as a social or political category. This sort of heresy, quite apart from its particular tenets, must be looked upon as an abundant wellspring of capitalism. The reason is clear: it brought economic interests to the fore and gave commercial ability a special chance. Is it not obvious that the dissenters, excluded as they were from public life, could not but throw all their energies into economic activities? Only from this source could they hope to derive the means for winning for themselves respected positions in the body politic. On the other hand, it followed from their peculiar position as dissenters that their economic activities were hampered by all manner of difficulties. Hence there was a tendency for their economic capacities to be highly developed. For they could hope for commercial success only from the most scrupulous conscientiousness, the most careful calculations, and the utmost endeavors to meet the needs of their customers.

68. CONSEQUENCES OF THE INTERVENTION OF CAPITAL'

It would be hopeless to try to treat the intervention of capital as an event which happened at a particular epoch, or a stride which was taken within a given period. It is a tendency which has been spreading with more or less rapidity for centuries, first in one trade and then in another, in progressive countries. We cannot date such a transformation even in one land; for though we find traces of capitalism so soon as natural economy was ceasing to be dominant in any department of English life, its influence in reorganising the staple industry of this country was still being strenuously opposed at the beginning of the present century. The revolution-for this has been a real revolution—which came about so gradually in our own island has run a different course in other lands; there has been no regular series of steps in the march of capitalistic progress. The intervention of capital eventually brought about an entire reconstruction of the social system of Western Europe.

The military system in the early Middle Ages was organised on feudal lines. Each political magnate maintained his own troops and was responsible for bringing them into the field properly equipped and provisioned. The commissariat was irregular or non-existent, and it might be hardly possible to retain an army in the field, or to continue siege operations at the critical moment in a campaign.

'Adapted by permission from W. Cunningham, Western Civilization, II, 162-82. (The Cambridge University Press, 1913.)

The slightness of the political ties between the feudatories and the Crown rendered it difficult to get soldiers together, and they were likely to disband so soon as the specified time for which they were bound to serve had elapsed. Military operations carried on under such conditions were not only very ineffective but also extraordinarily expensive. The withdrawal of the industrial population and the yeomen from their work must have been a serious interruption to the ordinary processes of production, while the undisciplined hosts were only too likely to provide for their necessities by plundering the country in which they were quartered or through which they passed. The intervention of capitalists, who provided the means of hiring mercenary troops, and later of forming disciplined armies, rendered a better military organisation possible and reduced the indirect evils caused by war so as to make it far less costly. In so far as any king became possessed of money, so that he could hire mercenary troops, he had a more efficient fighting instrument at command, and one on which he could rely so long as his money lasted. The Flemish, and later the Swiss mercenaries, were finer troops than the feudal levies, for they were habituated to constant fighting; not only were they better soldiers, but they were also more completely under control, so that the strategy of a campaign had a greater chance of being carried out as planned. These were military advantages, and the economic benefits to a country were quite as great; the mercenaries could be paid in money at a definite and known date; the raising of a feudal army had involved the disorganisation of ordinary industrial life and an indefinite charge on the resources of the realm.

The benefits which accrued from the intervention of capital were apparent, not only during the conduct of a campaign, but in all the preparations that might be necessary for a war; capitalists rendered the collection of revenue, in so far as it was taken in money, more "convenient" and less "expensive." The sale of offices, ecclesiastical and civil, is a cumbrous mode of obtaining supplies; the payment of the large sums which were occasionally demanded as feudal aids must have been oppressive. The voting of parliamentary supplies introduced comparative "certainty" into the system of taxation, as it enabled the landowners and merchants to know beforehand what they would have to pay. The action of the great bankers rendered this practice convenient, not only to the taxpayers, but to the Crown. Financiers were ready to advance money on the security of supplies that were actually voted, and thus to provide the Crown with the use of large

sums at short notice, and long before it would have been possible to collect the money.

When the advantages of the new method of military administration were once understood, no prince could afford to disregard them; all monarchs were compelled to rely on money as the sinews of war, and had frequent occasion to borrow in order to meet the exigencies of a campaign.

