 Appendix A. Sections 1 through 8 of Principles of Economics. This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org. Recording by Rhonda Federman. Principles of Economics by Alfred Marshall. Appendix A. Sections 1 through 8. The Growth of Free Industry and Enterprise. Section 1. The last section of the first chapter of Book 1 describes the purpose of Appendix A and B, and may be taken as an introduction to them. Although the proximate causes of the chief events in history are to be found in the actions of individuals, yet most of the conditions which have made these events possible are traceable to the influence of inherited institutions and race qualities and of physical nature. Race qualities themselves are, however, mainly caused by the action of individuals and physical causes in more or less remote times. A strong race has often sprung, in fact as well as in name, from the progenitor of singular strength of body and character. The usage, which makes a race strong in peace and war, are often due to the wisdom of a few great thinkers, who have interpreted and developed its customs and rules, perhaps by formal precepts, perhaps by a quiet and almost unperceived influence. But none of these things are of any permanent avail if the climate is unfavorable to vigor. The gifts of nature, her land, her waters, and her skies determine the character of the race's work and thus give a tone to social and political institutions. These differences do not show themselves clearly so long as man is still savage. Scanty and untrustworthy, as is our information about the habits of savage tribes, we know enough of them to be sure that they show a strange uniformity of general character amid great variety of detail. Whatever be their climate and whatever their ancestry, we find savages living under the dominion of custom and impulse, scarcely ever striking out new lines for themselves, never forecasting the distant future and seldom making provision even for the near future, fitful in spite of their servitude to custom, governed by the fancy of the moment, ready at times for the most arduous exertions, but incapable of keeping themselves long to steady work. Laborious and tedious tasks are avoided as far as possible. Those which are inevitable are done by the compulsory labor of women. It is when we pass from savage life to the early forms of civilization that the influence of physical surroundings forces itself most on our notice. This is partly because early history is meager and tells us but little of the particular events and of the influences of strong individual characters by which the course of national progress has been guided and controlled, hastened onwards or turned backwards. But it is chiefly because in this stage of his progress man's power of contending with nature is small and he could do nothing without her generous help. Nature has marked out a few places on the earth's surface as specially favorable to man's first attempts to raise himself from the savage state and the first growth of culture and the industrial arts was directed and controlled by the physical conditions of these favored spots. Even the simplest civilization is impossible unless man's efforts are more than sufficient to supply him with the necessaries of life. Some surplus over them is required to support that mental effort in which progress takes its rise and therefore nearly all early civilizations have been in warm climates where the necessaries of life are small and where nature makes bountiful returns even to the rudest cultivation. They have often gathered around a great river which has lent moisture to the soil and afforded an easy means of communication. The rulers have generally belonged to a race that has recently come from a cooler climate in a distant country or in neighboring mountain lands. For a warm climate is destructive of energy and the force which enabled them to rule has almost in every case been the product of the more temperate climate of their early homes. They have indeed retained much of their energy in their new homes for several generations living meanwhile in luxury on the surplus products of the labor of the subject races and have found scope for their abilities in the work of rulers, warriors, and priests. Originally ignorant, they have quickly learned all that their subjects had to teach and have gone beyond them. But in this stage of civilization an enterprising intellectual character has almost always been confined to the ruling few. It has scarcely ever been found in those who have borne the main burden of industry. The reason of this is that the climate which has rendered an early civilization possible has also doomed it to weakness. In colder climates nature provides an invigorating atmosphere and though man has a hard struggle at first yet as his knowledge and riches increase he is able to gain plentiful food and warm clothing. And at a later stage he provides himself with those large and substantial buildings which are the most expensive requisites of a cultured life in places in which the severity of the weather makes it necessary that nearly all domestic services and meetings for social intercourse should have the protection of a roof. But the fresh invigorating air which is necessary to the fullness of life cannot be obtained at all when nature does not freely give it. The laborer may indeed be found doing hard physical work under a tropical sun. The handicraftsmen may have artistic instincts. The sage, the statesman or the banker may be acute and subtle but high temperature makes hard and sustained physical work inconsistent with a high intellectual activity. Under the combined influence of climate and luxury the ruling class gradually lose their strength. Fewer and fewer of them are capable of great things and at last they are overthrown by a stronger race which has come most probably from a cooler climate. Sometimes they form an intermediate caste between those whom have hitherto ruled and their new rulers but more often they sink down among the spiritless mass of the people. Such a civilization has often much that is interesting to the philosophical historian. Its whole life is pervaded almost unconsciously by a few simple ideas which are interwoven in that pleasant harmony that gives their charm to oriental carpets. There is much to be learnt from tracing these ideas to their origin in the combined influence of race, of physical surroundings, of religion, philosophy and poetry, of the incidents of warfare and of the dominating influence of strong individual characters. All this is instructive to the economist in many ways but it does not throw a very direct light on the motives which it is his special province to study. For in such a civilization the ablest men look down on work. There are no bold free-enterprising workmen and no adventurous capitalists. Despised industry is regulated by custom and even looks to custom as its sole protector from arbitrary tyranny. The greater part of custom is doubtless but a crystallized form of oppression and suppression but a body of custom which did nothing but grind down the weak could not long survive. For the strong rest on the support of the weak, their own strength cannot sustain them without that support and if they organize social arrangements which burden the weak wantonly and beyond measure, they thereby destroy themselves. Consequently, everybody of custom that endures contains provisions that protect the weak from the most reckless forms of injury. In fact, when there is little enterprise and no scope for effective competition, custom is a necessary shield to defend people not only from others who are stronger than themselves but even from their neighbors in the same rank of life. If the village Smith can sell his plow shares to none but the village and if the village can buy their shares from no one but him, it is to the interest of all that the price should be fixed at a moderate level by custom. By such means, custom earns sanctity and there is nothing in the first steps of progress that tends to break down the primitive habit of regarding the innovator is impious and an enemy. Thus the influence of economic causes is pressed below the surface where they work surely and slowly. They take generations instead of years to produce their effect. Their action is so subtle as easily to escape observation altogether and they can indeed hardly be traced except by those who have learned where to look for them by watching the more conspicuous and rapid workings of similar causes in modern times. Section two. This force of custom in early civilizations is partly a cause and partly a consequence of the limitations of individual rights and property. As regards all property more or less but especially as regards land, the rights of the individual are generally derived from and limited by and in every way subordinate to those of the household and the family in the narrower sense of the term. The rights of the household are in like manner subordinate to those of the village which is often only an expanded and developed family according to traditionary fiction, if not in fact. It is true that in an early stage