The Empire which collapsed in 476 left a rich legacy of economic and social thought which survived its political structure and remained untouched by historical accident. This inheritance consisted primarily of moral principles, derived from the Gospels and defined by the Fathers, and of habits of thought formed in the Roman world.

In East and West alike, Christianity had flowered among peoples accustomed to certain economic and social institutions deemed natural or commonly accepted and regulated by laws: for example, property and slavery. It did not reject outright the learned or popular view of these traditional institutions, but it introduced a conception of man and of human relationships which modified and threatened existing customs and, indeed, the very foundations of society. By their commentaries upon the Scriptures, by their enlargements upon precepts and counsels, the Doctors, and especially Ambrose and Augustine, established the whole programme of a new system of ethics, the fiats and the interdicts of which were already sanctioned by popes and councils.

Thus, as early as the end of the fifth century, the fundamental conceptions about economy and society had been enunciated in Christian literature and in the imperial legal codes. The barbarian and feudal periods were to do no more than preserve this accumulated wealth of ideas, which came to sudden fruition at the time of the twelfth-century renaissance and the scholastic period.

In a broad introduction we shall trace the external history, as represented by the environment and sources; then consider successively the conceptions of economy and of society before summing up, in conclusion, the principal repercussions of these conceptions upon the practice of nations.

Introduction

A human community whose members are predominantly engaged in agriculture is unlikely to exceed a village in importance. A concentration of an urban character presupposes, in fact, the presence of a population whose resources are of quite a different order.

There are towns which, from the economic point of view, operate essentially as consumers. They obtain the means of purchasing the consumption goods their inhabitants require from dues derived from a variety of external sources, or receive these dues directly in kind. This was the position of such political and religious centres as Imperial Rome and Papal Rome. It was the position, too, of many civitates in the early Middle Ages, formerly Roman administrative centres with active populations of merchants and craftsmen, but now devitalized and inhabited primarily by clerical communities living on the produce of episcopal and abbatial domains.

Nevertheless, town-dwellers normally have an economic function as producers, not, of course, in agriculture, but in trade and in industry. In such cases, towns are at once producers and consumers.

In this chapter the history of the town will be studied in relation to economic history. We shall consider it in some measure from its beginnings, bearing in mind that in the Carolingian period the towns, as centres of population, were of slight importance. It should not be forgotten, however, that what then existed in the way of towns, and what in large measure would serve as the basis for later development, was inherited from earlier times.

Government Finance

The history of government finance in the countries of the Baltic area in the later Middle Ages suffers generally from a lack of sources. It is normally impossible to express economic realities for this area in statistical terms. Financial records were poor from the beginning and have been preserved only in a fragmentary fashion; but even if they had been preserved without loss, they would probably still have told only an unsatisfactory tale of what really happened. It is not before the period of centralized royal governments that we first have the chance of surveying financial development with any degree of certainty. Even at this stage, however, although some figures are available, they are scarcely ever of a sort which would permit safe deductions about the rise and fall of revenue.

For our knowledge of government finance we are consequently thrown back for the most part upon legal and political documents and what we know of the political circumstances of the time. Such material, clearly, provides only glimpses of economic conditions and hints about the crucial economic problems of government. On the other hand, it does reveal the relationship between needs and resources—the activities of kings and dukes and their counsellors which called for expenditure, and the measures they took to obtain some sort of financial balance. It is in any case impossible to estimate the taxable capacity of a medieval people; at least in the political sources we get evidence of the limits of its willingness to pay taxes. So the history of government finance in the medieval states of northern Europe is the history of state administrations wrestling with economic difficulties of which we only now and then get a clear view.

The Problems of Gild History

The occupational gilds of the west are one of the best-known forms of medieval association, familiar both on account of their long post-medieval career, and because they had early lent themselves to the ordering of economic and political life in urban society. Their traditions of corporate charity and piety further attest that they were once genuine communities within the larger community, with a social and religious character transcending mere economic interest and struggle for power. The economic historian has to study every aspect of the gilds, but always with an eye to the central problem of their influence on the economy. Did the various means by which they sought to secure their members' interests, as these were conceived at the time, retard or stimulate economic growth? Did gilds hinder or promote the flow of trade? Did they try to expand the market for manufactured goods? Had they any general policies regarding innovation? Did they affect at all the amount of saving or the direction of investment?

