A History of Political Economy

第4章

AFrenchwriterwhodealtwiththequestionofmoney，butfromadifferentpointofview，wasJeanBodin。InhisRéponse

auxparadoxesdeM。Malestroittouchantl’enchérissementdetoutesleschosesetdesmonnaies，1568，andinhisDiscours

surlerehaussementetladiminutiondesmonnaies，1578，heshowedamorerationalappreciationthanmanyofhis

contemporariesofthecausesoftherevolutioninprices，andtherelationofthevariationsinmoneytothemarketvaluesof

waresingeneralaswellastothewagesoflabour。Hesawthattheamountofmoneyincirculationdidnotconstitutethe

wealthofthecommunity，andthattheprohibitionoftheexportofthepreciousmetalswasuseless，becauserendered

inoperativebythenecessitiesoftrade。Bodinisnoinconsiderablefigureintheliteraryhistoryoftheepoch，anddidnot

confinehisattentiontoeconomicproblems;inhisSixlivresdelaRépublique，about1576，hestudiesthegeneralconditions

oftheprosperityandstabilityofstates。Inharmonywiththeconditionsofhisage，heapprovesofabsoluteGovernmentsas

themostcompetenttoensurethesecurityandwell—beingoftheirsubjects。Heentersintoanelaboratedefenceofindividual

propertyagainstPlatoandMore，ratherperhapsbecausetheschemeofhisworkrequiredthetreatmentofthatthemethan

becauseitwaspracticallyurgentinhisday，whentheexcessesoftheAnabaptistshadproducedastrongfeelingagainst

communisticdoctrines。Heisunderthegeneralinfluenceofthemercantilistviews，andapprovesofenergeticGovernmental

interferenceinindustrialmatters，ofhightaxesonforeignmanufacturesandlowdutiesonrawmaterialsandarticlesoffood，

andattachesgreatimportancetoadensepopulation。Butheisnotablindfollowerofthesystem;hewishesforunlimited

freedomoftradeinmanycases;andheisinadvanceofhismoreeminentcontemporaryMontaigne（7）inperceivingthatthe

gainofonenationisnotnecessarilythelossofanother。Tothepublicfinances，whichhecallsthesinewsoftheState，he

devotesmuchattention，andinsistsonthedutiesoftheGovernmentinrespecttotherightadjustmentoftaxation。Ingeneral

hedeservesthepraiseofsteadilykeepinginviewthehigheraimsandinterestsofsocietyinconnectionwiththeregulation

anddevelopmentofitsmateriallife。（8）

CorrectviewsastothecauseofthegeneralriseofpricesarealsoputforwardbytheEnglishwriter，W。S。（William

Stafford），inhisBriefeConceipteofEnglishPolicy，publishedin1581，anddedicatedtoQueenElizabeth。Itisintheform

ofadialogue，andiswrittenwithlivelinessandspirit。TheauthorseemstohavebeenacquaintedwiththewritingsofBodin。

Hehasjustideasastothenatureofmoney，andfullyunderstandstheevilsarisingfromadebasedcoinage。Hedescribesin

detailthewayinwhichtheseveralinterestsinthecountryhadbeenaffectedbysuchdebasementinpreviousreigns，aswell

asbythechangeinthevalueofthepreciousmetals。Thegreatpopulargrievanceofhisday，theconversionofarableland

intopasture，heattributeschieflytotherestrictionsontheexportofcorn，whichhedesirestoseeabolished。Butinregardto

manufacturesheisatthesamepointofviewwiththelatermercantilists，andproposestheexclusionofallforeignwares

whichmightaswellbeprovidedathome，andtheprohibitionoftheexportofrawmaterialsintendedtobeworkedup

abroad。

Outofthequestionofmoney，too，arosethefirstremarkableGermanproductiononpoliticaleconomywhichhadanoriginal

nationalcharacterandaddressedthepublicinthenativetongue。TheErnestineSaxonlinewasinclined（1530）tointroducea

debasementofthecurrency。Apamphlet，GemeineStymmenvonderMüntze，waspublishedinoppositiontothis

proceeding，undertheauspicesoftheAlbertinebranch，whosepolicywassounderintheeconomicsphere。Areplyappeared

justifyingtheErnestineproject。ThiswasfollowedbyarejoinderfromtheAlbertineside。TheErnestinepamphletis

describedbyRoscherasill—written，obscure，inflated，and，asmightbeexpectedfromthethesisitmaintained，sophistical。