of civilization few would have had much desire to depart far from the practices that were prevalent around them. However complete and sharply defined had been the rights of individuals over their own property. They would have been unwilling to face the anger with which their neighbors would regard any innovation and the ridicule which would be poured on anyone who should set himself up to be wiser than his ancestors. But many little changes would occur to the bolder spirits and if they had been free to try experiments on their own account, changes might have grown by small and almost imperceptible stages until sufficient variation of practice had been established to blur the clear outline of customary regulations and to give considerable freedom to individual choice. When however each head of a household was regarded as only senior partner and trustee for the family property, the smallest divergence from ancestral routine met with the opposition of people who had a right to be consulted on every detail. And further in the background behind the authoritative resistance of the family was that of the village. For though each family had sole use for a time of its cultivated ground, yet many operations were generally conducted in common so that each had to do the same things as the others at the same time. Each field when its turn came to be fallow became part of the common pasture land and the whole land of the village was subject to redistribution from time to time. Therefore the village had a clear right to prohibit any innovation for it might interfere with their plans for the collective cultivation and it might ultimately impair the value of the land and thus injure them when the time came for the next redistribution. In consequence, there often grew up a complex network of rules by which every cultivator was so rigidly bound that he could not use his own judgment and discretion even in the most trivial details. It is probable that this has been the most important of all the causes which have delayed the growth of the spirit of free enterprise among mankind. It may be noticed that the collective ownership of property was in harmony with that spirit of quietism which pervades many Eastern religions and that its long survival among the Hindus has been partly due to the repose which is inculcated in their religious writings. It is probable that while the influence of custom over prices, wages and rent has been overrated, its influence over the forms of production and the general economic arrangements of society has been underrated. In one case, its effects are obvious but they are not cumulative and in the other, they are not obvious but they are cumulative and it is an almost universal rule that when the effect of a cause, though small at any one time, are constantly working in the same direction, their influence is much greater than at first sight appears possible. But however great the influence of custom in early civilization, the spirit of Greeks and Romans was full of enterprise and more interest attaches to the inquiry why they knew and cared so little for those social aspects of economic problems which are of so great interest to us. Section three. The homes of most of the earlier civilizations had been in great river basins whose well-watered plains were seldom visited by famine. For in a climate in which heat is never lacking, the fertility of the soil varies almost directly with its moisture. The rivers also offered means of easy communication that were favorable to simple forms of trade and division of labor and did not hinder the movements of the large armies by which the despotic force of the central government was maintained. It is true that the Phoenicians lived on the sea. This great Semitic race did a good service by preparing the way for free intercourse among many peoples and by spreading the knowledge of writing, of arithmetic and of weights and measures but they gave their chief energies to commerce and manufacture. It was left for the genial sympathies and the fresh spirit of the Greeks to breathe in the full breath of freedom over the sea and to absorb into their own free lives the best thoughts and the highest art of the old world. Their numberless settlements in Asia Minor, Magna Grisha and in the Hellas proper developed freely their own ideals under the influence of the new thoughts that burst upon them. Having constant intercourse with one another as well as with those who held the keys of the older learning sharing one another's experiences but fettered by no authority. Energy and enterprise instead of being repressed by the weight of traditional usage were encouraged to found a new colony and work out new ideas without restraint. Their climate absolved them of the need of exhausting work. They left to their slaves what drudgery had to be done and gave themselves up to the free play of their fancy. House, room, clothing and firing cost but little. Their genial skies invited them to out-of-door life making intercourse for social and political purposes easy and without expense. And yet the cool breezes of the Mediterranean so far refreshed their vigor that they did not for many generations lose the spring and elasticity of temper which they had brought from their homes in the North. Under these conditions were matured a sense of beauty in all its forms. A subtle fancy and an originality of speculation and energy of political life and a delight of subordinating the individual to the state such as the world has never again known. The Greeks were more modern in many respects than the peoples of medieval Europe and in some respects were even in advance of our own time but they did not attain to the conception of the dignity of man as man. They regarded slavery as an ordinance of nature. They tolerated agriculture but they looked on all other industries as involving degradation and they knew little or nothing of those economic problems which are of absorbing interest to our own age. They had never felt the extreme pressure of poverty. Earth and sea and sun and sky had combined to make it easy for them to obtain the material requisites for a perfect life. Even their slaves had considerable opportunities of culture and had it been otherwise there was nothing in the Greek temper and nothing in the lessons that the world had up to that time learned to make them seriously concerned. The excellence of Greek thought has made it a touchstone by which many of the leading thinkers of the after ages have tried every new inquiry and the impatience with which the academic mind has often regarded the study of economics is in great measure due to the impatience which the Greeks felt for the anxious care and plotting work of business. And yet a lesson might have been learned from the decadence of Greece which was brought about by the want of that solid earnestness of purpose which no race has ever maintained for many generations without the discipline of steady industry. Socially and intellectually they were free but they had not learned to use their freedom well. They had no self mastery, no steady persistent resolution. They had all the quickness of perception and readiness for new suggestions which are elements of business enterprise but they had not its fixity on purpose and patient endurance. A genial climate slowly relaxed their physical energies. They were without that safeguard to strength of character which comes from resolute and steadfast persistence in hard work. And at last they sank into frivolity. Section four. Civilization still moving westwards had its next center in Rome. The Romans were a great army rather than a great nation. They resembled the Greeks and leaving business as much as possible to slaves but in most other respects were contrast to them. In opposition to the fresh fullness of the life of the Athenians to the youthful joy with which they gave free play to all their faculties and developed their own idiosyncrasy. The Romans showed the firm will, the iron resolution, the absorption indefinite serious aims of the mature man. Singularly free from the restraints of custom they shaped their own lives for themselves with a deliberate choice that had never been known before. They were strong and daring, steady of purpose and abundant in resource, orderly in habit and clear sighted in judgment. And thus, though they preferred war and politics they had in constant use all the faculties required for business enterprise. Nor was the principle of association inactive. Trade guilds had some vigor in spite of the paucity of artisans who were free. Those methods of combined action for business purposes and of production on a large scale by slave labor and factories in which Greece had been the pupil of the East gained new strength when imported into Rome. The faculties and the temper of the Romans fitted them especially well for the management of joint stock companies and a comparatively small number of very wealthy men with no middle class were able with the aid of trained slaves and freed men to undertake large contracts by land and by sea at home and abroad. They made capital hateful but they made it powerful and efficient. They developed the