Economic history

“ Commerce and the growth of colonies, the extension of the middle class, the redistribution of wealth, the growth of cities, the dependence in relations of trade of one nation upon another, all these things shook the ancient organisation of society. The industrial system grew up upon the basis of a naturalistic theory of all economic relations. Unlimited freedom in labour and in the use of capital were claimed. ”

“ In the higher grades of economic society the advantages of the recent changes were more distinct, the disadvantages less so. The rise of capital and business enterprise into greater importance, and the extension of the field of competition, gave greater opportunity to employing farmers, merchants, and manufacturers, as well as to the capitalists pure and simple. ”

“ Historical pundits are just now much interested in what is called the economic interpretation of history; that is, the theory that the whole history of man, including his religions and philosophies and ethnic movements, his flowerings of art, his Periclean and Augustan Ages, his Protestant Reformations and French Revolutions—has been determined primarily by economic conditions. ”

“ Economically it extended from peasant proprietorship and a use economy to a market-money economy; from a society of working peasant farmers to an economy resting upon war captives reduced to slavery; from an economy based on production for trade and profit to an economy based on power-grabbing, special privilege, speculation and corruption; from an austerity economy based on primary production to an economy based on affluence, exploitation, and gluttony. ”

“ Our courts of justice, our financial institutions, our methods of trade, and our schools of all grades are examples of social harmonies which found their form by long conflict, and settled down to smooth action by custom. The financial institutions and the methods of trade belong to the economic system. The system of production is modern and new. ”

“ Each civilization has had a background of simple use economy—food gathering, animal husbandry, agriculture—in which most of the people produced what they needed and consumed what they produced. Such an economy employs money rarely. ”

“ Can sufficient capital be accumulated? A brief résumé of the industrial history of the last one hundred years or so will be relevant at this stage of the discussion. Capitalistic production, in its modern significance, was born of the industrial revolution in England in the latter half of the eighteenth century. ”

“ With the increase of commerce and the growing power of the middle classes, there has arisen the "industrial age." Interests connected with production and trade, and with the material side of civilization, have come into great prominence. ”

“ Survey of commercial development, 1860-1914.—In the chapters introductory to the history of commerce in the nineteenth century, attention was directed to the increasing rapidity of movement, which makes the second half of the century a period by itself, distinguished above all others by its wonderful commercial development. That the United States enjoyed a full measure of the world’s progress in commerce is shown by the following table, which gives the figures of imports and exports in millions of dollars. ”

“ It follows that the exchange values of manufactured articles, [pg 483] compared with the products of agriculture and of mines, have, as population and industry advance, a certain and decided tendency to fall. Money being a product of mines, it may also be laid down as a rule that manufactured articles tend, as society advances, to fall in money price. The industrial history of modern nations, especially during the last hundred years, fully bears out this assertion. ”

“ The advent of trade (business) and the trading class created a small but potentially powerful class whose income and wealth were not derived from direct contact with nature but came from trade, money changing, lending, insuring and other activities associated with the accumulation and investment of wealth in profit-yielding enterprises. ”

“ That a large number of such men of substance, whose wealth was the produce of industry, existed at the period, is an indication that the nation had grown rich by trade, and had also advanced in population. ”

“ Saving up and borrowing were both more practicable. More capital was now in existence and more persons could obtain the use of it. As a result, manufacturing, trade, and even agriculture could now be conducted on a more extensive scale, changes could be introduced, and production was apt to be profitable, as prices were increasing and returns would be greater even than those calculated upon. ”

“ The whole trend of affairs, however, both conscious and unconscious, was to make the world one vast hive of industry, instead of an infinite number of self-sufficient, separate hives; the village market had expanded into the provincial market, the provincial into the national, the national into the imperial, and the imperial into the world market. ”

“ Through the discovery of the new world and the influx of gold and silver that came with it gave impetus to industry and commerce of the cities; the rapid increase of money capital increased extravagance and induced a desire for amassing wealth, which changed modes of life, changed policies and systems of political economy. ”

“ But the process of development which alone made it possible—the development of modern banking, the invention of paper currency media, the breaking down of international trade restrictions, all the mechanical and scientific inventions which have resulted in the binding of the world together in one whole as far as commerce is concerned,—all this would comprise in brief the essential features of the complete commercial development of two centuries or more, and how far they are related as cause or effect it would be hard to say. ”

“ We think nowadays that the resources of a state depend upon the prosperity of the people, no matter whether this prosperity comes from agriculture or from manufactures, 167from internal trade or from foreign trade. Statesmen, however, of the period under discussion, set a peculiarly high value on foreign commerce, and regarded it as a more important branch of industry than any other. ”

“ The wealth at first attracted to the capital, as the chief place of abode for the aristocracy, by degrees finds its way to the industrial people in the provinces, to be employed in the development of arts and manufactures, and is thus spread throughout the whole kingdom, to find its way back to the capital, through the medium of those who, having by commerce or otherwise accumulated a superabundance, resort thither to spend it. ”

“ In both cases labour, capital, and land were the factors which went to produce it, though they might contribute in different proportions to the prosperity of different lands; and hence the respective advantages and disadvantages of two or more countries could be discussed and compared.
2. During the first sixty years of the eighteenth century the financial condition and the fiscal possibilities of England were still the chief topics to which economic writers addressed themselves, and not without reason. ”

