ve
carried the greatest part of the trade of Europe, her manufactures
flourished exceedingly, and foreign nations could not afford to abstain
from purchasing them.

[Sidenote: _LAISSEZ-FAIRE._]

Before entering on the expansion of manufactures and the industrial
revolution which accompanied it, a word may be said as to the attitude
of the state towards these changes. For some two centuries it had been
held that it was the duty of the state to order trade with the object of
increasing the wealth and power of the nation, and a policy was followed
of interference with trade and its conditions by regulations, bounties,
and restrictions, which is called the mercantile system. To this policy
belong the navigation acts and the regulation of colonial trade and
manufactures for the benefit of the mother-country. The American
revolution dealt it a mortal blow. About the same time Adam Smith's work
led to the idea that national wealth would increase if men were left to
seek their own wealth without interference. While trade outgrew the old
regulations which ordered its conditions, the system of state
interference became discredited, a new economic policy of
non-interference, called _laissez-faire_, took its place, and questions
of trade, manufacture, wages, and other conditions of labour were
increasingly left to settle themselves. This reversed the policy long
and successfully pursued by the whigs, who fostered trade as the basis
of national prosperity. The tories on the other hand held that national
prosperity was based on land, and desired to lighten its burdens by
taxing personal property, and we shall find Pitt distributing his
taxation widely and so as to fall mainly on the moneyed class.[182]
_Laissez-faire_ reached its full development in the establishment of
free trade; it has already been modified in many respects, and may
hereafter be subjected to further modification to suit altered
circumstances.

The expansion of trade during our period was due to improved processes
of manufacture and increased facilities of transport, and in a far
higher degree to the substitution of machinery moved by the power of
water or steam for manual labour. The north, hitherto the most backward
part of England, became the chief seat of industrial life and commercial
enterprise. Wealth was increased, industry became more dependent on
capital, and changes were effected in its conditions which for a time
pressed heavily on the poor. In 1760