appliances of money lending with great energy and partly in consequence of the unity of the imperial power and the wide extent of the Roman language. There was in some important respects more freedom of commerce and of movement throughout the civilized world in the days of the Roman Empire than even now. When then we recollect how great a center of wealth Rome was how monstrous the fortunes of individual Romans and they have only recently been surpassed and how vast the scale of her military and civil affairs of the provision needed for them and of the machinery of her traffic. We cannot wonder that many writers have thought they found much resemblance between her economic problems and our own but the resemblance is superficial and illusory. It extends only to forms and not to the living spirit of national life. It does not extend to the recognition of the worth of the life of the common people which in our time is giving to economic science its highest interest. In ancient Rome industry and commerce lacked the vital strength which they have attained in more recent times. Her imports were won by the sword. They were not bought with the products of skilled work in which the citizens took a worthy pride as were those of Venice or Florence or Bruges. Traffic and industry alike were pursued almost with a sole eye to the money gains to be derived from them and the tone of business life was degraded by the public disdain which shows itself in the legal and practically effective restriction of the senators from all forms of business except those connected with the land. The equities found their richest gains in farming the taxes in the plunder of provinces and in later times in the personal favor of the emperors and did not cherish that spirit of probity and thorough work which are needed for the making of a great national trade. And at length, private enterprise was stifled by the ever growing shadow of the state. But though the Romans contributed but little directly to the progress of economic science yet indirectly they exerted a profound influence over it for good and evil by laying the foundations of modern jurisprudence. But philosophic thought there was in Rome was chiefly stoic and most of the great Roman stoics were of oriental origin. Their philosophy when transplanted to Rome developed a great practical power without losing its intensity of feeling and in spite of its severity it had in it much that is kindred to the suggestions of modern social science. Most of the great lawyers of the empire were among its adherents and thus it set the tone of the later Roman law and through it of all modern European law. Now the strength of the Roman state had caused states' rights to extinguish those of the clan and the tribe in Rome at an earlier stage than in Greece. But many of the primitive Aryan habits of thought as to property lingered on for a long while even in Rome. Great as was the power of the head of the family over its members, the property which he controlled was for a long time regarded as vested in him as the representative of the family rather than as an individual. But when Rome had become imperial her lawyers became the ultimate interpreters of the legal rights of many nations and under stoic influence they set themselves to discover the fundamental laws of nature which they believed to lie in concealment at the foundation of all particular codes. This search for the universal as opposed to the accidental elements of justice acted as a powerful solvent on rights of common holding for which no other reason than that of local usage could be given. The later Roman law therefore gradually but steadily enlarged the sphere of contract gave it greater precision, greater elasticity and greater strength. At last almost all social arrangements had come under its dominion. The property of the individual was clearly marked out and he could deal with it as he pleased. From the breadth and nobility of the stoic character modern lawyers have inherited a high standard of duty and from its austere self-determination they have derived a tendency to define sharply individual rights in property. And therefore to Roman and especially stoic influence we may trace indirectly much of the good and evil of our present economic system on the one hand much of the untrammeled vigor of the individual in managing his own affairs and on the other not a little harsh wrong done under the cover of rights established by a system of law which has held its ground because its main principles are wise and just. The strong sense of duty which stoicism brought with it from its Oriental home had in it something also of Eastern quietism. The stoic though active and well-doing was proud of being superior to the troubles of the world. He took his share in the turmoil of life because it was his duty to do so but he never reconciled himself to it. His life remained sad and stern oppressed by the consciousness of his own failures. This inner contradiction as Hegel says could not pass away till inward perfection was recognized as an object that could be attained only through self renunciation and thus its pursuit was reconciled with those failures which necessarily accompany all social work. For this great change the intense religious feeling of the Jews prepared the way but the world was not ready to enter into the fullness of the Christian spirit till a new tone had been given to it by the deep personal affections of the German race. Even among the German peoples true Christianity made its way slowly and for a long time after the fall of Rome there was chaos in Western Europe. Section five. The tootin, strong and resolute as he was found it very difficult to free himself from the bonds of custom and of ignorance. The hardiness and fidelity which gave him his special strength inclined him to cherish over much the institutions and customs of his family and his tribe. No other great conquering race has shown so little capacity as the tootins have done for adopting new ideas from the more cultured though weaker people whom they conquered. They prided themselves on their rude strength and energy and cared little for knowledge in the arts. But these found a temporary refuge on the eastern coasts of the Mediterranean until another conquering race coming from the South was ready to give them new life and vigor. The Saracens learned eagerly the best lessons that the conquered had to teach. They nurtured the arts and sciences and kept alive the torch of learning at a time when the Christian world cared little whether it went out or not. And for this we must ever owe them gratitude. But their moral nature was not so full as that of the tootins. The warm climate and the sensuality of their religion caused their vigor rapidly to decay and they have exercised very little direct influence on the problems of modern civilization. The education of the tootins made slower but sureer progress. They carried civilization northward to a climate in which sustained hard work has gone hand in hand with the slow growth of sturdy forms of culture and they carried it westwards to the Atlantic. Civilization, which had long ago left the shores of the rivers for those of the great inland sea, was ultimately to travel over the vast ocean. But these changes worked themselves out slowly. The first point of interest to us in the New Age is the reopening of the old conflict between town and nation that had been suspended by the universal dominion of Rome which was indeed an army with headquarters in a town but drawing its power from the broad land. Until a few years ago complete and direct self-government by the people was impossible in a great nation. It could exist only in towns or very small territories. Government was necessarily in the hands of the few who looked upon themselves as privileged upper classes and who treated the workers as lower classes. Consequently the workers, even when permitted to manage their own local affairs were often wanting in the courage, self-reliance and the habits of mental activity which are required as the basis of business enterprise. And as a matter of fact both the central government and the local magnates did interfere directly with the freedom of industry prohibiting migration and levying taxes and tolls of the most burdensome and vexatious character. Even those of the lower classes who were nominally free were plundered by arbitrary fines and dues levied under all manner of excuses by the partial administration of justice and often by direct violence and open pillage. These burdens fell chiefly on just those people who were more industrious and more thrifty than their neighbors for among whom, if the country had been free the spirit of bold enterprise would gradually have arisen to shake off the bonds of tradition and custom. Far different was the state of the people in the towns. There the industrial classes found strength in their numbers and even when unable to gain the upper hand altogether they were not, like their brethren in the country treated as though they belonged to a different order of beings from their rulers. In Florence and in Bruges as in ancient Athens the whole people could hear