Butitisinterestingascontainingastatementofthefundamentalprinciplesofthemercantilesystemmorethanonehundred

yearsbeforethepublicationofMun’sbook，andforty—sixbeforethatofBodin’sSixlivresdelaRépublique。TheAlbertine

tracts，accordingtoRoscher，exhibitsuchsoundviewsoftheconditionsandevidencesofnationalwealth，ofthenatureof

moneyandtrade，AndoftherightsanddutiesofGovernmentsinrelationtoeconomicaction，thatheregardstheunknown

authorasentitledtoaplacebesideRaleighandtheotherEnglish"colonial—theorists"oftheendofthesixteenthand

beginningoftheseventeenthcentury。

InconnectionwiththesamesubjectofmoneywemeetthegreatnameofCopernicus。HistreatiseDemonetaecudendae

ratione，1526（firstprintedin1816），waswrittenbyorderofKingSigismundI，andisanexpositionoftheprincipleson

whichitwasproposedtoreformthecurrencyofthePrussianprovincesofPoland。Itadvocatesunityofthemonetary

systemthroughouttheentirestate，withstrictintegrityinthequalityofthecoin，andthechargeofaseignioragesufficientto

covertheexpensesofmintage。

AntonioSerraisregardedbysomeasthecreatorofmodernpoliticaleconomy。HewasanativeofCosenzainCalabria。HisBreveTrattatodellecausechepossonofareabbondareliregnid’oroed’argentodovenonsonominiere，1613，was

writtenduringhisimprisonment，whichisbelievedtohavebeenduetohishavingtakenpartintheconspiracyofCampanella

fortheliberationofNaplesfromtheSpanishyokeandtheestablishmentofarepublicanGovernment。Thiswork，long

overlooked，wasbroughtintonoticeinthefollowingcenturybyGalianiandothers。Itstitlealonewouldsufficientlyindicate

thattheauthorhadadoptedtheprinciplesofthemercantilesystem，andinfactinthistreatisetheessentialdoctrinesofthat

systemareexpoundedinatolerablyformalandconsecutivemanner。Hestronglyinsistsonthesuperiorityofmanufactures

overagricultureasasourceofnationalwealth，andusesinsupportofthisviewtheprosperityofGenoa，Florence，and

Venice，ascontrastedwiththedepressedconditionofNaples。Withlargerinsightthanmanyofthemercantilistsexhibit，he

insistsontheimportance，towardstheacquisitionofwealth，notaloneoffavourableexternalconditions，butofenergetic

characterandindustrioushabitsinapopulation，aswellasofastablegovernmentandagoodadministrationofthelaws。

ThefirstsystematictreatiseonoursciencewhichproceededfromaFrenchauthorwastheTraitédel’ÉconomiePolitique，

publishedbyMontchrétiendeWatteville（orVasteville）（9）in1615。Theuseofthetitle，saysRoscher，nowforthefirsttime

giventothescience，wasinitselfanimportantservice，sinceevenBaconunderstoodby"Economia"onlythetheoryof

domesticmanagement。Thegeneraltendenciesandaimsoftheperiodareseeninthefactthatthistreatise，notwithstanding

thecomprehensivenameitbears，doesnotdealwithagricultureatall，butonlywiththemechanicalarts，navigation，

commerce，andpublicfinance。Theauthorisfilledwiththethendominantenthusiasmforforeigntradeandcolonies。He

advocatesthecontrolbyprincesoftheindustryoftheirsubjects，andcondemnsthetoogreatfreedom，which，inhisopinion

totheirowndetriment，theGovernmentsofSpain，Portugal，andHollandhadgiventotrade。Hisbookmayberegardedasa

formalexpositionoftheprinciplesofthemercantilesystemfortheuseofFrenchmen。

AsimilarofficewasperformedinEnglandbyThomasMun。Inhistwoworks，ADiscourseofTradefromEnglanduntothe

