 
 measure, in disentangling their demesne from the open 
 fields and getting it together in compact areas. If a 
 lord so placed chose to use his enclosed demesne for 
 sheep rather than for crops, he could please himself 
 and injure none except the cottars whom he no longer 
 needed to employ, or the tenant to whom he may 
 previously have let part of it. But where the demesne 
 still lay in the open fields, the lord could do nothing 
 with separate acre or half-acre strips : to be able to 
 enclose spaces of convenient size he must somehow 
 
 57
 
 Economic Organisation 
 
 get into his hands the adjacent strips of his tenants. 
 For this and other reasons, we find that enclosure 
 very commonly meant, in practice, the disappearance 
 of a number of customary holdings in the open fields. 
 It was now that the process started which I began by 
 saying we should find one of our main subjects of 
 attention in English economic history — viz. the removal 
 from the land of that class of small peasant cultivators 
 which is still so conspicuously attached to it in France 
 and Germany. 
 
 The legal character of the changes in question has 
 been the subject of much discussion, and cannot even 
 yet be said to be satisfactorily determined. My own 
 opinion is that they were greatly facilitated, in the 
 earlier stages of the enclosure movement, by the un- 
 certain state of the law as to customary tenancy. 
 The villeins of the thirteenth century were technically 
 said to hold " at the will of the lord, according to the 
 custom of the manor." In the course of time the 
 second half of the clause had come to be understood 
 as limiting the first half : so long as a tenant per- 
 formed his customary services, the general feeling was 
 that he should not be disturbed. In not a few cases, 
 indeed, it had come to be the practice, when a new 
 tenant was being admitted, to make the grant expressly 
 one "for life." Where that had been done, a lord 
 who wanted to resume such a tenement had but to 
 wait till the occupier died. It was certainly the 
 custom, even when the tenancy was distinctly for life, 
 to admit the son of the last holder ; but evidently 
 in this case no legal claim could be put forward 
 and the custom could be disregarded. Where no 
 
 58
 
 Break-Up of the Manor 
 
 such limitation to a life or lives bad been expressed 
 in the admission of the tenant, the next heir might 
 seem to be safe in his appeal to custom when he 
 sought admission. But the lord had a recognised 
 right to receive a "line," or payment on admittance. 
 It was generally recognised that the fine should be 
 "reasonable." But it was not till far in the reign of 
 Elizabeth that this principle received judicial con- 
 firmation, and still later that the reasonable fine was 
 fixed at twice the rental. It is highly probable that 
 in many cases the lords got holdings back into their 
 hands by the simple plan of demanding an impossible 
 fine. But we can go still further : there is a good deal 
 of evidence that, in the earlier years of the movement, 
 a certain amount of actual eviction took place of 
 sitting tenants. Listen to the account given in his 
 Utopia by Sir Thomas More in 1516. He has been 
 explaining, through the mouth of an imaginary foreign 
 observer, how it was that there were so many thieves 
 in England. After mentioning causes common to 
 England and the Continent, he goes on: "There is 
 another cause which, as I suppose, is peculiar to you 
 Englishmen alone. . . . Your sheep, that were wont 
 to be so meek and tame and so small eaters, be 
 become so great devourers and so wild that they eat 
 up and swallow down the very men themselves. . . . 
 For look in what parts of the realm doth grow the 
 finest and dearest wool, there noblemen and gentlemen, 
 yea and certain abbots . . . leave no ground for 
 tillage ; they enclose all into pastures : they throw 
 down houses, they pluck down towns," i.e. villages, 
 "and leave nothing standing, but only the church to 
 
 59
 
 Economic Organisation 
 
 be made a sheephouse. . . . That one covetous 
 cormorant . . . may compass about and enclose many 
 thousand acres of ground together within one pale 
 or hedge, the husbandmen be thrust out of their own, 
 or else either by covin and fraud or by violent 
 oppression they be put beside it, or by wrongs and 
 injuries they be so wearied that they be compelled 
 to sell all. By one means, therefore, or another, 
 either by hook or crook, they must needs depart 
 away. . . . Away they trudge, I say, out of their 
 known and accustomed houses, finding no place to 
 rest in." We must not suppose, because this de- 
 scription of the England of his own time was prefixed 
 by way of a foil to his account of the happy state of 
 Utopia, that More was a mere literary idealist. He 
 was a trained lawyer and administrator : seven years 
 later he became Speaker of the House of Commons, 
 thirteen years after, Lord Chancellor. The language 
 in the next reign of Bernard Gilpin, the model parish 
 priest, is to a like effect. Speaking of certain landlords, 
 " for turning poor men out of their holds," he says, 
 " they take it for no offence ; but say the land is their 
 own." The same conclusion is forced upon us by 
 the evidence given before Royal Commissioners in 
 1 5 17 of wholesale enclosures here and there : three 
 hundred acres in one place and three hundred in 
 another, with the refrain in each case "and the in- 
 habitants have departed." Nay, in one case, that of 
 Stretton Baskerville in Warwickshire, where "twelve 
 messuages and four cottages" were "decayed," and 
 six hundred and forty acres of land enclosed, " so that 
 eighty persons there inhabiting were constrained to 
 
 60
 
 Break-up of the Manor 
 
 depart thence and live miserably," the clearance seems 
 to have taken place all on one day, which almost a 
 quarter of a century later the people of the district 
 remembered to have been the sixth day of December 
 in the ninth year of Henry the Seventh. 
 
 At a later time, it is true, the " tenant by custom " 
 was protected by the king's courts. Brian, Chief 
 Justice, is reported as saying as early as 148 1 that 
 "his opinion hath always been and ever shall be that 
 if a tenant by custom paying his services be ejected 
 by the lord, he shall have an action of trespass against 
 him" ; and by 1530 this dictum got into the standard 
 legal text-book. It is highly probable, however, that 
 when the enclosure movement began, the national 
 law courts were only just beginning tentatively to re- 
 cognise a right of property in the customary tenant, 
 and that many a man was ejected who, even half a 
 century later, would have had too well recognised a 
 right to his holding to be disturbed. 
 
 At some period not yet quite satisfactorily deter- 
 mined, customary tenants came to be known as " copy- 
 hold " tenants, since they were said to hold by copy 
 of the court roll on which their services were regis- 
 tered. And undoubtedly copyholders have been 
 secure in their holdings from the early part of the 
 seventeenth century. " Now," wrote Sir Edward 
 Coke, the great authority on the common law in the 
 reign of the first Stuart, in a special little treatise on 
 the subject, "copyholders stand upon a sure ground ; 
 now they weigh not their lord's displeasure ; they 
 shake not at every sudden blast of wind ; they eat, 
 drink, and sleep securely ; only having a special care 
 
 61
 
 Economic Organisation 
 
 of the main chance, to perform carefully what duties 
 and services soever their tenure doth exact and custom 
 doth require : then let the lord frown, the copyholder 
 cares not, knowing himself safe and not within any 
 danger. For if the lord's anger grew to expulsion, 
 the law has provided several weapons of remedy ; for 
 it is at his election either to sue a subpoena or an 
 action of trespass against the lord. Time hath dealt 
 very favourably with copyholders in divers respects." 
 Recent investigations have begun to show us how 
 this security was probably established by the action of 
 the royal courts in the fifteenth and sixteenth centuries. 
 But these investigations have also shown us that time 
 and the courts " dealt favourably with copyholders " 
 by a sort of winnowing process. The term "copy- 
 holder" was apparently, for some time, applied very 
 loosely to almost any kind of customary tenant, in- 
 cluding even tenants for life or lives. But it was only 
 "copyholders of inheritance," as the favoured class 
 came to be called — holders of "good and perfect 
 copyhold lands," as another contemporary phrase de- 
 scribed them — who could appeal to the king's courts 
 with any confidence. Some figures recently published 
 go to show that when the courts did begin to bestir 
 themselves, there were about as many manors in which 
 copyholders were understood to have no "estate of 
 inheritance" as there were in which they were more 
 fortunate. 
 
 But whatever the legal character of the change may 
 have been in any particular case, the economic effect 
 was the same. In the language of Lord Chancellor 
 Bacon — looking back on the changes which began 
 
 6?
 
 Break-up of the Manor 
 
 indeed a century before his time, but had continued 
 to be warmly discussed — "arable land was turned 
 into pasture ; and tenancies for years, lives and at 
 will, whereupon much of the yeomanry lived, were 
 turned into demesnes," i.e. were brought into the 
 lord's own possession. 
 
 Loud complaints about enclosures from writers of 
 every class abound in our sixteenth-century literature : 
 they seem to indicate an agrarian revolution ; and we 
 know that they caused the gravest concern to our states- 
 men, and called forth repeated legislative acts and 
 strong assertions of executive authority. To these we 
 shall return. Yet certain recent writers have urged, 
 with a good deal of apparent force, that the transfor- 
 mation actually effected was nothing like as great as 
 has been commonly supposed. Basing their con- 
 clusions upon certain contemporary evidence before 
 royal commissions, they have shown pretty conclusively 
 that in this first period — from, say, 1450 to 1610 — 
 enclosures were confined mainly to the midland 
 group of counties : Leicester, Northampton, Rutland, 
 Warwick, Bedford, Berks, Bucks, Oxford, and Middle- 
 sex. But when they go on to reckon that even in 
 these counties less than one-tenth of the soil was 
 affected, they seem to press their evidence beyond 
 what it will bear, and to forget certain important 
 considerations. My own minimum estimate for the 
 above-named counties would be that about one-fifth 
 of the arable land was affected ; and this was certainly 
 quite enough to occasion considerable alarm. More- 
 over this estimate does not include the demesne land 
 laid down to pasturage ; great distress might be 
 
 63
 
 Economic Organisation 
 
 caused thereby among the cottars who had previously 
 lived chiefly by wages, and now had to abandon their 
 cottages and patches of land and move elsewhere, 
 even though no " yardling " or " half-yardling " families 
 were disturbed in their holdings. 
 
 All the developments we have been following — the 
 transformation of labour-rendering into rent-paying 
 customary tenants, the removal of many of the cus- 
 tomary tenants in consequence of enclosures and the 
 introduction of sheep-breeding in the place of tillage, 
 the growth of a class of large "farmers" on the 
 demesnes, gradually accumulating their own farming 
 capital — all these had new and greater consequences 
 at the time of the Reformation. The Reformation in 
 religion, whether for good or for ill, was an expression 
 of individualism ; it emphasized the direct relation to 
 God of the individual soul. But religious individualism 
 was but a part or aspect of a universal tendency in the 
 direction of freeing the individual from tradition and 
 usage and stimulating him to think and act for himself. 
 And this took shapes both good and bad : it showed 
 itself in greater individual enterprise and improved 
 methods of production, and it showed itself in more 
 obvious selfishness and self-seeking ; what contem- 
 porary writers call " private affection," " private profit " 
 and "singular lucre." In all the economic relations 
 of human beings with one another, it meant more of 
 what we now call "competition/' with all that it 
 involves. 
 
 Now it would be absurd to depict the earlier centuries 
 as a time when self-seeking did not exist. But there 
 can hardly be any doubt that in the sixteenth century 
 
 64
 
 Break-up of the Manor 
 
 self-seeking became more general, more alert, more 
 unabashed ; and of course this manifested itself very 
 clearly in men's relations to land, which was still the 
 basis of national life. English land even to-day — if 
 we compare our prevailing practices and feelings with 
 those current in America or Canada or Australia — 
 is only partially commercialised. Men do not in 
 England, even yet, commonly think of land as a 
 source of profit exactly in the same way as they think 
 of a cotton mill ; and English economists still prefer 
 to distinguish "land" pretty sharply from "capital." 
 Yet English land, though not completely, is largely 
 commercialised : and it was in the period of the 
 Reformation that this commercialisation first made 
 headway. " Farms," for instance {i.e. farms of demesnes 
 or portions of demesnes), came to be looked upon as 
 sources of profit ; would-be tenants came forward to 
 offer higher rents, or to buy the reversion when the 
 term of the sitting tenant should expire. Money made 
 in trade in the towns turned in this direction for in- 
 vestment, and city business men competed for farms with 
 countrymen. Landlords naturally took advantage of the 
 opportunity to increase their incomes, and were roundly 
 abused by the preachers and pamphleteers of the time 
 as " rent raisers " and " rent enhancers." Bishop 
 Latimer declared in one of his sermons that for a farm 
 for which his yeoman father had paid a rent of three 
 or four pounds by the year, his successor was now 
 paying sixteen pounds or more ; and in another place, 
 referring to farms on a larger scale, that "that which 
 heretofore went for twenty or forty pounds by the year 
 is now let for fifty or a hundred pounds by the year." 
 
 65 E
 
 Economic Organisation 
 
 And an additional impulse and excuse was given by 
 the rise of prices which followed upon the debasement 
 of the currency in the later years of Henry VIII and 
 under Edward VI. 
 
 To the new feeling concerning land a greatly wider 
 scope was inevitably given by the dissolution of the 
 monasteries in 1536 and 1539. It has been reckoned 
 that about one-fifth of the land of the country now 
 passed, by gift or easy terms of sale by the crown, into 
 the hands of lay lords and gentry, in addition to what- 
 ever they held before. " Those families," wrote Hallam 
 in 1827, "within and without the peerage, which are 
 now deemed the most considerable, will be found, with 
 no great number of exceptions, to have first become 
 conspicuous under the Tudor line of kings ; and, if we 
 could trace the titles of their estates, to have acquired no 
 small portion of them, mediately or immediately, from 
 monastic or other ecclesiastical foundations." This is 
 true not only of several of the great Whig houses of 
 the eighteenth century, "the great civil and religious 
 liberty families," of whom Disraeli gives the typical 
 history in Sybil ; it is true also of many of the sub- 
 stantial country gentlemen, like the family to which 
 Oliver Cromwell belonged, who formed the strength of 
 the Puritan and parliamentarian party in the seventeenth 
 century. It is not my business here to discuss the 
 question whether or no this was the best disposition 
 of the wealth of the monasteries under the circum- 
 stances of the time and in the interests of the future ; it 
 is sufficient to call attention to the facts themselves. Of 
 the suppressed smaller monasteries the number is said 
 to have been three hundred and seventy-six ; of the 
 
 66
 
 Break-Up of the Manor 
 
 greater, probably about two hundred and fifty ; some 
 six hundred and twenty-six in all. Probably in at 
 least five hundred parishes the dissolution involved the 
 substitution of a layman for an ecclesiastical body in 
 the ownership of the whole or a considerable part of 
 the manor. Now it is the universal experience — not 
 in England only — that ecclesiastical and similar cor- 
 porate bodies are conservative in their policy and easy- 
 going in their demands. The rentals paid to the 
 monasteries by the farmers of demesne land and the 
 fines on renewal paid by the customary tenants were 
 probably, as a rule, relatively low. But now came the 
 new owners, moved by the new spirit of gain. They 
 enhanced rents, converted in many places arable into 
 pasture, and tried to bully customary tenants to accept 
 leases for lives or periods of years. We must not 
 exaggerate the extent of these changes ; after a period 
 of disturbance, the new owners settled down on their 
 estates, and rents — having been adjusted to the new 
 conditions of agriculture and the new range of prices — 
 tended once more to become stationary. Moreover 
 very many customary tenants did survive under the 
 new name of " copyholders," with a legal security of 
 tenure. Even the open field, with its compulsory 
 rotation, remained over the larger part of rural England, 
 though in a less complete and symmetrical form. Still 
 the beginnings had been made of the new system of 
 capitalist farming ; and many of the peasant cultivators 
 had disappeared from the land. 
 
 67
 
 LECTURE IV 
 
 The Rise of Foreign Trade: the Advent of 
 Capital and Investment. 
 
 In turning now to consider the beginnings of England's 
 foreign trade, we must steadily bear in mind that, though 
 the interest of the subject is great, both for the light it 
 casts on the conditions of the time and also because 
 of the dominant part which foreign trade was destined 
 ultimately to play in English development, its bulk was 
 relatively very small throughout the Middle Ages, in 
 comparison with the total economic activity of the 
 nation. England remained on the whole a self-sufficing 
 country : export carried away only such surplus raw 
 produce as the land did not itself require, especially 
 wool ; and import brought chiefly luxuries, such as 
 silks, furs, fine and dyed woollen cloth, and French 
 wines, purchased by a very limited upper class, to- 
 gether with the spices which rendered more palatable 
 the food and drink of the well-to-do. Probably the 
 only imported article in general use among the masses 
 of the people was the Norwegian tar which was em- 
 ployed as dressing for sheep in cases of scab : this 
 seems to have been introduced at the end of the 
 thirteenth century. Down to the close of the Middle 
 Ages, England was far inferior to certain other parts 
 
 68
 
 Foreign Trade 
 
 of Europe, — to the Rhineland and the great cities of 
 north and south Germany on the one side, to the 
 ItaHan repubHcs, such as Genoa and Venice, on the 
 other, — in manufacturing skill, in accumulated capital, 
 in commercial enterprise, in knowledge of the arts of 
 navigation and of accounting, and in the possession of 
 shipping. It was really only in the seventeenth century 
 that England began to compete with the other nations 
 of western Europe on anything like equal terms, and 
 only in the eighteenth century that it took the place of 
 Holland and became the great carrying and entrepot 
 nation of the world. 
 
 I shall group what I have to say on this subject 
 around two problems, which were closely connected. 
 When our story begins, the foreign trade of England 
 may be described as of the "passive" kind. Imports 
 were brought to our shores almost exclusively in 
 foreign ships by foreign merchants, and exports were 
 carried away in foreign ships by foreign merchants. / 
 It was a position of affairs similar to what exists in 
 China to-day and existed even in Russia a century ago. 
 Chinese goods hardly come to Europe on Chinese 
 ships at all ; as late as the middle of last century Russian 
 merchants only conducted one-ninth of the import and 
 one-forty-fourth of the export trade of their own land. 
 From a position like this we have to see how English 
 foreign trade became " active," and how not only the 
 distribution of imports and the collection of exports 
 within the land, but the undertaking of the actual 
 business of import and export was assumed by English 
 hands. The second problem is the organisation of 
 this new branch of activity, its relation to the form of 
 
 69
 
 Economic Organisation 
 
 organisation that had already grown up for internal 
 trade and industry, and the gradual development of 
 new forms to meet the peculiar needs of foreign 
 undertakings. 
 
 To begin, then, with the state of affairs when our 
 foreign trade was practically entirely in the hands of 
 foreigners. In some respects foreignness may be said 
 to have had nothing to do with nationality ; and in 
 strictness I ought rather to speak of " alien " merchants 
 when I mean merchants from other countries. For in 
 the thirteenth and fourteenth centuries, "foreigner" 
 (from forinsecus) meant simply an outsider, a man from 
 a distance : it was applied as freely to a man from another 
 town in the same country as to a man from another 
 country ; and in some important aspects all " foreign- 
 ers," whether aliens or not, were treated alike by the 
 townsmen to whom they came. They were welcome 
 so far as they gave business to the resident burgesses 
 of the towns to which they came : so far, that is, 
 as they brought things which the burgesses could sell 
 for them, or took away goods which the burgesses could 
 buy for them. But they were most unwelcome when 
 they tried to deal directly with non-burgesses or to sell 
 retail. For the conception of a " national " trade was 
 only beginning to grow up ; and the unit of com- 
 mercial life was still the town and not the nation. Of 
 course foreigners who were also aliens were doubly 
 foreign : their speech bewrayed them. And at a time 
 when law was not yet completely " territorial " but 
 was still largely " personal " ; when, that is to say, a 
 man, wherever he might travel, was thought to have a 
 right to be tried by the laws to which he had been 
 
 70
 
 Foreign Trade 
 
 accustomed, it was inevitable that alien merchants in 
 England — a country still relatively barbarous — should 
 live a somewhat separate life. They were very much 
 in the position of the communities of European mer- 
 chants until recently in China. Like them, they were 
 restricted to a few ports and trading centres, and not 
 allowed to penetrate freely into the interior. And 
 they were watched with anxious concern to see that 
 they did not defraud the simple-minded native burgess, 
 or invade his monopoly either of the collecting or of 
 the distributing trade in the country itself. 
 
 Particular bodies of foreign merchants were able to 
 purchase for themselves valuable trading privileges and 
 to secure the right to trade with England on paying only 
 moderate duties. Of these the most important were 
 the German merchants known as the Teutonic Hanse, 
 and the merchants of Italy, above all those of Venice. 
 The Teutonic Hanse was a great confederation of 
 German towns, inspired throughout by what were 
 conceived to be the interests of their traders. "To 
 navigate is a necessity for us, to live is not " {Navigare 
 necesse est : vivere non est necesse), was its proud motto. 
 In its earlier history its leader was Cologne, owing 
 especially to its eminence in the manufacture of cloth ; 
 later the Baltic towns, led by Liibeck, came to the 
 front, owing to the immense importance of the herring 
 fisheries which they then controlled. Some one has 
 rather bitterly said that the herring and the clove 
 (the chief object of Eastern trade) have caused more 
 bloodshed than anything else except the Christian 
 religion. Into the historical importance of the herring 
 I cannot here enter. Suffice it to say that, during the 
 
 71
 
 Economic Organisation 
 
 fourteenth century, the Hanseatic towns, banded to- 
 gether in opposition to the Danish monarch who sought 
 to control the entrance to the Sound, grew into some- 
 thing very much hke a federal republic ; though each 
 of the city-states which constituted it was subject nomi- 
 nally to the Emperor, and many of them also to some 
 nearer territorial prince. Of the settlements of their 
 merchants in foreign countries, the most important 
 were the four "counters " at Bruges, Bergen, Novgorod, 
 and London : in the last-named city they possessed a 
 settlement, surrounded by a strong wall and compris- 
 ing warehouses, residences, a fine hall and a pleasant 
 garden, which was known as the Steelyard, and which 
 occupied a site on the Thames bank now taken by 
 Cannon Street railway station. At first practically the 
 whole trade between England and Germany was in 
 their hands ; to the end of the sixteenth century they 
 succeeded in excluding Englishmen from entering into 
 direct commercial relations with north Germany and 
 the Baltic. They always paid export duties lower than 
 other aliens, and usually somewhat less than were paid 
 by Englishmen themselves. In the relations of inter- 
 national trade, the Steelyard served much the same 
 purpose as the famous settlement of South German 
 merchants in Venice known as the Fondaco dei 
 Tedeschi, with this important difference, that the 
 Italian republic was not in the earlier and more 
 primitive stage of commercial development still occu- 
 pied by England. Perhaps a closer analogy may be 
 found in the mediaeval "factories" of the Italian 
 merchants in the Near East, and of the English 
 East India Company later in the Far East. 
 
 72
 
 Foreign Trade 
 
 Equally characteristic of the time were the privileges 
 and tariff preferences granted by the English govern- 
 ment to Venice for the benefit of her merchants. 
 After various experimental arrangements earlier in the 
 fourteenth century, intercourse between the two states 
 settled down in its closing years into a regular system 
 which survived well into the sixteenth century. Every 
 year Venice despatched a great fleet of galleys, with 
 Bruges, the busiest centre of the trade of western 
 Europe, as its ultimate destination. These " Flanders 
 galleys," as they were called, visited on their way 
 Syracuse, Majorca and the ports of Spain and Portugal, 
 and then struck north for the English Channel. A 
 part of the fleet usually turned off to Southampton, 
 while the rest went on to the Low Countries. Arrived 
 at Southampton, the Venetian traders remained doing 
 business for several weeks, until it was time to rejoin 
 their consorts and return home. The fleet, be it ob- 
 served, was a public undertaking. The ships belonged 
 to the state of Venice, which appointed the commander 
 of the whole flotilla and provided captains and crews 
 and fighting men. The right of freighting a ship was 
 put up to auction ; and though the trading was all 
 done by individual merchants or small partnerships, 
 and there was no general joint-stock, the character 
 of the cargoes and the places and periods of trade 
 were all carefully regulated by the government, and 
 no one was allowed to send goods to England except 
 in this annual fleet. No doubt the rulers of Venice, 
 who were themselves merchants, were right in thinking 
 that it was very expedient to keep their ships and men 
 together : in this way they could provide the more 
 
 73
 
 Economic Organisation 
 
 completely for their safety, maintain stricter discipline 
 and a higher standard of commercial morality, and 
 make better terms with the several foreign governments. 
 The policy of the Venetian government was precisely 
 similar to that of the Hanse : it was directed to two 
 ends : to securing a good market in England and the 
 Low Countries for the commodities, both of home pro- 
 duction and obtained from the East, in which they 
 traded, and to gaining all the profit that could be 
 derived from their position as the sole source of 
 supply for Mediterranean countries of English, French, 
 and Flemish commodities. All outsiders, including 
 the citizens of the countries where they themselves 
 enjoyed large privileges, were absolutely excluded from 
 the whole of the Mediterranean under their control. 
 
 But, obviously, such one-sided arrangements as these 
 with the Hanse and Venice could not permanently 
 survive when a number of Englishmen made their 
 appearance, anxious and capable themselves to take 
 part in foreign trade. The remarkable thing is that 
 the privileges of the foreigners were retained by them 
 so long after well-organised bodies of English rivals 
 had begun to call their monopoly in question. 
 
 The first of these were the so-called Merchants of 
 the Staple or Staplers. By " staple " was understood 
 a fixed or appointed market. From quite early in the 
 fourteenth century it was the settled policy of the 
 English government to appoint certain fixed places 
 at which all sales of wool, the chief product of the 
 country, should take place, and to which accordingly 
 all English merchants who dealt in wool were bound 
 to resort. The frequent changes of location — some- 
 
 74
 
 Foreign Trade 
 
 times one, sometimes several, places in England itself 
 being chosen for the staple, sometimes a place on the 
 Continent, usually Bruges — give an appearance of 
 vacillation to the policy which does not really belong 
 to it. The policy itself was throughout consistent : it 
 was to mark out regular channels through which the 
 stream of trade should flow, so that it might with 
 facility be both protected and taxed. At last the 
 choice of the government fixed permanently upon 
 Calais, which combined the advantages of a con- 
 tinental situation with those of English rule ; and 
 there the staple for wool remained for a century 
 and a half — from 1399 until the town was lost to 
 England in 1558. 
 
 We can discern the gradual consolidation of 
 the group of English wool-staplers into a definite 
 organisation — the Mayor and Company of the Staple 
 — on exactly the same lines as the craft companies. 
 Like the craft companies, it resulted from the con- 
 junction of two forces — the impulse towards fellow- 
 ship spontaneously felt by men engaged in the same 
 business, men having the same interests and running 
 the same risks, and the need of regulation and control 
 felt by the government, partly for fiscal reasons, but 
 partly, also, from an honest desire to safeguard 
 national interests. And this body necessarily, under 
 the circumstances of the time, enjoyed a monopoly 
 as against other Englishmen. Whether this mon- 
 opoly was in practice irksome would depend upon 
 whether it was exercised in an exclusive spirit, and 
 whether there really were any number, worth speaking 
 of, of competent merchants excluded from member- 
 
 75
 
 Economic Organisation 
 
 ship. These questions we do right probably in 
 answering, for the earher part of the company's 
 history, in the negative. 
 
 We might have supposed that a body of EngHsh- 
 men engaged in the export of wool would have 
 speedily come into conflict with the privileges of the 
 foreign merchants, since wool was the main export 
 article of the " Hansards " and a chief export article 
 of the Italians. But the staplers were limited by 
 their own government to Calais : from Calais, through 
 the foreign merchants who resorted thither to meet 
 them, they were able apparently to supply a con- 
 siderable market in the Netherlands and the north 
 of France ; and this seems on the whole to have 
 satisfied them. 
 
 Far different was the state of mind of a younger 
 English body of traders, the Company of Merchant 
 Adventurers. Their very name indicates the con- 
 scious growth of a new spirit among Englishmen. 
 These merchants aimed at going further afield and 
 engaging in foreign trade across the seas outside the 
 limits of English territory ; they aimed also at find- 
 ing a market abroad for the new manufactured com- 
 modity which England was beginning to produce on 
 a large scale, viz. woollen cloth. In both these ways 
 they were looked upon as peculiarly enterprising and as 
 undertaking a distinctly greater risk or "adventure" 
 than the staplers. True, the gregariousness and sense 
 of common interest even among these Adventurers was 
 so strong that they too soon began to form themselves 
 into a company, organised like one of the great city 
 companies of London. Moreover, though the whole 
 
 76
 
 Foreign Trade 
 
 world was before them, the foreign market into which 
 they really desired to press was just the other side 
 of the Channel and the North Sea. And there they 
 were forced, if not by governmental regulation by 
 the circumstances of the time, to make some one 
 particular town their "staple," and establish them- 
 selves in an imposing and commodious House. They 
 could not get the right of settlement or the right to 
 trade — which alone made settlement worth while — 
 except by a licence from the local prince ; they could 
 only offer attractive terms to a foreign prince by 
 agreeing to come together at some one place ; and 
 only in this way, also, could they protect their 
 common interests when the settlement had taken 
 place. They naturally sought first to establish them- 
 selves at Bruges, the then centre of the trade of 
 western Europe. But Bruges was itself a seat of 
 the manufacture of cloth, and was allied to Ghent 
 which carried on that manufacture on a still larger 
 scale. On their famous woollen cloth rested the pros- 
 perity of all the Flemish towns : the manufacturing 
 interests were much too jealous and too strong to 
 allow Englishmen to invade the local monopoly ; and 
 accordingly the Merchant Adventurers were com- 
 pelled to turn elsewhere. In 1407 they established 
 themselves for the first time at Antwerp, by the favour 
 of the Duke of Brabant. Antwerp was then quite a 
 small town, insignificant in comparison with Bruges ; 
 and the Duke, who wanted to benefit by the duties 
 the English importers would pay him, could afford 
 to disregard the remonstrances of the few weavers 
 and cloth merchants there might happen to be in 
 
 n
 
 Economic Organisation 
 
 his capital. For a good many years the Adventurers 
 were not quite satisfied with Antwerp as their centre, 
 and made various attempts to get a footing in some 
 busier place ; but after 1444 they settled down at 
 Antwerp for good, and remained there till the town 
 was ruined by the religious troubles of the next 
 century and the disastrous siege of 1584. Their 
 presence certainly contributed to the astounding 
 growth of Antwerp in wealth and population and 
 trade, a growth which by the middle of the six- 
 teenth century placed it in a position in relation to 
 western European markets as strong as that which 
 Bruges had occupied in previous centuries. But 
 although the English Adventurers might seem to 
 be as definitely localised as the Staplers, and there 
 might appear to be little difference in their methods 
 of business, they really breathed a more independent 
 and enterprising air. They were not bound by 
 governmental regulations to the same extent as the 
 Staplers ; the cloth export was an expanding busi- 
 ness, while the woollen trade was a stationary or 
 declining one ; and when the great era of geogra- 
 phical discovery began at the end of the fifteenth 
 century, it was the Merchant Adventurers who were 
 most eager and able to push out into new directions. 
 Out of their circle arose all the Tudor companies for 
 adventuring into distant parts for purposes of trade 
 — the Russia Company, the Levant Company, and, 
 greatest of all, the East India Company ; so that they 
 may be regarded in a very real sense as the founders 
 of English foreign trade. 
 