and sometimes did hear from the leaders of public policy a statement of their plans and the reasons for them and could signify their approval or disapproval before the next step was taken. The whole people could on occasion discuss together the social and industrial problems of the time knowing each other's counsel profiting by each other's experience working out in common a definite resolution and bringing it into effect by their own action. But nothing of this kind could be done over a wide area till the invention of the telegraph, the railway, and the cheap press. By their aid a nation can now read in the morning what its leaders have said on the evening before and ere another day has passed the judgment of the nation on it is pretty well known. By their aid the council of a large trades union can at a trifling cost submit a difficult question to the judgment of their members in every part of the country and get their decision within a few days. Even a large country can now be ruled by its people. But till now what was called popular government was a physical necessity the government by a more or less wide oligarchy. Only those few who could themselves go frequently to the center of government or at least receive constant communication from it could take part directly in government and though a much larger number of people would know enough of what was going on to make their will broadly effective through their choice of representatives yet even they were a small minority of the nation till a few years ago and the representative system itself is only of recent date. Section 7 In the Middle Ages the history of the rise and fall of towns is the history of the rise and fall of successive waves on the tide of progress. The medieval towns as a rule own their origin to trade an industry and did not despise them and though the wealthier citizens were sometimes able to set up a close government in which the workers had no part they seldom retain their power long. The great body of the inhabitants frequently had the full rights of the citizens deciding for themselves the foreign and domestic policy of their city and at the same time working with their hands and taking pride in their work. They organized themselves into guilds thus increasing their cohesion and educating themselves in self-government and though the guilds were often exclusive and their trade regulations ultimately retarded progress yet they did excellent work before this deadening influence had shown itself. The citizens gained culture without losing energy without neglecting their business they learned to take an intelligent interest in the many things besides their business they led the way in the fine arts and they were not backward in those of war they took pride in magnificent expenditure for public purposes and they took equal pride in the careful husbanding of the public resources in clear and clean state budgets and in system of taxes levied equitably and based on sound business principles thus they led the way towards modern industrial civilization and if they had gone on their course undisturbed and retained their first love of liberty and social equality they would probably long ago have worked out the solutions of many social and economic problems which we are only now beginning to face but after being long troubled by tumult and war they at last succumbed to the growing power of the countries by which they were surrounded and indeed when they had obtained dominion over their neighbors their own rule had often been harsh and oppressive so that their ultimate overthrow by the country was in some degree the result of a just retribution they have suffered for their wrongdoings but the fruit of their good work remains and is the source of much that is best in the social and economic traditions that our age has inherited from its predecessors Section 8 feudalism was perhaps a necessary stage in the development of the Teutonic race it gave scope to the political ability of the dominant class and educated the common people in habits of discipline and order but it concealed under forms of some outward beauty much cruelty and uncleanness physical and moral the practices of chivalry combined extreme deference to women in public with domestic tyranny elaborate rules of courtesy towards combatants of the nightly order were maintained by the side of cruelty and extortion in dealing with the lower classes the ruling classes were expected to discharge their obligations towards one another with frankness and generosity they had ideals of life which were not devoid of nobility and therefore their characters will always have some attractiveness to the thoughtful historian as well as to the chroniclers of wars of splendid shows and of romantic incidents but their consciences were satisfied when they had acted up to the code of duty which their own class required of them and one article of that code was to keep the lower classes in their place though indeed they were often kind and even affectionate towards those retainers with whom they lived in daily contact so far as cases of individual hardship went the church strove to defend the weak and to diminish the sufferings of the poor perhaps those finer natures who were attracted to the service might often have exercised a wider and a better influence if they had been free from the vow of celibacy and able to mingle with the world but this is no reason for rating lightly the benefit which the clergy and still more the monks rendered to the poorer classes the monasteries were the homes of industry and in particular of the scientific treatment of agriculture they were secure colleges for the learned and they were hospitals and alms houses for the suffering the church acted as a peacemaker in great matters and in small the festivals and the markets held under its authority freedom and safety to trade again the church was a standing protest against caste exclusiveness it was democratic in its organization as was the army of ancient Rome it was always willing to raise to the highest post the ablest men in whatever rank they were born its clergy and monastic orders did much for the physical and moral well-being of the people and it sometimes even led them in open resistance to the tyranny of their rulers but on the other hand it did not set itself to help them to develop their faculties of self-reliance and self-determination and to attain truer inner freedom while willing that those individuals who had exceptional natural talent should rise through its own offices to the highest posts it helped rather than hindered the forces of feudalism in their endeavor to keep the working classes as a body ignorant devoid of enterprise and in every way dependent on those above them Teutonic feudalism was more kindly in its instincts than the military dominion of ancient Rome and the laity as well as the clergy were influenced by the teachings imperfectly understood as they were of the Christian religion with regard to the dignity of man as man nevertheless the rulers of the country districts during the Middle Ages united all that was the most powerful in the Oriental subtlety of theocratic caste and in the Roman force of discipline and resolution and they used their combined strength in such a manner as on the whole to retard the growth of strength and independence of character among the lower orders of the people the military force of feudalism was however for a long time weakened by local jealousies it was admirably adapted for welding into one living whole the government of a vast area under the genius of a Charles the Great but it was equally prone to dissipate itself into its constituent elements as soon as its guiding genius was gone Italy was for a long time ruled by its towns one of which indeed of Roman descent with Roman ambition and hard fixity of purpose held its waterways against all attack till quite modern times and in the Netherlands and other parts of the continent the free towns were long able to defy the hostility of the kings and barons around them but at length stable monarchies were established in Austria, Spain and France a despotic monarchy served by a few able men drilled and organized the military forces of vast multitudes of ignorant but sturdy country folk and the enterprise of free towns their noble combination of industry and culture was cut short before they had time to outgrow their early mistakes then the world might have gone backwards if it had not happened that just at that time new forces were rising to break up the bonds of constraint and spread freedom over the broad land within a very short period came the invention of printing the revival of learning, the reformation the discovery of the ocean routes to the new world and to India any one of these events alone would have been sufficient to make an epic in history but coming together as they did and working all in the same direction they affected a complete revolution thought became comparatively free and knowledge ceased to be altogether inaccessible to the people the free temper of the Greeks revived the strong self-determining spirits gained new strength and were able to extend their