We have, in the next place, laid emphasis on the proposition that historical progress has consisted mainly in the establishment of ever larger and larger communities as the controllers of economic policy in place of small. The seventeenth and eighteenth centuries seemed to us the birth hour of modern states and modern national economies; and, therefore, to have been necessarily characterised by a selfish national commercial policy of a harsh and rude kind. Whether such a policy was rightly directed in details depended on the information and sagacity of the personages who guided the state; whether it was to be justified as a whole, whether as a whole it had a probability of success, that depended, then as ever, on the question whether it accompanied a great upward-moving stream of national and economic life.
The progress of the nineteenth century beyond the mercantilist policy of the eighteenth depends, - keeping to this thought of a succession of ever larger social communities, - on the creation of leagues of states, on alliances in the matter of customs and trade, on the moral and legal community of all civilised states, such as modem international law is more and more bringing into existence by means of a network of international treaties.
But, of course, by the side of this stands another and not less important chain of connected phenomena, which also helps to explain the contrast between the nineteenth century on the one side, and the seventeenth and eighteenth on the other. The struggle of social bodies with one another, which is at times military, at other times merely economic, has a tendency, witHthe progress of civilisation, to assume a higher character and to abandon its coarsest and most brutal weapons. The instinct becomes stronger of a certain solidarity of interests, of a beneficent interaction, of an exchange of goods from which both rivals gain. It was in this way that the strife of towns and territories had been softened and moderated with time, until, on the foundation of still greater social bodies, the states, it had passed into a moral influence, and an obligation to educate and assist the weaker members within the larger community.
So the eighteenth century ideas of a humane cosmopolitanism began to instil into men the thought of a change of policy in the economic struggles of European states at the very time when the international rivalry had reached its highest point. After the War of Independence of the United States, after the liberation of the South American colonies from the mother countries, after it became increasingly difficult to maintain the old, harsh, colonial policy, after international law had made progress (for which no one fought more energetically than Frederick the Great), and after the promulgation of the doctrine of mutual gain in international trade, there arose the possibility of a more humane contest. Undoubtedly we must regard this movement, - which reached its first great high-water mark, though accompanied by excessive and one-sided eulogy, in the Free Trade period 1860-1875, - as one of the great advances made by mankind. One might say that tHe seventeenth and eighteentH centuries created the modern national economies, and that the nineteenth has humanised their relations to one another. This being our point of view, we are able to raise ourselves above the suspicion of desiring, without qualification, to represent the embittered commercial strife, the privateering and colony-conquering wars of England, the prohibition and navigation laws of the eighteenth century, as presenting an ideal for our own day.
Yet must we declare, with equal emphasis, that the literary-ideological movement that assailed the old mercantile system set out from Utopias, which, useful as they were as a leaven for the transformation of public opinion, were, nevertheless, very remote from real life. Does it not sound to us to-day like the irony of fate, that the same England, which in 1750-1800 reached the summit of its commercial supremacy by means of its tariffs and naval wars, frequently with extraordinary violence, and always with the most tenacious national selfishness, that that England at the very same time announced to the world the doctrine that only the egoism of the individual is justified, and never that of states and nations; the doctrine which dreamt of a stateless competition of all the individuals of every land, and of the harmony of the economic interests of all nations?
To our own time has the task been given to survey both periods from a higher standpoint; to give their due value to the theories and ideals, the real psychical motives and the practical results of both ages; and so to understand them.
Appendix I
The Prussian Silk Industry in the Eighteenth Century 1892I have already attempted, some years since, to shew that the whole mercantilist policy can only be understood when it is regarded as a stage and a means in the creation of a larger economic and political community. As the mediaval city-states and the great lordships became more and more incapable of serving as adequate organs of social life, as their contests one with another degenerated into a chaos of anarchy, it became necessary that all conceivable means should be employed, - if need be, through "blood and iron," - to erect territorial and national states. Enlightened princely despotism was the representative and leader of this great progressive movement; a movement which was destined to annihilate the freedom of the Estates and corporations, to establish freedom of trade and great markets at home, and to combine all the resources of the country, economic as well as financial and military, in face of the foreigner.
