Chapter 3

In the course of the fifteenth century this second class of capitalists, courtiers, merchants, and financiers, successors to the capitalists of the hanses and the gilds, is in its turn drawn along toward the downward grade. The progress of navigation, the discoveries made by the Portuguese, then by the Spaniards, the formation of great monarchical states struggling for supremacy, begin to destroy the economic situation in the midst of which that class had grown to greatness, and to which it had adapted itself. The direction of the currents of commerce is altered. In the north, the English and Dutch marine gradually take the place of the hanses. In the Mediterranean, commerce centres itself at Venice and at Genoa. On the shores of the Atlantic, Lisbon becomes the great market for spices, and Antwerp, supplanting Bruges, becomes the rendezvous of European commerce. The sixteenth century sees this movement grow more rapid. It is favored at once by moral, political, and economic causes; the intellectual progress of the Renaissance, the expansion of individualism, great wars exciting speculation, the disturbance of monetary circulation caused by the influx of precious metals from the New World. As the science of the Middle Ages disappears and the humanist takes the place of the scholastic, so a new economy rises in the place of the old urban economy. The state subjects the towns to its superior power. It restrains their political autonomy at the same time that is sets commerce and industry free from the guardianship which the towns have hitherto imposed upon them. The protectionism and the exclusiveness of the bourgeoisies are brought to an end. If the craft-guilds continue to exist, yet they no longer control the organization of labor. New industries appear, which, to escape the meddling surveillance of the municipal authorities, establish themselves in the country. Side by side with the old privileged towns, which merely vegetate, younger manufacturing centres, full of strength and exuberance, arise; in England, Sheffield, and Birmingham, in Flanders, Hondschoote and Armentières.[28]

The spirit in which is now manifested in the world of business, is that same spirit of freedom which animates the intellectual world. In a society in process of formation, the individual, enfranchised, gives the rein to his boldness. He despises tradition, gives himself up with unrestrained delight to his virtuosity. There are to be no more limits on speculation, no more fetters on commerce, no more meddling of authority in relations between employers and employed. The most skillful wins. Competition, up to this time held in check, runs riot. In a few years enormous fortunes are built up, others are swallowed up in resounding bankruptcies. The Antwerp exchange is a pandemonium where bankers, deep-sea sailors, stock-jobbers, dealers in futures, millionaire merchants, jostle each other--and sharpers and adventurers to whom all means of money-getting, even assassination, are acceptable.

This confused recasting of the economic world transfers the rôle played by the capitalists of the late Middle Ages in a class of new men. Few are the descendants of the business men of the fourteenth century among those of the fifteenth and sixteenth. Thrown out of their course by the current of events, they have not been willing to risk fortunes already acquired. Most of them are seen turning toward administrative careers, entering the service of the state as members of the councils of justice or finance and aspiring to the _noblesse de robe_, which, with the aid of fortunate marriages, will land their sons in the circle of the true nobility. As for the new rich of the period, they almost all appear to us like parvenus. Jacques Coeur is a parvenu in France. The Fugger and many other German financiers--the Herwarts, the Seilers, the Manlichs, the Haugs--are parvenus of whose families we know little before the fifteenth century, and so are the Frescobaldi and the Gualterotti of Florence, or that Gaspar Ducci of Pistoia who is perhaps the most representative of the fortune-hunters of the period.[29] Later, when Amsterdam has inherited the commercial hegemony of Antwerp, the importance of the parvenus characterizes it not less clearly. We may merely mention here, among the first makers of its greatness, Willem Usselinx,[30] Balthazar de Moucheron, Isaac Lemaire. And if from the world of commerce we turn toward that of industry the aspect is the same. Christophe Plantin, the famous printer, is the son of a simple peasant of Touraine.

The exuberance of capitalism which reached its height in the second half of the sixteenth century was not maintained. Even as the regulative spirit characteristic of the urban economy followed upon the freedom of the twelfth century, so mercantilism imposed itself upon commerce and industry in the seventeenth and eighteenth centuries. By protective duties and bounties on exportation, by subsidies of all sorts to manufactures and national navigation, by the acquiring of transmarine colonies, by the creation of privileged commercial companies, by the inspection of manufacturing processes, by the perfecting of means of transportation and the suppression of interior custom-houses, every state strives to increase its means of production, to close its market to its competitors, and to make the balance of trade incline in its favor. Doubtless the idea that "liberty is the soul of commerce" does not wholly disappear, but the endeavor is to regulate that liberty henceforward in conformity to the interest of the public weal. It is put under the control of intendants, of consuls, of chambers of commerce. We are entering into the period of national economy.

