The Mercantile System and its Historical Significance [18]
its time, of the municipal government in relation to the town and its environs. This was no mere fancy of the rulers; it was the innermost need of the higher civilisation itself that such enlarged and strengthened forms of social and economic community should come into existence. With the growing community in speech, art, and literature, with the growth of the spirit of nationality, with increasing communication and commerce, with money transactions and credit transactions becoming universal, the old mediaval forms of loose association no longer sufficed; and all the rigid local, corporate, class, and district organisations of an earlier time became intolerable hinderances to economic progress. Out of misery and conflict of every kind had arisen, in Spain as well as in France, in Holland as well as in England, the feeling of unity, the realisation of common interests; these it was, also, that prompted the stumbling search after new and wider forms of association. Herein economic and political interests went hand in hand. The stronger was the sense of nationality, the economic forces, the political power of any state, the more energetically did this movement get under way; for it meant a combining and organising of resources at home, even more than a measuring of them, when thus combined, with like creations across the frontier. The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several Estates; the whole foreign history is summed up in the opposition to one another of the separate interests of the newly rising states, each of which sought to obtain and retain its place in the circle of European nations, and in that foreign trade which now included America and India. Questions of political power were at issue, which were, at the same time, questions of economic organisation. What was at stake was the creation of real political economies as unified organisms, the centre of which should be, not merely a state policy reaching out in all directions, but rather the living heartbeat of a united sentiment. Only he who thus conceives of mercantilism will understand it; in its innermost kernel it is nothing but state making - not state making in a narrow sense, but state making and national-economy making at the same time; state making in the modern sense, which creates out of the political community an economic community, and so gives it a heightened meaning. The essence of the system lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protective duties, or navigation laws; but in something far greater: - namely, in the total transformation of society and its organisation, as well as of the state and its institutions, in the replacing of a local and territorial economic policy by that of the national state. With this accords the fact recently pointed out with regard to the literary history of the movement, that what is peculiar to all the mercantilist writers is not so much the regulations of trade which they propose for the increase of the precious metals as the stress they lay on the active circulation of money, especially within the state itself.(32*) The struggle against the great nobility, the towns, the corporations, and provinces, the economic as well as political blending of these isolated groups into a larger whole, the struggle for uniform measures and coinage, for a well-ordered system of currency and credit, for uniform laws and uniform administration, for freer and more active traffic within the land, - this it was which created a new division of labour, a new prosperity, and which liberated a thousand forces towards progress. As the territorial policy had rested on the overthrow of independent local and town policies, on the limitation and modification of local institutions, upon the increasing strength of the general interests of the whole territory, so now there followed, for centuries, a struggle between