EastIndies，2nded。，1621，andespeciallyinEngland’sTreasurebyForeignTrade，1664（posthumous），wehaveforthe

firsttimeaclearandsystematicstatementofthetheoryofthebalanceoftrade，aswellasofthemeansbywhich，according

totheauthor’sview，afavourablebalancecouldbesecuredforEngland。Thegreatobjectoftheeconomicpolicyofastate，

accordingtohim，shouldbesotomanageitsexportofmanufactures，itsdirectandcarryingtrade，anditscustomsduties，as

toattracttoitselfmoneyfromabroad。Hewas，however，opposedtotheprohibitionoftheexportofthepreciousmetalsin

exchangeforforeignwares，butontheground，fullyaccordingwithhisgeneralprinciples，thatthosewaresmightafterwards

bere—exportedandmightthenbringbackmoretreasurethanhadbeenoriginallyexpendedintheirpurchase;thefirstexport

ofmoneymightbe，ashesaid，theseed—time，ofwhichtheultimatereceiptofalargeramountwouldbetheharvest。（10）He

saw，too，thatitisinexpedienttohavetoomuchmoneycirculatinginacountry，asthisenhancesthepricesofcommodities，

andsomakesthemlesssaleabletoforeigners，butheisfavourabletotheformationandmaintenanceofastatetreasure。（11）

OneofthemostremarkableofthemoderatemercantilistswasSirJosiahChild（BriefObservationsconcerningTradeand

theinterestofMoney，1668，andANewDiscourseofTrade，1668and1790）。HewasoneofthosewhoheldupHollandas

amodelfortheimitationofhisfellow—countrymen。Heisstronglyimpressedwiththeimportancefornationalwealthand

well—beingofalowrateofinterest，whichhesaysistocommerceandagriculturewhatthesoulistothebody，andwhichhe

heldtobethe"cauzacausansofalltheothercausesoftherichesoftheDutchpeople。"Insteadofregardingsuchlowrate

asdependentondeterminateconditions，whichshouldbeallowedtoevolvethemselvesspontaneously，hethinksitshouldbe

createdandmaintainedbypublicauthority。Child，whilstadheringtothedoctrineofthebalanceoftrade，observesthata

peoplecannotalwaysselltoforeignerswithouteverbuyingfromthem，anddeniesthattheexportofthepreciousmetalsis

necessarilydetrimental。Hehastheordinarymercantilistpartialityforanumerouspopulation。Headvocatesthereservation

bytheMotherCountryofthesolerightoftradewithhercolonies，and，undercertainlimitations，theformationofprivileged

tradingcompanies。AstotheNavigationAct，hetakesupapositionnotunlikethatafterwardsoccupiedbyAdamSmith，

regardingthatmeasuremuchmorefavourablyfromthepoliticalthanfromtheeconomicpointofview。Itwillbeseenthat

heissomewhateclecticinhisopinions;buthecannotproperlyberegarded，thoughsomehaveattributedtohimthat

character，asaprecursorofthefree—tradeschooloftheeighteenthcentury。

Twoothereclecticsmaybeherementioned，inwhomjustviewsaremingledwithmercantilistprejudices——SirWilliam

TempleandCharlesDavenant。TheformerinhisObservationsupontheUnitedProvinceoftheNetherlands，1672，andhisEssayontheTradeofIreland，1673，hasmanyexcellentremarksonfundamentaleconomicprinciples，asonthefunctionsof

labourandofsavingintheproductionofnationalwealth;butheisinfectedwiththeerrorsofthetheoryofthebalanceof

trade。HefollowstheleadofRaleighandChildinurginghisfellow—countrymentoimitatetheexampleoftheDutchintheir

economicpolicy——advicewhichinhiscasewasfoundedonhisobservationsduringalengthenedresidenceinHollandas

ambassadortotheStates。DavenantinhisEssayontheEastIndiaTrade，1696—97，EssayontheProbableWaysofmaking