If we plot our earliest information as to the organization of gilds on a map, dating their appearance in each local industry, we immediately narrow the scope of these inquiries in two ways. In the first place, it becomes apparent that, so far as artisans were concerned, the craft gilds were of little account before the thirteenth century. In the great economic expansion of the eleventh and twelfth centuries, artisan gilds were too few and too scattered to have exercised any effective influence either as help or as hindrance. It was not until the latter part of the thirteenth century, when the expansion was slowing down, that they became at all widespread. They multiplied most rapidly in the fourteenth and fifteenth centuries, often in circumstances of population decline, trade recession and fiscal crisis. In the second place, certain types of town were clearly more favourable to a gild movement than others.

Introductory

The nature and the scope of government action in relation to economic affairs are, generally speaking, problems of medieval history which still await detailed investigation. An attempt to clear the ground for such an investigation within the territorial limits roughly defined by the modern frontiers of France and England demands, first, that some brief notice should be taken of the broad political and economic context within which government economic action took place in the two countries. These modern states were being created in medieval times, but the work of creation was long and uneven. The retreat of Rome and the barbarian invasions left Britain much more deeply fragmented and with a far smaller direct legacy from the Roman order than Gaul; yet England achieved a measure of unity at a time when the dispersal of authority across the Channel was reaching its extreme point. The work of unification of the West-Saxon, Anglo-Danish and Anglo-Norman kings, moreover, proved substantially enduring: thenceforward there was no authority comparable to that of the Crown. In France, on the other hand, the legacies of Rome and of barbarian kingship were dissipated in the ninth and tenth centuries, and the reconstitution of authority was in the first instance as much the work of great feudatories (the prime beneficiaries of the dispersal of power) as of the monarchy. For many generations, therefore, ‘regalian powers’ (including powers of economic direction) were shared in varying proportions between the Crown and the great provincial magnates. There were also substantial areas of French territory which were for long periods appendages to foreign kingdoms: Normandy and Gascony to England, Provence to the Empire or the Angevin kingdom of Naples. Medieval France comprehended a number of 'states' of which the kingdom was only one, each pursuing policies to a greater or lesser degree independent though not necessarily dissimilar.

Introduction

One of the most difficult problems confronting the historian of economic policy in the Middle Ages is to decide what constituted in those days the field of ‘economic policy’. We might define ‘economic policy’ today as ‘public policy in respect of the economic life of a country’; but, although this definition is so wide and elastic as to be almost elusive, it still remains difficult to adapt to it the remote reality of the Middle Ages.

Thus the fact that by economic policy we commonly mean a public policy is a source of uncertainty when we transfer such a concept to the medieval period. In dealing with the centuries preceding our millennium, it is often difficult to say whether the monarchs of that time in taking certain measures were acting as public authorities or as individuals. It is also difficult to decide whether a study of ‘economic policy’ in those centuries should take into consideration the provisions made and the programmes carried out by ecclesiastical or secular lords in the administration of their own manors, since we cannot disregard the fact that feudal lords were no less public authorities than the kings or emperors. The very distinction between public and private was blurred in the minds of men before the year 1000.

Even after that time, the distinction was not at once apparent. In fields like that of finance princes and monarchs continued to behave in such a way that it is difficult to say whether they acted as public bodies or as private individuals. On the other hand, it would be difficult to deny the appellation of ‘public’ to institutions like the gilds and similar corporations merely because we today do not recognize certain associations of workers and entrepreneurs as public bodies. To take an example, the corporations of merchants or merchant gilds in the Italian medieval towns were empowered and obliged to supervise and maintain the thoroughfares, to scrutinize prices and wages, to deal directly with foreign governments, drawing up actual commercial treaties in the name of their own cities.

Roman-Barbarian Continuity

The collapse of the Roman Empire in the West was so prolonged a process that to expect to find any cataclysmic change in the coinage would be unreasonable. No such violent change or lengthy cessation of coinage occurred except in Britain. After the Roman departure no further coin entered the country, and within a generation, by about A.D. 435, coin had ceased to be used as a medium of exchange. Not until the latter part of the seventh century were coins again used in Britain other than as jewellery. Elsewhere continuity was maintained. The barbarian ‘allies’ took over the Roman mints which continued to strike in the names of the emperors.