influence over others and a new continent suggested new problems to the thoughtful at the same time that it offered a new scope to the enterprise of bold adventurers End of Appendix A. Sections 1 through 8 Recording by Rhonda Fetterman Appendix A. Sections 9 through 17 of Principles of Economics This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org Recording by Rhonda Fetterman Principles of Economics by Alfred Marshall Appendix A. Sections 9 through 17 The Growth of Free Industry and Enterprise Section 9 The countries which took the lead in the new maritime adventure were those of the Spanish Peninsula It seemed for a time that though the leadership of the world having settled first in the most easterly peninsula of the Mediterranean and then smoothed to the middle peninsula would settle again in that westerly peninsula which belonged both to the Mediterranean and the Atlantic But the power of industry had by this time become sufficient to sustain wealth and civilization in a northern climate Spain and Portugal could not hold their own for long against the more sustained energy and the more generous spirit of the northern people The early history of the people of the Netherlands is indeed a brilliant romance Founding themselves on fishing and weaving they built up a noble fabric of art and literature of science and government But Spain set herself to crush out the rising spirit of freedom as Persia had done before And as Persia strangled Ionia but only raised yet higher the spirit of Greece proper So the Austro-Spanish Empire subdued the Belgian Netherlands but only intensified the patriotism and energy of the Dutch Netherlands and England Holland suffered from England's jealousy of her commerce but still more from the restless military ambition of France It soon became clear that Holland was defending the freedom of Europe against French aggression But at a critical time in her history she was deprived of the aid she might reasonably have expected from Protestant England and though from 1688 onwards that aid was liberally given her bravest and most generous sons had then already perished on the battlefield and she was overburdened with debt She has fallen into the background but Englishmen above all others are bound to acknowledge what she did and what more she might have done for freedom and enterprise France and England were thus left to contend for the empire of the ocean France had greater natural resources than any other northern country and more of the spirit of the new age than any southern country and she was for some time the greatest power in the world but she squandered in perpetual wars her wealth and the blood of the best of those citizens whom she had not already driven away by religious persecution The progress of Enlightenment brought with it no generosity on the part of the ruling class towards the ruled and no wisdom in expenditure From revolutionary America came the chief impulse towards a rising of the oppressed French people against their rulers but the French were strikingly wanting in that self-controlling freedom which had distinguished the American colonists Their energy and courage was manifested again in the great Napoleonic wars but their ambition overleaped itself and ultimately left to England the leadership of enterprise on the ocean Thus the industrial problems of the new world are being worked out under the direct influence and to some extent those of the old world are under the indirect influence of the English character We may then return to trace with somewhat more detail the growth of free enterprise in England England's geographical position caused her to be peopled by the strongest members of the strongest races of northern Europe A process of natural selection brought to her shores those members of each successive migratory wave who were most daring and self-reliant Her climate is better adapted to sustain energy than any other in the northern hemisphere She is divided by no high hills and no part of her territory is more than 20 miles from navigable water and thus there was no material hindrance to freedom of intercourse between her different parts while the strength and wise policy of the Norman and Plantagenet Kings prevented artificial barriers from being raised by local magnates As the part which Rome played in history is chiefly due to her having combined the military strength of a great empire with the enterprise and fixness of purpose of an oligarchy residing in one city so England owes her greatness to her combining as Holland had done on a smaller scale before much of the free temper of the medieval city with the strength and broad basis of a nation The towns of England had been less distinguished than those of other lands but she assimilated them more easily than any other country did and so gained in the long run most from them The custom of primogeniture inclined the younger sons of noble families to seek their own fortunes and having no special caste privileges they mixed readily with the common people This fusion of different ranks tended to make politics business-like while it warmed the veins of business adventure with the generous daring and romantic aspirations of noble blood Resolute on the one hand in resistance to tyranny and on the other in submission to authority when it is justified by their reason the English have made many revolutions but none without a definite purpose While reforming the constitution they have abided by the law They alone, unless we accept the Dutch have known how to combine order and freedom They alone have united a thorough reverence for the past with the power of living for the future rather than in the past But the strength of character which in later times made England the leader of manufacturing progress showed itself at first chiefly in politics in war and in agriculture The English archer was the forerunner of the English artisan He had the same pride and the superiority of his food and his physique over those of his continental rivals He had the same indomitable perseverance in acquiring perfect command over the use of his hands The same free independence and the same power of self-control and of rising to emergencies The same habit of indulging his humours when the occasion was fit but when a crisis arose of preserving discipline even in the face of hardship and misfortune But the industrial faculties of Englishmen remain latent for a long time They had not inherited much acquaintance with nor much care for the comforts and luxuries of civilization In manufactures of all kinds they lagged behind the Latin countries, Italy, France and Spain as well as the free cities of Northern Europe Gradually the wealthier classes got some taste for imported luxuries and England's trade slowly increased But there was for a long time no sign on the surface of her future commerce That indeed is the product of her special circumstances as much as, if not more than, of any natural bias of her people They had not originally, and they have not now that special liking for dealing and bargaining nor for the more abstract side of financial business which is found among the Jews, the Italians, the Greeks and the Armenians Trade with them has always taken the form of action rather than of maneuvering and speculative combination Even now the subtlest financial speculation on the London Stock Exchange is done chiefly by those races which have inherited the same aptitude for trading which the English have for action The qualities which have caused England in later times under different circumstances to explore the world and to make goods and carry them for other countries caused her even in the Middle Ages to pioneer the modern organization of agriculture and thus to set the model after which most other modern business is being molded She took the lead in converting labor dues into money payments a change which much increased the power of everyone to steer his course in life according to his own free choice For good and for evil the people were set free to exchange away their rights in the land and their obligations to it The relaxation of the bonds of custom was hastened alike by the great rise of real wages which followed the Black Death in the 14th century and by the great fall of real wages which in the 16th century resulted from the depreciation of silver, the debasement of coin the appropriation of the revenues of the monasteries to the purposes of court extravagance and lastly by the extension of sheep farming which set many workers adrift from their old homes and lowered the real incomes and altered the mode of life of those who remained The movement was further extended by the growth of the royal power in the hands of the tutors which put an end to private war and rendered useless the bonds of retainers which the barons and landed gentry had kept together the habit of leaving real property to the eldest son and distributing personal property among all the members of the family on the one hand increased the size of landed properties and on the other narrowed the capital which the owners of land had at their own command for working it These causes tended to establish the relation of landlord