 The appearance and progress of the Merchant 
 
 78
 
 Capital and Investment 
 
 Adventurers indicate the advent on a considerable 
 scale of a new factor in English economic development, 
 the factor of Capital (as distinguished from Land and 
 Labour) ; and the advent also of the phenomenon, 
 historically inextricable from Capital, which we call 
 Investment. By Capital the business world has always 
 meant — whatever the economists may have tried to 
 mean — wealth which its owner can employ for the 
 purpose of gain ; and by Investment we meant partly 
 the external, or business, fact that there really exist 
 openings for the use of wealth in directions which will 
 bring an income or "revenue," over and above the 
 return of the sum employed ; and partly the internal, 
 or psychological, fact that its owners are actually 
 desirous of using it in such directions. And the early 
 history of the Merchant Adventurers shows us how 
 this trading capital came into existence in England. 
 It did not arise out of the revenues of the great 
 landlords, as some have conjectured ; the younger 
 sons of the lesser gentry might go into business but 
 they certainly carried no capital with them. More 
 was probably made at first out of the profits of tax- 
 collecting ; and it is possible that some of the townsmen 
 who earliest engaged in trade were enriched by their 
 ownership of land made valuable by the growth of 
 an urban population. But the chief source, it would 
 appear, of the capital now turning in the direction 
 of foreign enterprise was the wealth already acquired 
 by merchants, whether of native or foreign extraction, 
 in the home trade, and especially in the importation 
 into England and the sale there of foreign commodities 
 in demand among the upper and middle classes. 
 
 79
 
 Economic Organisation 
 
 In dealing in an earlier lecture with the craft gilds 
 I probably gave the impression that they were all com- 
 posed of comparatively humble handicraftsmen ; and 
 this was perhaps unavoidable. But early in the 
 fourteenth century we notice that out of the multitude 
 of crafts or misteries a few companies had already 
 become conspicuous for the wealth and influence 
 of their members, both in London and in the other 
 chief trading centres of the realm.. In London — 
 where before the end of the reign of Edward III there 
 were as many as 48 " misteries " sufficiently organised 
 to send representatives to the Common Council — some 
 twelve " great companies " are soon conspicuous above 
 the rest — viz. the Mercers, Grocers, Drapers, Fish- 
 mongers, Goldsmiths, Skinners, Merchant Tailors, 
 Haberdashers, Salters, Ironmongers, Vintners, and 
 Clothmakers. Now all these trades required a certain 
 amount of capital. The Goldsmiths, for instance, used 
 an expensive raw material ; and though the master 
 goldsmith continued to work with his own hands at 
 the more delicate operations — as we may see him 
 represented in engravings of a somewhat later period 
 — the prosperous men of the craft naturally occupied 
 a superior social position. Much the same is true 
 of the Tailors, at a time when the upper classes 
 dressed so expensively. The Fishmongers needed 
 capital for their fishing smacks ; and so on. And the 
 three companies which were early placed at the head 
 of the list, the Mercers, Grocers, and Drapers, and 
 which make their appearance in each of the larger 
 towns as well as in London, were all composed of men 
 who were exclusively traders and not manufacturers at 
 
 80
 
 Capital and Investment 
 
 all. The Drapers arose perhaps out of the Shearmen, 
 who actually prepared the cloth for use ; but they soon 
 left the work of shearing to others, and confined them- 
 selves to purchase and sale : the importance of their 
 company testifies to the rapid extension of the manu- 
 facture of cloth in England. The Grocers, on the 
 other hand, were quite clearly from the first either 
 importers, or else dealers in imported commodities. 
 Their wares were all kinds of spices and drugs, and 
 their very name (Grossiers) implies that their operations 
 were wholesale. The Mercers, likewise, who traded in 
 " merceries " — linen, canvas, and above all silk fabrics 
 — derived their name from the fact that they were 
 dealers and handled "wares" (mercinwnia). From 
 several of these companies the Merchant Adventurers 
 were recruited : each Adventurer continued to belong 
 to his own city company — and indeed they were bound 
 to belong to one of the misteries if they wished to 
 enjoy the municipal franchise — while engaging in the 
 new foreign enterprise. But it was with the Mercers 
 that they were most closely associated. And how 
 much capital a successful Mercer might accumulate we 
 can gather from the story of Whittington, "thrice 
 Lord Mayor of London," in 1398, 1407, and 1420. 
 
 There had, it is true, been wealthy merchants and 
 financiers in London long before, and they had formed 
 a conspicuous element in the civic oligarchy. They 
 were, however, largely of foreign origin ; some were 
 Gascon, like the Mayor of Bordeaux in 1275 who 
 became Mayor of London in 1280 ; others were 
 Italian, like the leading men among the Pepperers, 
 the forerunners of the Grocers. Merchants of English 
 
 81 F
 
 Economic Organisation 
 
 descent were only beginning to make their way into 
 considerable operations, and they were commonly 
 connected in business with aliens controlling a larger 
 capital who could supply them with imported goods 
 on credit. But by the middle of the fourteenth 
 century the situation had changed. English-owned 
 capital now made foreign capital unnecessary for the 
 home trade ; and Englishmen had sufficiently large 
 resources, as well as sufficient courage and sufficient 
 knowledge how to deal with foreign tariffs and foreign 
 currency, to venture upon overseas trade on their 
 own account. 
 
 It is often said that the teaching of the mediaeval 
 Church with regard to Usury, enforced as it was by 
 secular legislation and by the law courts, failed to 
 recognise "the productive character of capital," and 
 put obstacles in the way of the progress of trade. 
 Such assertions show ignorance of the historical de- 
 velopment. During the later Middle Ages, what we 
 know as "capital" was only beginning to come into 
 existence : the world, that is to say, was only beginning 
 to see accumulations of wealth which could be invested 
 in any direction in trade and industry, and to realise 
 that opportunities for such investment actually existed. 
 Now any investment in which the owner of capital 
 actually "adventured" his property and took a real 
 risk, in the hope of obtaining some return over and 
 above the sum he put in, was regarded by theologians 
 and the ecclesiastical (or " canonist ") lawyers as per- 
 fectly legitimate. So that, instead of retarding the free 
 growth of trade, the Church may be even said to have 
 stimulated it, by employing its influence to turn the 
 
 82
 
 Capital and Investment 
 
 disposable wealth of the time away from mere loans to 
 impecunious rulers or extravagant grandees or mis- 
 managing monasteries — loans which might fairly be 
 described in most instances by the modern term " un- 
 productive " or the mediaeval term " barren " — into 
 the more productive paths of commercial venture. 
 This point of view is clearly expressed in the speech 
 with which Morton, the Cardinal Archbishop of 
 Canterbury, who was also Lord Chancellor of England, 
 addressed one of the early parliaments of Henry VII. 
 "His Grace (the King) prays you," he says, "to take 
 into consideration matters of trade, as also the manu- 
 factures of the kingdom, and to restrain the bastard 
 and barren employment of moneys to usury and un- 
 lawful exchanges ; that they may be, as their natural 
 use is, turned upon commerce and lawful and royal 
 trading." 
 
 In the south of Europe the capitalist organisation 
 which sprang up to meet the new needs of trade was 
 the Societas, the partnership or company (we may call 
 it either) trading on a joint-stock ; either in its simple 
 form, where all the partners alike took part in the 
 management, or in the special form adapted to the 
 needs of sea-going enterprise, known as the coviinenda, 
 and reappearing in England in these recent years in 
 what is known as "limited partnership." But in 
 England the habit of forming gilds was too all-pervasive, 
 and satisfied for a long time too completely all the needs 
 of the situation, to allow the joint-stock plan to appear 
 until much later, and then not as the accompaniment of 
 a societas on south-European lines, but as the inevitable 
 but tardy creation of the gild or fellowship itself, trading 
 
 83
 
 Economic Organisation 
 
 in distant regions. No doubt there were occasionally, 
 even in England, family partnerships ; and there were 
 also occasionally quite large partnerships formed for 
 various enterprises within the country, such as the 
 development of mines. But there is no trace of any 
 such large partnerships among Englishmen engaged in 
 foreign trade ; and indeed the rules of the fellowship of 
 Merchant Adventurers, which, like all other industrial 
 and commercial gilds, insisted upon a regular appren- 
 ticeship for each of its members, might easily stand in 
 the way. So long as a fellowship of traders (or " com- 
 pany " in the English sense) was able to come to terms 
 with foreign princes, and from the common subscrip- 
 tions, or possibly from contributions in proportion to the 
 individual trade done, was able to provide the necessary 
 establishment or " house " in the staple town, it sufficed 
 that the Adventurers should trade on their individual 
 stocks. But when in 1553 a number of "adventurers " 
 created "the mystery and company of the Merchant 
 Adventurers for the discovery of regions, dominions, 
 islands, and places unknown " at a great distance — to 
 wit, in Russia — and their agents had to reach that 
 country by way of the White Sea, and then penetrate 
 for hundreds of miles inland to the capital, it was 
 evident that individual trading was out of the question. 
 The year 1553, therefore, saw the formation of the 
 first true joint-stock company : and it is interesting to 
 notice that the number of members or shareholders 
 was 240, and the shares £2^ each. The example thus 
 set was imitated by several others of the companies 
 engaged in business overseas, and above all, half a 
 century later, by the East India Company, But the 
 
 84
 
 Capital and Investment 
 
 transition to the new corporate plan was not complete 
 even yet. For the joint-stock in the case of the Russia 
 Company, as afterwards in that of the East India Com- 
 pany, was hmited to each separate voyage, and the 
 profits were divided after each voyage in proportion 
 to the investment. It took some time to learn by 
 troublesome experience that the business of each voyage 
 could not be kept completely apart and separately 
 accounted for ; and that a permanent joint-stock, not 
 periodically repaid, was the only convenient arrange- 
 ment. 
 
 We are, however, rather outstripping the point we 
 have reached in the narrative. The great expansion of 
 England's foreign trade in the fifteenth century, and the 
 first half of the sixteenth, was the work of the Merchant 
 Adventurers, and they never reached the point of having 
 a common stock. As time went on, the tutelage in 
 which the merchants of the Hanse and of Italy sought 
 to hold the trade of this country became more and 
 more irksome. The English Adventurers sought to 
 enter into the geographical spheres of monopoly or 
 influence which the Hansards and the Venetians kept 
 jealously for themselves. Demands for reciprocity 
 fell on deaf ears ; and the inevitable outcome was 
 only delayed by the fact that the English monarchs 
 hesitated to give up the revenue they derived from the 
 foreigners, and to endanger the political friendship 
 of the powers they represented. First the Venetians 
 lost their privileged position in 1534 : they had obsti- 
 nately refused to let the English merchants enter the 
 Levant to share their trade in Malmsey wine and cur- 
 rants. Within half a century, with the favour of the 
 
 85
 
 Economic Organisation 
 
 Sultan, who was ready enough to favour the rivals of 
 his ancient enemies, the Venetians, the Levant Com- 
 pany was regularly established in the eastern Mediter- 
 ranean, and supplying England with the commodities 
 for which it had been previously dependent on Venice. 
 With the Hanse the bickering went on much longer. 
 While the Venetians were being driven to give up 
 their annual visits, the German merchants in the 
 Steelyard still maintained their proud position. When 
 Holbein came to England he found employment in 
 painting the leading members of the community ; and 
 the pageant he designed for them on the occasion of 
 the coronation procession of Anne Boleyn cast into 
 the shade all the like productions of the city com- 
 panies. Their complete satisfaction with themselves is 
 illustrated by the allegorical picture they commissioned 
 Holbein to produce for their hall : side by side with 
 the mediaeval conception of "The Triumph of Poverty" 
 it displayed the modern and commercial conception 
 of " The Triumph of Wealth," with all her appropriate 
 train of virtues. It was not till 1597 that the German 
 merchants, refusing definitely to let English traders 
 into their German preserves, finally lost their privileges 
 and left the Steelyard. But by that time the old unity 
 of the Hanse was already breaking up. What the 
 Adventurers could not obtain from the Hanse as a 
 whole, they were able to obtain from one of the 
 constituent towns. The year 161 1 saw them, after 
 many vicissitudes, finally established in Hamburg and 
 in the possession of lucrative privileges. From this 
 time dates the close connection between Hamburg 
 and England, which was so important a branch of the 
 
 86
 
 Capital and Investment 
 
 trading relations of this country during the seventeenth 
 and the early part of the eighteenth century. From 
 Hamburg the Merchant Adventurers were able to find 
 a market for their cloth over the whole of northern 
 Germany ; and there the " English Court " remained, 
 until it was broken up by the orders of Napoleon in 
 1806. 
 
 87
 
 LECTURE V 
 
 Domestic Industry and Tudor Nationalism 
 
 We have already seen the fundamental importance of 
 the woollen industry for English economic develop- 
 ment. It furnishes the explanation of the far-reaching 
 agricultural changes of the fifteenth and sixteenth 
 centuries : it provided the commodity with which 
 England first entered actively into the world's com- 
 merce. Its significance can hardly be overestimated. 
 It was the first of the great manufactures of England ; 
 it created a basis for English activity and wealth before 
 iron and cotton ; and in the seventeenth and early 
 eighteenth centuries it accounted for more than two- 
 thirds of our exports. Its power is shown by the 
 remarkable fact that it was able to bring about a 
 complete reversal of the trade policy of the country. 
 The export of English wool, which had once been 
 the pivot of the government's finance and the chief 
 occasion for commercial intercourse with foreign 
 countries, was from 1660 to 1825 absolutely pro- 
 hibited. It remains now to look at the internal 
 organisation of the industry ; and here again we 
 shall find that it presented phenomena of the utmost 
 interest. In the centuries before improvements in 
 transportation made it possible for Europe to provide 
 itself with the cotton of Asia or America, at a time 
 
 88
 
 Domestic Industry 
 
 when the use of furs and silks was necessarily con- 
 fined to the wealthier classes, woollen fabrics were the 
 common, over large areas practically the only, wear of 
 the great mass of the people. The organisation of their 
 production had accordingly a typical significance : it 
 exemplified, in all countries and in well-nigh every 
 district, and in a clear and unmistakable form, the 
 shapes which industrial relations were bound to take 
 under the varying conditions of the time. As soon as 
 specialised industrial workers made their appearance, 
 occupied mainly in manufacture and grouped together 
 for the most part in the towns, the shape was what we 
 now know as the gild system, and of this we have already 
 noticed the leading characteristics. There is much 
 that is still obscure in the municipal history of the 
 twelfth and thirteenth centuries ; but it is surely not 
 uninstructive that in all the large towns of western 
 Europe gilds of woollen weavers should have arisen 
 and made themselves conspicuous during that period, 
 and that only second to them in prominence should 
 have been gilds of fullers and dyers engaged in other 
 and later processes in cloth manufacture. The appear- 
 ance of such societies, a century or more before many 
 other craftsmen began to draw together in fellowship, 
 can only be explained by their greater number — itself 
 due to the more primary character of the want which 
 their products satisfied. 
 
 But as the woollen industry was the first, on any 
 considerable scale, to take the gild form, it was the first 
 to break away from it ; and this for the same reason — 
 the extent of the demand. England was capable of 
 producing large supplies of wool, of good quality. 
 
 89
 
 Economic Organisation 
 
 What was first lacking was technical skill. Whatever 
 may be the case to-day, the economic history of earlier 
 centuries fully bears out the contention of Frederick 
 List that the creation of " productive powers " is more 
 important for a nation than the mere possession of 
 " values in exchange." And England owes its pro- 
 ductive powers very largely to the alien immigrants 
 who have made their way to her, with or without wel- 
 come. The necessary skill in handicraft in the woollen 
 industry came to the country from the Netherlands 
 chiefly during two periods. There was a considerable 
 migration from the Low Countries during the reign of 
 Edward III, and again some two centuries later, during 
 the early years of Elizabeth. In the one case they were 
 driven from home by internal dissensions — by the con- 
 test between the great weaving cities of Ghent and 
 Ypres and their count, and by the collision of interest 
 between the large towns and the surrounding country 
 districts. In the second case they were driven away 
 by the religious persecutions of Alva. It is with the 
 first of these migrations that we have now to do ; for 
 the change in the organisation of industry made itself 
 clearly manifest long before the time of Elizabeth. 
 
 A rough and rude cloth was apparently produced 
 at one time in every town in the country. The 
 weaver would usually come into direct contact with 
 his customer or employer : I add "employer," because 
 undoubtedly it was often the practice for the weaver to 
 work up an employer's yarn. But with the improve- 
 ment here and there in the weaver's art, the manu- 
 facture, at any rate of the better qualities, would tend 
 to concentrate itself in particular localities. Sheep, 
 
 90
 
 Domestic Industry 
 
 again, were raised all over the country ; and we have 
 seen that in the fifteenth and sixteenth centuries the 
 inducement to grow wool was strong enough to bring 
 about enclosures in most of the Midland counties. In 
 time the natural advantages of the downs and moors 
 and of counties like Leicester and Lincoln would make 
 them the homes of the larger flocks ; and accord- 
 ingly wool merchants (or "wool staplers") became 
 even more necessary than before to collect the raw 
 material and convey it to users elsewhere in England 
 or abroad,, or to foreign merchants in London and 
 other ports. Nor Avas this all : as early as the four- 
 teenth century we can trace the rise of a body of 
 dealers in cloth, numerous enough in the country 
 generally to need a market provided for them in 
 London at Blackwell Hall in 1397, and rich enough 
 in London and the other great towns to take rank 
 among the wealthiest of the city companies. Doubt- 
 less these dealers, or " drapers " as they were called, 
 were engaged not only in collecting cloth for sale in 
 parts of England at a distance from the place of pro- 
 duction, but also in collecting it for export abroad. 
 What their presence indicates is the growing distance 
 between the producer and the consumer, and the need 
 for commercial middlemen. 
 
 But as the market widened, the opportunity for 
 middlemen and their services to production would 
 become even greater. Such a widening of the market 
 came with the growth and extension of the foreign 
 market for cloth, and we can ascribe this roughly to 
 the second half of the fifteenth century. 
 
 If we can regard the number of pieces on which the 
 
 9^
 
 Economic Organisation 
 
 Hansards paid duty as an index of the whole trade of 
 the country, we may conclude that the export of cloth, 
 which grew comparatively slowly — perhaps by fifty per 
 cent. — during the first half of the fifteenth century, 
 actually trebled itself during the second half. And 
 during that period we find four vital changes in in- 
 dustrial organisation taking place. First, the weaving 
 of cloth and the allied branches of the manufacture 
 are leaving the towns and establishing themselves in 
 villages and hamlets and isolated cottages over the 
 countryside ; secondly, with the abandonment by the 
 workpeople of the towns, the gild association also 
 drops asunder in the woollen industry, though the 
 State still, as we shall see, enforces the rule of 
 apprenticeship ; thirdly, the industry concentrates 
 itself in certain particular districts — " the shires 
 which use cloth-making," as a contemporary his- 
 torian calls them — those shires being chiefly Nor- 
 folk, Suffolk, and Essex in the east, Wilts, Somerset, 
 and Devon in the west ; and finally, a new class of 
 entrepreneurs appear — the " clothiers," as they are 
 called, who now control the whole process of produc- 
 tion. Their essential function, as the great Elizabethan 
 Statute of Apprentices phrases it, was to " put cloth to 
 making." An Act of 1465 reveals conditions precisely 
 similar to those which were found still in existence 
 more than three hundred and forty years later by the 
 famous parliamentary Committee of 1806 : the clothier 
 " delivering the wool " to be carded and spun, then 
 giving out the yarn to the weaver to be woven into 
 cloth, and then placing the cloth in the hands of the 
 fuller, " walker," or " tucker " to be felted and cleansed. 
 
 92
 
 Domestic Industry 
 
 This remarkable transformation raises more ques- 
 tions than we are at present able to solve. Where, 
 we may ask, did the capital and enterprise come 
 from, which are indicated by the advent of the 
 clothiers ? Probably from many directions, but espe- 
 cially from among the ranks of the drapers or cloth- 
 dealers : it was natural that men engaged in selling 
 cloth should undertake to procure its manufacture by 
 themselves purchasing the wool and getting the yarn 
 spun, and providing poor weavers with the necessary 
 materials. Where did the country weavers come 
 from ? Probably from the less successful craftsmen 
 and, especially, from among the discontented journey- 
 men of the towns, now becoming a separate industrial 
 class, and unable to look forward to finding places for 
 themselves in the narrow circle of " masters." How- 
 ever it may have been brought about, we have reached, 
 it will be seen, the third of the stages we have already 
 distinguished in the evolution of industry — the stage 
 marked by the dominance of a commercial middleman 
 who finds material and employment for the artisan. 
 Economists are accustomed, we have already noticed, 
 to call this condition of things by the not very satis- 
 factory terms, " domestic system," or Haiis-indnstrie, 
 from the fact that — in contrast with "the factory 
 system " that followed — the process of manufacture 
 still took place at the workman's own home. What- 
 ever we call it, there is evidently to be discerned here 
 an intermediate or a transition stage between the gild 
 system with its independent handicraftsmen and the 
 factory with its mass of congregated workpeople. 
 Capital first accumulated in trade now turned back, 
 
 93
 
 Economic Organisation 
 
 so to speak, on industry, and began to take the 
 control of the manufacturing operations. And the 
 appearance of the same system in the textile industries 
 of other countries — as, for instance, the linen manu- 
 facture of Holland and Silesia and the silk manufacture 
 of France — and indeed in all considerable manufac- 
 tures that sprang up before the advent of machinery, 
 such as Sheffield cutlery in the seventeenth century 
 and the English hat and boot trades in the eighteenth, 
 seems to indicate that it was the natural consequence 
 of the economic forces at work. When goods were 
 made by small masters in little workshops, the only 
 way in which manufacture could be quickly stimu- 
 lated to meet a rapidly growing demand was for 
 capitalists to come forward, provide the materials, and 
 undertake the business of finding a market. 
 
 The economic situation in England, as elsewhere, 
 was complicated by the fact that, while the large new 
 industry grew up with its new organisation in the 
 villages of certain districts, many of the old trades, 
 supplying only local or limited demands, continued 
 for a long time to be carried on in the towns by 
 independent master artisans, associated in companies 
 which were the direct representatives and descendants 
 of the mediaeval gilds. They continued to exist, but 
 they are no longer typical of the wider occupations 
 of the country. And it is significant that when in 
 1712 a pamphleteer drew the character of an English- 
 man under the name that has since stuck to him 
 of "John Bull," he depicted him as a clothier, whose 
 ordinary talk was of "the affairs of Blackwell Hall, 
 and the price of broadcloth, wool, and bays." 
 
 94
 
 Tudor Nationalism 
 
 It is, however, now time to introduce a factor which 
 can hardly escape the notice of any careful student of 
 the Tudor period : and that is the part played by 
 the regulating power of the national State. England, 
 from the time of the establishment of the strong rule 
 of her Norman kings, had never so completely escaped 
 from the control of a central government as some of 
 the continental countries. The legal and administra- 
 tive machinery elaborated by Henry II and his suc- 
 cessors, the legislative activity of Parliament under the 
 third Edward, these had brought the whole country 
 in large measure within the scope of a single all- 
 embracing political system. Over large parts of the 
 Continent, in the later Middle Ages, central national 
 authority was non-existent or exceedingly weak ; and 
 its place in the regulation of economic life was taken 
 by the authorities of the various towns and cities. 
 The unit of industrial and commercial relations was 
 the town, and neither the nation nor, as later in Ger- 
 many, the " territory " or principality. England, in 
 this as in other economic respects — such as the pre- 
 valence of the manorial system and the appearance of 
 the gild — was not unlike the rest of western Europe. 
 In England also we may characterise the period of the 
 later Middle Ages as a period of "town-economy." 
 Yet the several municipalities were never quite so free 
 from external control as in Italy or Germany ; and 
 we have already seen examples of the far-reaching 
 influence of the central government in certain direc- 
 tions, e.g. in the regulation of the staple. 
 
 But when we come to the age of the Tudors the 
 hold of the central government over the economic life 
 
 95
 
 Economic Organisation 
 
 of the people becomes far more clear and unmistakable. 
 This was the natural outcome in the economic sphere 
 of the wonderful outburst of the spirit of nationality 
 which characterises the latter part of the epoch. The 
 nation felt itself to be one, as never before ; having 
 this feeling of unity it was natural that it should wish 
 to see its ideals carried out over the whole country ; 
 and to do this it turned to the government as repre- 
 sentative of the national will. 
 
 The machinery of Tudor rule was threefold. First 
 there was the Parliament to give legislative force to 
 national policy. The period is marked by a series of 
 great statutes vitally affecting the organisation of econo- 
 mic life : the two most outstanding examples being what 
 was called in later ages the Statute of Apprentices, soon 
 after Elizabeth came to the throne (1563), and the great 
 Poor Law, almost at the end of her reign (1601), which 
 brought to a definite conclusion a series of experiments 
 in the way of legislation stretching over more than sixty 
 years. We cannot, indeed, attribute to Parliament dur- 
 ing this period any really independent initiative apart 
 from the monarch and his advisers. Parliament existed 
 to give information about the needs of the country, and 
 to give the support of national agreement and acqui- 
 escence to the measures already decided upon by the 
 wisdom of the government. It was only its usefulness 
 for this purpose which enabled it to survive during the 
 absolutism of Henry VIII. For the greater part of 
 the period, the real pivot, on which everything turned, 
 was that second part of the mechanism of government 
 — the Council. The Council both dictated legislation 
 and enforced it when it had been passed. It is very 
 
 96
 
 Tudor Nationalism 
 
 significant that while the prayer for the High Court of 
 Parhament was not composed till the stormy times of 
 Charles I's first parliament, and was not made a regular 
 part of the English Church service till 1662, the Book 
 of Common Prayer contained, from its earliest form 
 as drawn up in 1549, two prayers for the Council — one 
 in the Litany and one in the Communion office. This 
 sufficiently illustrates the place which it occupied in 
 the public eye. And the third great element in the 
 Tudor system was the local executive machinery — 
 that of the Justices of the Peace, acting individually, 
 or in association with their fellows in Quarter Sessions. 
 The office of Justice of the Peace had been growing 
 up ever since the reign of Edward III, and with it had 
 been incorporated the office of Justice of Labourers 
 which had been created to carry out the labour legis- 
 lation called forth by the Black Death. But it was 
 not till the Tudor period that it reached its definitive 
 form. 
 
 The place which the Justices of the Peace took hence- 
 forward in the political and social system of England 
 is altogether unique ; and of this English public men 
 were fully aware. " It is such a form of subordinate 
 government for the tranquillity and quiet of the realm," 
 wrote the great Chief Justice, Sir Edward Coke, "as 
 no part of the Christian world hath the like." Else- 
 where national governments, in the machinery at their 
 disposal for the administration of the provinces, were 
 limited to one of two alternatives. Either local ad- 
 ministration had to be left to local magnates — these 
 in the country districts, of course, being the larger 
 landlords — and this meant the survival of feudalism. 
 
 97 O
 
 Economic Organisation 
 
 Or the central government planted in the several 
 districts a number of professional officials, who were 
 sent down from the capital and who, if they had 
 no local partialities and interests, had also no local 
 affections or influence : and thus was constituted 
 a bureaucracy. England alone — for good or for ill, 
 we must not hastily say which — was able in large 
 measure to combine the virtues of both methods. The 
 Justices were, in fact, the local squires, with all their 
 local knowledge and weight ; but they derived their 
 authority from a royal commission, and they carried on 
 their work under the inspection and control of the 
 Council at the centre of government. 
 
 The drawback to the system — and every system 
 has its drawbacks — was that the agency through 
 which the government was compelled to act was an 
 agency with an inevitable class bias. Yet it was not 
 till, in the latter half of the seventeenth century, 
 the effective supervision and, if need were, coercion 
 by the Council were withdrawn, that the defects of 
 English adminstrative machinery began to outweigh 
 its merits. 
 
 Let us now look at the policy pursued by the Council, 
 confirmed by Parliament and enforced through the 
 Justices ; or rather at the principles at the back of it. 
 These principles were those of the great thinkers of the 
 Middle Ages, now applied to the whole country and 
 enforced by a national authority. They started from 
 the idea not of liberty but of order. A State should 
 be well ordered ; and by well ordered was understood 
 a grouping of its subjects in due ranks, each with its 
 proper duties and responsibilities. 
 
 98
 
 Tudor Nationalism 
 
 ''The heavens themselves," 
 
 Shakespeare, in the last months of EHzabeth's reign, 
 makes one of his characters say, in Troiliis and 
 Cressida, 
 
 "the planets and this centre 
 Observe degree, priority and place, 
 Insisture, course, proportion, season, form, 
 Office and custom, in all line of order." 
 
 And he goes on to express the current view of the 
 thoughtful men of the time that even " enterprise " — 
 by which he means the proper activity of citizens in 
 their several positions — was dependent on the main- 
 tenance of " degree." 
 
 " O, when degree is shaked, 
 Which is the ladder to all high designs, 
 Then enterprise is sick ! Hovv^ could communities, 
 Degrees in schools and brotherhoods in cities. 
 Peaceful commerce from dividable shores, 
 The premogeniture and due of birth. 
 Prerogative of age, crowns, sceptres, laurels, 
 But by degree, stand in authentic place? 
 Take but degree away, untune that string, 
 And hark, what discord follows." 
 
 And SO in the Catechism, set forth in 1549 to be learnt 
 by every child, high or low, before he was brought to 
 be confirmed by the bishop, the compendium of duty 
 ended with the statement that it behoved everyone 
 "to learn and labour truly to get mine own living, 
 and to do my duty in that state of life unto which it 
 shall please God to call me " — not, be it observed, " hath 
 pleased God," as shown merely in the fact of birth. 
 The men of Tudor times supposed, no doubt, that for 
 most people their " state of life " was practically settled 
 
 99
 
 Economic Organisation 
 
 by their birth ; but they never beheved in rigid 
 castes, and they always recognised that a man might 
 be called by God to a state of life other than that 
 in which he was born. But in whatever state or 
 degree he found himself, of that degree he was to 
 do the duty. 
 
 But to do it he would need training. And that 
 training it was believed to be the duty of the govern- 
 ment to see that he got. Hence the great Statute of 
 Apprentices of 5 Elizabeth, cap. 4, which extended to 
 the whole nation and to all manufacturing industries, 
 the seven years' obligatory apprenticeship which had 
 hitherto been enforced by the several misteries backed 
 up by the municipalities. " It shall not be lawful to 
 any person, other than such as do now lawfully exercise 
 any occupation, to exercise any craft now used within 
 the realm of England and Wales, except he shall have 
 been brought up therein seven years at the least as 
 apprentice . . . nor to set any person on work in such 
 occupation, being not a workman at this day, except 
 he shall have been apprentice." The use of the word 
 " now " — " now used within the realm " — was certainly 
 not intended as a limitation : but the judges in the 
 eighteenth century ruled that the effect of it was to limit 
 the statute to industries already established in 1563 ; so 
 that (and this is an important fact) the new cotton trade 
 and the new iron trade which came into existence in the 
 eighteenth century were never subject to any statutory 
 prescription as to apprenticeship, however common — 
 in the cotton trade in particular — the practice may in 
 fact have become in imitation of the usage in other 
 trades. 
 