thePeopleGainersintheBalanceofTrade，1699，etc。，alsotakesupaneclecticposition，combiningsomecorrectviewson

wealthandmoneywithmercantilistnotionsontrade，andrecommendingGovernmentalrestrictionsoncolonialcommerceas

stronglyasheadvocatesfreedomofexchangeathome。

Whilstthemercantilesystemrepresentedtheprevalentformofeconomicthoughtintheseventeenthcentury，andwasalone

dominantintheregionofpracticalstatesmanship，therewasgrowingup，sidebysidewithit，abodyofopinion，differentand

indeedhostileincharacter，whichwasdestinedultimatelytodriveitfromthefield。Thenewideaswerefirstdevelopedin

England，thoughitwasinFrancethatinthefollowingcenturytheytookholdofthepublicmind，andbecameapowerin

politics。Thattheyshouldfirstshowthemselveshere，andafterwardsbeextended，applied，andpropagatedthroughout

EuropebyFrenchwriters，belongstotheorderofthingsaccordingtowhichthegeneralnegativedoctrineinmoralsand

politics，undoubtedlyofEnglishorigin，founditschiefhomeinFrance，andwasthencediffusedinwideningcirclesthrough

thecivilizedworld。InEnglandthismovementofeconomicthoughttooktheshapemainlyofindividualcriticismofthe

prevalentdoctrines，foundedonatrueranalysisoffactsandconceptions;inFranceitwaspenetratedwithapowerfulsocial

sentiment，furnishedthecreedofaparty，andinspiredaprotestagainstexistinginstitutionsandanurgentdemandfor

practicalreform。

Regardedfromthetheoreticside，thecharacteristicfeaturesofthenewdirectionwerethefollowing。Theviewofatleastthe

extrememercantiliststhatnationalwealthdependsontheaccumulationofthepreciousmetalsisprovedtobefalse，andthe

giftsofnatureandthelabourofmanareshowntobeitsrealsources。Theexaggeratedestimateoftheimportanceofforeign

commerceisreduced，andattentionisoncemoreturnedtoagricultureandtheconditionsofitssuccessfulprosecution。On

thesideofpracticalpolicy，aso—calledfavourablebalanceoftradeisseennottobethetrueobjectofanation’sora

statesman’sefforts，buttheprocuringforthewholepopulationinthefullestmeasuretheenjoymentofthenecessariesand

conveniencesoflife。And——whatmorethananythingelsecontraststhenewsystemwiththeold——theelaborateapparatusof

prohibitions，protectiveduties，bounties，monopolies，andprivilegedcorporations，whichtheEuropeanGovernmentshad

createdinthesupposedinterestsofmanufacturesandtrade，isdenouncedordeprecatedasmoreanimpedimentthana

furtherance，andthefreedomofindustryisinsistedonastheonethingneedful。Thiscircleofideas，ofcourse，emergesonly

gradually，anditsearliestrepresentativesineconomicliteratureingeneralapprehenditimperfectlyandadvocateitwith

reserve;butitrisessteadilyinimportance，beingmoreandmorefavouredbythehighestminds，andfindinganincreasing

bodyofsupportersamongsttheintelligentpublic。

SomeoccasionaltraitsofaneconomicschemeinharmonywiththesenewtendenciesaretobefoundintheDeCiveandLeviathanofHobbes。Buttheefficacyofthatgreatthinkerlayratherinthegeneralphilosophicfield;andbysystematising，

forthefirsttime，thewholenegativedoctrine，hegaveapowerfulimpulsetowardsthedemolitionoftheexistingsocial

order，whichwasdestined，asweshallsee，tohavemomentousconsequencesintheeconomicnolessthaninthestrictly

politicaldepartmentofthings。

Awriterofnosuchextendedrange，butofmuchsagacityandgoodsense，wasSirWilliamPetty，authorofanumberof

piecescontaininggermsofasoundeconomicdoctrine。Aleadingthoughtinhiswritingsisthat"labouristhefatherand

activeprincipleofwealth，landsarethemother。"Hedividesapopulationintotwoclasses，theproductiveandthe

unproductive，accordingastheyareorarenotoccupiedinproducingusefulmaterialthings。Thevalueofanycommodity

depends，hesays，anticipatingRicardo，ontheamountoflabournecessaryforitsproduction。Heisdesirousofobtaininga

universalmeasureofvalue，andchoosesashisunittheaveragefoodofthecheapestkindrequiredforaman’sdaily

sustenance。Heunderstandsthenatureoftherentoflandastheexcessofthepriceofitsproduceoverthecostof

production。Hedisapprovesoftheattempttofixbyauthorityamaximumrateofinterest，andisgenerallyopposedto