and tenant in England while the foreign demand for English work and the English demand for foreign luxuries led especially in the 16th century to the concentration of many holdings into large sheep runs worked by capitalist farmers that is there was a great increase in the number of farmers who undertook the management and risks of agriculture supplying some capital of their own but borrowing the land for a definite yearly payment and hiring labor for wages in like manner as later on the new order of English businessmen undertook the management and the risks of manufacture supplying some capital of their own but borrowing the rest on interest and hiring labor for wages free enterprise grew fast and fiercely and it was one-sided in its action and cruel to the poor but it remains true that the English large farm arable and pastoral worked with borrowed capital was the forerunner of the English factory in the same way as English archery was the forerunner of the skill of the English artisan Section 11 meanwhile the English character was deepening the natural gravity and intrepidity of the stern races that had settled on the shores of England inclined them to embrace the doctrine of the Reformation and these reacted on their habits of life and gave a tone to their industry man was, as it were, ushered straight into the presence of his creator with no human intermediary and now for the first time large numbers of rude and uncultured people yearn toward the mysteries of absolute spiritual freedom the isolation of each person's religious responsibility from that of his fellows rightly understood was a necessary condition for the highest spiritual progress but the notion was new to the world it was bare and naked, not yet overgrown with pleasant instincts and even in kindly natures individuality showed itself with a hard sharpness of outline while the coarser natures became self-conscious and egotistic among the Puritans especially the eagerness to give logical definiteness and precision to their religious creed was an absorbing passion hostile to all lighter thoughts and lighter amusements when occasion arose when they could take combined action which was made irresistible by their resolute will but they took little joy in society they shunned public amusements and preferred the quieter relaxations of home life and it must be confessed some of them took an attitude hostile to art the first growth of strength had then something in it that was rude and ill-mannered but that strength was required for the next stage upwards it needed to be purified and softened by much tribulation it needed to become less self-assertive without becoming weaker before new instincts could grow up around it to revive in a higher form what was most beautiful and most solid in the old collective tendencies it intensified the affections of the family the richest and fullest of earthly feelings perhaps there never has been before any material of texture at one so strong and so fine with which to build up a noble fabric of social life Holland and other countries shared with England the great ordeal which was thus opened by the spiritual upheaval that closed the Middle Ages but from many points of view and especially from that of the Economist England's experiences were the most instructive and the most thorough and were typical of all the rest England led the way in the modern evolution of industry and enterprise by free and self-determining energy and will Section 12 England's industrial and commercial characteristics were intensified by the fact that many of those who had adopted the new doctrines in other countries sought on her shores a safe asylum from religious persecution by a sort of natural selection those of the French and Fleming's and others whose character was most akin to the English and who had been led by that character to study thoroughness of work in the manufacturing arts and to teach them those arts for which their character had all along fitted them during the 17th and 18th centuries the court and the upper classes remained more or less frivolous and licentious but the middle class and some parts of the working class adopted a severe view of life they took little delight in amusements that interrupted work and they had a high standard as to those material comforts which could be obtained only by unremitting hard work they strove to produce things that had a solid and lasting utility rather than those that suited only for the purposes of festivities and ostentation the tendency, when once it had set in, was promoted by the climate for though not very severe, it especially unsuited to the lighter amusements and the clothing, house room and other requisites for a comfortable existence in it are of especially expensive character these were the conditions under which the modern industrial life of England was developed the desire for material comforts tends towards a ceaseless straining to extract from every week the greatest amount of work that can be got out of it the firm resolution is to submit every action to the deliberate judgment of the reason tends to make everyone constantly ask himself whether he could not improve his position by changing his business or by changing his method of doing it and lastly complete political freedom and security enables everyone to adjust his conduct as he has decided that it is in his interest to do and fearlessly to commit his person and his property to new and distant undertakings in short the same causes which have enabled England and her colonies to set the tone of modern politics have made them also set the tone of modern business the same qualities which gave them political freedom gave them also free enterprise in industry and commerce section 13 freedom of industry and enterprise so far as its action reaches tends to cause everyone to seek that employment of his labor and capital in which he can turn them to the best advantage and this again leads him to try to obtain a special skill and facility in some particular task by which he may earn the means of purchasing what he himself wants and hence results a complex industrial organization with much subtle division of labor some sort of division of labor is indeed sure to grow up in any civilization that has held together for a long while however primitive its form even in very backward countries we find highly specialized trades but we do not find the work within each trade so divided up that the planning and arrangement of the business its management and its risks are born by one set of people while the manual work required for it is done by hired labor this form of division of labor is at once characteristic of the modern world generally and of the English race in particular it may be merely a passing phase in man's development it may be swept away by the further growth of that free enterprise which has called it into existence but for the present it stands out for good and for evil as the chief fact in the form of modern civilization the kernel of the modern economic problem the most vital changes hitherto introduced into industrial life center around this growth of business undertakers we have already seen how the undertaker made his appearance at an early stage in England's agriculture the farmer borrowed land from his landlord and hired the necessary labor being himself responsible for the management and risks of the business the selection of farmers has not indeed been governed by perfectly free competition but it has been restricted to a certain extent by inheritance and by other influences which have often caused the leadership of agricultural industry to fall into the hands of people who have had no special talent for it but England is the only country in which any considerable play has been given to natural selection the agricultural systems of the continent have allowed the accident of birth to determine the part which every man should take in cultivating land or controlling its cultivation the greater energy and elasticity obtained by even this narrow play of selection in England has been sufficient to put English agriculture in advance of all others and has enabled it to obtain a much larger produce than is got by an equal amount of labor from similar soils in any other country of Europe but the natural selection of the fittest to undertake to organize and to manage has much greater scope in manufacture the tendency to the growth of undertakers in manufacturers had set in before the great development of England's foreign trade in fact traces of it are to be found in the woolen manufacturer in the 15th century but the opening up of large markets in new countries gave a great stimulus to the movement both directly and through its influence on the localization of industry that is the concentration of particular branches of production in certain localities the records of medieval fares and wandering merchants shows that there were many things each of which was made in only one or two places and then distributed north and south, east and west over the whole of Europe but the wares whose production was localized and which traveled far were almost always of high price and small