 100
 
 Tudor Nationalism 
 
 Having been properly trained, every man, it was 
 assumed, could find suitable employment. How it 
 was proposed to deal with cases where that assumption 
 was falsified by events, we shall learn in a moment. 
 Finding employment, it was generally held that men, 
 should receive a suitable wage ; and to this conviction 
 the government sought to give effect by the system 
 of Justices' Assessments, under the control of the 
 Council. Ever since the Black Death, Parliament had 
 attempted to determine the rates of remuneration for 
 agricultural labour. We must be careful not to inter- 
 pret this policy as the outcome merely of selfishness on 
 the part of the landlords. The public opinion of all 
 educated men was on the side of the public authorities 
 in applying to labour the general principle of "just 
 price." It seemed as evidently immoral to ask for 
 higher wages because the ranks of labour were thinned 
 by pestilence, as (to take an instance which actually 
 occurred) to try to get a higher price for tiles because 
 the town was unroofed by a tempest. To leave such 
 things to the operation of the Supply and Demand of 
 the moment was to abandon the duty and task of 
 government. The attitude in this matter of William 
 Langland, who wrote his Vision of Piers the Plowman 
 about 1377, is highly significant. It is usual to con- 
 trast Langland with Chaucer, the man of the people 
 with the man of the court. J. R. Green, for instance, 
 describes him as " the gaunt poet of the poor." And 
 yet Langland has no sympathy with 
 
 "labourers landless, that live by their hands," 
 
 and, not content with "worts a day old," " penny ale," 
 
 lOI
 
 Economic Organisation 
 
 and " a piece of good bacon," clamour for " fresh 
 flesh or fish " : 
 
 " He must highly be hired, or else will he chide, 
 Bewailing his woe as a workman to live . . . 
 He curses the King and his Council after, 
 Who license the laws that the labourers grieve." 
 
 Langland warns them harshly that a time of dearth 
 will soon come and reduce them to a more patient 
 frame of mind. 
 
 The difficulties, which were always considerable, in 
 enforcing the statutes of labourers were increased in the 
 middle of the sixteenth century by the rise in prices, 
 due first to the debasement of the currency during the 
 government of Henry VIII and Edward VI, and then 
 by the influx of silver from the newly discovered mines 
 of America. Yet these difficulties were far from induc- 
 ing the government to leave wages to free contract : 
 their effect was only to lead the government to substi- 
 tute scales of wages varying with the cost of living for 
 the rigidly fixed rates of earlier statutes. The great 
 statute of 1563 (5 Eliz., cap. 4), already referred to, 
 began by confessing that the existing laws with regard to 
 wages could not " conveniently " — " respecting the ad- 
 vancement of prices " — " be put in due execution with- 
 out the greatest grief and burden of the poor labourer 
 and hired man." What was therefore necessary, it 
 went on to say, was legislation which would " yield unto 
 the hired person, both in the time of scarcity and in 
 the time of plenty, a convenient proportion of wages." 
 Accordingly it enacted that the Justices of the Peace of 
 every shire or town, at every Easter Sessions, " calling 
 unto them such discreet and grave persons ... as 
 
 102
 
 Tudor Nationalism 
 
 they shall think meet, and conferring together respect- 
 ing the plenty or scarcity of the time," should " have 
 authority to rate and appoint the wages " of all labour- 
 ers, artificers, &c. These rates they were to certify to 
 Chancery ; " whereupon it shall be lawful for the Lord 
 Chancellor, upon declaration thereof to the Queen . . . 
 or to the Lords or others of the Privy Council ... to 
 cause to be printed and sent down proclamations con- 
 cerning the several rates appointed." " If " in any 
 year " it shall happen that there be no need of any 
 alteration, then the proclamation for the year past shall 
 remain in force." 
 
 It was "pollitiquely intended" — i.e. consciously 
 aimed at as a matter of State policy — as a later statute 
 puts it, that the regulation of wages should extend to 
 all manual occupations. But doubts were raised as to 
 whether the statute was intended to cover persons em- 
 ployed in "domestic" industry, like the weavers work- 
 ing for clothiers ; first, because the original act seemed 
 to lay stress only on workers in husbandry and on the 
 particular crafts which had previously been regulated, 
 and, secondly, because it had implied that the wages 
 were to be time wages, while in the woollen industry, 
 in the form it had now assumed, payment was gener- 
 ally made by the piece. Accordingly, by a statute of 
 1597-8 (39 Eliz., cap. 12), the authority of the Justices 
 was expressly defined to include the rating of wages 
 "of any labourers, weavers, spinsters and workmen 
 or workwomen whatsoever, either working by day, 
 week, month or year, or taking any work, at any 
 person's hand whatsoever, to be done," i.e. as piece- 
 work. That there was felt to be some need to inter- 
 
 103
 
 Economic Organisation 
 
 Vene for the protection of the domestic weavers is 
 shown by the fact that an act of 1603-4 (^ J^^v cap. 
 6) not only confirmed this definition of the Justices' 
 authority, but went on to enact that " if any clothier 
 or other shall refuse to obey the said assessment of 
 wages, and shall not pay so much or so great wages to 
 their weavers, spinsters, workmen or workwomen as 
 shall be appointed . . . that then every clothier and 
 other person so offending shall forfeit for every such 
 offence, to the party grieved, ten shillings." As an after- 
 thought it occurred to the legislators that many of the 
 clothiers had prospered so far as to be made Justices 
 themselves, and that these clothier Justices might have 
 too much influence in Quarter Sessions. A separate 
 section was accordingly tacked on to the act with this 
 significant proviso, "that no clothier being a justice 
 of peace . . , shall be any rater of any wages for any 
 weaver, tucker, spinster or other artisan that dependeth 
 upon the making of cloth." 
 
 The clear implication of a clause like this helps us^ 
 I think, to arrive at a conclusion as to the character 
 of the legislation as a whole. It has been represented 
 by some writers as a huge conspiracy of the employ- 
 ing classes to keep down wages. I cannot agree 
 with them. I think it was an honest attempt to 
 secure for every employed person what should be a 
 fitting wage, and a wage that should vary with the 
 cost of living ; although it is quite obvious that in 
 deciding what was "a convenient proportion of 
 wages," i.e. wages suitable to the position of "the 
 hired person," the Justices of the Peace would not be 
 likely to err on the side of extravagance. And the 
 
 104
 
 Tudor Nationalism 
 
 case of the clothier Justices shows that the govern- 
 ment were fully aware of the possibility of selfish 
 bias, and would do what they could to counteract 
 it. It is another question how far the act was 
 obeyed by the Justices, and still another how far 
 the assessments were observed. When the subject 
 began to be discussed, some thirty years ago, only 
 about a dozen assessments of various dates between 
 1593 and 1684 were known to exist. But since 
 then more than a hundred others have come 
 to light ; sufficient to prove that, throughout the 
 seventeenth century, the annual assessment was part 
 of the ordinary business of every Easter Sessions. 
 There is much also to suggest that on the whole the 
 assessments were conformed to by employers. But 
 how far or how long the assessments kept pace with 
 the cost of living we have as yet hardly enough evi- 
 dence to decide. The comparisons sometimes insti- 
 tuted between the movement of assessed wages and 
 the movement of the price of wheat are not quite 
 conclusive ; because the Justices would properly take 
 into account the whole range of a labourer's wants 
 and not the single article of wheaten bread. As the 
 Essex Justices declared in 1651, it was their duty 
 to have "special regard and consideration to the 
 prices at this time of all kinds of victuals and apparel, 
 both linen and woollen, and all the necessary charges." 
 It is only in the last year or so that statisticians have suc- 
 ceeded in constructing " index numbers " to show the 
 variation in the cost of living of working-people in the 
 twentieth century : for the seventeenth and eighteenth 
 centuries the index numbers have still to be calculated. 
 
 105
 
 Economic Organisation 
 
 In the first half of the eighteenth century, the prac- 
 tice of assessment gradually fell into disuse. So com- 
 pletely was it disregarded in the cloth industry that in 
 1756, on the petition of the woollen weavers of Glou- 
 cester, an act was passed giving the Justices authority 
 to fix wages by the ell, regardless of the fact that they 
 already had that power by the unrepealed statute of 
 Elizabeth. In 1757, on the petition of the clothiers, 
 the act was repealed, and with it, by implication, the 
 wage assessment clauses of the act of 1563, so far as 
 the woollen trade was concerned, since it was now 
 enacted that wages should in future be settled by free 
 contract between the parties. The reason assigned 
 was that a prescribed weaving wage per ell, or unit 
 of length, was incompatible with the great variety in 
 the width of various kinds of cloth and in the weight 
 of the yarn employed. The abandonment in 1757 
 of State regulation of wages in what was then the 
 one really great industry of England is very signi- 
 ficant. It shows that the system of regulating wages 
 was abandoned long before the advent of machinery 
 or the factory. It was thrown off by employers in 
 an industry still in the domestic stage and still 
 making no use of "power." And the excuse given 
 was not without a certain force. With the multi- 
 plication of varieties of product, a wage list to be 
 appropriate must become proportionately detailed and 
 elaborate. This is what is being discovered to-day 
 in all attempts to settle rates of wages either by joint 
 agreement or by statutory boards. It is likely enough 
 that the Justices in the eighteenth century had not 
 the necessary technical knowledge. 
 
 106
 
 Tudor Nationalism 
 
 In the years which followed 1757, the only serious 
 attempt to regulate wages by the authority of the 
 Justices is to be found in the so-called Spitalfields 
 Acts which were passed in 1773 for the benefit of 
 the London silk-weavers, and were tolerably success- 
 ful, though restricted in their operation to London 
 and not affecting the cheaper silk manufactures of 
 Coventry and Macclesfield. The legislation was effec- 
 tive, partly because the article produced was of the 
 nature of a luxury, partly because the Justices allowed 
 themselves, in the rates they fixed, to be guided by 
 agreements between employers and employed. So 
 successful on the whole was the arrangement in this 
 particular case that the Spitalfields Acts were suffered 
 to remain unrepealed till 1824, in spite of the fact that 
 the act of Elizabeth for the regulation of wages gene- 
 rally had been repealed in 181 3. The powers of the 
 Justices in respect of wages certainly left no bitter 
 memories behind them. For in the distress of the 
 Industrial Revolution it again and again occurred to 
 various bodies of workpeople to appeal to the act of 
 5 Elizabeth and petition that it should again be en- 
 forced. The reply of Parliament to these embarrassing 
 requests was to abrogate the act altogether. 
 
 Not quite a century afterwards, legislation began to 
 retrace its steps. By the act of 1909, Trade Boards 
 were established by the State to "fix minimum rates 
 of wages " in certain trades popularly spoken of as 
 " sweated " : in the language of the act, trades in which 
 " the rate of wages is exceptionally low." The Boards 
 are composed not only of an equal number of repre- 
 sentatives of employers and workers, but also of such 
 
 107
 
 Economic Organisation 
 
 a number of "appointed members" as the Board of 
 Trade may think fit, short of half that of the repre- 
 sentative members, and they are presided over by an 
 "appointed" chairman. The numbers of the "ap- 
 pointed " members in the first five Boards have been 
 3 out of a total of 15, 3 out of 35, 3 out of 19, 5 out of 
 21, and 3 out of 11 respectively. They are all persons 
 of approved tact, and doubtless they seek by patient 
 diplomacy to obtain the largest possible measure of 
 agreement : but it is perfectly clear that they hold the 
 balance of power. In 191 2 a much longer step was 
 taken, and statutory machinery set up to "settle" 
 " minimum rates of wages," together with the neces- 
 sary " district rules," for all the underground workers 
 in the coal mines of the country. That machinery con- 
 sists in the last resort of the individual chairmen of the 
 several Joint District Boards, inasmuch as they are 
 directed themselves to settle the rates and rules, if 
 any Board fails to reach an agreement ; and these 
 chairmen are appointed, in default of agreement, by the 
 Board of Trade. Wages under these acts are just as 
 much " regulated by the State " as ever were those fixed 
 by the Justices' assessments. They are State-regulated 
 in two senses : in the sense that they are not determined 
 by free contract between the parties concerned (either 
 individuals or associations), but by an authority which 
 derives its power from the State ; and in the sense 
 that this authority in the last resort lies in the hands 
 of persons nominated by the executive of the State. 
 To control wages through local bodies with statutory 
 powers, even if they are in some degree representative, 
 is as much State control as to do so directly from 
 
 108
 
 Tudor Nationalism 
 
 Whitehall. The more immediately practical problem 
 to-day is not whether free contract shall be superseded 
 by State control, but what are the wisest methods of 
 exercising State control. I may add that before we 
 criticise the vague language — "a convenient propor- 
 tion of wages " — of the act of Elizabeth, we may ask 
 ourselves whether the legislation of Edward VII and 
 George V is even equally explicit as to the principles 
 on which the determination shall rest. In directing 
 the authorities to get information about *' the plenty 
 or scarcity of the time," the legislation of 1563 at any 
 rate recognised that consideration as to cost of living 
 which the legislation of 1909-12 passed by in silence. 
 To return, however, to other features of the Tudor 
 policy. Having been properly trained and being 
 secured in a "convenient" wage, it was everyone's 
 duty to work ; and it was assumed by statute after 
 statute that employment could be found by everyone 
 who cared to take it. The vagrancy of sturdy beggars 
 was sternly prohibited, in a series of statutes of ever- 
 growing severity. Such persons were to be openly 
 whipped (said a statute of 1598) " until his or her body 
 be bloody, and forthwith sent from parish to parish 
 the straight way to the parish where he was born if 
 the same way be known, and if not, to the parish where 
 he last dwelt one whole year, there to put himself to 
 labour as a true subject ought to do." If he had no 
 parish " settlement," as it was called, he was to be 
 conveyed to the house of correction (whose establish- 
 ment the act authorised), " there to remain and be 
 employed in work until he shall be placed in some 
 
 service." 
 
 109
 
 Economic Organisation 
 
 But all the destitute were not "sturdy," i.e. able to 
 earn their living if they chose. It was gradually borne 
 in upon the minds of the men of the sixteenth century, 
 that, besides "idle and loitering persons and valiant 
 beggars," there were " impotent, feeble and lame, which 
 are the poor in very deed." These must be assisted j 
 no worthy person should be allowed to starve in a 
 well-ordered State ; and accordingly for the relief of 
 the " poor in very deed," the Tudor government gradu- 
 • ally built up the Poor Law, which reached its definite 
 form in the statute of 1601. The real starting point 
 was the act of 1536, which imposed on the several 
 parishes the duty of relieving their own destitute poor. 
 Notice in passing that this was one, and the most im- 
 portant, of those statutes which made the ecclesiastical 
 division of the country, the parish, i.e. the area attached 
 to the village church, the unit of administration for 
 civil purposes. The authority of the local Justice and 
 the machinery of the parish now began to take the place 
 in the life of the people which the lord of the manor 
 and the manorial court had previously occupied : and 
 this was the easier because in rural districts the parish 
 and the Justice in a large proportion of cases were 
 only the manor and its lord under other names. And 
 the explanation of the use made of the ecclesiastical 
 parish is largely to be found in the history of the Poor 
 Law. The Poor Law grew out of a plan to regulate 
 voluntary charity. At first it was thought to be 
 enough that the churchwardens of every parish should 
 take "discreet and convenient order, by gathering 
 and procuring of charitable and voluntary alms of 
 the good christian people within the same with boxes 
 
 no
 
 Tudor Nationalism 
 
 every sunday, holyday, and other festival day and 
 otherwise," and that the parsons "in all and every 
 their sermons ... as in time of all confessions and 
 at the making of wills should exhort, move, stir and 
 provoke people to be liberal " ; and it was expressly 
 laid down that, when voluntary alms would not 
 suffice, the parishioners were not to be " constrained to 
 any such certain contribution but as their free wills and 
 charities shall extend." But organised charity broke 
 down then, as it has so frequently broken down since. 
 In 1555 it was enacted that any parishioner who refused 
 to make a suitable contribution should be " gently ex- 
 horted " by the parson and churchwardens, and if he 
 was obstinate he should 'be sent for by the bishop and 
 talked to. In 1563 it was recognised that even the 
 eloquence of the bishop might fail ; and it was pro- 
 vided that an " obstinate person " should be summoned 
 before the Justices (or mayors in towns), who should 
 lay an assessment upon him. And finally, in 1572, the 
 Justices were empowered to make a direct assessment, 
 and to appoint overseers of the poor to take charge 
 of the whole business. 
 
 The relief of the poor thus fell under the super- 
 vision of the Justices. Sed quis custodiet custodes 
 ipsos f — who would supervise the Justices ? The 
 answer is the Council. It is a very striking fact that 
 until quite recent years England has been distinguished 
 from the countries of the Continent in the possession 
 of a systematic national provision for the destitute. 
 And this is the more remarkable because England 
 by no means led the way in this matter. It did 
 but follow in the wake of the Low Countries, of 
 
 III
 
 Economic Organisation 
 
 France and Germany, The principles involved had 
 been clearly stated, among Protestants by Luther and 
 Zwingli, among Catholics by the humanist Vives ; 
 they had been discussed and accepted by the highest 
 theological tribunal of the western world, the Sor- 
 bonne ; and they had attracted universal attention 
 when they had been carried out by the enlightened 
 municipality of Ypres. It is curious that one Flemish 
 city, Ypres, should have led the way in the reform of 
 the relief of the poor, and another, Ghent, should 
 occupy the same honourable position in our own 
 time with regard to unemployment insurance. But 
 the continental poor-relief measures, for various reasons 
 still rather obscure, did not succeed in permanently 
 establishing themselves. The outcome was different 
 in England, because here the Privy Council had 
 sufficient hold upon the country to force the Justices 
 to do their prescribed work. And, curiously enough, 
 it seems to have been during the period 1 629-1 640, 
 when Charles I tried to dispense with a parliament, and 
 the Privy Council was quite exceptionally vigorous in 
 dragooning the country gentry, that the Poor Law 
 finally took firm root in English soil. The policy of 
 "Thorough" was successful in this one direction, 
 whatever it may have been in others. 
 
 These, then, were the main outlines of the Tudor 
 system of government. It assumed that normally 
 every able-bodied subject willing to work could find 
 employment on satisfactory terms. This assumption 
 was likely to be realised in a more or less static 
 society ; a society in which there was little change in 
 the volume and distribution of employment, or in 
 
 112
 
 Tudor Nationalism 
 
 which the changes were so gradual that the labour 
 force could readily adjust itself to altered circum- 
 stances. But, as a matter of fact, the demand for 
 labour was violently disturbed during the period in 
 more ways than one. To begin with, it was seriously 
 diminished in the country districts by the enclosures 
 for sheep farming ; " for one shepherd or herdsman," 
 wrote Sir Thomas More in 151 6, "is enough to eat 
 up that ground with cattle, to the occupying whereof 
 about husbandry many hands were requisite." For 
 this reason, if for no other, the Tudor government 
 could not hesitate to interfere and try to stop the 
 enclosure movement. And it had two other reasons, 
 which are clearly set forth in Lord Chancellor Bacon's 
 History of Henry VII. Bacon's whole political attitude, 
 be it noted in passing, was based on a consistent theor- 
 ising of the Tudor policy ; and, according to Bacon, 
 enclosure was prejudicial alike to the king's revenue 
 and to the king's militai-y power. When, says he in 
 the passage from which a few words have already 
 been quoted, " enclosures began to be more frequent, 
 whereby arable land, which could not be manured," 
 i.e. worked or cultivated, " without people and families, 
 was turned into pasture, which was easily rid by a 
 few herdsmen ; and tenancies for years, lives, and at 
 will, whereupon much of the yeomanry lived, were 
 turned into demesnes ; . . . the king knew full well 
 that there ensued upon this a decay and diminution 
 of subsidies and taxes ; for the more gentlemen, ever 
 the lower books of subsidies." Moreover, "it hath 
 been held," he continues, " by the general opinion of 
 men of best judgment in the wars . . . that the prin- 
 
 113 H
 
 Economic Organisation 
 
 cipal strength of an army consisteth in the infantry or 
 foot. And to make good infantry, it requireth men 
 bred, not in a servile and indigent fashion, but in some 
 free and plentiful manner. Therefore if a state run 
 most to noblemen and gentlemen, and the husbandmen 
 and ploughmen be but as their workfolks and labourers 
 or else mere cottagers, which are but housed beggars, 
 you may have a good cavalry, but never good stable 
 bands of foot. And this is to be seen in France and 
 Italy, and some other parts abroad . . . inasmuch 
 as they are enforced to employ mercenary bands of 
 Switzers, and the like, for their battalions of foot." 
 
 Hence the several statutes to check sheep farming ; 
 and especially the most important of all, that of 1489, 
 which prohibited the " letting-down " of houses of hus- 
 bandry which were used with twenty acres of ground 
 or upward. This, as Bacon explains, would serve, if 
 enforced, for both purposes — to maintain a substantial 
 yeomanry and to provide employment : " the houses 
 being kept up did of necessity enforce a dweller ; and 
 the proportion of land for occupation being kept up 
 did of necessity enforce that dweller not to be a beggar 
 or cottager, but a man of some substance, that might 
 keep hinds and servants and set the plough a-going." 
 Hence a series of Royal Commissions of enquiry, be- 
 ginning with one in 15 17 of which Sir Thomas More 
 was a member ; with others in 1548, 1566, 1607, and 
 then in rapid succession in 1632, 1633, and 1636. Here 
 again the Council of Charles I tried to carry through a 
 policy of Thorough in the teeth of enclosing land- 
 owners ; and one of the reasons for the unpopularity of 
 Archbishop Laud with the squirearchy was his vigour- 
 
 114
 
 Tudor Nationalism 
 
 ous efforts to " lay open enclosures." I cannot help 
 thinking that the action of the government, spasmodic 
 as it was, and apt to be hindered by the selfish interests, 
 from time to time, of certain great lords on the Council 
 (as in the minority of Edward VI), did do a good deal 
 to check the enclosure movement. 
 
 But England was now becoming a manufacturing 
 country as well as an agricultural one ; and to the long- 
 continued dislocation of agricultural labour was now 
 being added the periodical depression due to fluctua- 
 tion in the demand for manufactured goods. Occa- 
 sional over-production is the inevitable concomitant of 
 all manufacture carried on for a wide market, when 
 there is not sufficient knowledge and concerted action 
 among manufacturers to adjust supply to demand. We 
 have seen that the woollen manufacture was the first, 
 and for centuries the only, English industry to obtain a 
 foreign market ; we have seen that this extension of the 
 market was in part the cause, and in part the effect, of 
 the appearance of the new classes of capitalist middle- 
 men, viz. the clothiers and of capitalist exporters, viz. 
 the Merchant Adventurers. And as soon as a foreign 
 cloth trade had been created, it began to suffer from 
 grave periodical depression and lack of employment 
 — due usually to a temporary loss of the foreign market 
 owing to various causes, political or economic. The 
 government was not inclined to look on passively ; 
 both because its whole social policy rested on the 
 assumption that the willing workman could always get 
 paid employment, and also because weavers out of 
 work were apt to be turbulent and a danger to the 
 public peace. And the policy of the Council was 
 
 115
 
 Economic Organisation 
 
 precisely the same in this respect from the days of 
 Cardinal Wolsey to the days of Charles I. In 1528, 
 1586, 1622, 1629, they did just the same thing. They 
 sent to the Justices of the counties affected, and 
 directed them to summon the clothiers before them 
 and urge them to continue to give employment. Such 
 measures are intelligible when we find that, in the time 
 of James I, a really prosperous clothier — and there 
 were many such — was reckoned to find work for some 
 five hundred persons. " We may not endure," wrote 
 the Council in 1622, "that the clothiers should, at 
 their pleasure and without giving knowledge thereof 
 unto this Board, dismiss their workpeople, who, being 
 many in number and most of them of the poorer sort, 
 are in such cases likely by their clamours to disturb 
 the quiet and government of those parts wherein they 
 live." The clothiers commonly replied that they 
 could not find a market for their cloth at Blackwell 
 Hall : the London merchants, they alleged — especially 
 the Merchant Adventurers, who had a monopoly, as 
 against other Englishmen, of the export cloth trade — 
 would not buy from them. Thereupon the merchants 
 were sent for and severely talked to, and threatened 
 with the loss of their privileges if they did not take the 
 accumulating bales off the clothiers' hands. 
 
 The fluctuation of employment was likely to be even 
 greater under the domestic system than under the 
 factory system. For under the latter the manufacturer 
 has a strong motive — in his fixed plant, which would 
 otherwise remain idle, and in the rent and rates and 
 other general charges which must run on but little 
 diminished — to keep his works going as long as 
 
 116
 
 Tudor Nationalism 
 
 possible, and to manufacture for stock. But under the 
 domestic system the clothiers had no works or plant 
 to be kept going. 
 
 It was apparently deemed a reasonable answer to the 
 remonstrances of the Council for the clothiers to point 
 out that the merchants had ceased to take their goods. 
 Could the merchants have done otherwise ? Cardinal 
 Wolsey evidently thought they could : " When the 
 clothiers do daily bring cloths to your market for your 
 ease, to their great cost, you, of your wilfulness, will 
 not buy them." To behave so was to behave "not 
 like merchants but like graziers" — a byword for 
 selfishness in those days of enclosure. It is interest- 
 ing to note how surprised statesmen were, or feigned 
 to be, at the naked manifestation of commercial 
 self-interest. Perhaps there was even then enough 
 capital in the hands of the merchants to enable them 
 to anticipate to some extent the reopening of the 
 foreign market, temporarily closed by international 
 complications ; a little pressure from the Council may 
 have been salutary. But it must be remembered that 
 the exporters traded on their individual account : the 
 only plan by which the risk of buying ahead of 
 demand could be fairly distributed would be to raise a 
 joint stock to which they should all contribute ; and 
 this was apparently done at least once, in 1586. 
 
 But, if it came to the worst, there was the Poor Law 
 to fall back upon. " If there shall be found a greater 
 number of poor people," wrote the Council to the 
 Justices in 1622, "than the clothiers can employ, we 
 think it fit, and accordingly require you, to take order 
 for putting the statute in execution, whereby there is 
 
 117
 
 Economic Organisation 
 
 provision made ... by raising of public stocks for 
 the employment of such as want work." This is an 
 aspect of the Elizabethan Poor Law which is often 
 left out of account. The Overseers of the Poor, ran 
 the act of 1601 — repeating legislation which went back 
 to 1572 — were to provide " a convenient stock of flax, 
 hemp, wool, thread, iron and other stuff, to set the 
 poor on work." The full history of this policy is still 
 to be written. Perhaps the need diminished as time 
 went on ; but for half a century or more the parish 
 authorities did, as a matter of fact, try in many places 
 to provide work for the unemployed. The attempts 
 were doubtless often ill managed and badly organised. 
 We are not told how the parish authorities managed 
 to dispose of the output ; but, on the other hand, we 
 certainly are not sufficiently acquainted with contem- 
 porary circumstances to condemn the Tudor policy 
 off-hand. 
 
 118
 
 LECTURE VI 
 
 Agricultural Estates and English Self- 
 Government 
 
 In this lecture I intend to deal with the distribution 
 and cultivation of agricultural land in England during 
 the centuries since the Revolution of 1688. We are 
 compelled to take that starting point, though we should 
 like to go further back, because we there get some 
 sort of statistical basis in the calculations of the con- 
 temporary statistician, Gregory King. According to 
 his estimate, there was then a population in England 
 and Wales of five and a half millions. Out of these, 
 more than four and a half millions, if we may trust 
 his calculations, were still maintained by agriculture, 
 and not half a million by manufacture and internal 
 trade. Some three-quarters of a century later, Arthur 
 Young, the celebrated author of the agricultural Tours, 
 writing in 1769, estimated the population as being 
 then at least eight and a half millions, and of these 
 he ascribed hardly more than three millions to agri- 
 culture, and just three millions to manufactures. 
 Neither of these estimates is likely to be very close ; 
 but if they at all approximate to the truth, they indi- 
 cate not only a very great increase in the manufactur- 
 ing population, but also a considerable decline, positive 
 as well as comparative, in the rural population. 
 
 119
 
 Economic Organisation 
 
 But 1688 is also, in itself, a date of the utmost 
 significance for our present purpose. It marks the 
 definite establishment of Parliamentary Government 
 in England. Whatever power, for a century and a 
 half to come, monarchs might continue to exercise, 
 they had to obtain through their influence in Parlia- 
 ment. And Parliament reflected the interests of the 
 landlord class, reinforced or mitigated, from time to 
 time, as the case might be, by those of the merchants. 
 It became impossible for an English monarch, even had 
 he desired it, to pursue a policy not in line with the 
 views represented in Parliament. Now the investiga- 
 tions of Knapp and his disciples have proved beyond 
 a doubt that in Germany the maintenance of peasant 
 cultivators over a great part of country was due, 
 very largely, to the policy of "peasant protection" 
 followed by Frederick the Great and other paternal 
 princes of the eighteenth century. They insisted 
 on the retention of the existing number of peasant 
 holdings on the estates of the lords of land ; and this 
 for precisely the same reasons as Lord Chancellor 
 Bacon, as we have seen, assigned for the measures of 
 Henry VII. In their judgment, the absorption of the 
 customary peasant holdings in the lords' demesnes 
 was injurious both to the revenue and to the army. 
 And, like the Tudors and early Stuarts, they fixed 
 their attention on the keeping up, de facto, of the 
 number of peasant households, and avoided the ques- 
 tion of the legal right to the property. But with the 
 fall of the independent power of the Council, nothing 
 of this kind was any longer possible in England. 
 
 Moreover, in the years immediately preceding and 
 
 120
 
 Self-Government 
 
 succeeding the Revolution in England, the crown 
 lands passed almost entirely into private hands. Such 
 a change was naturally favoured by political thinkers 
 who wished the crown to lose all sources of supply 
 outside Parliament. Yet it was precisely on the 
 crown lands, more conservatively managed, as they 
 commonly were, than other properties, that in more than 
 one of the larger German states customary tenancies 
 survived, right down to the time, towards the end of 
 the eighteenth century, when governments came to be 
 inspired by a pro-peasant policy and set about con- 
 verting tenancies into ownership. 
 