Governmentalinterferencewiththecourseofindustry。Heseesthatacountryrequiresforitsexchangesadefinitequantity

ofmoneyandmayhavetoomuchofit，andcondemnstheprohibitionofitsexportation。Heholdsthatoneonlyofthe

preciousmetalsmustbethefoundationofthecurrency，theothercirculatingasanordinaryarticleofmerchandise。Petty’s

nameisspeciallyassociatedwiththeprogressofstatistics，withwhichhewasmuchoccupied，andwhichhecalledbythe

nameofpoliticalarithmetic。Relyingontheresultsofsuchinquiries，hesethimselfstronglyagainsttheopinionwhichwas

maintainedbytheauthorofBritanniaLanguens（1680），Fortrey，RogerCoke，andotherwriters，thattheprosperityof

Englandwasonthedecline。

Themostthoroughgoingandemphaticassertionofthefree—tradedoctrineagainstthesystemofprohibitions，whichhad

gainedstrengthbytheRevolution，wascontainedinSirDudleyNorth’sDiscoursesuponTrade，1691。Heshowsthatwealth

mayexistindependentlyofgoldorsilver，itssourcebeinghumanindustry，appliedeithertothecultivationofthesoilorto

manufactures。Thepreciousmetals，however，areoneelementofnationalwealth，andperformhighlyimportantoffices。

Moneymayexistinexcess，aswellasindefect，inacountry;andthequantityofitrequiredforthepurposesoftradewill

varywithcircumstances;itsebbandflowwillregulatethemselvesspontaneously。Itisamistaketosupposethatstagnation

oftradearisesfromwantofmoney;itmustariseeitherfromaglutofthehomemarket，orfromadisturbanceofforeign

commerce，orfromdiminishedconsumptioncausedbypoverty。Theexportofmoneyinthecourseoftraffic，insteadof

diminishing，increasesthenationalwealth，tradebeingonlyanexchangeofsuperfluities。Nationsareeconomicallyrelatedto

theworldjustinthesamewayascitiestothestateorasfamiliestothecity。Northemphasisesmorethanhispredecessors

thevalueofthehometrade。Withrespecttotheinterestofcapital，hemaintainsthatitdepends，thethepriceofany

commodity，ontheproportionofdemandandsupply，andthatalowrateisaresultoftherelativeincreaseofcapital，and

cannotbebroughtaboutbyarbitraryregulations，ashadbeenproposedbyChildandothers。Inarguingthequestionoffree

trade，heurgesthatindividualsoftentaketheirprivateinterestasthemeasureofgoodandevil，andwouldforitssakedebar

othersfromtheirequalrightofbuyingandselling，butthateveryadvantagegiventooneinterestorbranchoftradeover

anotherisinjurioustothepublic。Notradeisunprofitabletothepublic;ifitwere，itwouldbegivenup;whentradesthrive，

sodoesthepublic，ofwhichtheyformapart。Pricesmustdeterminethemselves，andcannotbefixedbylaw;andallforcible

interferencewiththemdoesharminsteadofgood。Nopeoplecanbecomerichbystateregulations，——onlybypeace，

industry，freedom，andunimpededeconomicactivity。ItwillbeseenhowcloselyNorth’sviewofthingsapproachestothat

embodiedsomeeightyyearslaterinAdamSmith’sgreatwork。（12）

LockeisrepresentedbyRoscheras，alongwithPettyandNorth，makingupthe"triumvirate"ofeminentBritisheconomists

ofthisperiodwholaidthefoundationsofanewandmorerationaldoctrinethanthatofthemercantilists。Butthisviewof

hisclaimsseemscapableofbeingacceptedonlywithconsiderabledeductions。HisspeciallyeconomicwritingsareConsiderationsoftheloweringofInterestandraisingthevalueofMoney，1691，andFurtherConsiderations，1695。

