If we inquire of History what were the causes of the downfallof this Republic and of its commerce, she replies that theyprincipally consisted in the folly, neglect, and cowardice of aworn-out aristocracy, and in the apathy of a people who had sunkinto slavery.The commerce and manufactures of Venice must havedeclined, even if the new route round the Cape of Good Hope hadnever been discovered.
The cause of it, as of the fall of all the other Italianrepublics, is to be found in the absence of national unity, in thedomination of foreign powers, in priestly rule at home, and in therise of other greater, more powerful, and more united nationalitiesin Europe.
If we carefully consider the commercial policy of Venice, wesee at a glance that that of modern commercial and manufacturingnations is but a copy of that of Venice, only on an enlarged (i.e.
a national) scale.By navigation laws and customs duties in eachcase native vessels and native manufactures were protected againstthose of foreigners, and the maxim thus early held good that it wassound policy to import raw materials from other states and toexport to them manufactured goods.(9*)It has been recently asserted in defence of the principle ofabsolute and unconditional free trade, that her protective policywas the cause of the downfall of Venice.That assertion comprisesa little truth with a great deal of error if we investigate thehistory of Venice with an unprejudiced eye, we find that in hercase, as in that of the great kingdoms at a later period, freedomof international trade as well as restrictions on it have beenbeneficial or prejudicial to the power and prosperity of the Stateat different epochs.Unrestricted freedom of trade was beneficialto the Republic in the first years of her existence; for howotherwise could she have raised herself from a mere fishing villageto a commercial power? But a protective policy was also beneficialto her when she had arrived at a certain stage of power and wealth,for by means of it she attained to manufacturing and commercialsupremacy.Protection first became injurious to her when hermanufacturing and commercial power had reached that supremacy,because by it all competition with other nations became absolutelyexcluded, and thus indolence was encouraged.Therefore, not theintroduction of a protective policy, but perseverance inmaintaining it after the reasons for its introduction had passedaway, was really injurious to Venice.
Hence the argument to which we have adverted has this greatfault, that it takes no account of the rise of great nations underhereditary monarchy.Venice, although mistress of some provincesand islands, yet being all the time merely one Italian city, stoodin competition, at the period of her rise to a manufacturing andcommercial power, merely with other Italian cities; and herprohibitory commercial policy could benefit her so long only aswhole nations with united power did not enter into competition withher.But as soon as that took place, she could only have maintainedher supremacy by placing herself at the head of a united Italy andby embracing in her commercial system the whole Italian nation.Nocommercial policy was ever clever enough to maintain continuouslythe commercial supremacy of a single city over united nations.