 The course of English political development was 
 confirmed by the ecclesiastical changes which accom- 
 panied or followed the Reformation. The country 
 where to-day peasant proprietorship is most universal is 
 perhaps Bavaria. There the Counter- Reformation was 
 triumphant, and the Church retained its estates. And 
 this contributed in the long run to the extension of pea- 
 sant properties in two ways, negatively and positively. 
 Negatively, because the unenterprising ecclesiastical 
 lords allowed their customary tenants to remain ; so 
 that, when, in the nineteenth century. Church lands 
 were secularised, there was a body of cultivating peasants 
 still in occupation who could easily be converted into 
 owners. Positively, because the large subsidies which 
 the sovereigns obtained from the ecclesiastical assem- 
 blies saved them from dependence on a parliament of 
 squires. We have seen already how in England the 
 dispersal of the monastic lands into lay hands under 
 Henry VIII enlarged the area within which the ordinary 
 motives of landlordship would be likely to operate 
 
 121
 
 Economic Organisation 
 
 energetically. But it should also be noticed that the 
 abandonment by Convocation in 1662 of the right of 
 granting clerical subsidies was an important step in the 
 process which finally deprived the English king of all 
 chance of pursuing an independent social policy. 
 
 And now let us look more closely at the rural popu- 
 lation in 1688. There can be little doubt that by that 
 time the class of large landowners already occupied, at 
 least in some districts, the position in which we now 
 find them. What Lord Eversley calls " the ideal of the 
 English land system " was already in large part realised. 
 Sir Roger de Coverley, the baronet of Worcestershire 
 described by Addison in the Spectator in 17 11, was 
 " landlord," he tells us, " to the whole congregation " 
 in the parish church, as well as patron of the living. 
 When the sermon is finished, the knight walks down 
 from his seat in the chancel between a double row of 
 his tenants, who stand bowing to him on either side. 
 He " is a justice of the quorum ; he fills the chair at 
 quarter sessions v/ith great ability, and three months 
 ago gained universal applause by explaining a passage 
 in the Game Act." He is, in fact, already " the 
 squire " of English fiction — the squire of Fielding and 
 Washington Irving, of Trollope and Mrs. Humphrey 
 Ward. Yet the " ideal " of which Lord Eversley 
 speaks was not yet by any means completely realised. 
 There were many villages not yet dominated by a single 
 great landowner ; there were still a considerable number 
 of small landowners — either freeholders or copyholders 
 with a security of tenure amounting practically to com- 
 plete ownership. These were the famous " yeomen " 
 of England; at a time when " yeomen " was something 
 
 122
 
 Self-Government 
 
 more than a picturesque literary term. There were, for 
 instance, at least two of them among Sir Roger's near 
 neighbours ; and the Spectator came up with them as 
 they were riding to the assizes : one is described as "a 
 yeoman of about a hundred pounds a year," who " has 
 been several times foreman of the petty jury ; " and the 
 other was left by his father fourscore pounds a year, 
 but had lost so much in consequence of his litigious 
 temper that he was not then worth thirty. With these 
 figures of yeomen's incomes may be compared a passage 
 which implies that the income of Sir Roger himself 
 was at least ;^5oo a year. How many such yeomen 
 can we suppose there to have been, about this time ? 
 Well, Gregory King gives the following estimates : i6o 
 temporal lords, with average incomes of ;^32oo ; 800 
 baronets, with average incomes of ;^88o ; 600 knights, 
 with average incomes of £6^0 ; 3000 esquires, with 
 average incomes of ;^45o : practically all of these must 
 have owned whole parishes, in many cases several 
 parishes. Then King goes on : 12,000 gentlemen, with 
 average incomes of ;^28o : the contemporary use of the 
 word " gentleman " implied the ownership of landed 
 estate ; 40,000 " freeholders of the better sort," with 
 average incomes of ^^91 ; and 120,000 "freeholders of 
 the lesser sort," with average incomes of ;^55. Accord- 
 ing to these figures, the total income of the lesser land- 
 owners was still almost five times that of the esquires 
 and other large proprietors. 
 
 A century later — as we learn from Arthur Young, 
 writing in 1793 — "small properties" in England were 
 "exceedingly rare" ; and tlie general impressions we 
 get from his writings have lately been confirmed 
 
 123
 
 Economic Organisation 
 
 by statistical inquiries based upon the Land Tax 
 Assessments. The amount of land in twenty-four 
 Oxfordshire parishes held in properties of less than 
 100 acres diminished between about 1600 and 1785 
 by two-thirds ; in ten Gloucestershire parishes by 
 four-fifths ; and much the same " consolidation of 
 estates and shrinkage in the number of small owners " 
 can be shown to have taken place over the rest of 
 the country. If we may generalise from a few known 
 cases, the building up of the very large estates pro- 
 ceeded most rapidly between about 1720 and 1785. 
 
 Now how did this take place ? Mainly by purchase. 
 This would be recommended to their employers by 
 up-to-date stewards. The agent to the Duke of Buck- 
 ingham, Edward Laurence, in a well-known treatise, 
 The Duty of a Steward to his Lord (1727), advises the 
 steward not to forget " to make the best enquiry into 
 the disposition of any of the freeholders, within or 
 near any of his lord's manors, to sell their lands, that 
 he may use his best endeavours to purchase them at 
 as reasonable a price as may be, for his lord's advan- 
 tage and convenience." The small owners were offered 
 prices in excess of the capital value of their properties 
 as sources of income, and were glad to get the money 
 to pay off their debts, put into trade, or even to stock 
 larger farms as tenants. Where did the buyers obtain 
 the purchase money they so freely offered ? Mainly 
 from wealth gained in trade. The last quarter of 
 the seventeenth and the first quarter of the eighteenth 
 century were marked by an extraordinary expansion of 
 English oversea trade, as illustrated by the struggle 
 over the privileges of the East India Company, so 
 
 124
 
 Self-Government 
 
 graphically described by Macaulay, side by side with 
 a great enlargement of the woollen industry, which 
 furnished the chief article of export, and the establish- 
 ment of new trades, especially silk-weaving, by the 
 Huguenot refugees. It was the money made in 
 trade which enabled the government to contract a 
 great public debt, and it was in return for a loan that 
 a body of public creditors were granted the privileges 
 of a banking company and so created the Bank of 
 England. A " moneyed interest," as the political writers 
 of the time termed it, came into existence ; or rather 
 grew into so much larger proportions as for the first 
 time to balance the "landed interest." To writers 
 who clung to the ideals of the past it was a subject 
 for lament that, in the language of Swift, "power 
 which was used to follow land " had " now gone over 
 to money." But owing to the peculiar character of 
 English nobility, and the peculiar system of English 
 government, it inevitably became the dearest wish of 
 the moneyed interest itself to join the ranks of the 
 landed, and there were no such obstacles in the way 
 as existed in some other countries. Men enriched by 
 trade bought estates and tried to " found families " ; 
 and men of old county families "married into the 
 city," and strengthened their position in the country 
 by the use of the fortunes of heiresses. Once ob- 
 tained, great estates were kept together by the device 
 of " Family Settlements." This requires some ex- 
 planation. 
 
 In England there is now no such thing legally as 
 " entail " ; i.e. land cannot be indefinitely tied up in 
 such a way, by any single deed or conveyance, that 
 
 125
 
 Economic Organisation 
 
 its ownership must necessarily pass henceforward in 
 a certain prescribed Hne. At one time, certainly, 
 entails were authorised by the statute De Bonis of 
 1285 : according to that statute, land granted to a 
 man and the heirs of his body could not be per- 
 manently parted with by the grantee, and after his 
 death it necessarily passed to his lineal heirs. But, 
 in course of time, means were found for evading the 
 act ; especially by the device of a fictitious lawsuit, 
 called a " common recovery," which enabled the life 
 tenant (or, as we should say now, the life owner) to 
 free himself from the restriction, and obtain the 
 right of selling or otherwise disposing of the estate. 
 Taltarum's case in 1472 approximately marks the time 
 when the contrivance was fully allowed by the courts. 
 The great lords, including the king, might wish to 
 secure the reversion of the estates they had granted 
 to their vassals, by insisting that possession should 
 be limited to descendants in the direct line, and that, 
 when the line failed, the land should escheat to the 
 superior lord ; but the great body of the landed gentry 
 were evidently too strong for them, and insisted on 
 disposing of their lands as they pleased. It is the 
 more remarkable that about the middle of the seven- 
 teenth century the process of legal construction should 
 in effect be exactly reversed, and that legal ingenuity 
 should be turned, and with success, to the invention 
 of means by which estates, when once obtained, could 
 be "kept in the family." An accurate account in any 
 brief shape of the legal steps involved in a "strict 
 settlement " is beyond the wit of man to compose : 
 the whole business is immersed in a sea of technicalities 
 
 126
 
 Self-Government 
 
 in which only lawyers, and but few of them, can swim 
 with safety. But the effect of what happens is that 
 by a series of legal arrangements, repeated in every 
 generation, commonly at the marriage of the heir, the 
 ownership of the estate is always settled for a genera- 
 tion ahead. Primogeniture is secured from generation 
 to generation, and the nominal proprietor is never 
 more than a " life tenant." " Primogeniture " indeed, 
 as an authority has well said, who himself belonged 
 to one of the Whig houses, " is accepted by the whole 
 nobility, the squires of England, the lairds of Scotland, 
 and the Irish gentry of every degree, as almost a 
 fundamental law of nature, to which the practice " 
 of settlement "only gives a convenient and effectual 
 expression." 
 
 The credit for having added the last completing 
 touches to the necessary legal procedure is ascribed 
 to Orlando Bridgman, a famous conveyancer of the 
 Commonwealth period, who became Lord Keeper 
 under Charles II ; and it is commonly supposed that 
 the object of the device was to secure landed families 
 from the forfeiture of estates during the troubles of 
 the Civil Wars. It is curious to find that the arrange- 
 ment known as " Fideicommiss," which in Germany 
 achieves precisely the same object as the Englisli 
 strict settlement, though in a somewhat different way, 
 is also traced to a contemporary and not dissimilar 
 period, that of the Thirty Years' War. But while it 
 was estimated, in the middle of last century, that in 
 i:i.ngiaad the estates under settlement exceeded two- 
 thirds of the kingdom, the Fidcicummisse in Prussia, 
 as lute as 1895, only covered some six per cent, of 
 
 127
 
 Economic Organisation 
 
 the area of the state, and even in Silesia did not 
 amount to fifteen per cent. Of late years, however, 
 their number has been growing so rapidly as to attract 
 a good deal of attention. The explanation is to be 
 found in the number of men who have recently 
 acquired great fortunes in business and in finance, 
 and who now seek to found country families for the 
 sake of the social consideration, the sport, and, it 
 would appear sometimes, the titles of nobility, which in 
 a country like Prussia large landed estate is supposed 
 to bring with it. The old aristocracy complain that 
 " good old-fashioned landlordism suffers from the 
 invasion of the Berlin Bourse," and cry out for a 
 law which shall prohibit the formation of Fideicom- 
 misse by recent purchasers. 
 
 All this helps to explain the fresh vitality poured 
 into the landowning class in England in the seven- 
 teenth and eighteenth centuries from the circles of 
 trade and finance. For why did wealthy Englishmen 
 seek to accumulate estates and then to keep them 
 together ? Partly, no doubt, because they were held to 
 be peculiarly safe investments. But in new countries 
 like America it does not occur to millionaires to create 
 great country estates. The reason, as Toynbee pointed 
 out, is to be found in the character of the contemporary 
 political system. To begin with, landed estate of a 
 sufficient size practically secured for its owner, if he 
 was not quite exceptionally stupid or drunken, the 
 position of Justice of the Peace. Such a position 
 gave dignity and secured respect, as well as substantial 
 power. 
 
 Gneist, the most distinguished German constitu- 
 
 128
 
 Self-Government 
 
 tionalist of the last generation, wrote a famous history 
 of the poHtical system of England, to which he gave 
 the title Self -Government. The very name implied 
 praise ; and it was meant by Gneist to indicate the 
 superiority of the English administrative system, which 
 he held up for the imitation of his countrymen, over 
 the bureaucratic system of France. And his concep- 
 tion of "self-government" he thus defines : "internal 
 administration of the country by unpaid magistrates, 
 having control, for the purpose, of local rates." But 
 this means simply that administration of the country 
 by the Justices, and especially by the corporate 
 authority of Quarter Sessions, which remained in 
 their hands until it was taken away from them and 
 transferred to elected County Councils in 1888. I 
 remember when I was a student at Gottingen — some 
 years before, but at a time when the inevitable change 
 was already looming in the distance — hearing a lecture 
 by the distinguished German historian, Reinhold Pauli. 
 He ended his course on English constitutional history 
 by giving a glowing account of the fabric of local 
 government. But as we left the lecture room he said 
 to me, " I haven't the heart to tell them that what I 
 have been describing is passing away." And with all 
 its great merits — merits in itself in spite of the jests 
 about "Justices' justice," and, still more, merits as the 
 alternative to a bureaucracy — the English system of 
 local " self-government " was one of the main reasons 
 for the desire to build up large landed estates. 
 
 The other main reason was the character of the 
 central government, — the Parliamentary oligarchy. 
 The power of the Whig ministry rested on the control 
 
 129 I
 
 Economic Organisation 
 
 of votes in Parliament. Large landed property gave 
 its owners great local influence in determining the 
 elections. Those who controlled the elections could 
 demand a share of ministerial patronage. And as the 
 settling of estates left the younger sons of the landed 
 gentry to be otherwise provided for, they must be 
 quartered on the army, the church, and the public 
 services. Large estates, local administration, parlia- 
 mentary government, patronage, and primogeniture 
 were thus all inseparably associated. 
 
 It should not be forgotten that it was not only 
 yeomen, accustomed to put their own hands to the 
 plough, who were induced to sell out. In certain 
 parts of the country — and especially in the west, where 
 the substantial village and widespreading manor of 
 the Midlands had not been the rule — there were in 
 the sixteenth and seventeenth centuries a considerable 
 number of small landowners, who, whatever their 
 origin may in reality have been, were accounted gentry 
 by the heralds of the period, with the right to armorial 
 bearings. In their Visitations of Devon between 153 1 
 and 1620, the heralds enrolled fourteen "gentle" 
 families whose names began with A, forty-seven begin- 
 ning with B, sixty-three beginning with C. Of the 
 A families only one remains among the landowners 
 of to-day ; of the B and C families only five under 
 each letter. The rest have disappeared, and their 
 lands passed into other hands, chiefly to new families 
 coming out from the towns. And it is interesting 
 to observe that, the more commercial England in fact 
 became, the more general was the contempt for trade 
 among the landed gentry who were themselves largely 
 
 130
 
 Agricultural Estates 
 
 its offspring. It is probably with perfect accuracy 
 that a well-known writer, who has an extensive know- 
 ledge of the genealogies and traditions of the west 
 country, attributes the " irruption of false pride relative 
 to ' soiling the hands with trade ' " to " the great 
 change that ensued after Queen Anne's reign." "Vast 
 numbers of estates changed hands, and passed into 
 the possession of men who had amassed fortunes in 
 trade ; and it was among the children of these rich 
 retired tradesmen that there sprang up such a con- 
 tempt for whatever savoured of the shop and the 
 counting house." Certainly the Elizabethan and 
 Jacobean monuments to be found in parish churches 
 record the origin of many a squire's wealth in his 
 prosperity as " Citizen and Mercer," " Citizen and 
 Haberdasher," of London or some other town, in a 
 way for which it would be hard to find parallels on 
 the mural tablets of a later date. 
 
 But while actual purchase will explain the dis- 
 appearance of a great many of the small separate 
 properties, which were actually "freehold," and of 
 those copyholds which were distinctly recognised to 
 be "copyholds of inheritance," it does not account 
 for the development of landlordship in another and 
 perhaps even more important direction. It explains 
 it extensively, but not intensively. We have seen that 
 the result of the enclosures of the sixteenth century 
 was not greatly to diminish the number of peasant 
 families except in certain districts. Most of them had 
 stayed on their customary holdings in much the same 
 material condition as before ; but with many of them a 
 change had been effected in their legal status. They 
 
 131
 
 Economic Organisation 
 
 had been induced to "surrender their copies/' which 
 so long as they retained them might perhaps have 
 given them a secure heritable estate, in return for 
 leases for lives or for terms of years. Fitzherbert 
 concluded his well-known book on Surveying, printed 
 in 1523, with a frank piece of advice and a remark- 
 able prophecy. Let the lords of manors encourage 
 the tenants to exchange their strips one with another, 
 so that each may enclose "one little croft or close 
 next to his own house," by offering to grant to each 
 of them a lease at the same rents and services as 
 before, " to have to him and to his wife and to his 
 children, so that it pass not three lives, then being 
 alive and named." "The lords, meseemeth, can do 
 no less than to grant them these three lives of the old 
 rent, remembering what profits they may have at the 
 end of the terms, they know not how soon. For, un- 
 doubted, one set day cometh at last, and though the 
 advantage of the lords come not anon, it will come at 
 length. And therefore saith the philosopher : Quod 
 difl'ertur non auferiur : that thing that is deferred is not 
 taken away." Some of the new owners of monastic 
 lands were not inclined to be so patient. " Making 
 us believe that our copies are void," the tenants are 
 represented as complaining, "they compel us to sur- 
 render all our former writings, whereby we ought to 
 hold some for two and some for three lives, and to 
 take by indenture for twenty-one years." How far 
 such extreme measures went we cannot say, but we 
 have reason to believe that Fitzherbert's more moderate 
 and cautious advice was frequently followed. A 
 
 definite agreement that the lease should be renewed 
 
 132
 
 Agricultural Estates 
 
 on the same terms, which was sometimes made, was 
 not always complete security. Thus we know that on 
 certain royal estates in Elizabeth's reign, the tenants 
 accepted leases for forty years, renewable at the option 
 of the holder, on payment of a fine of two years' rent, 
 instead of their " copies and customary estates " ; but 
 when one of the estates was sold to the servant of a 
 courtier they were in great alarm, "perceiving that 
 they were likely to have their lands and tenements 
 after the expiration of their leases taken from 
 them." And well in the eighteenth century Laurence 
 is heard teaching the same lesson to his readers as 
 Fitzherbert : " Noblemen and gentlemen should en- 
 deavour to convert copyhold for lives to leasehold for 
 lives." 
 
 Now all this does not mean that as soon as the 
 leases expired, the holding at once became a yearly 
 tenancy at a competitive or rack rent. As a fact 
 the leases — especially of larger farms — were very 
 commonly renewed time after time on payment of 
 a lump sum known as a fine. In many cases the 
 convenience of occasionally receiving a good round 
 sum — especially where the landlord was a corporate 
 body and the fine was divided among its members — 
 was a powerful reason against converting the holding 
 into a yearly tenancy. But the change from copyhold 
 into leasehold, when there was no express right of 
 renewal, had this effect : it turned the landlord into 
 the absolute owner, with a legal right to dispose of 
 the land as he pleased, instead of being a partial 
 owner only, sharing the property in it with a tenant 
 who enjoyed an heritable right — in other words, it 
 
 133
 
 Economic Organisation 
 
 destroyed the semi-proprietorship of the peasant copy- 
 holder. It was sometimes asserted in the eighteenth 
 century that leases for Hves or for long terms of years, 
 renewable on paying a fine, ought in justice to be 
 regarded as constituting a certain tenant right : that 
 the son or other representative of the previous tenant 
 ought to have "a renewable right," even without 
 express stipulation in the lease, on payment of a fixed 
 fine. But this contention was never supported by the 
 courts. And thus almost insensibly, as the result of a 
 change from copy to lease which to very many tenants 
 might seem purely formal, the old tenant-right passed 
 away. Only a few copyholds, and they copyholds of 
 inheritance, remained as exceptional curiosities ; and 
 no new tenant-right arose in England like that which 
 managed to form itself in Ulster. 
 
 So much then for the ownership of land : the growth 
 in extension of landed estates, and the intensification 
 of the landlord's ownership within the several manors. 
 We may suppose both to have gone on briskly during 
 the first three-quarters of the eighteenth century. We 
 have now to look at a second but closely connected 
 series of changes — the amalgamation of farms. This 
 was also one of the measures advised by Laurence 
 in 1727: "the steward should endeavour to lay all 
 the small farms, let to poor indigent people, to the 
 great ones." But he recommends patience, and that 
 the landlord should wait till farms fell in by death ; 
 and it seems to have been in the latter part of the 
 century that the policy began to be generally carried 
 out. When it came, it was the concomitant of the 
 second and much more sweeping movement of en- 
 
 134
 
 Agricultural Estates 
 
 closure ; and this again was largely the consequence 
 of a great wave of interest in agricultural science. 
 
 An enthusiasm for agricultural improvement took 
 possession of a few great landlords early in the 
 Hanoverian period. The pioneer was Lord Towns- 
 hend, who about 1730 turned away with disgust 
 from political intrigue and devoted himself to his 
 estates. The great achievement by which he earned 
 the honourable title of "Turnip Townshend " was 
 the field cultivation of turnips and clover. This 
 rendered unnecessary the customary triennial fallow, 
 and so rendered possible the so-called Norfolk or 
 four-course system of agriculture, which became the 
 model for the rest of England ; and which, by making 
 it possible to keep stock in large numbers, increased 
 the supply of manure and so resulted in richer crops. 
 A little later, Bakewell in Leicestershire revolutionised 
 the art of the grazier, and showed how the ox and sheep 
 might be grown for food and not for draught and wool. 
 As Townshend led the way in producing grain for the 
 coming millions, so Bakewell produced beef and mutton 
 for the millions. The oxen and sheep in the Smithfield 
 market were from two to three times as heavy at the 
 end of the eighteenth century as at the beginning. 
 
 Soon after the accession of George III, the passion 
 for improvement became general among landlords. 
 The way was led by Coke of Holkham, who possessed 
 large means which he could devote to the enrichment 
 of the soil and to the introduction of new crops and 
 artificial cattle-foods on the farms he took into his 
 own hands from tenants who refused to accept leases 
 at increased rentals. His rent-roll increased from 
 
 135
 
 Economic Organisation 
 
 some ;^2ooo in 1776 to some ^^20,000 in 18 16 : but 
 this was the result of a bold and lavish expenditure 
 of capital, as well as of untiring personal application 
 to the management of his estate. 
 
 The consequence of these and similar improvements 
 all over the country was a vast increase in the produc- 
 tion of food. And this increase rendered possible the 
 expansion of our population, which was stimulated by 
 the growth of the factory industries, offering employ- 
 ment to children, and by that most mistaken policy 
 with regard to poor relief which was adopted generally 
 by the Justices at the end of the eighteenth century, 
 and which made it a paying speculation for the rural 
 labourer to marry early. We are accustomed now to 
 think of English manufactures as being exchanged for 
 foreign food supplies : it must be remembered that 
 well into the nineteenth century this could not take 
 place. It was impeded no doubt to some extent by 
 the protective tariff ; but it was impeded also by the 
 long Napoleonic wars ; and even if the freest importa- 
 tion of corn had been permitted, there were no foreign 
 supplies available to feed the rapidly growing English 
 population until the virgin soils of the New World 
 were made accessible, in the last quarter of the nine- 
 teenth century, by improvements in transportation. 
 Indeed, during the worst years, when prices were at 
 their height, from 1795 to 1802, importation under 
 the operation of the sliding scale was, in fact, almost 
 fiee. The English population certainly went through 
 hard times : but it was at any rate kept alive, and 
 enabled to increase fifty per cent, between 1750 and 
 1800 and a hundred per cent, between 1800 and 1850. 
 
 136
 
 Agricultural Estates 
 
 Under these circumstances there was every motive 
 to augment the productivity of the soil. The object 
 appealed to the immediate self-interest of the landlords, 
 since it would increase their rents ; and it might well 
 seem a patriotic duty, since it would find food for 
 the growing population and enable England to resist 
 the world domination of Napoleon. And what obvi- 
 ously stood in the way was the open-field system of 
 farming with intermixed strips which still prevailed 
 over perhaps half the arable area of most parishes in 
 central and southern England. It was uneconomical 
 and prevented improvement, and hence reformers like 
 Arthur Young, who began his celebrated tours in 1767, 
 were never weary of calling for its abolition, and with 
 it of the common pastures. Enclosure had never 
 absolutely ceased since Tudor times, but now it began 
 again with fresh ardour ; and between 1760 and 1850, 
 by means of Enclosure Acts, practically all the re- 
 maining open fields and most of the commons were 
 swept away. 
 
 We cannot doubt that the change was associated 
 with a vast improvement in agricultural methods and 
 in the production of food ; and Jeremy Bentham, 
 the utilitarian philosopher, had some justification in 
 thinking the spectacle of an enclosure " one of the 
 most reassuring of all the evidences of improvement 
 and happiness." The high price of wheat in the later 
 years of the eighteenth and the early years of the 
 nineteenth century furnished both a stimulus and an 
 excuse for the enclosure movement, just as the demand 
 for wool had done in Tudor times ; for wheat could 
 be grown much more profitably on enclosed farms. 
 
 137
 
 Economic Organisation 
 
 A chart which registers the number of enclosure 
 acts and the price of wheat per quarter shows that 
 they moved together : the higher the price, the greater 
 the number of enclosure acts pushed through. And 
 it seems to have been proved recently that the amount 
 of injustice in the reapportioning of the rights in- 
 volved was less than has often been supposed. The 
 small open-field farmer, however, and still more the 
 cottager were often more injured by the enclosure of 
 the waste or common, inasmuch as it prevented his 
 keeping cows or pigs, than by the throwing together 
 of the acres in the open fields : and two-thirds in extent 
 of the land enclosed was in fact common or waste. 
 
 The agricultural reformers of the time believed not 
 only in enclosed farms but in relatively large farms. 
 And here, as soon as the economists made their appear- 
 ance in the first half of the nineteenth century, the 
 agricultural writers had the supposed authority of poli- 
 tical economy on their side. Farming on a large 
 scale, it was supposed to be demonstrated, was more 
 economical than on a small : its gross produce might 
 not be greater, but its net produce certainly would be. 
 
 This was probably true enough for cereal farming, 
 which made large wheat crops its main object. Ac- 
 cordingly, M'Culloch, the permanent economist of the 
 Edinburgh Review, vigorously advocated large farming 
 as the best means of promoting national well-being. 
 " If a country were generally divided into small farms," 
 he wrote in 1838, " a much greater number of labourers 
 would necessarily be engaged in the cultivation of the 
 soil, and there would be a proportionally smaller 
 quantity of its produce to dispose of to others." While 
 
 138
 
 Agricultural Estates 
 
 in France, he asserted, two-thirds of the people were 
 employed in agriculture, in England less than one- 
 third sufficed to carry on an infinitely superior system 
 of cultivation. " Here is the powerful spring that has 
 contributed more, perhaps, than any other to enable 
 us to carry our commercial and manufacturing pros- 
 perity to its present unexampled height, and which 
 makes us advance in the career of improvement. Let 
 us not, therefore, by giving the smallest countenance 
 to any scheme either for dividing estates or for building 
 cottages on wastes, do anything that may tend to 
 increase the purely agricultural population. The 
 narrower the limits within which it can be confined, 
 the better will be our agriculture, and the greater will be 
 the surplus produce with which to feed the other classes, 
 on whose numbers and prosperity the wealth, power 
 and glory of the country must ever mainly depend." 
 
 The conjunction of the self-interest of the landlords 
 who in the nineteenth century were mostly Tories, 
 with the supposed science of the economists who were 
 mostly Radicals, had the natural result. Small farms 
 of twenty, thirty, forty, fifty and sixty acres were thrown 
 together to form large farms of from a hundred and 
 fifty to two hundred acres ; and on many a large farm 
 of to-day the small farm-houses of an earlier period 
 are still standing, divided into labourers' dwellings. 
 And thus the large capitalist farm system which had 
 arisen first on the demesne lands was extended finally 
 to the lands once held by small customary tenants : 
 and the social gulf between farmer and labourer was 
 left bridgeless over the larger part of the country. 
 
 139
 
 LECTURE VII 
 
 The Industrial Revolution and Freedom of 
 
 Contract 
 
 "The Industrial Revolution" has come to be the 
 generally accepted designation for a certain period of 
 English economic history. It owes its present vogue to 
 its employment by Toynbee as the title of his lectures, 
 pubhshed in 1884 J ^^^ its place in economic literature 
 has been confirmed by its adoption as the title of the 
 elaborate and substantial treatise of a French scholar, 
 M. Mantoux, two and twenty years later. The term 
 was not absolutely original with Toynbee. Several 
 years before, Jevons in the book on the Coal Question 
 which aroused so much attention, had remarked in 
 passing that " writers of the eighteenth century enter- 
 tained most gloomy anticipations concerning the 
 growing debt, and they were only wrong in under- 
 valuing the industrial revolution which was then pro- 
 ceeding " ; and it is highly probable that other writers 
 had used the same descriptive term even before Jevons. 
 Yet it was Toynbee's use of it which drove home the 
 idea that the events of the period to which he referred 
 did indeed involve a change so complete and so rapid 
 as to be properly designated " a revolution." 
 
 With the term as Toynbee and Mantoux employ it, 
 no fault can be found. But in this case as in others — 
 
 140
 
 The Industrial Revolution 
 
 for instance, that of "the Renaissance" — the progress 
 of historical science consists first in introducing em- 
 phasis and constructing large generahsations, and then 
 in going on to readjust the proportions and give due 
 weight to qiiahfications. This is the more necessary 
 because what to Toynbee and Mantoux was "the 
 industrial revolution of the eighteenth century" has 
 become in the mouths of their popularisers " the 
 industrial revolution." 
 
 The qualification which now needs calling attention 
 to is that the changes between, let us say, 1776 
 (when Adam Smith published the Wealth of Nations 
 and James Watt perfected the steam-engine) and 1832 
 (the date of the first Reform Bill), did but carry 
 further, though on a far greater scale and with far 
 greater rapidity, changes which had been proceeding 
 long before. No great period is in actual fact sharply 
 cut off from that which precedes and follows it ; and 
 for our present purpose it is perhaps more important 
 to view the development in the reign of George III 
 as a culmination of movements already on foot than 
 as creating something entirely new. 
 