bulk the cheaper and heavier goods were supplied by each district for itself in the colonies of the new world however people had not always the leisure to provide manufacturers for themselves and they were often not allowed to make even those which they could have made for though England's treatment of her colonies was more liberal than that of any other country she thought that the expense which she incurred on their behalf justified her in compelling them to buy nearly all kinds of manufacturers from herself there was also a large demand for simple goods to be sold in India and to savage races these causes led to the localization of much of the heavier manufacturing work in work which requires the highly trained skill and delicate fancy of the operative organization is sometimes of secondary importance but the power of organizing great numbers of people gives an irresistible advantage when there is a demand for whole ship cargoes of goods of a few simple patterns thus localization and the growth of the system of capitalist undertakers were two parallel movements due to the same general cause and each of them promoting the advance of the other the factory system and the use of expensive appliances in manufacture came at a later stage they are commonly supposed to be the origin of the power which undertakers wield in English industry and no doubt they increased it but it had shown itself clearly before their influence was felt at the time of the French Revolution there was not a very great deal of capital invested in machinery whether driven by water or steam power the factories were not large and there were not many of them but nearly all the textile work of the country was then done on a system of contracts this industry was controlled by a comparatively small number of undertakers who set themselves to find out what, where, and when it was most advantageous to buy and to sell and what things it was most profitable to have made they then let out contracts for making these things to a great number of people scattered over the country the undertakers generally supplied the raw material and sometimes even the simple implements that were used those who took the contract executed it by the labor of themselves and their families and sometimes but not always by that of a few assistants as time went on the progress of mechanical invention caused the workers to be gathered more and more into small factories in the neighborhood of water power and when steam came to be substituted for water power then into larger factories in great towns thus the great undertakers who bore the chief risks of manufacturing without directly managing and superintending began to give way to wealthy employers who conducted the whole business of manufacturing on a large scale new factories attracted the attention of the most careless observer and this last movement was not liable to be overlooked by those who were not actually engaged in the trade as the preceding movement had been thus at length general attention was called to the great change in the organization of industry which had long been going on and it was seen that the system of small businesses controlled by the workers themselves was being displaced by the system of large businesses controlled by the specialized ability of capitalist undertakers the change would have worked itself out very much as it has done even if there had been no factories and it will go on working itself out even if the retail distribution of force by electric or other agencies should cause part of the work that is now done in factories to be taken to the home of the workers section 14 the new movement both in its earlier and later forms has tended constantly to relax the bonds that used to buy nearly everyone to live in the parish in which he was born and it developed free markets for labor which invited people to come and take their chance at finding employment and in consequence of this change the causes that determine the value of labor began to take a new character up to the 18th century manufacturing labor had been hired as a rule retail though a large and fluid labor class which could be hired wholesale had played a considerable part in the industrial history of particular places on the continent and in England before then in that century the rule was reversed at least for England and the price of labor ceased to be dominated by custom or by bargaining in small markets during the last hundred years it had even more and more been determined by the circumstances of supply and demand over a large area a town, a country, or the whole world the new organization of industry added vastly to the efficiency of production for it went far towards securing that each man's labor should be devoted to just the highest kind of work which he was capable of performing well and that his work should be ably directed and supplied with the best mechanical and other assistance that wealth and the knowledge of the age could afford but it brought with it great evils which of these evils was voidable we cannot tell for just when the change was moving most quickly England was stricken by a combination of calamities almost unparalleled in history they were the cause of a great part, it is impossible to say, of how great a part of the sufferings that are commonly ascribed to the sudden outbreak of unrestrained competition the loss of her great colonies was quickly followed by the great French war which cost her more than the total value of the accumulated wealth she had at its commencement an unprecedented series of bad harvests made bread fearfully dear and worse than all a method of administration of the poor law was adopted which undermined the independence and vigor of the people the first part of the last century therefore saw free enterprise establishing itself in England under favorable circumstances its evils being intensified and its beneficial influences being hindered by external misfortunes the trade customs and the guild regulations by which the weak had been defended in past times were unsuitable to the new industry in some places they were abandoned by common consent in others they were successfully upheld for a time but it was a fatal success for the new industry incapable of flourishing under the old bonds left those places for others where it could be more free then the workers turned to the government for the enforcement of the old laws of parliament prescribing the way in which the trade should be carried on and even for the revival of the regulation of prices and wages by justices of the peace these efforts could not but fail the old regulations had been the expression of the social moral and economic ideas of the time they had been felt out rather than thought out they were the most instinctive results of the experience of generations of men who had lived and died under almost unchanged economic conditions in the new age changes came so rapidly that there was no time for this each man had to do what was right in his own eyes but with little guidance from the experience of past times those who endeavored to cling to old traditions were quickly supplanted the new race of undertakers consisted chiefly of those who had made their own fortunes strong, ready, enterprising men who, looking at the success obtained by their own energies, were apt to assume that the poor and the weak were to be blamed rather than to be pitied for their misfortunes impressed with the folly of those who tried to bolster up economic arrangements which the stream of progress had undermined they were apt to think that nothing more was wanted than to make competition perfectly free and to let the strongest have their way they glorified individuality of character and they were in no hurry to find a modern substitute for the social and industrial bonds which had kept men together in earlier times meanwhile misfortune had reduced the total net income of the people of England in 1820 a tenth of it was absorbed in paying the mere interest on the national debt the goods that were cheapened by the new inventions were chiefly manufactured commodities of which the working men were but a small consumer as England had then almost a monopoly of manufacturers he might indeed have got his food cheaply if manufacturers had been allowed to change their wares freely for corn grown abroad but this was prohibited by the landlords who ruled in parliament the laborers wages so far as they were spent on ordinary food were the equivalent of what his labor would produce on the very poor soil which was forced into cultivation to eke out the insufficient supplies raised from the richer grounds he had to sell his labor in a market in which the forces of supply and demand would have given him a poor pittance even if they had worked freely but he had not the full advantage of economic freedom he had no efficient union with his fellows he had neither the knowledge of the market nor the power of holding out for a reserve price which the seller of commodities has and he was urged on to work and to let his family work during long hours and under unhealthy conditions this reacted on the efficiency of the working population and