The coinage of the late Roman Empire reflected its economic decrepitude. On the one hand there was a highly valued gold coin, the solidus, introduced by Constantine, of fine gold, weighing 24 siliquae (about 4 48 gm.), together with its half, the semissis, and third, the tremissis or triens. On the other hand there was the heavy copper follis, revived by Anastasius I in 498 as a coin of forty nummi, and its poor relations down to the nummus. Between were the sparsely issued silver siliquae and half-siliquae, twenty-four siliquae being worth a solidus. The magnificent gold coinage served for imperial gifts and the payment of subsidies to imperial ‘allies’ such as the 50,000 solidi paid by Maurice Tiberius to Chilperic in 584. It was only of importance within the Empire because taxes had to be paid in gold. The prolific bronze coinage was of use only for the multiplicity of small local payments. Neither was of much use in commerce, and the small silver coinage came to an end under Justinian (527-65).

It is the fault of most writing on the history of art in the nineteenth century that art and architecture are kept separate. Admittedly, it is not easy to see a unity of style between Scott's St Pancras of 1868 and Monet's St Lazare of 1877. Moreover, one is discouraged from any efforts at formulating such a unity by the crashing drop in aesthetic quality directly one moves from the most familiar works of painting to the most familiar works of architecture. No one can deny the truth of this value judgement, but there is also a fallacy involved. One tends to forget official painting and non-official architecture, the one as bad as any insurance company headquarters, the other not as good, but occasionally nearly as good, as Monet and Seurat. If one is aware of the whole evidence, a treatment can be attempted doing justice to all its aspects. The only difficulty which remains is that the layman—and in this respect nearly everybody is a layman—knows much about the Impressionists and Post-Impressionists, but near to nothing about Philip Webb and Norman Shaw, H. H. Richardson and Stanford White, and indeed Antoni Gaudí.

This is one reason why painting is taken first in this chapter. Another is that the nineteenth century was indeed a century of the dominance of painting, aesthetically as well as socially. The dominance had been established before the year 1870. Socially speaking the patron of 1870 was no longer the patron of 1770. About 1770 the social situation of art had still been that of the Middle Ages, the Renaissance and the Baroque.

To ask what were the important developments of the last thirty years of the nineteenth century is to be reminded of the force of continuity in men's affairs and of the rarity of abrupt change. The growth of material power and wealth; of industrialism and urbanisation; of technology and scientific knowledge; of transport, communications and trade; of population and of the movement of population; of centralised government; of democracy; of literacy and education; of public opinion and the press—these prominent developments of the age had been almost as prominent in the generation, if not in the whole century, which ended in 1870; and the same developments are no less central to an understanding of the years which stretch from the beginning of the twentieth century to the present day. If we call this period simply the age of material improvement or of industrial development or of democratic progress we have not said much of value about it. Nor does it help towards sharper definition to reflect upon another characteristic of the time: that these continuing massive developments, or most of them, occurred only in European society and its off-shoots in North America and the other areas of white settlement. This restriction and the consequent predominance of European power and civilisation in the world had existed long before 1870. They were to last beyond 1900, when European monopoly of all this progress was still scarcely touched by changes in Japan, and the discrepancy between the European and less advanced societies had become more acute than it had ever been.

The last thirty years of the nineteenth century were for the peoples of western Europe, if not for those of the world as a whole, an era of virtually unbroken peace. In western Europe there was an interval between the Wars of Unification which had shattered the pattern of the Vienna Settlement and the conflicts over the lands of the disintegrating Turkish empire which were to develop into the first World War. Even outside this area there were only three instances where two major powers were involved in mutual conflict—the Russo-Turkish War of 1877–8, the Sino-Japanese War of 1894 and the Spanish-American War of 1898—and these quarrels, either by their nature or from the agreed policy of the great powers, were kept strictly within local bounds. European powers protecting or extending their interests in Africa and Asia were constantly engaged in minor conflicts, and Great Britain in 1899 became involved in a struggle with the Boer Republics of South Africa which assumed proportions transcending the category of ‘small wars’; but within Europe itself, outside the Balkan Peninsula, the Peace of Frankfurt signed between France and the victorious German empire in 1871 ushered in forty-three years of uninterrupted peace.

Yet during these years the great powers, particularly those of Europe, were preparing for war with a diligence for which modern history had hitherto offered no parallel. Engines of war, maritime and military, were multiplied prodigiously in number, complexity, and cost. Defence preparations received an ever-swelling allocation in national budgets; and the male populations of the mainland states of Europe became bound to military service from the end of their adolescence until the onset of later middle age.