 The primary force that was at work was Capital, and 
 the capitalistic spirit — the desire of Investment for the 
 sake of gain — which was bound up with it. Long 
 before 1776, by far the greater part of English industry 
 had become dependent on capitalistic enterprise in the 
 two important respects that a commercial capitalist 
 provided the actual workmen with their materials and 
 found a market for the finished goods. The workmen 
 continued to work in their own homes or in sheds 
 or outhouses attached to them ; and for this reason 
 
 141
 
 Economic Organisation 
 
 the system may be spoken of as domestic, (German : 
 Hausindustrie). I think this is on the whole the most 
 convenient practice, and I have followed it in the 
 previous lectures. As it happens, however, the term 
 domestic system, when it was first used in England, 
 in the 1806 Report of a Committee of the House of 
 Commons, was applied to somewhat different con- 
 ditions. It was applied especially to the organisation 
 of the woollen industry in Yorkshire ; where the 
 cottage manufacturer bought his own wool and then 
 got it spun for himself, and hence was no mere wage- 
 earner, but the producer of a commodity which he 
 himself sold to the merchants at the cloth hall or 
 otherwise. Some of the witnesses sharply distin- 
 guished this system from the system of the West of 
 England, where the workman never owned the material 
 and therefore never owned the goods, and was simply 
 paid wages by the clothier who employed him. The 
 same distinction between cottage manufacturers selling 
 their product and cottage workmen selling their labour 
 is to be found in the industrial history of other 
 countries, and French and German writers have made 
 various attempts to invent a suitable terminology. In 
 German the word most commonly used for the latter 
 conditions is Verlagsystem. Verleger is a term still in 
 common use for a merchant who gives out work to 
 be done in the employe's own workshop or workroom : 
 the English term which most nearly covers the same 
 meaning is factor. Verlag is the building whence 
 material is distributed and where the finished goods are 
 stored : ivarehoiise is perhaps the nearest equivalent. 
 I remember that when I was wandering once around 
 
 142
 
 The Industrial Revolution 
 
 the " small forge " district of the Thuringian forest, a 
 smith looked up from his anvil to ask me if I was 
 the Verleger from the neighbouring town. If we are 
 to invent a new term, perhaps factor-system might 
 serve ; although the employing capitalists in England 
 were only in certain small trades actually called 
 "factors." Commission-system.^ which has been pro- 
 posed, is obviously inaccurate, because the work was 
 not done on commission, either by the employing 
 capitalist or by the cottage workman. 
 
 A good deal of discussion, too, has turned upon 
 the relation between the two forms of organisation, 
 and between each of them and what preceded and 
 followed. It has been argued that it is mistaken to 
 group them together ; that " the domestic system " of 
 Yorkshire, and forms like it, were really more closely 
 akin to the handicrafts of an earlier period : the differ- 
 ence consisted simply in its diffusion over rural districts, 
 and the disappearance in Yorkshire (and commonly 
 in similar cases elsewhere) of the gild organisation 
 binding the several master craftsmen together. On 
 the other hand, "the system of the clothier of the 
 west of England," like similar arrangements in other 
 trades and other lands, where the cottage workmen 
 were simply wage-earners, has been said to be more 
 closely akin to the factory system. In this case the 
 manufacture itself, it is urged, had become capitalistic, 
 and not simply the "merchanting" part of the business: 
 and the factor-system, leading to production on a 
 large scale — large from the whole industry though not 
 in the individual shop — and supplying a wide national 
 or even foreign market, was merely an earlier stage of 
 
 143
 
 Economic Organisation 
 
 that grande Industrie of which the factory is the 
 later form. 
 
 The difficulty is that, though cases may actually be 
 found which do indeed answer well enough to these 
 characterisations, they are not sufficiently universal 
 to serve the purposes of classification without a good 
 deal of caution. To begin with, the difference between 
 being paid a price for goods sold and being paid a 
 wage for work done may in practice almost disappear, 
 so far as either the sense of independence or the 
 material well-being of the workman is concerned. 
 And the total output of an industry working under 
 the former conditions and the market ultimately 
 reached by it through various capitalist intermediaries, 
 may be — and in the Yorkshire case actually were — 
 very considerable. 
 
 The question of classification and terminology, how- 
 ever, so far as England is concerned, may be passed 
 over with some equanimity because in the period 
 between the gild and the factory it was that more 
 completely capitalised form which involved the pro- 
 vision of material by the capitalist and the payment 
 by him of wages which was by far the most widely 
 prevalent. That this was the case with the clothiers 
 of the south and west of England throughout the 
 sixteenth and seventeenth centuries is beyond all ques- 
 tion. The rising woollen trade of Yorkshire instead 
 of being typical in this respect was exceptional ; and, 
 in consequence perhaps of the subsequent concentra- 
 tion of the woollen industry in the West Riding, and 
 the picturesque description by Defoe, it has been 
 assigned a larger relative importance than it deserves. 
 
 144
 
 The Industrial Revolution 
 
 To that I shall return : the point I want just now 
 to emphasize is that the plan of giving out material 
 and paying wages was characteristic of every other 
 important industry in the eighteenth century. The 
 proof is to be found in the legislation against embezzle- 
 ment of material. If we turn to the article " Manufac- 
 turers " in Postlethwayt's two great folios, The Universal 
 Dictionary of Trade and Commerce, published in 1755, 
 we shall find that it sets forth " the principal laws of 
 England relating to manufacturers and artificers," 
 and that these are concerned entirely with this char- 
 acteristic evil of the prevalent system. There was 
 first the temporary act of 1702, reciting that "many 
 frauds are daily committed by persons employed in 
 the working-up of the woollen, linen, fustian, cotton 
 and iron manufactures, by embezzling and purloining 
 of the materials with which they are entrusted," and 
 providing certain penalties. In 1710 it was made 
 perpetual. The act of 1740 extended its provisions 
 to persons employed " in cutting or manufacturing 
 gloves, breeches, leather, boots, shoes or other goods." 
 This "proving deficient," in 1749 the workpeople 
 affected were classified anew, as "any person hired 
 to make any felt or hat, or work up any woollen, 
 linen, fustian, cotton, iron, leather, fur, hemp, flax, 
 mohair or silk manufactures." In all these cases 
 the dominance of the capitalist middleman was due to 
 the fact that, as things then were, he was needed to 
 organise the manufacture and to assume the risk which 
 was involved in advancing the necessary capital, in view 
 of a market wJiich was too distant and uncertain for the 
 individual artisan to cope with. The craftsman was 
 
 145 K
 
 Economic Organisation 
 
 not yet necessarily " divorced from the instruments of 
 production " — to use the phrase of certain modern 
 writers : he commonly owned his own loom in the 
 woollen and silk trades, just as many a sweated semp- 
 stress of our own day owns her own sewing-machine. 
 It was not the instrument of production, but access to 
 the market that he was cut off from by circumstances. 
 And the essential similarity between industrial condi- 
 tions then and under the subsequent factory system is 
 shown by the fact that we already come across combi- 
 nations of cottage workpeople against their merchant 
 employers and movements for higher wages. 
 
 Before going further we must pause for a moment 
 to consider the exceptional conditions in the cloth 
 industry of the West Riding. Those conditions are 
 thus described by the Report of 1806: "The manu- 
 facture is conducted by a multitude of master manu- 
 facturers, generally possessing a very small and scarcely 
 ever any great extent of capital. They buy the wool 
 of the dealer ; and in their own houses, assisted by 
 their wives and children, and from two or three to 
 six or seven journeymen, they dye it (when dyeing 
 is necessary) and through all the different stages work 
 it up into undressed cloth. . . . The manufacturer" 
 then " carries it on the market day to a public hall 
 or market where the merchants repair to purchase. 
 Several thousands of these small master manufacturers 
 attend the market at Leeds, where there are three halls 
 for the exposure and sale of their cloths ; and there 
 are similar halls at Bradford, Halifax, and Hudders- 
 field." And like similar small manufacturers elsewhere, 
 we are further told that "a great proportion of the 
 
 146
 
 The Industrial Revolution 
 
 manufacturers occupy a little land, from three to 
 twelve or fifteen acres each." 
 
 Three questions suggest themselves : first, why did 
 capital play this relatively minor part in Yorkshire, 
 when in the production of woollen goods of much 
 the same kind (i.e. "woollen" as distinguished from 
 " worsted ") it was so much more prominent elsewhere ; 
 second, how were the goods marketed ; and third, 
 how long did these conditions survive. To the first 
 question, the answer is probably that the capitalist 
 mercantile clothier did not make his appearance in 
 Yorkshire until some considerable time after the in- 
 dustry had risen to importance in that county in the 
 seventeenth century, because the West Riding was a 
 relatively poor district, far behind the fertile counties 
 of the south in agricultural wealth, and a long way 
 off from the capitalists of London and Norwich. 
 Capital did not come forward because in that district 
 it did not exist. To the second question the answer is 
 given by the public markets. In the beginning these 
 were in the open air ; on the bridge at Leeds and then 
 in Briggate, at Huddersfield alongside the churchyard. 
 Then, as the numbers increased who frequented the 
 market, covered halls were provided : in Leeds in 171 1, 
 in Halifax and Wakefield a year or so before. When 
 the domestic industry was at its height, from 1750 to 
 1780, every town of any size in the district erected from 
 one to three spacious buildings of this kind. Such 
 meeting-places for merchants and manufacturers, where 
 goods could be gathered together and displayed, were 
 necessary features in domestic industry of this type ; 
 and the buildings of this sort still standing in many 
 
 M7
 
 Economic Organisation 
 
 localities of western Europe testify to its former preval- 
 ence. Here the smallest manufacturer, who could 
 bring in only one piece a week, could spread out his 
 cloth on the boards with as good a chance to dispose 
 of it to the merchants who came thither as his most 
 prosperous rival. On the third question, how long such 
 conditions lasted, a good deal of light has been thrown 
 by the recent publication of some letters of a Halifax 
 cloth-factor for the year 1706. It is clear that, as 
 early as this, no small part of the business of exchange 
 was being taken away from the public market. Cloth 
 merchants had established permanent connections with 
 particular makers, and now gave them direct orders. 
 Moreover, there was a class of agents or factors, giving 
 orders on commission either for London merchants 
 or for merchants of Rotterdam, Amsterdam, and Ham- 
 burg, and making little use of the public market. 
 And when, under the first two Hanoverian sovereigns, 
 the worsted manufacture, hitherto the monopoly of 
 the Norwich area, was introduced into the Bradford 
 district, the new branch of business was almost from 
 the first carried on by men of larger capital, resembling 
 more nearly the clothiers of the west country. For this 
 two reasons have been assigned which would seem 
 to be adequate : the materials were more expensive 
 and needed more capital for their purchase, the work 
 was less difficult and required less skill on the part 
 of the weavers and the other operatives. Capital took 
 control and operative skill became subservient. 
 
 From this digression let us return to the general 
 English movement. Conditions approached more 
 nearly to the later factory system when the capitalist 
 
 148
 
 The Industrial Revolution 
 
 "undertaker" owned the necessary instrument of pro- 
 duction and let it out to the workman — as, for instance, 
 in the hosiery industry with its knitting-frame. There 
 has been a great deal of discussion as to the distinction 
 to be drawn between the "tool" and the "machine" : 
 the one, it has been said, can be owned by the work- 
 man, the latter is too expensive. If this distinction is 
 valid, then the handloom and the knitting-frame, like 
 the sewing-machine of to-day, were midway between 
 the two. They were not beyond the means of some 
 workpeople : but they were relatively so expensive that 
 under certain circumstances there was an opportunity 
 for a capitalist to step in and supply them. 
 
 An even closer approximation to the factory of later 
 days would be reached when the capitalist thought it 
 expedient to gather a body of workpeople together in 
 one place, under one roof. An organisation of this kind 
 Karl Marx christened " manufacture," as distinguished 
 from the factory system dependent on machinery ; and 
 he laid down that it was " the prevalent characteristic 
 form of the capitalist process of production throughout 
 the period from the middle of the sixteenth to the last 
 third of the eighteenth century." The word " manufac- 
 ture " was certainly not limited in England, during that 
 period, to this particular sense, and it would be difficult 
 to introduce it now as a technical term : but the name 
 would not matter if the fact were as Marx stated. But 
 it is equally certain that though occasional examples 
 may be found, as in the pin manufactory described by 
 Adam Smith, the aggregation of workpeople under the 
 control of capitalists was not the "prevalent char- 
 acteristic" of the period. That is surprising, both 
 
 149
 
 Economic Organisation 
 
 because something of the kind can be found in the 
 EngHsh woollen industry in the first half of the 
 sixteenth century, and because what may seem like 
 a case can be made out for such a stage in continental 
 development. 
 
 John Winchcombe of Newbury, who died about 
 1520, and soon became legendary as the greatest of 
 English clothiers, was said by later tradition to have 
 employed a hundred looms in his house. Another 
 rich clothier, soon after the dissolution of the monas- 
 teries, is reported by an eye-witness to have filled 
 every corner of the lodgings of Malmesbury Abbey 
 with looms, and he was in negotiation for the buildings 
 of Osney Abbey for a like purpose. Moreover, the 
 Weavers' Act of 1555 complains that certain clothiers 
 had set up divers looms in their houses and worked 
 them by journeymen and unskilful persons. Why 
 these experiments were given up it is impossible at 
 present to say. We can hardly explain their abandon- 
 ment by the act I have mentioned, which forbade 
 any weaver outside a town to have in his house or 
 possession more than two looms, or any " person 
 using the feat or mistery of cloth making" — i.e., I 
 presume, any clothier — also outside towns, to have 
 more than one. The act remained on the statute 
 book as late as the beginning of the nineteenth century, 
 and the Committee of 1806 reported that "it is highly 
 valued, and its repeal strongly opposed by a very 
 respectable class of petitioners." But this could not 
 have prevented such establishments being set up in 
 the market towns, like Tiverton, where in fact most 
 of the clothiers lived. We may conjecture that it was 
 
 150
 
 The Industrial Revolution 
 
 the policy of the Tudor government to frown upon 
 undertakings of that kind : for an act of 1585, relating 
 to a coarse cloth made in Cornwall and Devon, ex- 
 clusively for the Breton market, expressly limits the 
 number of looms in that business to three in one 
 house, whether in town or country. But whether it 
 was legislation which brought them to an end or 
 simply the discovery that such aggregations were after 
 all not particularly profitable, and that more could 
 be made with the same capital in commerce overseas, 
 phenomena of this kind did altogether disappear from 
 the woollen industry and the other staple trades until 
 a very short time before the introduction of machinery. 
 During the Stuart period, it is true, large works 
 were established from time to time for various manu- 
 factures. Among these were glass, soap, and wire. 
 Their history has still to be written : but the very fact 
 that it is obscure shows that they could not have 
 flourished to any very large extent. And in the next 
 century the similar attempts made in the staple trades 
 were few in number and evidently not particularly 
 successful. There is an interesting passage in one of 
 Arthur Young's Tours describing what he found in 
 Yorkshire in 1768. At Boynton, he says, " Sir George 
 Strickland was so obliging as to shew me his woollen 
 manufactory ; a noble undertaking, which deserves 
 the greatest praise. In this country the poor have no 
 other employment than what results from a most 
 imperfect agriculture ; consequently three-fourths of 
 the women and children were without employment. 
 It was this induced Sir George to found a building 
 large enough to contain on one side a row of looms 
 
 151
 
 Economic Organisation 
 
 of different sorts, and on the other a large space for 
 women and children to spin. The undertaking was 
 once carried so far as to employ a hundred and fifty 
 Imnds, who made very sufficient earnings for their 
 maintenance ; but the decay of the woollen exportation 
 reduced them so much, that now those employed are, 
 I believe, under a dozen." 
 
 In attributing so much importance to "manu- 
 facture," in the special sense he assigned to it, Marx 
 would seem to have been generalising from France. 
 The "manufactures royales," which were large estab- 
 lishments enjoying special governmental favours in 
 the way of subsidies and exemptions from taxes, and 
 the "manufactures privilegiees," which were similar 
 establishments enjoying a monopoly of certain branches 
 of the trade, are said between them to have turned out 
 at one time two-thirds of the cloth produced in France : 
 and in other industries similar establishments had a like 
 period of success. But all the advantages enumerated 
 by Marx as flowing from co-operation in labour would 
 not have succeeded in establishing these " manufac- 
 tures " without the active support, and even in many 
 cases the initiative, of the government. This was one of 
 the great achievements of Colbert. When the govern- 
 ment withdrew its assistance, the "manufactures" 
 at once began rapidly to decline ; and it seems very 
 doubtful whether their existence vitally affected the 
 subsequent development of industry. In England, 
 the efforts of the government in this direction under 
 the early Stuarts were wrecked by the outcry against 
 monopolies : under the later Stuarts the monarchy 
 was not in a position to carry out a strong industrial 
 
 152
 
 The Industrial Revolution 
 
 policy of its own, and there was no minister like 
 Colbert to attempt it. 
 
 Without special governmental favours, the advantages 
 which the collection of his workpeople in a single 
 building would give an employer were usually too 
 slight and too dubious to encourage any large move- 
 ment in this direction. Where the work could be 
 broken up into a number of separate operations, as in 
 the manufacture of pins, it would doubtless greatly 
 facilitate that type of division of labour to bring 
 together under one roof a sufficient body of men for 
 each to be assigned a specialised job. But where, as 
 in the woollen industry, division of labour could not 
 go beyond the processes of combing, spinning, dyeing, 
 weaving, fulling, &c., there would be no such gain 
 in a mere aggregation of workpeople, performing 
 the same operation. The only advantages that I 
 can discern would lie in the better supervision of 
 the quality of the work and in the greater regularity of 
 output. Against these had to be set the cost of pro- 
 viding the building as well as of the necessary super- 
 vision. Accordingly the only successful introduction 
 of the textile factory, on a considerable scale, before 
 the last quarter of the eighteenth century, was in the 
 silk-spinning industry ; and here the explanation is 
 to be found in the introduction of machinery which 
 required "power" (in this case supplied by water) 
 beyond that producible by human muscle. It is only 
 because the spinning of silk was, after all, a relatively 
 small trade that the advent of the factory on the 
 Derwent in 171 8 did not transform English industrial 
 life as the subsequent cotton factories did. 
 
 153
 
 Economic Organisation 
 
 The appearance of the factory is therefore the 
 characteristic feature of the industrial revolution of 
 the later years of the eighteenth century, even though 
 it had actually come into existence sporadically half 
 a century earlier. It meant a new forward step in 
 the evolution of capital : the assumption, on a large 
 scale, by the owner or controller of capital of a 
 further function besides that of the mercantile inter- 
 mediary — the function of actually directing and super- 
 vising the manufacturing process itself. And this, if 
 it did not produce absolutely new phenomena, im- 
 mensely intensified the effects of the capitalist control 
 already established. The effects, I hasten to add, 
 were good as well as bad. For the advent of capital 
 brought about a vast enlargement and cheapening of 
 production. This should never be lost sight of, though 
 it is so obvious that one sometimes forgets it. 
 
 The cotton " factory " was so much the most 
 striking example of the new conditions, that "factory 
 system " is on the whole the most expressive term to 
 describe the new organisation. But of course the 
 essential feature of the phenomenon is the aggregation 
 of a body of workpeople in one workplace, drawn 
 together by the necessity of attendance upon power- 
 machinery, and directed by capitalist employers. 
 This was to be seen in the coal-mine and in iron 
 or engineering works just as much as in the tex- 
 tile factory. Undoubtedly it was the necessary 
 outcome of the great mechanical inventions. Of 
 these there may be distinguished two parallel series — 
 one in the textile sphere and one in the allied spheres 
 of coal, iron, and steel. I do not propose to give an 
 
 154
 
 The Industrial Revolution 
 
 account of them : it is easily found in many a book. 
 It is well to bear in mind in studying them what 
 Jevons has remarked as to the three conditions of 
 invention. There must be, first, the discovery of a new 
 principle for the accomplishment of some mechanical 
 task. That principle may be discerned centuries before 
 the idea is actually realised, because the other two 
 conditions are absent. Secondly, a method of con- 
 struction must be invented by which the principle 
 can be carried out. And thirdly, a strong practical 
 purpose must present itself, for which the new 
 mechanism is urgently needed. Thus in the history 
 of the steam-engine, the business motive was furnished 
 by the desire to get rid of the water which began to 
 trouble coal miners as shafts became deeper ; and in 
 the textile series, the business motives were, first, the 
 desire to get abundant cotton yarn in order to supply 
 the recently improved handlooms, and then the desire 
 to improve the loom still further in order to make 
 rapid use of the now cheapened and abundant yarn. 
 Throughout, the growth of population, and the im- 
 provement of transportation (by turnpike roads, canals, 
 and later by railways), accompanied the progress of 
 manufactures. It is impossible to say that either was 
 simply the cause or the effect! of the others. All three 
 stimulated and promoted one another. 
 
 Recalling what we have already seen as to the 
 function of capital while industry was still in the 
 " domestic " or " factor " stage, it is clear that its assist- 
 ance would be even more necessary when machines had 
 to be purchased and works erected. Besides Jevons' 
 three pre-requisites, there was, accordingly, another 
 
 155
 
 Economic Organisation 
 
 which had to be reaHsed before manufacture could pass 
 into the machine era : viz. the provision of capital. The 
 manufacturer might conceivably borrow it : in our 
 own day, as we all know, manufacturing activity, as 
 well as mercantile, is greatly forwarded by the organi- 
 sation and extension of credit, through banks and 
 discount houses. In the Industrial Revolution also 
 this factor must be assigned a share : for it is signi- 
 ficant that country banks, which had previously been 
 very few in number, increased quite rapidly from 
 about the time of the American war ; and Adam 
 Smith closed his chapter on banking by a paragraph 
 designed to show that " the late multiplication of bank- 
 ing companies, by which many people have been 
 much alarmed," was all for the best. Competition, he 
 argued, would compel them to be "more circumspect," 
 while it would also "oblige all bankers to be more liberal 
 in their dealings with their customers." But while 
 overdrafts might supplement capital, and the discount- 
 ing of bills might enable manufacturers to turn over 
 their capital more quickly, they would not actually 
 provide, in the first instance, the requisite resources. 
 The mechanism of the limited liability company, by 
 which capital is contributed both by shareholders out- 
 side the actual management and also in the form of 
 debentures or bonds, was, of course, in 1776 three- 
 quarters of a century away. 
 
 Ricardo and the " classical " economists, therefore, 
 were simply giving expression to the facts around 
 them when they wrote as if the men who directed 
 manufactories were themselves, as a rule, the owners 
 of all or almost all the capital they made use of, and 
 
 156
 
 The Industrial Revolution 
 
 when they started the habit, which has survived till 
 to-day, of speaking as if the capitahst and the employer 
 were necessarily the same person. Even in 1848 
 John Stuart Mill observed that "the control of the 
 operations of industry usually belongs to the person 
 who supplies the whole or the greatest part of the 
 funds by which they are carried on." 
 
 We have still to explain the self-owned capital of 
 the earlier generations of factory owners. And recent 
 discussions of this question have taken us back with a 
 renewed appreciation to the phrases of contemporary 
 economists. " Capitals," says Adam Smith — and it is 
 instructive that he uses the word in the plural — " are 
 increased by parsimony and decreased by prodigality ; " 
 and he contrasts the unproductive expenditure of the 
 rich on "idle guests and menial servants," with "the 
 maintenance of productive hands " " by what a frugal 
 man annually saves." Senior, in 1835, introduced the 
 term " abstinence," as more fitly expressing the source 
 of capital. All that his argument required was the 
 purely negative sense which makes abstinence mean 
 simply non-consumption ; yet he characterised abstin- 
 ence as implying "self-denial," and declared that "to 
 abstain from the enjoyment which is in our power" 
 is "among the most painful exertions of the human 
 will." Phrases like these have occasioned no little 
 mirth : it is hard to discover self-denial or parsimony, 
 as the world understands those words, in the processes 
 by which modern capital is most largely accumulated. 
 But as applied to the beginnings in the eighteenth 
 century of modern manufacturing capital, the terms 
 are exact and appropriate. To a great extent it was
 
 Economic Organisation 
 
 in actual fact the result of " parsimony " and " absti- 
 nence," as the plain man uses the words. 
 
 That the new manufacturing middle class was largely 
 Nonconformist is a very familiar fact. But what have 
 not been sufficiently noticed are the economic conse- 
 quences in the eighteenth century of Nonconformist 
 conceptions of religious duty. I need not now discuss 
 how far those conceptions were due to the individu- 
 alism of their theology, an individualism which in 
 Calvinism and later religious movements had gone a 
 good deal beyond the individualism of the earlier 
 stages of the Reformation : nor how far it was due to 
 the political and social circumstances in which the 
 Dissenters found themselves. Whatever may have 
 been the causes, certain ideas became dominant among 
 them, which had not indeed been altogether absent 
 from the Christianity of earlier centuries, but had 
 then been moderated in their operation by other and 
 conflicting opinions. Among these ideas we may 
 single out the following: business as a divine "call- 
 ing"; the sinfulness of pleasure-seeking; the lawful- 
 ness of material gain. " If God," replied Richard 
 Baxter in 1673 to the enquiries of his congregation, 
 "shew you a way in which you may lawfully get 
 more than in another way,- if you refuse this and choose 
 the less gainful way, you cross one of the ends of your 
 calling, and you refuse to be God's steward." Pecuniary 
 means, acquired by assiduous application to business 
 and the prudent choice of the gainful way, naturally 
 accumulated when there was no expenditure on amuse- 
 ments or on interests outside the business, the family, 
 and the religious " connection." To a shrewd and scru- 
 
 158
 
 The Industrial Revolution 
 
 pulous observer like John Wesley, this was a matter for 
 grave alarm. " Religion," he wrote, " must necessarily 
 produce both industry and frugality, and these cannot 
 but produce riches. . . . We tmist exhort all Christians 
 to gain all they can and to save all they can : that is, 
 in effect, to grow rich." " But as riches increase, so 
 will pride, anger, and love of the world." The only 
 remedy in his opinion was for " those who gain all they 
 can and save all they can " to " likewise give all they 
 can." It is not uncharitable, however, to conjecture 
 that, with ordinary humanity, the natural way to dispose 
 of savings, which could not be used for display or self- 
 indulgence, was in business investment. And here we 
 have doubtless the explanation to a large extent of the 
 way in which capital was found in middle-class business 
 circles to finance the new inventions. 
 
 The establishment of the factory system would 
 inevitably have been attended by great social dangers 
 and difficulties even if the social situation had been 
 altogether satisfactory in every other respect. In the 
 closing years of the eighteenth century and the open- 
 ing years of the nineteenth, this was, I need hardly 
 say, by no means the case in England. There was 
 the great war which involved heavy taxation ; and 
 there was a recently elaborated system of out-door 
 Poor Relief which, however benevolent in intention, 
 was in actual working exceedingly demoralising. But 
 let us concentrate our attention on the industrial posi- 
 tion. We have there to deal with two absolutely 
 different sets of facts. There was, first, the effect of 
 the competition of the new machine-made goods with 
 similar goods made by hand. The supersession of a 
 
 159
 
 Economic Organisation 
 
 widely extended handicraft by mechanical methods 
 of production involves a problem which no country 
 so far has had the wisdom to solve satisfactorily : 
 in England it was the long-drawn agony of the 
 handloom weavers (when the new machinery, first 
 applied to the rising cotton trade, was introduced into 
 the deep-rooted and widespread woollen industry) which 
 added so greatly to the gloom of the Chartist period. 
 And secondly — and it is this that specially concerns 
 us here — there were the conditions produced within 
 the machine-using industries themselves. In all of 
 them the cost of the machinery necessarily created 
 a wide social cleavage between employers and em- 
 ployed. Although what we may call "patriarchal" 
 conditions of intimacy and mutual knowledge survived 
 far more than is commonly supposed, and survive even 
 to-day, the personal tie tended to be replaced, wher- 
 ever large bodies of workpeople were brought together, 
 by a purely " cash nexus." This was not, as Carlyle 
 might lead us to suppose, due to any peculiar hard- 
 ness of heart on the part of the employers : it was 
 due to the necessities of the situation. And as the 
 personal tie weakened, employers were likely to press 
 more strenuously their right — and even, as they might 
 urge, their duty — to be governed by profit-making con- 
 siderations, and to be more intent on buying their 
 labour as cheaply as possible. The absence of com- 
 bination among the workpeople put them at a dis- 
 advantage in their bargaining for remuneration ; while 
 the like absence of combination among employers 
 forced the more benevolent among them to follow the 
 lead of the more " business-like." Meanwhile, in the 
 
 l6o
 
 Freedom of Contract 
 
 textile industries there were even graver immediate 
 causes of evil. The new machinery rendered the work 
 physically so light that it became possible to employ 
 women and children in large numbers ; and the 
 sinking of capital in costly machinery made it seem 
 the interest of employers to work that machinery as 
 continuously as possible. Neither the employment 
 of children nor excessive hours were absolutely new 
 phenomena. Both had been seen in the domestic 
 workshop. But the employment of children was now 
 systematised and extended on a vast scale ; and exces- 
 sive hours, instead of being an occasional episode, 
 say once a week, became a regular thing, every day 
 in the week. 
 
 The country was the slower in dealing with the 
 situation because of what had now come to be the 
 prevalent belief, not only in business circles but also 
 in the minds of the intellectual leaders of public 
 opinion, that control or regulation by the State was 
 an antiquated and irrational policy ; that the State 
 ought to limit its functions to the maintenance of 
 what was called "law and order," and that the liberty 
 of the individual to pursue his own interest in his own 
 way — what was denominated '' freedom of contract " 
 — was not only socially expedient, but also a natural 
 right. It is interesting to observe how in this matter 
 the pressure of business interest went side by side with 
 the elaboration of an abstract social theory. For a 
 century after the Revolution of 1688, the Whig party, 
 which found its theoretic justification in John Locke's 
 doctrine of natural rights, was also the party of the 
 mercantile or moneyed interest. And this interest, 
 
 161 L
 
 Economic Organisation 
 
 though it demanded protection and privilege in foreign 
 trade, found the existing State regulation of industry 
 at home very much in its way. Listen to the frank 
 utterances of Sir Josiah Child, the great East India 
 merchant, in his celebrated and oft-reprinted Discourse 
 of Trade, first published in 1698 : 
 
 " All our laws that oblige our people to the making 
 of strong, substantial (and, as we call it, loyal) Cloth, 
 of a certain length, breadth and weight, if they were 
 duly put in execution, would, in my opinion, do more 
 hurt than good, because the humours and fashions of 
 the World change, and at some times, in some places 
 (as now in most), slight, cheap, light Cloth will sell 
 more plentifully and better than that which is heavier, 
 stronger and truer wrought ; and if we intend to have 
 the trade of the World, we must imitate the Dutch, 
 who make the worst as well as the best of all manu- 
 factures, that we may be in a capacity of serving all 
 Markets and all Humours. 
 
 I conclude all our laws limiting the number of 
 Looms, or kind of servants, and times of working, to 
 be certainly prejudicial to the Clothing-Trade of the 
 Kingdom. . . . 
 
 I conclude that stretching of Cloth by Tenters, 
 though it be sometimes prejudicial to the Cloth, is 
 yet absolutely necessary to the Trade of England, and 
 that the excess of straining cannot be certainly limited 
 by any law, but must be left to the Seller's or Ex- 
 porter's discretion, who best knows what will please 
 his Customers beyond the Seas." 
 