As the rulers of Europe ceased to be primarily dependent on landed estates for their revenue, some interesting constitutional changes followed. As the income of the Crown was derived from the taxation of the agricultural and industrial classes, it was essential that the people as well as the prince should be prosperous; hence the tendency of the French monarchy to the paternal regulation of industry with the view of rendering the country rich. In England the Crown's necessities continued to be the people's opportunities, and all attempts to exercise rule in disregard of the popular will were destined to failure. Not merely did the people as taxpayers succeed in enforcing their demands, but there is reason to believe that the intermediaries who negotiated loans were also able to exercise considerable influence from time to time. The great London financiers and other royal creditors appear to have aimed at directing the economic policy of the realm and to have been fairly successful in forcing their views upon the Crown.

The financial magnates of the fifteenth and sixteenth centuries carried on business in a double capacity, as they not only engaged in lending money to the Crown, but were merchants as well. Their practice in this respect was of great importance, for it rendered their money-lending legitimate from the standpoint of the canonists. Men. like Jacques Coeur or William Canynges or the Fuggers and Welsers would not let their money lie idle; and it was perfectly true that in lending it to the king they were depriving themselves of the opportunity of making commercial gain. It therefore came to be recognised that a lender might legitimately charge for lucrum cessans or damnum emergens; and no serious effort could be made to prevent such capitalists from entering on transactions which were practically advancing money on interest. When it came to be generally assumed that a man would usually get some gain by investing his money, and was therefore entitled to be compensated for merely refraining from using it himself, the old prohibitions ceased to apply and the negotiation of loans came to be an everyday feature of commercial life. As

a result of these changes in opinion, the most powerful restrictions which had checked the fluidity of capital were broken down; in the fifteenth century it had become possible to obtain the means of developing any promising undertaking.

During the latter part of the fifteenth century many favourable openings at home and abroad were beginning to offer themselves to enterprising men; the exclusive privileges of aliens had been curtailed, and the active trade of France and of Holland, of Scandinavia and England, was attracting native energy. The profits on successful ventures were large, and every new prospect of profit constituted a demand for capital. And the supply was forthcoming; hitherto prudent persons had been content to hoard their wealth; so soon as they were persuaded to invest it in economical undertakings for the sake of gain they were treating it as capital. The best opportunities of course, lay with those who had the good fortune to live on any of the lines of the world's trade.

As commercial intercourse revived and increased during the fourteenth and fifteenth centuries, it tended more and more to bring about a revolution in industrial life. Groups of small masters, each of whom was working on his own account, though they were associated together for mutual supervision, were neither able nor willing to adapt themselves to new conditions; and they were gradually superseded in the more important callings by capitalists who employed large numbers of journeymen. One craft after another was affected by the opportunities which the expansion of trade afforded, and artisans began, under the direction of merchants, to manufacture, not merely with reference to the requirements of their neighbours and the demand in the city market, but with a view to the possibilities of sale in distant places. Capitalist merchants were required as intermediaries to purchase materials or to sell goods, and they easily slipped into the position of capitalist employers who directed their workmen and controlled the conditions and terms of labour.

C. Capitalism and the Woolen Industry

[NOTE. These selections on some aspects of the coming in of capitalism in the woolen industry should be read with the purpose of watching the emergence of such "capitalistic" phenomena as (a) transfer away from the worker of control of his conditions of work, such as hours and place; (b) shift of ownership of tools from worker

to employer; (c) shift of ownership of raw material; (d) group labor taking the place of work performed by one or a few individuals; (e) transfer of ownership of product to capitalist and consequent loss of control by worker over marketing functions; (f) the assumption by the entrepreneur of the financial risks of production; (g) the gradual development of a wage system and a laboring class.

69. A DIAGRAM OF STAGES OF DEVELOPMENT

A diagrammatic presentation of stages of development is certain to be misleading unless much caution is exercised in using it. In studying the following diagram the student should keep in mind:

1. No accurate dates can be assigned for the emerging of any given "stage." This "time of emergence" varied from country to country, from district to district, and from industry to industry. Furthermore, a given stage does not suddenly spring into being. It has been preceded by a long period of preparation. Who can say precisely when the period of preparation is over?

2. It is seldom true that one stage is completely supplanted by another. The earlier stage tends to persist, in certain localities or industries, through all the later stages. For example, we have today survivals of household economy and of the handicraft régime.