POLITICAL ECONOMY 353 before the third. The latter revolution is attributed by Adam Smith to the operation of selfish interests, that of the proprietor on the one hand, who discovered the superior productiveness of cultivation by free tenants, and that of the sovereign on the other, who, jealous of the great lords, encouraged the encroachments of the villeins on their authority. But that the church deserves a share of the merit seems beyond doubt moral impulses, as often happens, conspiring with political and economic motives. The serfs were treated best on the ecclesiastical estates, and the members of the priesthood, both by their doctrine and by their situation since the Northern conquests, were constituted patrons and guardians of the oppressed or subject classes. Out of the liberation of the serfs rose the first linea ments of the hierarchical constitution of modern industry in the separation between the entrepreneurs and the workers. The personal enfranchisement of the latter, stimulating activity and developing initiative, led to accumulations, which were further promoted by the estab lishment of order and good government by the civic cor porations which grew out of the enfranchisement. Thus an active capitalist class came into existence. It appeared first in commerce, the inhabitants of the trading cities importing expensive luxuries from foreign countries, or the improved manufactures of richer communities, for which the great proprietors gladly exchanged the raw produce of their lands. In performing the office of carriers, too, between different countries, these cities had an increasing field for commercial enterprise. At a later period, as Adam Smith has shown, commerce promoted the growth of manufactures, which were either produced for foreign sale, or made from foreign materials, or imitated from the work of foreign artificers. But the first import ant development of handicrafts in modern Europe belongs to the 14th and 15th centuries, and the rise of manufac turing entrepreneurs is not conspicuous within the Middle Ages properly so called. Agriculture, of course, lags behind ; though the feudal lords tend to transform them selves into directors of agricultural enterprise, their habits and prejudices retard such a movement, and the advance of rural industry proceeds slowly. It does, however, pro ceed, partly by the stimulation arising from the desire to procure the finer objects of manufacture imported from abroad or produced by increased skill at home, partly by the expenditure on the land of capital amassed in the pro secution of urban industries. Some of the trade corporations in the cities appear to have been of great antiquity; but it was in the 13th century that they rose to importance by being legally recognized and regulated. These corporations have been much too absolutely condemned by most of the economists, who insist on applying to the Middle Ages the ideas of the 18th and 19th centuries. They were, it is true, unfitted for modern times, and it was necessary that they should disappear ; their existence indeed was quite unduly prolonged. But they were at first in several respects highly beneficial. They were a valuable rallying point for the new industrial forces, which were strengthened by the rise of the esprit de corps which they fostered. They improved technical skill by the precautions which were taken for the solidity and finished execution of the wares produced in each locality, and it was with a view to the advancement of the industrial arts that St Louis undertook the better organization of the trades of Paris. The cor porations also encouraged good moral habits through the sort of spontaneous surveillance which they exercised, and they tended to develop the social sentiment within the limits of each profession, in times when a larger public spirit could scarcely yet be looked for. MODEHN TIMES. The close of the Middle Ages, as Comte has shown, must be placed at the end, not of the 15th, but of the 13th cen tury. The modern period, which then began, is filled by a development exhibiting three successive phases, and issuing in the state of things which characterizes our own epoch. During the 14th and 15th centuries the Catholico-feudal system was breaking down by the mutual conflicts of its own official members, whilst the constituent elements of a new order were rising beneath it. On the practical side the ant agonists matched against each other were the crown and the feudal chiefs ; and these rival powers sought to strengthen themselves by forming alliances with the towns and the industrial forces they represented. The movements of this phase can scarcely be said to find an echo in any contem porary economic literature. In the second phase of the modern period, which opens with the beginning of the 16th century, the spontaneous collapse of the mediaeval structure is followed by a series of systematic assaults which still further disorganize it. During this phase the central temporal power, which has made a great advance in stabi lity and resources, lays hold of the rising elements of manufactures and commerce, and seeks, whilst satisfying the popular enthusiasm for their promotion, to use them for political ends, and make them subserve its own strength and splendour by furnishing the treasure necessary for military success. With this practical effort and the social tendencies on which it rests the mercantile school of poli tical economy, which then obtains a spontaneous ascend ency, is in close relation. Whilst partially succeeding in the policy we have indicated, the European Governments yet on the whole necessarily fail, their origin and nature disqualifying them for the task of guiding the industrial movement ; and the discredit of the spiritual power, with which most of them are confederate, further weakens and undermines them. In the last phase, which coincides approximately with the 18th century, the tendency to a completely new system, both temporal and spiritual, becomes decisively pronounced, first in the philosophy and general literature of the period, and then in the great French explosion. The universal critical doctrine, which had been announced by the Protestantism of the previous phase, and systematized in England towards the close of that phase, is propagated and popularized, especially by French writers. The spirit of individualism inherent in the doctrine was eminently adapted to the wants of the time, and the general favour with which the dogmas of the social contract and laissezfaire were received indicated a just sentiment of the conditions proper to the contempor ary situation of European societies. So long as a new coherent system of thought and life could not be intro duced, what was to be desired was a large and active development of personal energy under no further control of the old social powers than would suffice to prevent anarchy. Governments were therefore rightly called on to abandon any effective direction of the social movement, and, as far as possible, to restrict their intervention to the maintenance of material order. This policy was, from its nature, of temporary application only; but the negative school, according to its ordinary spirit, erected what was merely a transitory and exceptional necessity into a per manent and normal law. The unanimous European move ment towards the liberation of effort, which sometimes rose to the height of a public passion, had various sides, corresponding to the different aspects of thought and life; and of the economic side the French physiocrats were the first theoretic representatives on the large scale, though the office they undertook was, both in its destructive and organic provinces, more thoroughly and effectively done
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