ThoughLeibnitzdeclaredwithrespecttothesetreatisesthatnothingmoresolidorintelligentcouldbesaidontheirsubject，

itisdifficultabsolutelytoadoptthatverdict。Locke’sspiritofsoberobservationandpatientanalysisledhimindeedtosome

justconclusions;andheisentitledtothecreditofhavingenergeticallyresistedthedebasementofthecurrency，whichwas

thenrecommendedbysomewhowereheldtobeeminentpracticalauthorities。Buthefallsintoerrorswhichshowthathe

hadnotbyanymeanscompletelyemancipatedhimselffromtheideasofthemercantilesystem。Heattachesfartoomuch

importancetomoneyassuch。Hesaysexpresslythatrichesconsistinaplentyofgoldandsilver，thatis，asheexplains，in

havingmoreinproportionofthosemetalsthantherestoftheworldorthanourneighbours。"Inacountrynotfurnished

withmines，therearebuttwowaysofgrowingrich，eitherconquestorcommerce。"Henceheacceptsthedoctrineofthe

balanceoftrade。Heshowsthattherateofinterestcannomorebefixedbylawthantherentofhousesorthehireofships，

andopposesChild’sdemandforlegislativeinterferencewithit。Butheerroneouslyattributedthefalloftheratewhichhad

takenplacegenerallyinEuropetotheincreaseofthequantityofgoldandsilverbythediscoveryoftheAmericanmines。He

setstooabsoluteavalueonanumerouspopulation，inthispointagreeingwithPetty。Onwagesheobservesthattherate

mustbesuchastocovertheindispensablewantsofthelabourer;whenthepriceofsubsistencerises，wagesmustriseina

likeratio，ortheworkingpopulationmustcomeonthepoorrates。Thefalloftherentoflandheregardsasasuresignofthe

declineofnationalwealth。"Taxes，howevercontrived，andoutofwhosehandssoeverimmediatelytaken，do，inacountry

wheretheirgreatfundisinland，forthemostpartterminateuponland。"Inthislastpropositionweseeaforeshadowingof

theimpôtuniqueofthephysiocrats。WhatevermayhavebeenLocke’sdirecteconomicservices，hisprincipalimportance，

likethatofHobbes，liesinhisgeneralphilosophicandpoliticalprinciples，whichpowerfullyaffectedFrenchandindeed

Europeanthought，excitingaspiritofoppositiontoarbitrarypower，andlayingthefoundationofthedoctrinedevelopedin

theContratSocial。（13）

NOTES:

1。Comptesrendusdel’AcadémiedesSciencesmoralesetpolitiques，lxii，435，sqq。

2。GeschichtederN。O。inDeutschland，p。25。

3。GeschichtederN。O。inDeutschland，p。228，sqq。

4。Roscher，GeschichtederN。O。inDeutschland，p。227。

5。Clément，Histoiredelavieetdel’administrationdeColbert（1846），p。134。

6。AmorevaluableworkisthatofRomeoBocchi（writtenin1611andpublishedin1621），Dellaguistauniversalemisurae

suotypo:vol。i，AnimadellaMoneta;vol。ii，CorpodellaMoneta，ofwhichafullaccounthasbeengivenbyU。GobbiinhisEconomiaPoliticanegliScrittoriItalianidelSecoloxvi—xvii（1889）。

7。"Ilnesefaictaucunprofitqu’audommaged’autruy。"Essais。liv。I，chap。21。

8。AwriterwhoseliteraryactivitywasofasimilarcharactertoBodin’sandwhoseemstohavebeenmuchinfluencedby

him，wastheItalianGiovanniBotero（1540—1617）。HistreatiseDellecausedellagrandezzadellecitta（1588;Eng。Trans。

byRobertPeterson，1606）wasintroductorytohischiefworkDellaragiondiStato，libriX（1589），inwhichhecombated

theprinciplesofMachiavelli。

9。Montchrétien，havingfomentedtherebellioninNormandyin1621，wasslainwithafewfollowers，byClaudeTurgot，lord

ofLesTourailles，whobelongedtotheelderbranchofthenoblehousefromwhichthegreatTurgotwasdescended。

