The Industrial System (Falsely Termed by the School 'The MercantileSystem')At the period when great nationalities arose, owing to theunion of entire peoples brought about by hereditary monarchy and bythe centralisation of public power, commerce and navigation, andhence wealth and naval power, existed for the most part (as we havebefore shown) in republics of cities, or in leagues of suchrepublics.The more, however, that the institutions of these greatnationalities became developed, the more evident became thenecessity of establishing on their own territories these mainsources of power and of wealth.
Under the conviction that they could only take root andflourish under municipal liberty, the royal power favouredmunicipal freedom and the establishment of guilds, both which itregarded as counterpoises against the feudal aristocracy, who werecontinually striving for independence, and always hostile tonational unity.But this expedient appeared insufficient, for onereason, because the total of the advantages which individualsenjoyed in the free cities and republics was much greater than thetotal of those advantages which the monarchical governments wereable to offer, or chose to offer, in their own municipal cities; inthe second place, because it is very difficult, indeed impossible,for a country which has always been principally engaged inagriculture, successfully to displace in free competition thosecountries which for centuries have acquired supremacy inmanufactures, commerce, and navigation; lastly, because in thegreat monarchies the feudal institutions acted as hindrances to thedevelopment of their internal agriculture, and consequently to thegrowth of their internal manufactures.Hence, the nature of thingsled the great monarchies to adopt such political measures as tendedto restrict the importation of foreign manufactured goods, andforeign commerce and navigation, and to favour the progress oftheir own manufactures, and their own commerce and navigation.
Instead of raising revenue as they had previously done byduties on the raw materials which they exported, they werehenceforth principally levied on the imported manufactured goods.
The benefits offered by the latter policy stimulated the merchants,seamen, and manufacturers of more highly civilised cities andcountries to immigrate with their capital into the greatmonarchies, and stimulated the spirit of enterprise of the subjectsof the latter.The growth of the national industry was followed bythe growth of the national freedom.The feudal aristocracy found itnecessary in their own interest to make concessions to theindustrial and commercial population, as well as to those engagedin agriculture; hence resulted progress in agriculture as well asin native industry and native commerce, which had a reciprocallyfavourable influence on those two other factors of national wealth.
We have shown how England, in consequence of this system, andfavoured by the Reformation, made forward progress from century tocentury in the development of her productive power, freedom, andmight.We have stated how in France this system was followed forsome time with success, but how it came to grief there, because theinstitutions of feudalism, of the priesthood, and of the absolutemonarchy, had not yet been reformed.We have also shown how thePolish nationality succumbed, because the elective system ofmonarchy did not possess influence and steadiness enough to bringinto existence powerful municipal institutions, and to reform thefeudal aristocracy.As a result of this policy, there was createdin the place of the commercial and manufacturing city, and of theagricultural province which chiefly existed outside the politicalinfluence of that city, the agricultural-manufacturing-commercialState; a nation complete in itself, an harmonious and compactwhole, in which, on the one hand, the formerly prevailingdifferences between monarchy, feudal aristocracy, and citizenhoodgave place to one harmonious accord, and, on the other hand, theclosest union and reciprocally beneficial action took place betweenagriculture, manufactures, and commerce.This was an immeasurablymore perfect commonwealth than the previously existing one, becausethe manufacturing power, which in the municipal republic had beenconfined to a narrow range, now could extend itself over a widersphere; because now all existing resources were placed at itsdisposition; because the division of labour and the confederationof the productive powers in the different branches of manufactures,as well as in agriculture, were made effectual in an infinitelygreater degree; because the numerous classes of agriculturistsbecame politically and commercially united with the manufacturersand merchants, and hence perpetual concord was maintained betweenthem; the reciprocal action between manufacturing and commercialpower was perpetuated and secured for ever; and finally, theagriculturists were made partakers of all the advantages ofcivilisation arising from manufactures and commerce.Theagricultural-manufacturing-commercial State is like a city whichspreads over a whole kingdom, or a country district raised up to bea city.In the same proportion in which material production waspromoted by this union, the mental powers must necessarily havebeen developed, the political institutions perfected, the Staterevenues, the national military power, and the population,increased.Hence we see at this day, that nation which first of allperfectly developed the agricultural, manufacturing, and commercialState, standing in these respects at the head of all other nations.