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 role in the exploitation of the mines,
because of the necessary dependence of that industry upon the possessors
of the soil, but it