 The period of Whig supremacy has been appro- 
 priately christened the period of "parliamentary Col- 
 
 162
 
 Freedom of Contract 
 
 bertism." Its objects were the same as those of the 
 strong paternal government of Louis XIV under his 
 great minister Colbert ; but the policy was shaped, 
 not as in France by the independent, if mistaken, 
 views of the crown and its chosen advisers as to the 
 well-being of the nation as a whole, but by the 
 immediate interests of the mercantile classes as ex- 
 pressed through Parliament. Unlike the Tudor policy, 
 it fixed attention on the foreign market, on imports 
 and exports, and allowed the whole system of internal 
 regulation — justices' assessments of wages, appren- 
 ticeship, supervision of processes, &c. — to fall into 
 abeyance. And when Adam Smith, continuing and 
 developing the individualism which characterised all 
 the philosophic speculation of the eighteenth century, 
 turned the argument for individual liberty directly 
 against the prevailing commercial restrictions, he did 
 not hesitate to be consistent and denounce the surviv- 
 ing remnants of industrial restriction at home as also 
 contrary to the principle of natural liberty. Starting 
 with the well-known Whig doctrine of Property as 
 set forth by Locke, the philosopher of the Revolution 
 settlement, he gave it an industrial application, a propos 
 of the law of apprenticeship. "The property which 
 every man has in his own labour, as it is the original 
 foundation of all other property, so it is the most 
 sacred and inviolable. The patrimony of a poor man 
 lies in the strength and dexterity of his hands ; and to 
 hinder him from employing this strength and dexterity 
 in what manner he thinks proper without injury to his 
 neighbour, is a plain violation of this most sacred 
 property. It is a manifest encroachment upon the 
 
 163
 
 Economic Organisation 
 
 just liberty both of the workman and of those who 
 might be disposed to employ him." 
 
 Under the influence of this belief the whole Tudor 
 code as to wages and employment was swept away in 
 1813 (wages) and 1814 (apprenticeship). "The reign 
 of Elizabeth," said the member in charge of one of 
 these bills, "though glorious, was not one in which 
 sound principles of commerce were known." 
 
 In a very few years the country began once more to 
 build up again piecemeal a new industrial code, con- 
 trolling the free play of individual action even more 
 effectively than the code of Elizabeth. I have not 
 time to enter into the details of the factory legislation 
 by which England, as it preceded the rest of the 
 world in its industrial evolution, set an example also 
 for the rest of the world in coping with some of the 
 gravest evils it produced. Let us indicate simply the 
 leading stages. The hours of labour of children and 
 young persons in cotton mills were limited in 1819 ; 
 in 1833 this restriction was extended to all the textile 
 trades, and a beginning was made in the creation of a 
 staff of Inspectors to see that the acts were enforced. 
 The Central Government, through the departments 
 then existing or subsequently created of the Home 
 Office, the Board of Trade, the Local Government 
 Board, and the Education Office, resumed the task of 
 enforcement of a social code which had dropt, a cen- 
 tury and a half before, from the hands of the Stuart 
 Council. In 1842 the State proceeded to interfere with 
 the labour of adults, by excluding women from under- 
 ground mines. In 1844 women were included with 
 
 children and young persons in the limitation of factory 
 
 164
 
 Freedom of Contract 
 
 hours. Those who advocated the measure did so with 
 the knowledge that it would, in effect, limit the hours 
 of employment of adult men in textile mills, and pro- 
 moted it with that purpose — "fighting," as was said, 
 " behind the women's petticoats," But the legislature 
 did not take the next long step and directly regulate 
 the hours of labour of adult men for almost half a 
 century; until in 1893 it made a fresh departure by 
 permitting the Board of Trade, on representation to it 
 of excessive hours worked by railway servants, to bring 
 a certain very gentle pressure to bear on the railway 
 companies to revise their time schedules. Fifteen years 
 later, in 1908, it took the gigantic step of limiting the 
 number of hours to be worked by all underground coal 
 miners; and this measure had been delayed so long 
 only because the miners themselves had not been 
 altogether unanimous in its favour". 
 
 Meanwhile, as early as 1844, the State had begun to 
 enforce certain regulations with regard to safety by in- 
 sisting on the proper fencing of machinery. Twenty 
 years later, in 1864, the legislature proceeded to em- 
 power the Secretary of State to issue special rules 
 regulating processes in dangerous trades ; but again 
 these were designed only for the protection of women 
 and children, and it was not till thirty years afterwards 
 that power was given, in 1895, to impose special rules 
 in regard to workshops in which men only were 
 employed. It is true that since 1850 the inspection 
 of coal mines had been undertaken by the State, and 
 every great catastrophe has since been followed by new 
 rules to promote safety ; and as early as 1875, freedom 
 of contract as between seamen and shipowners had 
 
 165
 
 Economic Organisation 
 
 been limited by the enactment of the Merchant Ship- 
 ping Act, which prohibited the loading of ships be- 
 yond the PHmsoll line : but these invasions of the 
 responsibilities of employers were long regarded as 
 altogether exceptional, and as justified by the peculiar 
 helplessness of men who leave the surface of the solid 
 earth to go down into its bowels or to traverse the sea. 
 Looking back on the history of the century 1813- 
 1913, it is now evident that the development of indus- 
 trial legislation has taken place chiefly in two periods. 
 These are, first, the period of bitter struggle over the 
 Factory Acts. In this struggle the economists were, as 
 a body, in favour of freedom all round — in industry 
 as well as commerce. The leaders of the Free Trade 
 movement, and especially John Bright, strenuously 
 opposed the proposed Factory Acts as "contrary to 
 all principles of sound legislation." Sir Robert Peel, 
 the son of a Lancashire cotton spinner, who became 
 the idol of the free-traders, was the hete noir of Lord 
 Shaftesbury, the champion of the cotton operatives ; 
 and the great Ten Hours' Act of 1847 ^^^ passed by 
 the Tory country gentlemen, partly from honest con- 
 viction, and partly in revenge for the repeal of the 
 Corn Laws by the representatives of the manufacturing 
 interests in the previoiis year. But by 1850 the main 
 lines of factory legislation were settled. Henceforth, 
 for many years, the movement was of the nature of a 
 very slow and cautious extension of its principles to 
 industries allied to the textile group and to non-textile 
 factories and workshops. During this period, when 
 the principle of commercial free trade was accepted by 
 both great political parties, it was also a matter of 
 
 166
 
 Freedom of Contract 
 
 general agreement that freedom of industrial contract 
 should be the general rule, and any " interference of 
 the State " altogether exceptional : the presumption 
 was held to be against it. And as it happened, the 
 most formidable of the critics, from the historical side, 
 of the individualist philosophy of the economists. 
 Sir Henry Maine, in his work on Ancient Law, pub- 
 lished in 1861, seemed to put the principle of free 
 contract on an even firmer basis than before by repre- 
 senting it as the inevitable outcome of an age-long 
 historical evolution. From Status to Contract came in 
 to supplement Laissez Faire. 
 
 It was not till the 'nineties that really large new de- 
 partures began to be made. The difficulties of Irish 
 land tenure had opened the eyes of the political party 
 which had been most closely identified in the past 
 with the principle of individual liberty to the necessity 
 of interfering with free contract between landlord 
 and tenant at least in Ireland ; but the old Political 
 Economy could hardly be "banished to Saturn" in 
 the case of Ireland without losing some of its vitality 
 in England. Moreover the movement of European 
 thought which, starting from Locke, had made men 
 in the eighteenth century regard the State as a mere 
 constable, whose only duty was to keep the ring within 
 which individual competitors should fight out their 
 battles, had, long before this, taken with Hegel another 
 turn. Among the English thinkers who gave expres- 
 sion to a more trustful view of the State may be 
 specially mentioned one who deeply influenced many 
 of the young men who afterv/ards came to the front — 
 the Oxford philosopher Thomas Hill Green. In a 
 
 167
 
 Economic Organisation 
 
 modest pamphlet printed in 1881 he drew a far- 
 reaching distinction between " mere freedom from 
 restraint " and " freedom in the higher sense — the 
 power of men to make the best of themselves." In 
 this latter sense, freedom might actually be forwarded 
 by greater restraint. 
 
 At one time it seemed as if the influence of Herbert 
 Spencer's writings would bring fresh strength to the 
 declining forces of individualism. But Spencer's anti- 
 pathy to State action was hard to reconcile with his 
 view of society as an organism, and went to extremes 
 which robbed him of the support of practical men. 
 Somewhat more effect was produced by Darwinism ; 
 it was seriously argued by certain devotees of science 
 that because " the struggle for existence " led to " the 
 survival of the fittest" in the biological sphere, no 
 restraint of any kind should be laid upon economic 
 competition. But here, again, the doctrine involved 
 too complete a reversal of modern civilisation to carry 
 weight with legislators : and it was never accepted by 
 Darwin's effective populariser, Huxley. And when 
 the period of stagnation in economic thought passed 
 away, which followed upon the mid-century domina- 
 tion of Mill, and a new and more fertile period began, 
 Jevons in 1882 broke away from the traditional pre- 
 sumption in favour of Laissez Faire and declared that 
 every case must be considered on its merits. 
 
 Whatever the causes may have been, the last quarter 
 of a century has seen the enactment of a great code of 
 compulsory insurance : insurance in fact, though not in 
 name, against Accidents, by the Workmen's Compensa- 
 tion Act of 1897, and, both in fact and name, by the In- 
 
 168
 
 Freedom of Contract 
 
 surance Act against Sickness of 191 1, and the measure 
 coupled with it of insurance against Unemployment, 
 at present restricted to three great trades, but doubtless 
 soon to be extended to the whole field of industry. 
 At the same time, as we have already seen, a fresh 
 beginning has been made with the State regulation of 
 wages by the Trade Boards Act of 1909 and by the 
 Minimum Wage Act for miners of 19 12. If the spirit 
 of Burleigh, the great statesman of Elizabeth, could 
 have heard what was said in the Commons when the 
 legislation of his mistress was swept away in 1813-14, 
 and could then have listened to what was said in the 
 same chamber in 1908-12, he would have smiled with 
 a grave satisfaction. 
 
 But historical evolution never really returns upon 
 itself ; there is always a vital difference between new 
 and old, however much they seem to resemble one 
 another. The difference between the Tudor situation 
 and our own consists in the advent, meanwhile, of 
 democracy. The State which has enacted the great 
 measures of the last two decades is a democratic State, 
 working mainly through paid officials ; and that brings 
 with it dangers just as real as, though different from, 
 those involved in a monarchical State compelled to act 
 through a landed aristocracy. 
 
 It is, I believe, a mitigation of those dangers that 
 the modern State, in the matter of wages at any rate, 
 can to a large extent make use of corporate organisa- 
 tions representing both sides of the wages contract. 
 The years which saw the beginnings of State interven- 
 tion saw also the first efforts of the workpeople to help 
 themselves by substituting the " collective bargaining " 
 
 1C9
 
 Economic Organisation 
 
 of trade unions for the impotence of the isolated work- 
 man. In earher centuries combination among work- 
 men to obtain an increase of wages had been forbidden 
 by the common law because it was deemed to be the 
 business of parhament and the justices to regulate the 
 conditions of employment. When the governmental 
 regulation of wages had, in fact, passed away, it might 
 have been supposed that combination among work- 
 people would have been permitted. On the contrary, in 
 1 799 combinations amongst workpeople were prohibited 
 by statute. This law was repealed in 1824-25 ; but the 
 very Radical who brought about its repeal did so in 
 the expectation that " if left alone combinations would 
 cease to exist." Combination long remained under 
 the ban of the economists : to them it was wrong, 
 because it was a violation of natural liberty, an inter- 
 ference with the freedom of each individual to make 
 what bargains he pleased for himself ; and it was also 
 futile, according to the orthodox doctrine of wages. 
 From Free Traders of the Manchester school it received 
 no sympathy : " combinations," said John Bright as late 
 as i860, " must in the long run be as injurious to the 
 working man as to the employer." Yet, as we all know, 
 trade unions succeeded in establishing themselves in 
 all the staple industries of the country, not without 
 bitter struggles, in which there was often violence and 
 folly on one side as well as ignorance of human nature 
 and short-sightedness on the other. And by 1894 the 
 Royal Commission on Labour was able to report that 
 in the staple trades of the country there were " strong 
 trade organisations which are accustomed to act together 
 in masses, and have made the old method of settling 
 
 170
 
 Freedom of Contract 
 
 individual wages by the haggling of the market impos- 
 sible, and which have for the most part already caused 
 the substitution for it of Wages Boards, or other more 
 or less formal institutions, by which they secure a con- 
 sultative voice in the division of receipts between 
 capital and labour." " The most quarrelsome period 
 of a trade's existence," the Commission remarks else- 
 where, " is when it is just emerging from the patriar- 
 chal condition in which each employer deals with his 
 own men with no outside assistance, but has not yet 
 fully entered into that other condition in which trans- 
 actions take place between strong associations fully 
 recognising each other." And the great engineering 
 strike of 1897-8, which raised the question of collec- 
 tive bargaining in a peculiarly difficult form, ended in 
 an explicit recognition of that principle by the vic- 
 torious employers in the terms of settlement. 
 
 It would be absurd after the upheavals of 191 1 and 
 19 1 2 to pretend that even the general recognition 
 of the principle of collective bargaining will alto- 
 gether solve the labour question. Even if the two 
 sides come together and are ready to bargain on behalf 
 of their constituents, they may not be able to reach an 
 agreement. In this case a chairman or umpire — in the 
 last resort appointed by the State — may have to decide, 
 if the two parties can be induced to give him this 
 authority. But he will be greatly assisted by previous 
 discussion ; and his decision would be in vain unless 
 there existed on each side organisations which could 
 carry his decision into effect. In spite of recent 
 storms the situation is really far more hopeful than 
 it was when the combination of the workpeople was 
 
 171
 
 Economic Organisation 
 
 actually far weaker ; and the remedy would seem to 
 lie, in part at any rate, in the direction of an even 
 completer combination of the parties concerned. There 
 are grave difficulties to be overcome before the problem 
 is solved of the most suitable organisation on either 
 side. Just now it is the question of trade union 
 structure that is uppermost : whether it shall follow 
 the lines of " crafts " {i.e. single industrial processes), 
 or "occupations" [i.e. groups of kindred processes), 
 or " industries " (as indicated by the grouping of 
 employers). Probably no uniform solution will ever 
 be possible ; nor to the like difficulties on the side 
 of employers. But this need not prevent the adoption 
 of working arrangements which will be sufficiently 
 effective for practical purposes. The industrial organi- 
 sation of the future will probably emerge, as did that 
 of the later Middle Ages, from a union of State 
 regulation from above with spontaneous combination 
 from below. 
 
 172
 
 LECTURE VIII 
 
 'Joint Stock and the Evolution of Capitalism 
 
 We have seen that the estabhshment of the factory or 
 "works" system implied the advent of large Capital 
 in the field of manufacture, and the acquisition by its 
 owners or users of the control over the whole process of 
 production as well as of distribution. And it is obvious 
 that what may conveniently and for brevity be called 
 "Capitalism," i.e. modern methods of production 
 directed for the profit-making purposes of capital, has 
 in one respect been vastly successful. Human labour 
 has been applied in an incomparably more effective way 
 than before ; science, by means of costly machinery, 
 has utilised forces of nature to an extent and of a kind 
 before undreamt of. Commodities in consequence have 
 been inconceivably multiplied and cheapened ; and, as 
 a result, a population almost four times as great was 
 supported on Eiiglish soil in 1901 as in 1801, and in 
 a state of material comfort which, for the great body 
 of the people, was undoubtedly superior to that of a 
 century before. But it is equally obvious that, human 
 nature being what it is, the capitalistic organisation of 
 industry under private ownership necessarily brought 
 with it a certain opposition of immediate interests 
 between employers and employed, and a constant risk 
 of industrial conflict. 
 
 173
 
 Economic Organisation 
 
 This being so, it was natural that lovers of their 
 kind should look round for some way out of a trouble- 
 some situation. One idea that occurred to them was 
 that the advantages of capital might be retained — the 
 employment of machinery, and production on a large 
 scale — but its disadvantages avoided if the ownership, 
 in the case of each factory or works, could be achieved 
 by its own workpeople. It was, in short, the remedy 
 of Co-operation, as Co-operation was understood by 
 those who first applied it to production. Its ideal was 
 the self-governing workshop, eliminating the individual 
 "employer" with his "profit," and thus abolishing 
 "the wage-system." Encouraged by some apparent 
 successes in Paris and London, in 1848 and the follow- 
 ing years, John Stuart Mill predicted Co-operation's 
 ultimate triumph. "The form of association," he 
 wrote in 1852, in the second edition of his widely- 
 read textbook of political economy, "which, if mankind 
 continue to improve, must be expected in the end to 
 predominate, is not that which can exist between a 
 capitalist as chief and workpeople without a voice in 
 the management, but the association of the labourers 
 themselves on terms of equality, collectively owning 
 the capital with which they carry on their operations, 
 and working under managers elected and removable 
 by themselves." Ten years later, in 1862, Mill declared 
 that the experience already attained " m.ust be conclu- 
 sive to all minds as to the brilliant future reserved for 
 the principle of co-operation." " It is hardly possible 
 to take any but a hopeful view of the prospects of man- 
 kind, when, in two leading countries of the world, the 
 obscure depths of society contain simple working men 
 
 174
 
 Evolution of Capitalism 
 
 whose integrity, good sense, self - command, and 
 honourable confidence in one another have enabled 
 them to carry these noble experiments to a triumphant 
 issue." The success of co-operation, he added, three 
 years later, would bring about "a moral revolution in 
 society ; the healing of the standing feud between 
 capital and labour ; the transformation of human life 
 from a conflict of classes struggling for opposite in- 
 terests to a friendly rivalry in the pursuit of a good 
 common to all ; the elevation of the dignity of labour ; 
 and a new sense of security and independence in the 
 labouring class." 
 
 But these anticipations have been grievously disap- 
 pointed. Hundreds of experiments have been made, 
 and there is a noble story to tell of persistence and 
 self-denial in the scraping-together of capital ; but 
 undertakings for co-operative production in Mill's 
 sense have without exception failed completely, either 
 from the business or from the co-operative point of 
 view. Some would have failed from stress of circum- 
 stances however well managed, but most of the failures 
 were due to mismanagement. The undertakings either 
 did not secure competent managers, usually because 
 they were not ready to pay sufficiently high salaries, 
 or else they quarrelled with them. Industrial self- 
 government proved altogether incompetent to organise 
 production and (what is even more important) to secure 
 a market. Success, where it did come, was equally 
 fatal ; the small societies of handicraftsmen, such as 
 most of the early co-operative groups really were, be- 
 came exclusive if they were successful, and began to 
 employ outside labour ; the large societies formed
 
 Economic Organisation 
 
 later in the cotton-spinning industry became mere 
 joint-stock companies, in which, indeed, working men 
 held shares, but in which the employers and employed 
 ceased to be identical bodies. Capitalism has not, as 
 a fact, been seriously modified by Co-operation. What 
 is called Co-operation has had any considerable 
 measure of success only in the sphere of retail distri- 
 bution ; the large manufacturing establishments run by 
 the federation of distributive stores — the Co-operative 
 Wholesale Society — are carried on in precisely the 
 same way as any well-managed " private " business. 
 
 What is known as ''Profit-sharing" differs from 
 Co-operation in that it proposes to provide all (or, in 
 its latest phase, " Labour Co-partnership," almost all) 
 the capital otherwise than by the contribution of the 
 workers in the several businesses, and to retain, in 
 the hands of those appointed by the owners of the 
 capital, the control over the management of the busi- 
 ness. It proposes, however, to add to the wages of 
 the workpeople some share of the profits, when profits 
 are obtained over and above what is regarded as a 
 proper interest on capital and a proper remuneration 
 for management. Whether this be but a slight modi- 
 fication of the ordinary capitalist system or contain 
 within itself the germs of a true co-operative system 
 need hardly be discussed here, in view of the fact that 
 hitherto its history, like the history of Co-operation 
 itself, has been a record (in every direction save one) of 
 repeated failure. The cause of failure in almost every 
 case, from that in 1875 of Messrs. Briggs, of whose ex- 
 periment Mill wrote in the most hopeful spirit, to that 
 of some recent much-discussed proposals, has been the 
 
 176
 
 Evolution of Capitalism 
 
 apparent incompatibility of profit-sharing with trade 
 unionism. That incompatibility shows itself even when 
 the concern which introduces the scheme does not 
 make — as most of the earher profit-sharing arrange- 
 ments made — abstinence from joining a union a con- 
 dition precedent to the sharing in profit. Employers 
 have now to reckon with the fact that in any industry 
 which employs skilled workmen under substantially 
 similar conditions in a number of establishments, the 
 workpeople of the several concerns are sure to be drawn 
 together by a sense of solidarity of interests, and will 
 certainly endeavour to promote what they deem to be 
 their interests by joint action. Profit-sharing or Labour 
 Co-partnership can hardly be worked without tending 
 to detach the group of men employed in the particular 
 concern from the general body of the trade. For that 
 reason it is certain to be opposed by intelligent trade 
 union leaders. There is only one industry in which it 
 has been found possible to keep it alive hitherto, and 
 that is the gas-making business. Following the prece- 
 dent of Sir George Livesey and the South Metropolitan 
 Gas Company, companies controlling more than half 
 the capital invested in the gas business in the United 
 Kingdom have introduced some element of profit- 
 sharing. But this is a business in which the labour 
 employed is almost entirely unskilled, and trade union- 
 ism has hitherto been very weak, and which is carried 
 on under other conditions exceptionally favourable to 
 profit-sharing. Chief among these are the large degree 
 of local monopoly necessarily enjoyed by the several 
 concerns, and also the peculiar system of legislative 
 regulation to which the industry is subject, — a system 
 
 177 M
 
 Economic Organisation 
 
 which makes an increase of dividend dependent on 
 a reduction of price to the consumer, and so obviously 
 and closely associates the interests of shareholders with 
 the efficiency of the labourers. 
 
 So long as these conditions are absent from other 
 industries, the only application of the idea of profit- 
 sharing which would be feasible would be some plan 
 which made the workpeople share in the profit of the 
 whole mdustry to which they belonged, without regard 
 to the fortunes of the particular concern by which for 
 the time they were employed. But even then the diffi- 
 culty would remain which has been felt in profit-sharing 
 as applied to particular works, viz. that the principle 
 that profit should be shared does not in the least 
 determine how it should be shared. There is no 
 general abstract principle that can be invoked from 
 either side to evade the troublesome necessity of bargain 
 between the parties concerned. 
 
 In opposition to the co-operative school, the great 
 French philosopher, Auguste Comte, maintained — in 
 the same year, 1848, as saw the initiation of co- 
 operative undertakings — that " the division " which had 
 "arisen spontaneously between Capitalist and Work- 
 men " was not a thing that could be reversed. On 
 the contrary it was to be regarded, he held, as " the 
 germ" out of which a future and more satisfactory 
 organisation of industry was to arise. The true solu- 
 tion of the difficulty, he declared, was that " the 
 spiritual power," which he hoped to create, should 
 " penetrate the employers with a strong and habitual 
 sense of duty to their subordinates." As it was easier, 
 he thought, to influence large employers in this direction 
 
 178
 
 Evolution of Capitalism 
 
 than small, the " tendency to a constant enlargement of 
 undertakings " was not to be lamented but welcomed. 
 Comte's hopes, then, were fixed on the " moralisa- 
 tion " of employers. It cannot be denied that some 
 improvement has taken place in that direction. The 
 first generation of factory owners included many 
 overbearing and narrowly self-seeking natures : there 
 is certainly now a far stronger sense prevalent of what 
 employers owe to their workpeople. There has been 
 a quickening of the employers' conscience ; and to this 
 the State by its factory legislation and the pressure 
 of the workpeople themselves through their unions 
 have both contributed in no small measure. And yet 
 the vast change that has taken place in business or- 
 ganisation since Comte's time has evidently tended 
 towards weakening even further the personal tie between 
 employer and employed, and towards putting fresh ob- 
 stacles in the way of any policy on the part of employers 
 which aims at anything besides commercial profit. My 
 reference of course is to the introduction of the limited 
 liability joint-stock company, for which the English 
 date is 1862. The joint-stock method has facilitated 
 the provision of capital for business purposes beyond 
 all expectation : but it has inevitably still further de- 
 personalised the relations of labour and capital. More- 
 over, it has made the situation far more difficult in 
 other ways. Directors feel themselves to be trustees 
 for the shareholders, and morally bound, as such, to 
 sacrifice philanthropy to gain. And owing to the 
 unrestricted transference of shares, high real profits 
 seem but modest returns to shareholders who have 
 come in later and paid high prices for their stock 
 
 179
 
 Economic Organisation 
 
 (simply because dividends were high), not to the com- 
 pany, but to the previous owners ; so that, however 
 large the trading profit may really be, the pressure of 
 all those shareholders who have bought at a high price 
 tends to be against anything that may possibly reduce 
 it. The prospect of any moralisation of individual 
 employers or single employing concerns resulting in a 
 voluntary sacrifice of profit for the benefit of work- 
 people is very small under a joint-stock regime. 
 What, in this position of affairs, is really more possible 
 to hope for, is that profit-seeking itself should lead 
 great manufacturing concerns to adopt measures 
 within their works which will both benefit their 
 people and directly (through internal economies) or 
 indirectly (through the force of advertisement and 
 appeal to the fellow-feeling of the consumer with the 
 workman) accrue to the employers' benefit. There 
 is room for much to be done in this direction — 
 the direction not of self-sacrifice but of enlightened 
 self-interest. Yet "welfare" programmes, to be per- 
 manently successful, must be so carried out as to be 
 consistent with the independence of the workpeople, 
 both pohtical and economic. 
 
 Looking back then on the nineteenth century, we 
 see that no fundamental modification has taken place 
 in the organisation of industrial production. It has 
 continued to be characterised by the dependence of 
 large bodies of workpeople on the provision of capital 
 by investors, induced thereto by the motive of profit. 
 All that state action and labour combination have 
 been able to do, in those branches of manufacture in 
 which they have been effective, is to raise somewhat 
 
 1 80
 
 Evolution of Capitalism 
 
 the plane of competition by enforcing certain standard 
 conditions of employment. What accordingly we have 
 now to observe is the evolution of capitalism, moving 
 in accordance with its own internal laws. 
 
 This evolution has taken precisely the same road in 
 England as in the other great manufacturing countries 
 of the world. Its movement has been marked by four 
 characteristics — (i) Concentration, with larger employ- 
 ment of fixed capital in proportion to labour, and 
 greater average aggregation of workpeople — so that the 
 actual number of mills or works increases more slowly 
 than the number of employes ; (2) Integration ; (3) 
 Combination and (4) Collective Action in the face of 
 labour. Let us look at each of these separately. 
 
 First as to Concentration. On this head we have 
 not yet for England any such easily accessible figures 
 as are provided for Germany and the United States by 
 the official census. There still survive in this country 
 widespread industries, such as that of tailoring, not 
 yet organised on factory lines, but conducted pn the 
 lines of the "domestic" industries of the eighteenth 
 century. There are even a number of small handicrafts 
 retaining many of the characteristics of the old gild 
 industry, though the gilds themselves have long ago 
 passed away. Moreover, new industries are continually 
 coming into existence which in their earlier stages can 
 be carried on successfully in small workshops. The 
 factory system has not yet won the complete domi- 
 nance which was prophesied for it half a century ago. 
 Nevertheless, in the staple industries of the country, 
 the factory or large "works" is the predominant form 
 of organisation ; and these works or factories become 
 
 181
 
 Economic Organisation 
 
 steadily larger and more expensively equipped. Thus 
 in 1844 the total capital invested in cotton mills and 
 machinery was calculated at about twice the annual 
 wages bill ; in 1890 at five times the wages bill ; the 
 average number of spindles per mill and looms per 
 mill was also at least fifty per cent, greater at the later 
 date. And this was in an industry which has notori- 
 ously moved much less rapidly in the direction of 
 concentration than some of the other staple trades, 
 notably the iron and engineering group, and this be- 
 cause a cotton mill still costs comparatively little to erect 
 and equip. Thus it has been reckoned that while 
 there were about four times as many blast-furnaces in 
 1900 as in 1800, the average "make" per furnace had 
 increased wellnigh fifteen times. It should be noticed, 
 however, that this increase in the average size of plants, 
 with a decrease or at any rate not a proportionate in- 
 crease in their number, is not necessarily the same 
 thing as a concentration in the ownership of the 
 capital involved. Thus the number of breweries fell 
 from forty-four thousand in 1850 to between five and 
 six thousand in 1903 ; but with the conversion in the 
 late 'nineties of brewery firms. into joint-stock com- 
 panies there went a wide diffusion in the holding of 
 stock, so that at the later date the share- and debenture- 
 holders in five alone of the largest brewery companies 
 numbered some 27,000 persons. About the same time 
 the capital in the English Sewing Cotton Company 
 belonged to some 12,000 owners, in the Fine Cotton 
 Spinners to between 5000 and 6000 ; while Lipton's 
 great business had as many as 74,000 shareholders. 
 It has indeed been argued that the diffusion of property 
 
 182
 
 Evolution of Capitalism 
 
 in joint-stock undertakings is less than has sometimes 
 been supposed, because a man of means commonly 
 holds shares in several concerns ; and some evidence 
 has been adduced in support of the estimate that the 
 owners of joint-stock properties do not number in all 
 more than 500,000. But when one reflects that most 
 of these must be adult males, usually with several 
 persons dependent upon them, even this minimising 
 estimate shows how far industrial capital is from being 
 owned exclusively by millionaires. The industrial 
 middle class now takes new forms ; it now consists 
 largely of officials of companies and holders of stock. 
 But any one who has walked through the residential 
 suburbs of our great manufacturing cities knows that 
 it shows no sign of disappearing, in spite of the pro- 
 phecies of Marx and his school. It may be doubted 
 whether it was ever relatively stronger than to-day. 
 
 The second characteristic of capitalistic evolution, 
 especially in the last quarter of a century, has been 
 Integration. This has been peculiarly marked in the 
 iron, steel, engineering, and shipbuilding group of 
 trades. By Integration is meant the bringing under a 
 single business control of a whole series of operations 
 contributing to a final result which had been previously 
 conducted entirely apart : for instance, of the whole of 
 the operations involved in the making and employment 
 of steel, from the mining of the ore and coal, through 
 the blast-furnace and steel plant up to the production 
 of hardware, machinery, or ships. In this direction 
 the way was led by Carnegie in America and Krupp 
 in Germany ; but in the 'nineties England rapidly 
 made up the leeway it had lost, and a dozen or more 
 
 183
 
 Economic Organisation 
 
 gigantic unifications took place — either in the shape 
 of actual amalgamation or by means of the purchase 
 of controlling interests. Thus John Brown & Co. of 
 Sheffield, owning coal mines, ore fields, blast-furnaces, 
 and steel plants, and turning out armour plates, boiler 
 plates, and a whole series of steel materials, amalga- 
 mated with the Clydebank Shipbuilding Company, 
 which built battleships and turbine liners. Armstrong 
 and Co. at Newcastle, beginning with making steel and 
 ordnance, bought up a great engineering business and 
 a large shipbuilding concern, and got a controlling 
 interest in a famous locomotive and marine engineer- 
 ing works, and in the chief company of torpedo manu- 
 facturers. About the same time the great concern of 
 Guest, Keen & Nettlefold in South Wales and Stafford- 
 shire brought under one management collieries, ore 
 deposits, blast-furnaces, steel plants, and a whole series 
 of manufactures of such products as nuts, bolts, and 
 screws. These are but typical examples. In such 
 integrating movements the initiative may come from 
 either direction ; it may start from the relatively finished 
 manufactures, reaching back to get a secure hold upon 
 their materials, or from the earlier stages in produc- 
 tion, reaching forward to get a more secure outlet for 
 their product. In either case the result is the same. 
 
