forces, and of their source in the transition to mechanical production. The terms of the treaty with France he made to conform almost meticulously to the views of the principal manufacturers. In his great speech in parliament in support of the treaty, he declared that it was based upon Britain's art and enterprise by virtue of which she was “confessedly superior in her manufactures and artificial productions." His change of attitude is evident as well from his later policies and speeches. In his address of February 17, 1792, on the state of the public finances, he enlarged upon the vast increase of commerce and industry since the misfortunes of the late wars, and asked, Why this unprecedented economic expansion? The first reason he assigned was “the improvement which has been made in the mode of carrying on almost every branch of manufacture, and the degree to which labor has been abridged, by the invention and application of machinery.” Accompanying this was the development of credit in the operations of industry; the spirit of enterprise in the expansion of markets; and the rapid accumulation of capital by the reinvestment of profits in productive undertakings. In this comprehensive speech on the resources and revenues of the country, agriculture was virtually ignored; it was mentioned in a merely incidental manner. His attitude aroused against him the bitterest criticism of Arthur Young, who charged that the minister, in his zeal for the industrial interests, "overlooks everything connected with land,” and that because of his favoritism, “the agricultural interests of this kingdom perhaps never found themselves in so contemptible a position.” Pitt's views and policies mean nothing less, in fact, than a recognition by him that out of the transition to mechanical production a new economic era was emerging. 8

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The great industrialists of the new era were the product not of monopoly but of ingenuity and enterprise; and they found it impossible to fit themselves into the grooves of the old system. They were impatient of public restraints, and even indifferent to public favors. The essential tendency of the reorganization of industry accompanying the development of the new methods of manufacturing was away from the old monopolistic, stratified system, and in the direction of a fluid, or elastic, or dynamic condition. This tendency involved a new conception of the relation of government to industry, namely, that government should conform to economic conditions, rather than attempt to create or to mold them. This conception, radically different in origin, nevertheless approximated the physiocratic and Smithian doctrine of laissez-faire. It was indeed the industrialist who forced the translation of Adam Smith's theories, particularly in reference to commerce, into practical policy. Smith's darling agrarians, whose interests he believed to be identical with public interests, and upon whose influence he relied for the changes he advocated, became the “last-ditch” opponents of free trade; and the despised industrialists became the relentless champions of liberalism, champions more liberal than even Smith himself, who tried to justify both the navigation system and countervailing duties. The work of introducing free trade and laissez-faire was mainly the work neither of the agrarians nor of the theorists, but of the industrialists. And their influence, as we have seen, was felt distinctly even in Adam Smith's own life time.

The teaching of the theoretical free-traders, in contrast with the illiberal spirit imputed to the manufacturers by Adam Smith and others, has commonly been assigned as the basis of the early free-trade movement. Adam Smith said, Let there be free trade. And at length there was free trade. Therefore, Adam Smith is the father of free trade. Such, in hyperbole, is the logic that has gained wide acceptance. The influence of an idea or of a personality is attractive, perhaps in part because it is intangible and elusive. But the force of an event is manifest and inescapable. The chief sources of the liberalism of the new industrial groups were not ideas but events.

Of these, the primary event was the transition to mechanical production. Connected therewith were secondary developments of the utmost importance in the history of economic liberalism. Those who utilized the improved technical methods were drawn thereby at once into a new economic system in which the old regulations and restrictions, being inapplicable, were necessarily discarded; and the slow-moving machinery of government, instead of creating new regulations and restrictions adapted to the new conditions, allowed virtually free play to the mobile economic forces of individual initiative and ambition. By the same means the utilization of technical improvements) English manufacturers acquired a productive and competitive superiority which enabled them to laugh at their rivals, and which removed the need of the old protective and monopolistic safeguards. It was not long till the new instruments of production created commodities in excess of available markets, and in consequence there arose a positive desire for the removal of the old restrictions which had become fruitful alone in retaliatory measures abroad, and for the substitution therefor of a system of reciprocity and ultimately of complete free trade by which new markets might be opened up for the output of the new technique. There was a parallel tendency of production to outrun the supply of raw materials available at home or by the use of shipping as limited by the acts of trade; and in consequence there arose inevitably the idea of securing increased supplies by relaxations in the navigation system and by concessions of a liberal nature to those who controlled the supplies. The rapid expansion of industry and of foreign trade resulting from the new methods of production involved also a disproportionate growth of population engaged in manufacturing and commerce as compared with agriculture, and this led in turn to a demand for the breaking down of the barriers raised to protect English agrarians from the competition of foreign food producers.

These tendencies toward a general policy of laissezfaire and economic liberalism were distorted and repressed by the quarter-century of wars and political reaction. But in the case of free trade, the forces which were active and influential even before Europe was devastated by the cataclysm of war and reaction were destined to find expression, during the reassertion of power by the industrial group in the nineteenth century, in an unprecedented system of commercial liberalism.

CHAPTER IV

THE INDUSTRIAL WORKERS

1. Economic control in relation to the workers

The most important and most promising single fact that emerges from a study of the transition from primitive methods to modern industrial technique is the wellnigh inconceivable increase of the productivity of human energy. There is but one event in the modern history of mankind that is comparable to the transformation of British industrial technique in respect to the opening up of economic opportunity, and that event was the discovery of the New World. The inventions and improvements in eighteenth-century England led to a veritable new world of opportunity less limited in scope and possibility, in fact, than the New World of sixteenth-century geographers. For the latter was circumscribed by the fixed boundaries of continents and islands, while the former was restricted only by the expanding boundaries of man's intelligence.

It is apparent that by means of the intervention of mechanical power and improved technique, a given unit of human energy could either be made to produce the same amount of commodities and services in a fraction of the former time, thus releasing human energy for noneconomic activities; or, the given unit of human energy could be kept in action long enough to produce, by the aid of technical improvements, a larger quantity of commodities and services. It is naturally to be supposed that

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