This was destined to last, as is familiar, until the moment when, in England at the end of the eighteenth century, on the Continent in the first years of the nineteenth, the invention of machinery and the application of steam to manufacturing completely disorganized the conditions of economic activity. The phenomena of the sixteenth century are reproduced, but with tenfold intensity. Merchants accustomed to the routine of mercantilism and to state protection are pushed aside. We do not see them pushing forward into the career which opens itself before them, unless as lenders of money. In their turn, and as we have seen it at each great crisis of economic history, they retire from business and transform themselves into an aristocracy. Of the powerful houses which are established on all hands and which give the impetus to the modern industries of metallurgy, of the spinning and weaving of wool, linen, and cotton, hardly one is connected with the establishments existing before the end of the eighteenth century. Once again, it is new men, enterprising spirits, and sturdy characters which profit by the circumstances.[31] At most, the old capitalists, transformed into landed proprietors, play still an active rôle in the exploitation of the mines, because of the necessary dependence of that industry upon the possessors of the soil, but it can be safely affirmed that those who have presided over the gigantic progress of international economy, of the exuberant activity which now affects the whole world, were, as at the time of the Renaissance, parvenus, self-made men. As at the time of the Renaissance, again, their belief is in individualism and liberalism alone. Breaking with the traditions of the old régime, they take for their motto "_laissez faire, laissez passer_". They carry the consequences of the principle to an extreme. Unrestrained competition sets them to struggling with each other and soon arouses resistance in the form of socialism, among the proletariate that they are exploiting. And at the same time that that resistance arises to confront capital, the latter, itself suffering from the abuses of that freedom which had enabled it to rise, compels itself to discipline its affairs. Cartels, trusts, syndicates of producers, are organized, while states, perceiving that it is impossible to leave employers and employees longer to contend in anarchy, elaborate a social legislation; and international regulations, transcending the frontiers of the various countries, begin to be applied to working men.

I am aware how incomplete is this rapid sketch of the evolution of capitalism through a thousand years of history. As I said at the beginning, I present it merely as an hypothesis resting on the very imperfect knowledge which we yet possess of the different movements of economic development. Yet, in so far as it is exact, it justifies the observation I made at the beginning of this study. It shows that the growth of capitalism is not a movement proceeding along a straight line, but has been marked, rather, by a series of separate impulses not forming continuations one of another, but interrupted by crises.

To this first remark may be added two others, which are in a way corollaries.

The first relates to the truly surprising regularity with which the phases of economic freedom and of economic regulation have succeeded each other. The free expansion of wandering commerce comes to its end in the urban economy, the individualistic ardor of the Renaissance leads to mercantilism, and finally, to the age of liberalism succeeds our own epoch of social legislation.

The second remark, with which I shall close, lies in the moral and political rather than the economic field. It may be stated in this form, that every class of capitalists is at the beginning animated by a clearly progressive and innovating spirit but becomes conservative as its activities become regulated. To convince one's self of this truth it is sufficient to recall that the merchants of the eleventh and twelfth centuries are the ancestors of the bourgeoisie and the creators of the first urban institutions; that the business men of the Renaissance struggled as energetically as the humanists against the social traditions of the Middle Ages; and finally, that those of the nineteenth century have been among the most ardent upholders of liberalism. This would suffice to prove to us, if we did not know it otherwise, that all these have at the beginning been nothing else than parvenus brought into action by the transformations of society, embarrassed neither by custom nor by routine, having nothing to lose and therefore the bolder in their race toward profit. But soon the primitive energy relaxes. The descendants of the new rich wish to preserve the situation which they have acquired, provided public authority will guarantee it to them, even at the price of a troublesome surveillance; they do not hesitate to place their influence at its service, and wait for the moment when, pushed aside by new men, they shall demand of the state that it recognize officially the rank to which they have raised their families, shall on their entrance into the nobility become a legal class and no longer a social group, and shall consider it beneath them to carry on that commerce which in the beginning made their fortunes.

FOOTNOTES:

[1] This article represents the substance of an address delivered at the International Congress of Historical Studies held in London, April, 1913.

[2] First edition in 1893.

[3] _Der Moderne Capitalismus_ (1902).

[4] R. Heynen, _Zur Entstehung des Capitalismus in Venedig_ (1905).

[5] H. Sieveking, "Die Capitalistische Entwickelung in den Italienischen Städten des Mittelalters", _Vierteljahrschrift für Social-und Wirtschaftsgeschichte_ (1909).

[6] Davidsohn, _Forschungen zur Geschichte von Florenz_, III. 36; A. Doren, _Die Florentiner Wollentuchindustrie_, p. 481.

[7] A. Schaube, "Die Wollausfuhr Englands von 1272", _Vierteljahrschrift für Social- und Wirtschaftsgeschichte_ (1908), pp. 39 ff. _Cf._ F. Keutgen, "Hansische Handelsgesellschaften", _ibid._ (1906), pp. 288 ff.