 The third feature of capitalistic evolution — and 
 again it has characterised especially the last quarter of 
 a century — has been the tendency towards monopolistic 
 Combination among concerns engaged in the same 
 manufacture. " Monopolistic " I use in no necessarily 
 bad sense, but simply to indicate that the main purpose 
 of such combinations is to affect price by controlling 
 
 184
 
 Evolution of Capitalism 
 
 supply. As there is no inherent sacredness in com- 
 petition, and prices determined solely by competition 
 have often been disastrous to the best interests of the 
 workpeople engaged, there is no need to start at the 
 word " monopoly." The promoters of a combination 
 often, indeed, put forward " the economies of com- 
 bination " as their motive, with the resulting ad- 
 vantages which they make possible to the public. In 
 most cases this is only a very subordinate motive in 
 actual fact ; the real motive is the higher price which 
 absence of competition may of itself be expected to 
 render possible. But it must be acknowledged that 
 economies by no means inconsiderable may often be 
 obtained. Competitive trading is in several ways, 
 especially in the expenses of advertisement and sale, 
 an unnecessarily costly method of satisfying public 
 wants ; so that it is quite possible for a monopoly to 
 result, at the same time, in a decrease of cost to the 
 consumers and an increase of profit to the producers. 
 
 Combination in Great Britain has taken one of two 
 forms — either that of an agreement, or the completer 
 form of a complete amalgamation. Of the former, 
 one of the most interesting is the agreement which 
 controls the manufacture of steel rails ; and this be- 
 cause it rests upon an international alliance among 
 the steel makers of the United States, England, Ger- 
 many, Belgium, France, and Russia, each national 
 combination being given a monopoly of the home 
 market and an allotted share of the rest of the 
 world. A similar international agreement is now to 
 be found in the tobacco business, and also, with 
 occasional breaks, between North Atlantic steamship 
 
 185'
 
 Economic Organisation 
 
 lines. Of the latter type, the amalgamations, the 
 chief examples are to be found in what are called 
 " Associations," but are really completely amalgamated 
 companies, created in certain branches of the textile 
 industries between 1898 and 1900. These are very 
 considerable concerns. Thus, the Calico Printers' 
 Association has a capital of 8J millions sterling, the 
 Fine Cotton Spinners of 7I, the Bleachers of 6f, the 
 Bradford Dyers of 4f. In each case the amalgama- 
 tion now controls the whole trade. All of them, it 
 will be seen, are subsidiary to the main textile pro- 
 cesses — spinning and weaving ; and it is significant 
 that while all the chief subsidiary industries are now 
 syndicated, the main body of each of the two great 
 textile trades, that composed of the spinning and 
 weaving branches, still remains subject to an almost 
 unlimited competition. 
 
 It used to be believed by some who disliked both 
 Trusts and Protection that England was effectually 
 defended, as they put it, from trusts by its policy of 
 free trade. But though England has hitherto re- 
 mained a free trade country, it is no longer quite 
 devoid of trusts. It is undoubtedly true, whether 
 it be regarded as an advantage or no, that the com- 
 mercial policy of this country has somewhat retarded 
 the formation of trusts and rendered them less secure. 
 But there are other important factors in the problem, 
 and chief among these are the technical requirements 
 of efficient production. With the increasing costliness 
 of modern plant, competition is continually at work to 
 reduce the number of competing firms. As soon as 
 an industry comes to be carried on by a few very large 
 
 186
 
 Evolution of Capitalism 
 
 concerns, it is easier for those concerns to come to an 
 agreement ; it is less likely that one of the parties to 
 the agreement will break away, and an increase of 
 price consequent upon the agreement is less likely to 
 call new competitors into the field. When twenty 
 firms made steel rails in Great Britain no agreement 
 was permanent ; now that the number has been re- 
 duced to nine, they apparently find it easy to hold 
 together. As soon as the number of concerns in a 
 trade can be counted on the fingers, they are likely to 
 see their interest in alliance rather than in competition. 
 And even moderate secure gains are coming to be 
 preferred to the chances of competition. The nerves 
 of the business world are growing weary of the strain 
 of competition, and the human craving for security 
 is one of the chief forces that are transforming in- 
 dustrial organisation. 
 
 When the trust is safe within the country itself, the 
 risk of competition from abroad depends largely on 
 geographical position. It is out of the question when 
 the work is necessarily attached to a locality — like 
 Manchester bleaching and Bradford dyeing. And 
 where competition is still possible, there is increasing 
 likelihood, in the present stage of affairs, that it will 
 be warded off by international agreements. 
 
 A recent writer has drawn up a list of some eigh- 
 teen large amalgamations or combinations of a mono- 
 polistic character — controlling, that is to say, each of 
 them, the sale and price of some one important com- 
 modity or group of commodities. This is without 
 reckoning the Railway and Shipping Conferences by 
 which competition is removed from rates to facilities 
 
 187
 
 Economic Organisation 
 
 and conveniences. But the custom of contrasting 
 monopoly with competition has for some time been 
 thoroughly misleading. It is not the case that, out- 
 side the visibly complete monopolies, competition still 
 reigns unrestricted. The fact is rather that over the 
 whole of the industrial field there is now a movement 
 away from unrestricted competition to some greater 
 degree of stability. It seldom culminates in absolute 
 monopoly, but absolute competition will soon be 
 even harder to find. 
 
 Moreover, the methods by which the way is pre- 
 pared for combination by the reduction of the number 
 of rivals, and by which the remaining rivals, on 
 coming to terms, are able to prevent encroachment 
 from outside, are the methods of competition itself. 
 The Lord Chancellor, Lord Halsbury, in the famous 
 Mogul case in 1891, which established the legality of 
 the rebate device of the shipping rings, remarked that 
 "if this is unlawful, the greater part of commercial 
 dealings, where there is rivalry in trade, must be equally 
 unlawful." Monopoly, that is to say, in restricting 
 competition, is not relying on authority ab extra, like 
 the state monopolies of the Stuart period : it is beating 
 down competition with competition's own weapons. 
 
 In my judgment the marked tendency in recent 
 decades towards the restriction, or even abolition, 
 of competition is no ephemeral outcome of anti- 
 social forces. The emergence of the trust is just as 
 "natural" as the rise of the gild or the factory. It 
 results from the inherent striving of capital towards 
 profit ; it proceeds from the good side of humanity, 
 the impulse toward mutual assistance and the desire 
 
 188
 
 Evolution of Capitalism 
 
 for stability, as well as from the less attractive side, the 
 pursuit of gain. I am convinced that to future gene- 
 rations the era of unrestricted competition, with its 
 recurring crises, will seem like a malady of childhood. 
 I view the combination movement with the more hope 
 because I regard the regularisation of production as 
 the best hope for the labouring classes, for whom 
 steadiness of employment is far more important than 
 the amount of remuneration. But it is obvious enough 
 that combinations, with all their possible advantages, 
 involve certain positive risks for the consumer. Not 
 so great as some people hastily suppose ; for limits 
 are put by self-interest even to monopoly prices ; 
 still risks considerable enough ; and I have no sort 
 of doubt that the State will be compelled after a time 
 to step in and subject monopoly prices to a certain 
 public supervision and, if need be, control, just as 
 the English State already sets limits upon the charges 
 of railway companies. What we have to do is to 
 see to it that the modern State is as competent as 
 may be to discharge its delicate but ultimately un- 
 avoidable task. 
 
 The remaining feature in the recent development on 
 the side of capital is the growth of the feeling of solidarity 
 among employers and the steady strengthening of their 
 organisations for collective action in relation to labour. 
 The great example of this is the Federation of Engi- 
 neering and Shipbuilding Employers. Again and 
 again in the past the workpeople have been better 
 combined than the employers, and have won their 
 battle by tackling them singly. It is lamented by some 
 that that time is now passing away ; that not only will 
 
 189
 
 Economic Organisation 
 
 the employers in one trade throughout the whole of a 
 district in future all stand together, but that the whole 
 body of employers in each great industry all over the 
 country will be so firmly knit together by a sense of 
 community of interest as to have a corporate opinion 
 strong enough to prevent even a great district, let 
 alone a single concern, from making terms to suit 
 itself. Just as at an earlier stage the coalowners of 
 Durham would not permit individual collieries in the 
 county to yield to trade union pressure without the 
 consent of the other owners, so in a later stage the 
 Glasgow employers in the engineering business main- 
 tained a lock-out long after they were ready themselves 
 to grant their own men the terms asked, in order to 
 maintain unity of action with the employers of Belfast. 
 Undoubtedly this solidarity of employers' interests does 
 for the time put greater difficulties in the way of trade 
 unions in the realisation of their immediate objects. 
 But it is apparently not only the natural response to a 
 like tendency on the side of labour, but also, in many 
 cases, the necessary preliminary for any further pro- 
 gress in the direction of industrial peace. As the diffi- 
 culties in the docks of London made clear only two 
 years ago, the great obstacles in the way of industrial 
 peace are not only the extremists on the labour side, 
 but also the employers (often comparatively small em- 
 ployers) who refuse to be bound by an employers' 
 agreement to which they were not individually parties. 
 Society is feeling its way, with painful steps, towards 
 a corporate organisation of industry on the side alike of 
 employers and of employed ; to be then more harmo- 
 niously, let us hope, associated together — with the 
 
 190
 
 Evolution of Capitalism 
 
 state alert and intelligent in the background to protect 
 the interests of the community. The world has never 
 yet had complete individualism ; it will never, I 
 believe, have complete socialism, for the egoistic 
 sentiment is as permanent an element in human 
 nature as the social. It has to create a working com- 
 promise suited for each age ; and we are also begin- 
 ning to realise that the old antithesis, which Herbert 
 Spencer in his Man v. The State exaggerated into an 
 antagonism, no longer exhausts the possibilities of 
 the situation. A place must be found in our social 
 organisation, and therefore in our social theory, for 
 the activity and mutual relation of groups, of divers 
 kinds and scales and degrees of compactness, inter- 
 mediate between the individual and political govern- 
 ment. This is the valuable thought to be discerned 
 amid the excesses of Syndicalism ; and this is the 
 lesson of that newer philosophy of social organisms 
 which is based, as by Gierke, on the study of history. 
 
 191
 
 APPENDIX 
 
 SUGGESTIONS FOR FURTHER READING 
 
 The purpose of the following notes is neither to indicate the 
 character and extent of the original sources of information 
 nor to provide a bibliography of the modern literature of 
 economic history. Their object is simply to inform those who 
 are entering upon the study where they will find the several 
 subjects dealt with, more or less competently, in the English 
 language, and in a readable and not too technical manner. 
 Many of the works referred to, it will be seen, have appeared 
 since these lectures were delivered ; and it need hardly be said 
 that their conclusions are not to be regarded as necessarily 
 authoritative, though always worth considering. 
 
 It should be remembered throughout that there is a vast 
 amount of information, over the whole range of English 
 economic history, to be found in Archdeacon Cunningham's 
 Growth of English Industry and Commerce (1903, 1905). A 
 few references will be given to the present writer's Economic 
 History (originally published in 1888 and 1893). This was 
 published in England as two parts of Vol. I. and in America 
 as two vols., and will be here cited as Econ. Hist. i. and ii. 
 Of i. the last edition should be used. 
 
 LECTURE I 
 
 The beginning of all real understanding of medi?eval agri- 
 cultural life is to be found in Seebohm's English Village 
 Community (1883). The student cannot do better than start 
 with the first 104 pages of that great work, where the author, be- 
 gmning with a nineteenth-century map of his own township of 
 
 193 N
 
 Economic Organisation 
 
 Hitchin, traces the main features of open-field agriculture 
 through the documents of the Middle Ages back to the time 
 of the Domesday Survey. Whatever may be thought of 
 Seebohm's own theories, set forth in the later chapters of 
 that book and in his subsequent Tribal System in W ales {\Z<^^ 
 and Tribal Custom in Anglo-Saxon Laiv (1902), as to the 
 origins of mediaeval serfdom, subsequent enquiry has only 
 confirmed the picture which he drew in the English Village 
 Community of the conditions to be explained. 
 
 The most impressive statement of the theory that the manor 
 grew out of a free self-governing village community will be 
 found in Sir Henry Maine's Village Communities in the East 
 and IVest (iSj i), lectures 3-5; the description of the "com- 
 mon fields," however, as " divided into three long strips," is, 
 of course, inaccurate, and shows how completely the open- 
 field system had been forgotten before it was explained afresh 
 by Seebohm. For the Teutonic peoples Maine avowedly 
 based his assertions on the writings of von Maurer; and von 
 Maurer's evidence will bp found stated and critically examined 
 in Fustel de Coulanges, Origin of Property in Land (Engl, 
 trans., 1891), pp. 3-62. 
 
 The theory which traces the continental equivalent of the 
 manor back to the Roman agricultural villa was set forth by 
 Fustel de Coulanges in a number of works of which none so 
 far have been translated. A summary view of his general 
 position is given in the short article Eustel de Coulanges in 
 Palgrave's Dictionary of Political Economy^ vol. ii. ; and an 
 independent account of agrarian conditions under the Roman 
 empire will be found in Pelham's lecture on The Imperial 
 Domains and the Colonate (1890). 
 
 Since the question was reopened by Fustel and Seebohm, 
 much fresh light has been thrown on the whole subject of serf- 
 dom by Professor Vinogradoff ( F/Z/azV/a^f? in England, 1892; 
 The Grotvth of the Manor, 1905), and the late Professor 
 Maitland (Pollock and Maitland, History of English Law, 
 
 194
 
 Appendix 
 
 1895; Domesday Book and Beyond^ 1897). The trend of the 
 arguments of both is in favour of the original freedom of the 
 main stock of cultivators of the soil ; but while the former is 
 disposed to save a good deal of the "collective ownership" 
 involved in the " mark " doctrine, the latter is inclined to 
 minimise every feature of an apparently " communal " char- 
 acter. The reader will perhaps be unable to devote much 
 time to these books unless he wishes to make a special study 
 of the problem of origins. But at any rate he should read the 
 account of villein tenure in Pollock and Maitland, History 0/ 
 English Law, vol. i. bk. ii. ch. i. § 12, and the brilliant section 
 in Maitland's Domesday Book and Beyond, pp. 107-128, in 
 which it is argued that a " manor " meant originally a " house 
 against which Danegeld was charged." Reviews of a good 
 many recent works on agrarian history, including those of 
 Vinogradoff and Maitland, will be found in Ashley's Surveys, 
 Historic and Economic {^ic)o6). These may be useful as present- 
 ing in a brief form most of the main propositions of the works 
 in question ; but the reader will discern, and be on his guard 
 against, any bias on the reviewer's part. The most recent 
 attempt of the same writer to review the present position of 
 the controversy will be found in the address on Comparative 
 Economic History and the English Landlord^ printed in the 
 Economic Journal iox June 19 13. 
 
 A vast mass of information as to the details of mediaeval 
 English life was obtained by Thorold Rogers from the account 
 rolls of bailiffs and similar documents, and is presented in his 
 History of Agriculture and Prices (I. and II., 1866), and in 
 more popular forms in his Six Centuries of Work and Wages 
 (1884) and Economic Interpretation of History (1888). It is 
 perhaps best studied in its first and more scholarly presenta- 
 tion; and chapter ii. of Agriculture and Prices, I., will be 
 found a characteristic and instructive specimen of his methods, 
 though some of the statements are open to criticism. But the 
 relation of the particular facts to one another has only been 
 
 195
 
 Economic Organisation 
 
 made clear since we have understood the real nature of the 
 open field ; and the reading of Rogers is best postponed till, by 
 the help of Seebohm or subsequent works, the main outlines 
 have been grasped of the agrarian organisation as a whole. 
 
 The chief contemporary sources of information on rural 
 economy is the treatise on Husbandry of Walter of Henley. 
 This, with some kindred writings, has been translated by the 
 late Miss Lamond, with an Introduction by Dr. Cunningham 
 (R. Hist. Soc, 1890). Pp. ix-xviii of the Introduction will 
 be found suggestive. 
 
 The really vital part of the information as to agricultural 
 methods derivable frcm Rogers and Walter of Henley is now 
 incorporated in Prothero's English Farming, Past and Present 
 (19 1 2). For the place of open-field tillage in the evolution of 
 agriculture out of " wild field-grass husbandry," as well as for 
 the facts as to crops and hvestock, Prothero's chapter i. 
 should be consulted. It should be noticed that "village 
 farm " is the writer's term for the more or less associated or 
 joint cultivation of the manor, regarded as a whole. 
 
 There is no very good account of manorial courts. A brief 
 statement will be found in Denton's England in the Fifteenth 
 Century (1888), pp. 13-16. But the distinction there drawn 
 between the "court baron" for freeholders and the "court 
 customary " for villeins has been shown by Maitland and 
 other recent writers to have been a comparatively late inven- 
 tion of the lawyers. Maitland's discussion of the various 
 sources of seigneurial justice in History of English Law, 
 bk. ii. ch. iii. § 5, is of fundamental importance for the serious 
 study of the subject, but will be found difficult by those 
 unacquainted with constitutional and legal terminology. 
 
 For the economic self-sufficiency of the manorial group, 
 reference may be made to Econ. Hist., i. pp. 33-36, and for 
 a comparison between the modern and mediaeval village to 
 
 pp. 40-43- 
 
 The quotation from Lord Eversley on p. 5 is from p. 17 of 
 
 196
 
 Appendix 
 
 his Agrarian Tenures (1893), written by him when he was 
 Mr. Shaw Lefevre. The French and German authorities 
 cited on p. 6 are Leonce de Lavergne, Rural Economy oj 
 Great Britain and Ire/and (Engl, trans., 1855), p. 74, and 
 Adolf Buchenberger, Agrartvesen und Agrarpolitik (1892), 
 p. 391. For the relation between Excise and the "incidents" 
 of feudal tenure, see Dowell, History of Taxation (ed. 2, 1888), 
 ii. pp. 17-22. 
 
 LECTURE II 
 
 The most important contribution to the early history of 
 English boroughs is the section in Maitland's Do?nesday Book 
 and Beyond, pp. 172-219. For London reference must be 
 made to Round, The Com?m/ fie of London {-i2>()()), pp. 219-251. 
 An account of recent German and French discussions as 
 to town life on the Continent is given in Ashley, Surveys: 
 see especially the article on The Beginnings of Toivn Life in 
 the Middle Ages, and the review of von Below. Much of the 
 recent discussion involves the use of an elaborate technical 
 terminology; but Surveys, pp. 167-173, will indicate the 
 general character of the questions involved. 
 
 The merit of having established the universality of the gild 
 merchant in English town development belongs to the late 
 Professor Charles Gross, and the main facts are clearly set 
 forth in his Gild Aferchant {i?,<^o), i. pp. 4-60. A summary 
 view is given in Econ. Hist., i. pp. 68-76, and a discussion of 
 the relations between merchant and craft gilds in Surveys^ 
 pp. 213-218, 225-226. 
 
 An account of the earlier craft gilds is given in Econ. Hist., 
 i. §§ 8-1 1. The whole of craft history was there construed 
 with a somewhat too exclusive attention to its earlier stages : 
 for a fuller account of the later craft companies, and a version 
 of their history substantially identical with that in the text, 
 reference may be made to ii. §§ 31-36. 
 
 197
 
 Economic Organisation 
 
 The most notable recent work on the subject, especially in 
 relation to London, is Professor Unwin's Gilds and Com- 
 panies of London (1908). Any bias of the present writer in 
 favour of regulation and control and any tendency to em- 
 phasize the more satisfactory sides of craft organisation will be 
 abundantly corrected by perusal of the last-named writer, who 
 certainly gives sufficient prominence to all the monopolistic 
 and selfish features. 
 
 As to the stages of industrial organisation : the first attempt 
 to set forth in English the classification introduced by German 
 scholars will be found in Econ. Hist., ii. pp. 219-222. With 
 this may now be compared Biicher, Itidustrial Evolution 
 (1893; Engl, trans., 1901), ch. iv. ; Unwin, Industrial Organ- 
 isation in the Sixteenth and Seventeenth Cetituries (1904), 
 Intro.; and Lloyd, The Cutlery Trades (1913), ch. i. 
 
 The doctrine of Aquinas, the most influential of the mediaeval 
 scholastic doctors, on Just Price, is explained in Econ. Hist., 
 i. § 16, with which may be compared Cunningham, Growth 
 of English Industry and Commerce, i. 249-255. For mediaeval 
 practice in the regulation of prices, see Econ. Hist., i. §§ 20, 
 21 ; ii. § 27. 
 
 LECTURE III 
 
 The general course of Commutation is set forth in Econ. 
 Hist., i. pp. 29-33, and Vinogradoff, Villainage, pp. 178-183. 
 More exact estimates than had previously been available of 
 the extent to which commutation took place before and after 
 the Black Death have been given by Page in his monograph 
 on The End of Villainage in England (Publications of the 
 Amer. Econ. Assoc, 1900). 
 
 The effects of compulsory labour, as witnessed by contem- 
 porary observers in central Europe about the end of the 
 eighteenth century, are stated by Jones, Distributioti of Wealth 
 (183 1 ). The chapters on Peasant Rents, reprinted separately 
 
 198
 
 Appendix 
 
 under that title (1895), form a most suggestive commentary 
 on mediaeval English development. 
 
 For "land and stock leases" reference should be made to 
 Thorold Rogers, Agriculture and Prices, i. pp. 24-25, 667-668, 
 or Six Centuries of Work and Wages, pp. 277-282. 
 
 On the relation of the Black Death to the Peasant Revolt, 
 Econ. Hist., ii. 264-7, should be read in the light of Page, 
 as above. 
 
 On the legal character of villein tenure and its relation to 
 enclosures, the discussion was opened by Econ. Hist., ii. pp. 
 272-283. The subject must now be viewed in the light of 
 the discovery by Savine of instances of the intervention of 
 the courts: see his article in Quarterly Journal of Economics 
 (published by Harvard University), xix. (1904). Recent dis- 
 cussions of the subject, utilising Savine's new facts, will be 
 found in Johnson, The Disappearance of the Small Landoivner 
 (1909), pp. 62-72, and Tawney, The Agrarian Problem iji tht 
 Sixteenth Century (1912), pp. 287-301, and the reviews by the 
 present writer of the former work in Econ. Journal (19 10), xx. 
 p. 54, and of the later, idid. (1913), xxiii. p. 85. 
 
 A first rough attempt was made to estimate the geographical 
 extent of the Tudor enclosures in Econ. Hist., ii. pp. 286-288 
 (see the notes and map). This must now be considerably 
 modified in the light of Gay, Inclosures in England in the 
 Sixteenth Ce?itury, in Quarterly Journal of Economics (1903), 
 xvii. Gay's percentages have been presented in the form of 
 a map by Mr. Johnson in his book above mentioned ; but see 
 the criticism already referred to. 
 
 A synopsis of the Tudor legislation concerning enclosures 
 is given in Appendix D to Slater's The English Peasantry and 
 the Enclosure of the Common Eields (1907); and there is a 
 valuable account of government intervention and a discussion 
 of its effects in Tawney's book before mentioned, pp. 351-400. 
 
 The quotation from Hallam on p. 66 is from his Constitu- 
 tional History (8vo ed.), I, p. 79. 
 
 199
 
 Economic Organisation 
 
 LECTURE IV 
 
 The characteristics of the period of " town economy " are 
 explained by SchmoUer, with special reference to German 
 development, in The Mercantile System (Engl, trans., 1896), 
 pp. 1-13 ; and the subject is dealt with at some length in 
 relation to England in Econ. Hist., i. § 13 ; ii. §§ 24-29. 
 
 An account of the Hanseatic Steelyard in London is given 
 in Pauli's Pictures of Old England (Engl, trans.). 
 
 Fresh light has been thrown on the early history of the 
 London Great Companies, and on the position of the foreign 
 commercial element in the thirteenth century, by Unwin, Gilds 
 and Companies of London, chapters iv. to vi. For the four- 
 teenth and fifteenth centuries a more vivid impression is to be 
 obtained from turning over the London documents translated 
 by Riley in Memorials of London and London Life (1868) than 
 from any modern writings. 
 
 The relation of Risk to the mediaeval doctrine of Usury is 
 briefly stated in Econ. Hist., ii. p. 419, and the subject dis- 
 cussed more at length in Cunningham, English Lndustry and 
 Commerce, i. pp. 360-368 ; while the history of the conception 
 of Capital in business practice and in economic theory will be 
 found in the article under that head by the present writer in 
 An EncyclopcBdia of Lndustrialism (1913). 
 
 Dr. Scott's Joint Stock Companies to 1720 (1911-12) con- 
 tains a most valuable collection of material for the commercial 
 history of the sixteenth and seventeenth centuries, which 
 economists have only just begun to utilise. For the lines 
 of development converging on the first English joint stock 
 companies, chapter i. should be read ; and for the peculiar 
 significance of the Russia Company, chapter ii. With this 
 may be compared the similar experience later of the East 
 India Company, as narrated in Hunter's History of British 
 India (1899), i., chapters vi. and vii. 
 
 200
 
 Appendix 
 
 LECTURE V 
 
 The early development of the English woollen industry is 
 given at some length in Econ. Hist., ii. eh. iii. ; which may 
 now be supplemented on the technical side by Salzmann, 
 EfigHsh Industries of the Middle Ages (1913), pp. 1 41-156. 
 The part played by Alien Immigrants is the subject of a 
 special work under that title by Dr. Cunningham (1897) : for 
 the Flemish weavers of the fourteenth century see § 22, 
 and for the Walloons and Flemings of the sixteenth century 
 
 §§ 29-35- 
 
 The intention and effects of the Justices' Assessments were 
 
 first dealt with, in recent times, by Thorold Rogers ; see for 
 
 instance his Economic Interpretation of History, pp. 38-45. 
 
 The problem was more dispassionately considered, and fresh 
 
 evidence adduced, by Hewins, English Trade and Finance, 
 
 chiefly in the Seventeenth Century (1892), pp. 82-88, and 
 
 Cunningham, English Indtistry and Commerce (1903), ii. § 168. 
 
 It is to be hoped that the two most instructive papers on 
 
 the subject by Mr. Tawney, in English though published in 
 
 the Vierteljahrschrift fiir Social- und Wirtschaftsgeschichte 
 
 (1913), will soon be accessible in an English publication. 
 
 The early history of the Poor Law is given in Econ. Hist., 
 ii. ch. v. ; and its development under Elizabeth and the first 
 two Stuarts by Miss Leonard, The Early History of E?iglish 
 Poor Relief {\c)oo). The latter book is indispensable for a 
 just view of Tudor and Stuart conceptions of statecraft, and 
 for the part played by the Council. 
 
 List's view of " productive powers," referred to on p. 90, 
 is set forth by him in his Natiofial System of Political 
 Economy (Engl, trans., new ed., 1904), ch. xii. The 
 pamphleteer referred to on p. 94 was Dr. Arbuthnot, whose 
 History of Joh?i Bull is conveniently accessible in Cassell's 
 National Library. 
 
 201
 
 Economic Organisation 
 
 LECTURE VI 
 
 The best introduction to the agrarian history of the eigh- 
 teenth century is still Toynbee's Industrial Revolution of the 
 Eighteenth Century (1884), cheap ed., pp. 13-22, 34-44, 
 though it can now be supplemented and corrected in detail 
 by reference to more recent works, such as Johnson's 
 Disappearance of the Small Lattdowner, especially pp. 128-150. 
 The movements for improvement in agricultural methods are 
 described fully in Prothero's English Farming, Fast and 
 Fresent, chapters vii.-xi. Two recent and extremely instruc- 
 tive treatises on the mechanism and consequences of enclosure 
 are those of J. L. and B. Hammond, The Village Labourer 
 (1911), and Professor Conner, Commoti Land and Inclosure. 
 Their attitude is very different, and they produce different im- 
 pressions. A useful criticism and comparison of the two by 
 J. H. Clapham will be found in the Economic Journal, June 
 191 2, with which may be compared Slater, Making of Modern 
 England {i()i 2,), pp. 37-43- For the effect of the Corn Laws 
 the reader will do well to turn to Nicholson's History of the 
 English Corn Latvs (1904). The views of agricultural experts 
 and of economists with regard to the superiority of large over 
 small farming, and a discussion of the bearing of their argu- 
 ments on cereal farming in particular, occupy Part I of 
 Professor Levy's Large and Small Holdings (Engl, trans., 
 191 1). An approximation to really significant statistics as to 
 the size of holdings was made. for the first time in 1914: see 
 Agricultural Statistics, xlviii, pt. i. 
 
 The most readable and compact account of the history of 
 English land law, up to the devising of the present method of 
 Family Settlement, is in Sir Frederick Pollock's Land Laws, 
 chapters iii.-v. 
 
 The Whig authority quoted on p. 127 is Brodrick, English 
 Land and English Landlords (1881), p. 99; and the well- 
 
 202
 
 Appendix 
 
 known writer of the west country of p. 131 is Mr. Baring- 
 Gould, Old Country Life (1889), cheap ed., 1913, p. 15- 
 
 LECTURE VII 
 
 It would be a mistake to begin the study of the Industrial 
 Revolution elsewhere than in the pages of Toynbee's book of 
 that name, chapters ii., iv., vi., viii. ; and for the changes in 
 mechanical methods Jevons' Coal Question (1865), chapter vi., 
 should not be neglected. But after the general view obtained 
 from these books it will be well to go on to the more thorough 
 discussion of many of the questions involved in Archdeacon 
 Cunningham's Growth of English Industry and Commerce 
 (1903), iii. §§ 242-272. 
 
 The effect upon the formation of capital of the religious 
 ideas of the Calvinists was first pointed out by Max Weber, 
 and the argument was further elaborated by Ernst Troeltsch. 
 None of their writings are so far accessible in English. The 
 same line of thought, however, has been applied to England 
 by Professor Levy in his Economic Liberalism, ch. v. (Engl, 
 trans., 19 13); and a few pages by the present writer on the 
 subject appear in the British Association Handbook to 
 Birmingham (1913), pp. 354-358- 
 
 Of capitalism in manufactures in the seventeenth century 
 some examples are given by Levy, Monopoly and Coinpetition 
 (Engl, trans., 191 1), ch. i. Karl Marx's analysis of what he 
 calls " manufacture " will be found in Capital, ch. xxiv. 
 