Abrupt change is not characteristic of the economic process in history. In most respects even the nineteenth-century world was working out, on a much larger scale, the logic of methods inherited from an earlier age. What distinguished the nineteenth century increasingly from earlier centuries and explains the pace, rhythm and scale of its economic growth was the extent to which international trade and investment came to transmit the very means of economic change themselves from the forward to the backward areas. The sale, or more often the loan, of capital equipment—railways, engines, rolling-stock, mining gear, pumps, machinery—accelerated the rate at which the economic arrangements and social structures of the less advanced nations were transformed. As trade came to imply not only the exchange of goods, but the permanent nexus of investment, a new type of politico-economic relationship emerged, rich in material promise and heavy with political risk. Much of the foreign trade of Britain, still the leading economic power in most respects in 1900, rested upon contracts designed (in the most simplified terms) to enable nations which could not afford to pay for capital equipment on current account to borrow it. The supposition underlying these transactions was that the opportunities they created would enable the borrower to pay a return to the lender.

This phenomenon was not new in 1870; but it owed its new prominence to the period of railway building which had begun in continental Europe before the mid-century. This was still going on vigorously in the fourth quarter, both through new construction and the replacement of old iron track by steel.

The last thirty years of the nineteenth century saw the European balance of power at its most perfect: five great powers (with a doubtful sixth), each able to maintain its independence, none strong enough to dominate the others. The irreconcilable antagonism between France and Germany, and the equally irreconcilable, though less persistent, antagonism between Austria-Hungary and Russia in the Balkans, prevented the creation of any preponderant combination. The balance of power took on the appearance of a natural law, self-operating and self-adjusting; Europe enjoyed the longest period of peace known in modern times; and the powers turned their energies outwards to ‘imperialist’ expansion. All acquired empires; some at their own backdoor, the others overseas.

The Franco-Prussian War, which broke out in July 1870, created this exceptional balance. It began as a French attempt to arrest the progress of German unity; instead it freed Europe from the shadow of French predominance without putting German predominance in its place. It was the last war fought solely in Europe and confined to European great powers. It was indeed confined to two powers. This was unexpected. Great Britain was genuinely neutral once Belgium was secured. But Austria-Hungary prepared to intervene on the French side, though only after French victories. Russia first talked vaguely of threatening Austria-Hungary into neutrality; then, with equal vagueness, planned to compete with her for French favour. These calculations came to an abrupt stop as the campaign developed. The first battles on the frontier went against France. On 3 September the main French army was defeated and compelled to surrender at Sedan. Napoleon III became a prisoner. The French empire was overthrown, and the Republic proclaimed in Paris.

During the late nineteenth century the United States lost their former place in the imagination of Europe, and by 1900 the accusations of immaturity, materialism and indiscriminate self-praise, formerly the stock-in-trade of conservative critics, had been accepted by the European left. In spite of attempts to treat this as an ‘age of enterprise’ modern Americans have been inclined to echo these criticisms, and ‘the Gilded Age’, with its implications of ostentatious wealth and intrinsic worthlessness, remains the popular label. Yet America remained the land of opportunity both for millions of poor European migrants and for well-to-do investors, and Americans themselves moved from the doubts and divisions of civil war to self-confidence, to social stability, and to a surprising uniformity in their fundamental beliefs. Movements of protest and criticism appealed to a traditional stock of American principles; proposals for radical change in the political, social and economic system won little support. For critics and conservatives alike the American utopia remained America.

The period was dominated by the rise of a highly developed industrial and capitalist society in the North and Mid-West. This society experienced internal tensions similar to those of other industrial societies, but avoided the great fissure of politics based on class. Until the last years of the century it did not encounter the problem of dependencies overseas, but it faced comparable problems in its relationship with the less-developed rural regions occupying a greater part of the territory of the United States.

About the year 1870 Europe entered upon a new phase in its history with the final achievement of the nation-state in Germany and Italy. The emergence of two nation-states in central Europe marked the sole great change within the European system of states during the century between the Congress of Vienna and the first World War. It was a change that transformed the system without disrupting it. Two predominant features of the nineteenth century, liberal constitutionalism and the principle of nationality, characterised this event; the third dynamic of the age, socialism, did not make its advent till the revolt of the Commune in 1871.