[8] _Cf._ H. Pirenne, _Les Anciennes Democraties des Pays-Bas_, pp. 11 ff.

[9] I. Goll, "Samo und die Karantinischen Slaven", _Mitteilungen des Instituts für Oesterreichische Geschichtsforschung_, vol. XI.

[10] A. Dopsch, _Die Wirtschaftsentwickelung der Karolingerzeit_, II. 274. I cannot, however, accept the thesis of Mr. Dopsch on the importance of commerce in the Carolingian period. The extremely interesting texts which he has assembled seem to me to establish the existence of a sporadic commerce only.

[11] Of course all the new towns did not grow up around an episcopal residence. Many of them, especially in the North and particularly in the Low Countries, had as their primitive nucleus a fortress (Ghent, Bruges, Ypres, Lille, Douai, etc.). But my purpose here is merely to recall the broad outlines of the subject.

[12] See on this subject the interesting article by W. Vogel, "Ein Seefahrender Kaufmann um 1100", _Hansische Geschichtsblätter_ (1912), pp. 239 ff.

[13] "Unde non agriculturae delegit exercitia colere, sed potius, quae sagacioris animi sunt, rudimenta studuit arripiendo exercere."

[14] One finds already in the twelfth century lenders of money undertaking veritable financial operations. See H. Jenkinson and M. T. Stead, "William Cade: a Financier of the Twelfth Century", _English Historical Review_ (1913), p. 209 ff.

[15] _Die drei Bevölkerungsstufen._

[16] The _Livre de la Vingtaine d'Arras_ (ed. A. Guesnon) says, in speaking of the merchants of that town, in 1222, "Emunt non ad usum civitatis, sed ut exportent et discurrant per nondinas longinquas et per Lombardiam".

[17] G. von Below, "Grosshändler und Kleinhändler im Deutschen Mittelalter", _Jahrbücher für Nationalökonomie und Statistik_ (1900).

[18] A. Schaube, "Die Wollausfuhr Englands vom Jahre 1273", _Vierteljahrschrift für Social- und Wirtschaftsgeschichte_ (1908), p. 183.

[19] A. Duchesne, _Histoire des Maisons de Guines, d'Ardres et de Gand_, p. 289.

[20] Rymer, _Foedera_, vol. II., part IV., p. 49.

[21] For an example, see Espinas and Pirenne, _Recueil de Documents relatifs à l'Histoire de la Draperie Flamande_, II. 391.

[22] J. Kulischer, "Warenhändler und Geldausleiher im Mittelalter", _Zeitschrift für Volkswirtschaft_, etc., XVII. (1908).

[23] G. Espinas, "Jehan Boine-Broke, Bourgeois et Drapier Douaisien", _Vierteljahrschrift für Social- und Wirtschaftsgeschichte_ (1904), pp. 34 ff.

[24] For the relations of the capitalists with the English crown see: Whitwell, "Italian Bankers and the English Crown", _Transactions of the Royal Historical Society_, XVII. (1903); and Bond, "Extract from the Liberate Rolls relative to the Loans supplied by Italian Merchants to the Kings of England", _Archaeologia_, XXVII. (1840). _Cf._ Hansen, "Der Englische Staatscredit unter König Edward III. und die Hansischen Kaufleute", _Hansische Geschichtsblätter_ (1910).

[25] F. Arens, "Wilhelm Servat von Cahors als Kaufmann zu London", _Vierteljahrschrift für Social- und Wirtschaftsgeschichte_ (1913), pp. 477 ff.

[26] V. Fris, "Thomas Fin, Receveur de Flandre", _Bulletin de la Commission Royale d'Histoire de Belgique_ (1900), pp. 8 ff.

[27] Schneider, "Die Finanziellen Beziehungen der Florentinischen Banquiers zur Kirche", _Schmollers Forschungen_, vol. XVII.

[28] Pirenne, "Une Crise Industrielle an XVI^e Siècle", _Bulletin de l'Académie Royale de Belgique_, classe des lettres (1905).

[29] R. Ehrenberg, _Das Zeitalter der Fugger_, I. 311 ff.

[30] J. F. Jameson, "Willem Usselinx", in Am. Hist. Assoc., _Papers_, II.

[31] See, in Cunningham, _The Growth of English Industry and Commerce in Modern Times_, p. 618, this citation from P. Gaskell: "Few of the men who entered the trade rich were successful. They trusted too much to others, too little to themselves." Let us recall here that the founder of the largest industrial establishments of Belgium, John Cockerill, was a simple workman. See E. Mahaim, "Les Débuts de l'Établissement John Cockerill à Seraing", _Vierteljahrschrift für Social- und Wirtschaftsgeschichte_ (1905), p. 627.