“ Trade, finance and commerce, by producing a regular flow of abundant income, brought into existence a new field of occupations and a new class--business and the businessmen. Herdsmen and farmers depended for their livelihood on nature, her niggardliness or generosity. The businessmen required only the presence of a group large enough to purchase goods and services, pay rent and interest, work for wages and leave the profits to the enterpriser. Each profit beyond the subsistence level enabled the businessmen to expand, buying more goods, hiring more labor, making still greater profits. ”

“ She produced little, and manufactured less, and the ill-gotten, blood-stained gain, which flowed to her shores from America, served only to feed an impractical vanity and to further unfit the nation for manufacturing and commercial life. ”

“ Growth of modern states under the influence of commerce.—If the modern reader is impressed, in studying the history of Europe before 1500, with the influence on commerce of the lack of strong government, he will be equally impressed, in the period from 1500 to 1800, with the strength of government and with the important part it played in commercial development. ”

“ The development of large scale factory production, the benefit of combination in the competitive struggle, and the tremendous advantage of concentration in securing possession of the unoccupied opportunities, were so great that vast accumulations of capital became the normal agency of the industrial world. ”

“ In the preceding pages we have attempted to study particular effects of the Commercial Revolution (in the broad sense including the expansion of commerce as well as the change of trade-routes) , such as the decline of Venice and of the Hanse, the formation of colonial empires, the rise of commercial companies, the expansion of banking, the introduction of new articles of commerce, and the development of agriculture and industry. In each particular the change was noticeable and important.
But the Commercial Revolution possesses a more general significance. ”

“ If the necessary limitations of general economic theory are recognized, most of the difficulties we have noticed disappear. Now that the “industrial revolution” has extended practically all over the world, so that we have several countries carrying on production by modern methods, it is easily possible to sketch the main features of industrial and commercial organization at the present time, to describe the banking and currency systems of the principal nations, their means of transport and communication, their systems of commercial law and finance, and their commercial policy. ”

“ As the nineteenth century approached its end a new element in the economic situation, which had been displaying itself in some measure for a considerable number of years, suddenly assumed a striking prominence in the United States, and remarkably transformed the industrial situation. ”

“ Comparative, though not absolute steadiness of prices, or at any rate a steady and calculable, in lieu of an irregular and jolting movement of prices, especially of those of the great necessaries of subsistence, is, on the whole, the accompaniment of an advanced civilization, the general character and result of which, indeed, may be said to be to repress irregularities of all kinds, and to bring all social processes nearer and nearer to the equability of those of mechanics. ”

“ These multiple functions of a civilized economy are part and parcel of the changes which have converted the simple barter deal of exchanging a pair of shoes for a shirt into a specialized, civilized market place. They also cause civilized economies to devote far more time and money to marketing goods and services than they spend in their manufacture. ”

“ Throughout the book economic principles are discussed with special reference to American conditions, and their workings are illustrated by frequent allusions to American experience. The subjects of wealth, its consumption, production, and distribution, exchange, money, credit, bimetallism, monopolies, international trade, wages, land nationalization and socialism, and the economic functions of Government are thus treated ”

“ But there are other causes to which we must ascribe the extension of British manufactures and commerce; of these we shall only enumerate what we regard as the principal and the most powerful: the stimulus which any particular improvement in manufactures gives to future and additional improvements, or rather, perhaps, the necessity which it creates for such additional improvements; the natural operation of enlarged capital; the equally natural operation of encreased wealth among the various classes of the community ”

“ Traders and merchants made a profit every time they found a customer. The countryside lived on a use economy supplemented by barter. As money increased in quantity it was loaned at rates of interest by merchants and bankers who owned it and used it for their purposes. Accumulating wealth and money enabled the traders, merchants, bankers and manufacturers to out-buy and out-point landlords and churchmen. ”

“ The savings of labor which have fallen so largely into the hands of the few, making them rich men, have built our railroads, steamships, telegraphs, manufactories, thus in many ways adding to the means of production, and the facilities of commerce at home and abroad. These saved earnings in the hands of men seeking investment for profit have increased the wealth, resources, and refinements of civilization, made abundance possible, and brought it within reach of all, except the unfortunate, or the indolent and improvident. ”

“ They certainly suffered heavily, and languished for several centuries; but a slow revival of industries and arts went on in them,--trade crept again into its old channels, or found new ones,--and wealth began to be accumulated anew. ”

“ Commerce is no doubt flourishing, and money is being made by the commercial classes, at present, under the Empire; but the highest industry is intimately connected with the moral and intellectual energies of a nation ”

“ Wages rose, the balance of trade was largely in favour of the North, the oil regions began to prosper, and industry, commerce and finance all waxed mighty. In 1864 the whole land was in the full sweep of industrial prosperity. ”

“ We have surveyed the field of economical facts, and have examined how they stand related to one another as causes and effects; what circumstances determine the amount of production, of employment for labour, of capital and population; what laws regulate rent, profits, and wages; under what conditions and in what proportions commodities are interchanged between individuals and between countries. We have thus obtained a collective view of the economical phenomena of society, considered as existing simultaneously. ”