In the 1870's liberalism was at the zenith of its historical course. In most of the countries of Europe it had brought into existence written constitutions with parliaments, a widening franchise, and constitutional guarantees of personal freedom. The last relics of legal inequality and bondage were removed by the Revolution of 1848 and Russia's abolition of serfdom in 1861. Equality before the law and personal freedom had practically everywhere become principles in law, despite strong opposition from both the feudal aristocracy and the bourgeoisie. Liberalism had thus achieved its civil programme; but the liberals' constitutional aims, an executive controlled by parliament and a legislature with unlimited powers, had been realised only partially and in differing degrees in the various countries. From about the mid-1870's the liberal parties, hitherto drawn from notabilities in the middle classes, became more and more involved in difficulties that raised problems of form and organisation.

Of all the European powers, Russia made the least concessions to (the liberal spirit of the late nineteenth century. Until 1906 the tsar remained an all-powerful autocrat; he could make and unmake laws without the consent of his ministers, who were responsible to him alone. Efforts at constitutional reform met with stubborn opposition from conservative elements amongst the bureaucracy and landowning gentry, the two main bulwarks of absolutism. The survival of the regime depended ultimately upon the political inertia of the peasants who formed the overwhelming majority of the population. Modern ideas were slow to penetrate into the Russian village. To millions the tsar was still an almost superhuman being who had their interests at heart and whose rule, they long believed, brought them solid advantages.

An immense social and cultural gulf separated the masses from the tiny educated minority. The position of this elite looked impregnable, so great was its power and prestige. In reality it was poised over an abyss. A land of extremes, Russia lacked a strong middle class. The most important intermediate group, the intelligentsia, who provided the leadership of the opposition movements, did not succeed in acquiring a mass following and forcing the government to grant concessions until the turn of the century. But the long and bitter struggle between the autocracy and its enemies began in earnest soon after the accession of Alexander II.

Alexander's reign (1855–81) opened auspiciously with the inauguration of a broad programme of social, cultural and administrative reforms; it ended with an unprofitable war and a wave of revolutionary violence, of which the tsar himself was the most prominent victim.

Education during these thirty years exhibited certain similar characteristics all over the world which enables us to view them together across the national boundaries. Accordingly we shall be concerned not with the various nations one by one, but with aspects of education illustrated from time to time by some particular nation.

The study of the development and content of education cannot but be ecological. Systems do not flourish in the air. They affect and are affected by the social, political, intellectual and religious structure as well as by the movements of their time. Of no period was this more true than of the last third of the nineteenth century. This was a period of the aftermath of wars in Europe, in America, in China and the Far East. It was a period of vast industrial expansion and of the rise into importance of the working class. It was a period of the expansion of Europe into Africa and elsewhere. And above all it was a period of secularisation. The Church, even in Catholic countries, was losing its grip on one department of life and thought after another. In education it saw the emergence of education as a civil right and as the concern of the whole community as such, instead of being merely a private or sectional concern.

One of the earliest aims of education, an aim as old as Plato, was the training of a social elite in the art of government. This attitude to education, which assumed that ability went with status, was but slowly replaced. It was not until the nineteenth century that an educational elite was recognised anywhere as an alternative to one that was purely social.

In tracing Indian developments in the second half of the nineteenth century it is important to balance carefully the Indian and British sides of the scales. And the British side was not British only, but European and western as well, for in much of their activity the British were harbingers of general western culture rather than the purveyors of Anglo-Saxondom. In the past there has been a tendency to regard the significant features of Victorian India as the completion of the British dominion, and the gradual spread of British administrative techniques and public works, of western cultural ideas and western humane values. The groups who secured the decision to introduce western institutions into India believed that Indian institutions were effete and Indian traditional ideas inferior if not positively harmful. They looked to a gradual replacement of things Indian by things European, though they did not all clothe their expectation in the vivid imagery of Macaulay. The first school of writers on British India were fascinated by the spectacle of the rise of British power, the most striking and lasting, as they believed, in the long procession of Indian empire. There followed, with James Mill's History as a bridge, those who thought that the true significance of British Indian history consisted in the introduction of western institutions. Both schools were absorbed in the British raj; while the first emphasised the raj, the second emphasised the British. Neither, along with most contemporary administrators, thought that India herself had much to offer towards her own future.