 A brief account of industrial legislation in the nineteenth 
 century is given in Jevons' State in Relation to Labour {i2>2> 2) ; 
 and a fuller statement in Hutchins and Harrison, History of 
 Factory Legislation (2nd ed., 191 1) : while the best account of 
 the early history of labour combinations will be found in 
 the earlier chapters (more objective, perhaps, in their tone 
 than the later) of Mr. and Mrs. Webb's History of Trade 
 
 203
 
 Economic Organisation 
 
 Unionism (1894). An impartial abstract of the Report of 
 the Poor Law Commission of 1832, indicating the evils in 
 the working of the system of relief adopted at the end of 
 the previous century, will be found in the Report of the recent 
 Poor Law Commission (1909), pt. iii. 
 
 The chapter (vii.) devoted to the problem of what he calls 
 " trade union structure " in Mr. Cole's World of Labour 
 (1913) is one of the most instructive parts of a work which 
 makes up by its vivacity and width of reading for its onesided- 
 ness and occasional violence of language. 
 
 The Halifax letters referred to on p. 148 are printed in 
 The Letter Books of Joseph Holroyd and Sam LLill, ed. 
 Heaton (Halifax, 19 14). 
 
 LECTURE Vin 
 
 After reading Mill's enthusiastic and hopeful account of pro- 
 ductive co-operation in his Political Economy^ bk. iv. ch. vii. 
 § 6, it is desirable to study the subsequent history of the 
 experiments in this direction in Potter (Mrs. Webb), The 
 Co-operative Movement in Great Britain (1891), ch. v., and 
 Schloss, Methods of Lndusirial Remuneration (ed. 3, 1898), 
 chapters xxii.-xxiv. An account and estimate of " distribu- 
 tive co-operation," with its large number of retail stores, its 
 Co-operative Wholesale Society and the factories which the 
 latter owns, is given in Price, Co-operation and Copartnership, 
 chapters viii.-x. On productive co-operation, in the later form 
 which it has taken at Kettering and elsewhere, there is a 
 paper. Co-operation in England (1899), by the present writer, 
 reprinted in Surveys, pp. 399-404. 
 
 The recent experiments in the direction of Co-partnership 
 — meaning thereby a plan by which the whole or part of the 
 worker's share of profit is invested in the concern employing 
 him — are sympathetically described by Fay, Copartnership ir. 
 
 204
 
 Appendix 
 
 Industry (1913), ch. iii., and analysed in Mr. Price's work 
 above mentioned, pp. 220-259. The whole subject of 
 Profit-sharing and Co-partnership is considered in an article, 
 Profit-sharings by the present writer in the Quarterly Review 
 for October 1913- 
 
 The views of Auguste Comte on the labour question may 
 be conveniently studied in his General View of Positimiin 
 (1848), ch. iii., Engl, trans, by Bridges, p. 117. 
 
 A quite indispensable collection of facts with regard to the 
 modern tendency towards capitalistic combination and mono- 
 poly is Macrosty's Trust Movement in British Industry 
 (1907); where chapter ii. on the iron and steel industries 
 and chapter v. on the textile industries bear closely on the 
 argument of this lecture. The history of railway amalgama- 
 tions and the extent of combination between the great lines 
 are briefly treated in Ross, British Railways (1904), chapters 
 i. and ii. The organisation of the Shippitig Conferences is 
 explained, and the problem considered " in what sense and to 
 what extent a Shipping Conference making use of the system 
 of deferred rebates secures a monopoly" in the Report of 
 the Royal Comfnission on Shipping Rings (1909). "Existing 
 monopolist organisations in English industry " are described 
 in Levy, Monopoly and Competition (Engl, trans., 191 1), ch. ix., 
 and the reasons for their growth considered in ch. x. 
 
 The facts as to the wide diffusion of the ownership of many 
 great modern undertakings, and the argument based upon 
 them, formed perhaps the most striking part of the famous book 
 by Eduard Bernstein, Die Voraussetzutigen des Sozialismus 
 (1899), which precipitated the controversy between the Re- 
 visionist and the Marxian schools of German socialists. They 
 will be found at pp. 40-54 of the Eng. trans. (1909) under 
 the title Evolutionary Socialism. 
 
 Professor Olto Gierke's teaching as to the nature of 
 " Genossenschaften " (Communities and Corporations) was 
 introduced to English readers by Professor Maidand's trans- 
 
 20$
 
 Economic Organisation 
 
 lation of a portion of his great work, under the title oi Political 
 Theories of the Middle Ages (1900), preceded by a preface in 
 which Maitland showed, in passing, its bearing on modern 
 discussions as to the nature of labour organisations. Since 
 then the general conception has had a growing influence, and 
 it has begun to affect political speculation, as may be seen in 
 Mr. Lindsay's article on The State in Recent Political Theory 
 in the Political Quarterly for February 19 14. 
 
 ;$o6
 
 INDEX 
 
 Italics indicate more or less technical terms, as well as the titles of book:. 
 
 Abstinence, 157 
 
 Accidents, insurance against, 168 
 
 Acre, shape and size of, 15 
 
 Addison, 122 
 
 Adults, restriction of labour of, 164 
 
 seq. 
 Adventurers, Merchant, 76, 84, 85, 
 
 115, 116 
 Advertisement, 185 
 Alva, 90 
 
 Amalgamation of business, 185 
 Amsterdam, 148 
 Ancient Law, 167 
 Antwerp, 77, 78 
 Apprentice, 38 
 
 Apprenticeship, 38, 42, 100, 164 
 Apprentices, statute of, 92, 96, 100, 
 
 102 seq. , 164 
 Appurtenant, 11 
 Aquinas, 198 
 Arbuthnot, Ur., 201 
 Aristotle, ig 
 Armstrong & Co. , 184 
 Assessment of wages, 102 seq., 107, 164 
 Associations, 186 
 Atlantic steamships, 185 
 Austria, 48 
 
 Bacon, Lord Chancellor, 62, 113, 114 
 
 Bailiff, 12, 46, 54 
 
 Bakewell, 135 
 
 Balk, 14 
 
 Bank of England, 125 
 
 Banks, country, 156 
 
 Baring-Gould, S. , 202 
 
 Barley, 14 
 
 Baxter, Richard, 158 
 
 Bavaria, 121 
 
 Beans, 14 
 
 Bedfordshire, 63 
 
 Belfast, 190 
 
 Belgium, 185 
 
 Bentham, Jeremy, 137 
 
 Bergen, 72 
 
 Bernstein, E., 205 
 
 Biology, 168 
 
 Black Death, 49 seq. , 97 
 
 Blackwell Hall, 91,94, 116 
 
 Blast-furnaces, 182, 184 
 
 Bleachers, 186, 187 
 
 Board of Trade, 108, 164 
 
 Boards, Trade, 107, 169 
 
 Book of Common Prayer, 97, 99 
 
 Boonday, 12, 49 
 
 Boot manufacture, 145 
 
 Bourse, Berlin, 128 
 
 Boynton, 151 
 
 Bradford, 146, 148, 186, 187 
 
 Breeches, manufacture of, 145 
 
 Breweries, 182 
 
 Brian, C. ]., 61 
 
 Bridgman, Orlando, 127 
 
 Briggs, Messrs., 176 
 
 Bright, John, 166, 170 
 
 Brodrick, G., 202 
 
 Brotherhood , 30 
 
 Brown & Co., 184 
 
 Bruges, 72, 77 
 
 Bucks, 63 
 
 Burleigh, Lord, 169 
 
 Burns, Robert, 17 
 
 Calais, 75, 76 
 
 Calico Printers' Association, 186 
 
 Calling, 158 
 
 Calvinism, 158 
 
 Canals, 1^5 
 
 Canonist lawyers, 82 
 
 Capital, 79, 82, 141, 148, 155 seq., 
 
 174, 176, 180 seq.; capitals, 157; 
 
 fixed, 181 ; ownership of, 182 
 Capitalism, 173, 181 seq. 
 
 207
 
 Economic Organisation 
 
 Carlyle, Thomas, i6o 
 
 Carnegie, 183 
 
 Cash-nexus, 160 
 
 Catechism, 99 
 
 Chantry, 30 
 
 Charles I., 112, 114, 116 
 
 Chartism, 160 
 
 Chaucer, 54 
 
 Child, Sir Josiah, 162 
 
 Children, hours of labour of, 164 
 
 China, 34, 69, 71 
 
 Church, teaching on Usury, 82 
 
 Clapham, J. H., 202 
 
 Climate, 11 
 
 Cloth, woollen, 76, 87, 146, 162 
 
 Clothiers, g2seq., 115 seq., 143, 148, 
 
 ISO 
 
 Clove, 71 
 
 Clover, 135 
 
 Clydebank Shipbuilding Company, 
 
 184 
 Coal-mining, 154, 155, 165 
 Coal Question, 140 
 Coke, Sir Edward, 61, 97 
 Coke of Holkham, 135 
 Colbert, 152, 163 
 Cole, G. D. H. , 204 
 Collective action, of capital, 181, 189 
 
 seq. 
 Collective bargaining, i6g seq. 
 Cologne, 71 
 Combination, of labour, 160; laws, 
 
 170; of capital, 181, 1845^^. 
 Commenda, 83 
 
 Commissions, Royal, 60, 114, 170 
 Commission-system, 143 
 Common Recovery, 126 
 Common, rights of, 22 
 Commons, enclosure of, 138 
 Communal elements, 21, 195 
 Commutation , 46 seq. , 52 
 Compensation Act, Workmen's, 168 
 Competition, 64, 185, 187 
 Comte, Auguste, 178, 205 
 Concentration, 181 seq. 
 Conferences, Railway and Shipping, 
 
 187 
 Convocation, 122 
 Co-operation, 174 seq. 
 Co-operative Wholesale Society, 176 
 Copyhold, 61 seq., 67, 131 seq. 
 Corn laws, 136, 166 
 Cornwall, 151 
 Corporate organisation of industry, 
 
 190 
 Correction, house of, 109 
 
 Cost of living, 105, 109 
 
 Cottar, 17 
 
 Cotton industry, 100, 145, 153, 160, 182 
 
 Council, Privy, 96, 103, iii seq., 114 
 
 seq., 120, 164 
 Counter-Reformation, 121 
 County Councils, 129 
 Court, manorial, 23, 51, no 
 Coventry, 107 
 Craft, 28 ; modern application of 
 
 term, 172 
 Crises, 115, i8g 
 Cromwell, Oliver, 66 
 Crown lands, 121 
 Cunningham, Archdeacon, 193, 196, 
 
 200, 201, 203 
 Currants, 85 
 Custom, 45 
 Customary tenants, 44 
 
 Dangerous trades, 165 
 
 Darwinism, 168 
 
 Debasement of currency, 66 
 
 De Donis, statute, 126 
 
 Defoe, Daniel, 144 
 
 Demesne, 12, 16 ; letting of, 53 seq. 
 
 Derwent, 153 
 
 Devonshire, 92, 130, 151 
 
 Discourse of Trade, 162 
 
 Disraeli, 66 
 
 Dissenters, 158 
 
 Docks, London, 190 
 
 Domesday Survey, 9 
 
 Domestic system, 36, 93, 142 seq., 
 
 155. 181 
 Drapers, 81, 91, 93 
 Dream of John Ball, 49 
 Durham, 190 
 Dutch, 162 
 
 Duty of a Steward to his Lord, 124 
 Dyers, 89, 186 
 
 East India Company, 84, 124 
 Economies, internal, 180; of com- 
 bination, 185 
 Economists, 79, 138, 156, 170 
 Edinburgh Review, 138 
 Education Office, 164 
 Edward III, 95 
 Edward VI, 66, 102, 115 
 Elizabeth, Queen, 133, 164, 169 
 Embezzlement of material, 145 
 Enclosure, 56 seq., 114, 137 seq. 
 Engineering, strike of 1897, 171 ; 
 
 Federation, 189 
 English Sewing Cotton Company, 182 
 
 208
 
 Index 
 
 Entail, 125 
 Essex, 92, 105 
 Eversley, Lord, 5, 122, 196 
 Excise, II 
 
 Factories ( =tradingsettlements),72 
 
 Factory system, 36, 93, 149, 154, 159 
 seq., 173; factory acts, 164 seq., 
 179, 181 
 
 Factors, 148 
 
 Factor-system, 143, 155 
 
 Family system, 36 
 
 Farmer, original sense of term, 54, 64 
 
 Farms, large and small, 138 ; amal- 
 gamation of, 139 
 
 Fay, C. R, 204 
 
 Federation of Engineering and Ship- 
 building Employers, 189 
 
 Feldzwang , 14 
 
 Felt industry, 145 
 
 Fencing of machinery, 165 
 
 Ferm, 54 
 
 Fideicommisse , 127 
 
 Field, 13 
 
 Fine, on admission to customary tene- 
 ments, 59 ; on renewal of leases, 133 
 
 Fine Cotton Spinners, 182, 186 
 
 Fitzherbert, 132 
 
 Fixed capital, 181 
 
 Flanders galleys, 73 
 
 Flax, manufactures of, 145 
 
 Flat, 15 
 
 Fondaco dei Tedeschi, 72 
 
 Foreigner, 70 
 
 Four-course rotation, 135 
 
 France, peasant proprietors in, 3 ; 
 apprenticeship in, 38 ; silk industry 
 of, 94; 1x2, 114, 139, 185 
 
 Fraternity , 29, 30, 33 
 
 Frederick the Great, lao 
 
 Freedom, of Contract, i6i 
 
 Free-holder, 17 
 
 Fro hn den, 48 
 
 From Status to Contract, 167 
 
 Fullers, 89 
 
 Furlong, two senses, 15 
 
 Fur manufacture, 145 
 
 Fustel de Coulanges, 194 
 
 Fustian manufacture, 145 
 
 Gaul, 20 
 Gay, E. F. , 199 
 
 Geldwirthschaft , 45 
 
 Germany, peasant proprietors in, 2; 
 
 labour dues in, 48 ; 69, 95, 112, 
 
 i8s 
 
 Ghent, 90, 112 
 
 Gierke, Professor Otto, 191,205 
 
 Gild, mediaeval sense of, 29 
 
 Gild merchant, 27 
 
 Gild system, 25, 28 seq., 36, 39 seq. 
 
 181 
 Gilpin, Bernard, 60 
 Glasgow, 190 
 Glass manufacture, 151 
 Gloucester, 106 
 Glove manufacture, 145 
 Gneist, Professor, 128 
 Goldsmiths, 80 
 Gonner, Professor, 202 
 Grande Industrie, 144 
 Green, J. R. , loi 
 Green, T. H., 167 
 Gross, Professor Charles, 197 
 Groups, social, 191 
 Guest, Keen & Netllefold, 184 
 
 Halifax, 146, 148 
 
 Hallam, Henry, 66 
 
 Halls, cloth, 146 
 
 Halsbury, Lord Chancellor, 188 
 
 Hamburg, 86, 148 
 
 Hammond, J. L. and B. , 202 
 
 Handicraft system, 36 
 
 Handloom, 149, 155, 160 
 
 Hanse, Teutonic, 71 seq., 86, 92 
 
 Hat manufacture, 145 
 
 Hay, 22 
 
 Hedges, 56 
 
 Hegel, 167 
 
 Hemp, manufactures of, 145 
 
 Henry H, 95 
 
 Henry VH, 83, ir3 
 
 Henry VHI, 66, 96, 102, 121 
 
 Herring fishery, 71 
 
 Hewins, W. A. S., 201 
 
 Holbein, 86 
 
 Holland, 94 
 
 Home Office, 164 
 
 Hosiery industry, 149 
 
 House industry, 36, 93 
 
 Household system, 36 
 
 Huddersfield, 146, 147 
 
 Huguenots, 125 
 
 Husbandland , 14 
 
 Huxley, 168 
 
 Incidents of tenure in chivalry, 10 
 Individualism, 64, 167, 168, 191 
 Induiiries, 172 
 Inspectorate, 164 
 Instrument of production , 146 
 
 209 
 
 O
 
 Economic Organisation 
 
 Insurance Act, 169 
 Integration, 181, 183 seq. 
 Intermixed holdings, 21 
 International agreements in busi- 
 ness, 185 
 Invention, conditions of, 155 
 Investment, 79, 141 
 Ireland, 167 
 Iron industry, 100, 145 
 Italy, 69, 95, 114 
 
 JEVONS, W. S., 140, 155, 168, 203 
 
 John Bull, 94, 201 
 
 Johnson, A. H., 199, 202 
 
 Joint-stock, 83, 84, 117, 179 seq. 
 
 Jones, Richard, 198 
 
 Journeymen, 38, 41 
 
 Justices of the Peace, 97 seq. ; as- 
 sessments of wages, loi seq. ; and 
 poor relief, iii 
 
 Just price, 41, 198 
 
 King, Gregory, iig, 123 
 Knapp, Professor, 120 
 Krupp, 183 
 
 Labour Co-partnership, 176 
 Labour dues, mediaeval, 12 
 Labour question, 42 
 Labourers, characteristics of English 
 
 agricultural, 4, 5, 17; statute of, 
 
 50 ; justices of, 97 
 Laissez Faire, 167, 168 
 Land Tax Assessments, 124 
 Landed interest, 125 
 Landlords, number of English, 3 ; 
 
 characteristics of, 3 ; 134 
 Langland, William, loi 
 Latimer, 65 
 Laud, Archbishop, 114 
 Laurence, Edward, 124, 133, 134 
 Law and order, 161 
 Leases, 53 seq., 58, 67, 132 seq. 
 Leather industry, 145 
 Leeds, 146, 147 
 Leicestershire, 63, 9X 
 Leonard, Miss, 201 
 Levant Company, 86 
 Levy, Professor, 202, 203, 205 
 Limited liability, 179 
 Limited partnership, 83 
 Lincolnshire, 91 
 Lindsay, A. D., 206 
 Linen manufacture, 94, 145 
 Lipton's, 182 
 List, Frederick, 90, 201 
 
 Livesey, Sir George, 177 
 
 Living, 14 
 
 Local Government Board, 164 
 
 Locke, John, 161, 163, 167 
 
 London, 32, 38, 72, 80, 107, 174, 190 
 
 Louis XIV, 163 
 
 Low Countries, 56, 73, iii 
 
 Lubeck, 71 
 
 Luther, 112 
 
 Macaulay, 125 
 
 Macclesfield, 107 
 
 M'Culloch, 138 
 
 Machinery, 154 seq., 160 seq. 
 
 Macrosty, H. W. , 205 
 
 Maine, Sir Henry, 167, 194 
 
 Maitland, F. W., 49, 195, 196, 197, 
 205 
 
 Make, 182 
 
 Malmesbury Abbey, 150 
 
 Malmsey wine, 85 
 
 Manchester, 170, 187 
 
 Man v. the State, 191 
 
 Manor, 8 seq., no 
 
 Mantoux, M., 140 
 
 Manufacture, 149 
 
 Manufactures, royales and privile- 
 giies, 152 
 
 Manure, 22 
 
 Mark theory, 20, 195 
 
 Markets, 46 ; market in economic 
 sense, 36 
 
 Marx, Karl, 149, 152, 183 
 
 Master, 38, 93 
 
 Maurer, Georg von, 194 
 
 Mercers, 81 
 
 Merchant Gild, 27 
 
 Merchant Shipping Act, 165 
 
 Mitayer, 4, 55 
 
 Middle class, 26, 183 
 
 Middlesex, 63 
 
 Mill, John Stuart, 7, 157, 168, 174 
 
 Miners, minimum wage of, 108 
 
 Minimum Wage Act, 169 
 
 Mistery, 28 
 
 Mogul case, 188 
 
 Mohair manufacture, 145 
 
 Monasteries, dissolution of, 66, 121 
 
 Money economy, 45 
 
 Moneyed interest, 125 
 
 Monopolies, 152, 184, 188, 189 ; mo- 
 nopoly prices, 189 
 
 Monuments in churches, 131 
 
 Moralisation of employers, 179 se^. 
 
 More, Sir Thomas, 59, 113, 114 
 
 Morgen, 15 
 
 210
 
 Index 
 
 Morris, William, 49 
 Morton, Archbishop, 83 
 
 Napoleonic wars, 87, 136 
 Natural economy, 45 
 Naturalwirthschaft, 45 
 Newcastle, 184 
 Nicholson, Professor, 202 
 Nonconformists, 158 
 Non-textile factories, 166 
 Norfolk, 92; rotation, 135 
 Northampton-.hire, 63 
 Norwich, 148 
 Novgorod, 72 
 Nucleated village, 13 
 
 Oats, 14 
 
 Occupations, 172 
 
 Open field, 13 
 
 Osney Abbey, 150 
 
 Overseers of the poor, in, 118 
 
 Oxen, in ploughing, 15,23; weight 
 
 of. 135 
 Oxfordshire, 63, 124 
 
 Page, T. W. , 198 
 
 Pageants, 30 
 
 Paris, 174 
 
 Parish, as unit of administration, no 
 
 Parliament, under Tudors, 96 
 
 Parliamentary Government, 7, 120 
 
 seq., 129 seq. 
 Parsimony , 157 
 Partnership, 83 seq. 
 Passive trade, 69 
 Pasture farming, 56 seq. 
 Patronage, 130 
 Pauli, Reinhold, 129, 200 
 Peace, Justices of, 97 seq., 128, 129 
 Peas, 14 
 
 Peasant protection , 1 20 
 Peasants' Revolt, 49 seq, 
 Pepperers, 81 
 
 Philosophy, social, 161, 167, 191 
 Piers the Plowman, loi 
 Pins, manufacture of, 149, 153 
 Plague, Great, 49 seq. 
 Plant, cost of, 186 
 Plimsoll line, 166 
 Political Economy, 138, 167, 170 
 Pollock, Sir Frederick, 202 
 Poor Law, 96, woseq., 117, 136, 159 
 Population in 1688 and 1769, 119; 
 
 in iSoi and igoi, 173 
 Postlethwayt, Malachy, 145 
 Power, 153 
 
 Price, L. L. , 204 
 
 Prices, rise of , 66 ; control of, 184; 
 
 monopoly, 189 
 Primogeniture, 127 
 Productive pozvers , 90 
 Profit-sharing, 176 
 Prothero, R. E. , 196, 202 
 Property, doctrine of, 163 
 Protection, i86 
 Prussia, 127 
 
 Qi;arter Sessions, 97, loa, 129 
 
 Radicals, 139, 170 
 
 Railways, 155 ; Conferences, 187 
 
 Railway servants, hours of. 165 
 
 Reeve, 12, 54 
 
 Reformation, 7, 64 
 
 Reform Bill of 1832, 141 
 
 Report of 1806, 142, 146, 150; of 
 
 1894, 170 
 Revolution of 1688, 119, 120. 161, 
 
 163 
 Revolution, the industrial, 140 seq,, 
 
 156 
 Ricardo, David, 156 
 Rittergut, 19 
 Rogers, Thorold, 49 seq., 55 seq,, 
 
 195, 199, 201 
 Roman agrarian system, 20 
 Rotation of crops, 14, 22 
 Rotterdam, 148 
 Russia, 69, 185 
 Russia Company, 84 
 Rutlandshire, 63 
 Rye, 14 
 
 Savine, a., 199 
 
 Schmoller, Professor, 200 
 
 Scott, Sir Walter, 40 
 
 Scott, W. R. , 200 
 
 Screws, 184 
 
 Seamen, contracts of, 165 
 
 Seebohm, Frederic, 193 
 
 Seigneurial elements, 23 
 
 Seigneurie, ig 
 
 Self-Government , 129 
 
 Sempstresses, 146 
 
 Senior, N. W. , 157 
 
 Serfdom, 18, 19 
 
 Settlement, Parish, 109 
 
 Settlements, Family or Strict, 125 
 
 se^. 
 Sewing-machine, 146, 149 
 Shaftesbury, Lord, 166 
 Shakespeare, 99 
 
 211
 
 Economic Organisation 
 
 Shares, transference of, 179 
 Sheep-breeding, 56 5^^., 135 
 Sheffield, 184 
 
 Shipbuilding, 184; Federation, 189 
 Shipping Conferences, 187 
 Shoe manufacture, 145 
 Shot, IS 
 
 Sickness, insurance against, 169 
 Silesia, 94, 128 
 
 Silk manufacture, 94, 125, 145 ; spin- 
 ning, 153 
 Silver, influx of, 102 
 Slater, G., 199 
 Slavery, 18 
 Smith, Adam, 35, 141, 149, 156, 157, 
 
 163 
 Smithfield market, 135 
 Soap manufacture, 151 
 Socialism, 191 
 Societas, 83 
 Socmen, 17 
 
 Solidarity, sense of, 189 seq, 
 Somerset, 92 
 Sorbonne, 112 
 Sound, the, 72 
 Southampton, 73 
 South Metropolitan Gas Company, 
 
 177 
 Spectator, 122 
 Spencer, Herbert, 168 
 Spices, 68 
 
 Spiritual power, 178 
 Spitalfields Acts, 107 
 Squire, the, 5 seq., 122, 131 
 Staffordshire, 184 
 Stages of industrial evolation, 34 
 
 seq. 
 Staple, Merchants of the, 74 seq. 
 State control, i6i seq. 
 Statutes : — 
 
 1285 [De Donis), 126 
 
 1351 (Labourers), 50 
 
 1465 (Clothiers), 92 
 
 1489 (Husbandry), 114 
 
 1536 (Poor Relief), no 
 
 iS5S( .. .. )■ "I 
 1555 (Weavers), 150 
 1563 (Poor Relief), in 
 1563 (Wages, Apprenticeship), 
 92, 96, 100, 102 seq., 107, 164 
 1572 (Poor Relief), in 
 1585 (Cloth), 151 . 
 1597-8 (Wages), 103 
 1598 (Vagrancy), 109 
 1601 (Poor Relief), 96 
 1603-4 (Wages), 104 
 
 Statutes (continued) — 
 
 JJ02~\ 
 
 1740 r (EmbeEzlement), 145 
 
 1749J 
 
 \lf^\ (Weavers), 106 
 
 1773 (Spitalfields), 107 
 
 1813 (Wages), 164 
 
 1814 (Apprenticeship), 164 
 1819 (Factories), 164 
 
 j82^[ (Combination), 170 
 
 1833 (Factories), 164 
 1842 (Mines), 164 
 1844 (Factories), 164 
 1847 (Ten Hours), 166 
 1875 (Shipping), 165 
 1893 (Railways), 165 
 1897 (Workmen's Compensa- 
 tion), 168 
 
 1908 (Eight Hours), 165 
 
 1909 (Trade Boards), 107, 169 
 
 191 1 (Insurance), 169 
 
 1912 (Minimum Wage) 108, i6g 
 Steam-engine, 155 
 
 Steamship companies, 185 
 
 Steel, manufacture of, 183 ; rails, 185, 
 
 187 
 Steelyard, 72, 86 
 Stock, leased with land, 55 
 Stock, joint, 83, 84, 179 seq. 
 Strickland, Sir George, 151 
 Struggle for existence, 168 
 Suffolk, 92 
 
 Supply and Demand, loi 
 Surveying, 132 
 Survival of the Jiftest, 168 
 Sweated trades, 107 
 Swift, Jonathan, 125 
 Sybil, 66 
 Syndicalism, 191 
 
 Tailoring industry, 181 
 
 Tailors, Merchant, 80 
 
 Taltarum' s case, 126 
 
 Tar, 68 
 
 Tawney, R. H., 199. 201 
 
 Team, eight-ox, 23 
 
 Tenant, 9 
 
 Tenant farmers, characteristics of 
 
 English, 4 ; origin of, 53 seq., 64 
 Tenant-right. 134 
 Ten Hours Act, 166 
 Tenters, 162 
 Territorial law, 70 
 
 212
 
 Ind 
 
 ex 
 
 Textile trades, 164, 165, 186 
 
 Thorotigh, 112, 114 
 
 Tiverton, 150 
 
 Tobacco business, 185 
 
 Tool and Machine, 149 
 
 Tories, 139, 166 
 
 Tours, 119, 137, 151 
 
 Town ( = village), 11 
 
 Towns, early history of, 26 
 
 Town-economy , 95 
 
 Townshend, Lord, 135 
 
 Toynbce, Arnold, 128, 140, 203 
 
 Trade, Board of, 108, 164 
 
 Trade Boards, 107, 169 
 
 Trade Unions, 170 seq., 177 
 
 Transportation, 155 
 
 Troilus and Cressida, 99 
 
 Trusts, 186 seq. 
 
 Tucker, 92 
 
 Tudor period, characteristics of, 89 
 
 seq. 
 Turnips, 135 
 Turnpike roads, 155 
 
 Ulster, 134 
 
 Umpire, 171 
 
 Undertaker, 149 
 
 Unemployment, 115, 118, 169 
 
 Unions, trade, 170 seq. 
 
 United States. 185 
 
 Universal Dictionary of Trade and 
 
 Commerce, 145 
 Unwin, Professor, 198, 200 
 Usury, 82 
 Utopia, 30 
 
 Vagrancy, 109 
 
 Values in exchange, 90 
 
 Venice, 71, 73, 85 
 
 Verlagsystem, 142 
 
 Verleger, 142 
 
 View of craft ,31 
 
 Villa theory, 20 
 
 Villein, meaning of, 13 
 
 Villeinage, land in, 12 
 
 Vinogradoff, Professor, 194, 198 
 
 Virgate, 14 
 
 Visitations, heraldic, 130 
 
 Wages, assessment of, 102 seq., 107, 
 
 164 ; Boards, 171 
 Wakefield, 146 
 Wales, 23 ; South, 184 
 Walker, 92 
 
 Walter of Henley, 196 
 Warwickshire, 63 
 Watt, James, 37, 141 
 Wealth of Nations, 141 
 Weavers, immigration of foreign, 56, 
 
 90; gilds of, 8g ; legislation con- 
 cerning, 106, 150 
 Weavers' Act (1555), 150 
 Webb, S. and B., 203 
 Week work, 13 
 Welfare programmes, 180 
 Wesley, John, 159 
 West Country, 12, 130 
 West Riding, 144, 146 
 Wheat, 14; price of, 137 
 Whig government, 129 seq., 162; 
 
 doctrine, 161 
 Whittington, 81 
 Wiltshire, 92 
 Winchcombe, John, 150 
 Wine, 68 
 
 Wire manufacture, 151 
 Wolsey, Cardinal, 116, 117 
 Women, restriction of labour of, 164 
 Wool, 56, 68, 137 ; export of, fiS 
 Woollen industry, 56, 88 seq., 115, 
 
 125, 145, 150, 153, 160; report of 
 
 1806 on, 142, 146 
 Workmen's Compensation Act, 168 
 Works, iron and engineering, 154, 
 
 173. 181 
 Wyclif, 51 
 
 Yardland, 14 
 
 Ytirdling, 18 
 
 Yarn, 155 
 
 Yeoman, 122 
 
 Yorkshire, 142 seq., 147, 151 
 
 Young, Arthur, 119, 123, 137 
 
 Young Persons, hours of labour of, 164 
 
 Ypres, 90, 112 
 
 ZWINGLI. iia 
 
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