10。OnMun’sdoctrines，seeSmith’sWealthofNations，Bk。iv。chap。i。

11。WritersoflessimportancewhofollowedthesamedirectionwereSirThomasCulpeper（ATractagainsttheHighRate

ofUsury，1623，andUsefulRemarkonHighInterest1641），SirDudleyDigges（DefenceofTrade，1615），G。Malynes

（ConsuetudevelLexMercatoria，1622）E。Misselden（CircleofCommerce，1623），SamuelFortrey（England’sInterestand

Improvement，1663and1673），andJohnPollexien（EnglandandIndiainconsistentintheirManufacturers，1697）。

12。YetM。EugèneDaireasserts（OeuvresdeTurgot，i，322）that"HumeetTuckersontlesdeuxpremiersécrivainsquise

soinetélevés，enAngleterre，au—dessusdestheéoriesdusystèmemercantile。"

13。MinorEnglishwriterswhofollowedtheneweconomicdirectionwereLewisRoberts，TreasureofTraffick，1641;Rice

Vaughan，DiscourseofCoinandCoinage，16715;NicholasBarbon，DiscourseconcerningCoiningthenewmoneyhigher，

1696，inwhichsomeofLocke’serrorswerepointedout;andtheauthorofananonymousbookentitledConsiderationson

theEastIndiaTrade，1701。Practicalquestionsmuchdebatedatthisperiodwerethoseconnectedwithbanking，onwhicha

lengthenedcontroversytookplace，S。Lamb，W。Potter，F。Cradocke，M。Lewis。M。Godfrey，R。Murray，H。Chamberlain，

andW。Paterson，founderoftheBankofEngland（1694），producingmanypamphletsonthesubject;andthemanagementof

thepoor，whichwastreatedbyLocke，SirMatthewHale，R。Haines，T。Firmin，andothers。

Chapter5

ThirdModernPhase:SystemofNaturalLibertyThechangesintroducedduringthethirdphaseintheinternalorganisationoftheindustrialworldwere（1）themore

completeseparationofbankingfromgeneralcommerce，andthewiderextensionofitsoperations，especiallythroughthe

systemofpubliccredit;and（2）thegreatdevelopmentoftheuseofmachineryinproduction。Thelatterdidnotbecomevery

prominentduringthefirsthalfoftheeighteenthcentury，Whilsttendingtopromotethedignityoftheworkingclassesby

relievingthemfromdegradingandexhaustingformsoflabour，itwidenedthegulfbetweenthemandthecapitalist

employers。Itthusbecameplainthatforthedefinitiveconstitutionofindustryamoralreformwasthenecessarypreliminary

condition。

Withrespecttothepoliticalrelationsofindustry，aremarkableinversionnowshoweditself。Thesystematicencouragements

whichtheEuropeanGovernmentshadextendedtoitintheprecedingphasehadbeenpromptedbytheirdesiretouseitasan

instrumentforachievingthemilitarysuperioritywhichwasthegreatendofthekpolicy。Now，onthecontrary，themilitary

spiritsubordinateditselftotheindustrial，andthearmiesandthediplomacyofGovernmentswereplacedattheserviceof

commerce。ThewarswhichfilledalargepartoftheeighteenthcenturywereessentiallyCommercialwars，arisingoutofthe

efforttosustainorextendthecolonialestablishmentsfoundedinthepreviousphase，ortodepriverivalnationsofthe

industrialadvantagesconnectedwiththepossessionofsuchestablishments。Thischangeofattitude，notwithstandingits

deplorabletendencytofosterinternationalenmitiesandjealousies，markedarealandimportantprogressbypointingto

industrialactivityastheonepermanentpracticaldestinationofmodernsocieties。