therefore on the net value of their work and therefore it kept down their wages the employment of very young children for long hours was no new thing it had been common in Norwich and elsewhere even in the 17th century but the moral and physical misery and disease caused by excessive work under bad conditions reached their highest point among the factory population in the first quarter of the century they diminished slowly during the second quarter and more rapidly since then after the workmen had recognized the folly of attempts to revive the old rules regulating industry there was no longer any wish to curtail the freedom of enterprise the sufferings of the English people at their worst were never comparable to those which had been caused by the want of freedom in France before the Revolution and it was argued that had it not been for the strength which England derived from her new industries she would probably have succumbed to a foreign military despotism as the free cities had done before her smallest of population was she at times bore almost alone the burden of war against a conqueror in control of nearly all the resources of the continent and at other times subsidized larger but poorer countries in the struggle against him rightly or wrongly it was thought at the time that Europe might have fallen permanently under the dominion of France as she had fallen in an earlier age under that of Rome had not the free energy of English industries supplied the sinews of war against the common foe little was therefore heard and complained against the excess of free enterprise but much against that limitation of it which prevented Englishmen from obtaining food from abroad in return for the manufacturers which they could now so easily produce and even trade unions which were then beginning that brilliant though checkered career which has been more full of interest and instruction than almost anything else in English history passed into the phase of seeking little from authority except to be left alone they had learnt by bitter experience the folly of attempting to enforce the old rules by which government had directed the course of industry and they had as yet got no far reaching views as to the regulation of trade by their own action their chief anxiety was to increase their own economic freedom by the removal of the laws against combinations of workmen it has been left for our own generation to perceive all the evils which arose from the suddenness of this increase of economic freedom now first are we getting to understand the extent to which the capitalist employer untrained to his new duties was tempted to subordinate the well-being of his work people to his own desire for gain now first are we learning the importance of insisting that the rich have duties as well as rights and their individual and in their collective capacity now first is the economic problem of the new age showing itself to us as it really is this is partly due to a wider knowledge and a growing earnestness but however wise and virtuous our grandfathers had been they could not have seen things as we do for they were hurried along by urgent necessities and terrible disasters we must judge ourselves by a severe standard for though England has recently been called on to struggle once more for national existence her powers of production have been immensely increased free trade and the growth of steam communication have enabled a largely increased population to obtain sufficient supplies of food on easy terms the average money income of the people has more than doubled while the price of almost all important commodities except animal food and house room has fallen by one half or even further it is true that even now if wealth were distributed equally the total production of the country would only suffice to provide necessaries and the more urgent comforts for the people and that as things are many have barely the necessaries of life but the nation has grown in wealth, in health, in education and in morality and we are no longer compelled to subordinate almost every other consideration to the need of increasing the total produce of industry in particular this increased prosperity has made us rich and strong enough to impose new restraints on free enterprise some temporary material loss being submitted to for the sake of a higher and ultimate greater gain but these new restraints are different from the old they are imposed not as a means of class domination but with the purpose of defending the weak and especially children and the mothers of children in matters in which they are not able to use the forces of competition in their own defense the aim is to devise deliberately and promptly remedies adapted to the quickly changing circumstances of modern industry and thus to obtain the good without the evil of the old defense of the weak that in other ages was gradually evolved by custom even when industry remained almost unchanged in character for many generations together custom was too slow in its growth and too blind to be able to apply pressure only when pressure was beneficial and in this later stage custom can do but little good and much harm but by the aid of the telegraph and the printing press of representative government and trade associations it is possible for the people to think out for themselves the solution of their own problems the growth of knowledge and self-reliance has given them that true self-controlling freedom which enables them to impose of their own free will restraints on their own actions and the problems of collective production collective ownership and collective consumption are entering on a new phase projects for great and sudden change are now as ever for doom to fail and to cause reaction we cannot move safely if we move so fast that our new plans of life together outrun our instincts it is true that human nature can be modified new ideals new opportunities and new methods of action may as history shows alter it very much even in a few generations and this change in human nature has perhaps never covered so wide an area so fast as in the present generation but still it is a growth and therefore gradual and changes of our social organization must wait on it and therefore they must be gradual too but though they wait on it they may always keep a little in advance of it promoting the growth of our higher social nature by giving it always some new and higher work to do some practical ideal towards which to strive thus gradually we may attain to an order of social life in which the common good overrules individual caprice even more than it did in early ages before the sway of individualism had begun but unselfishness then will be the offspring of deliberate will and though aided by instinct individual freedom will then develop itself in collective freedom a happy contrast to the old order of life in which individual slavery to custom caused collective slavery and stagnation broken only by the caprice of despotism or the caprice of revolution section 17 we have been looking at this movement from the British point of view but other nations are hastening in the same direction America faces new practical difficulties with such intrepidity and directness that she has already attained leadership in some economic affairs she supplies many of the most instructive instances of the latest economic tendencies of the age such as the development of speculation and trade combination in every form and she will probably before long take the chief part in pioneering the way for the rest of the world Australia also shows signs of vigor and she has indeed some advantage over the United States in the greater homogeneity of her people for though the Australians and nearly the same may be said of the Canadians come from many lands and thus stimulate one another to thought and enterprise by a variety of their experiences and their habits of thought yet nearly all of them belong to one race and the development of social institutions can proceed in some respects more easily and faster than if they had to be adjusted to the capacities and temperaments the tastes and the wants of people who have had little affinity with one another on the continent the powers of obtaining important results by free association is less than in English speaking countries and in consequence there is less resource and less thoroughness in dealing with industrial problems but their treatment is not quite the same in any two nations and there is something characteristic and instructive in the methods adopted by each of them particularly in relation to the sphere of governmental action in this matter Germany is taking the lead it has been a great gain to her that her manufacturing industries developed later than those of England and she has been able to profit by England's experience and to avoid many of her mistakes in Germany an especially large part of the best intellect in the nation seeks for employment under government and there is probably no other government which contains within itself so much trained ability of the highest order on the other hand the energy the originality and the daring make the best men of business in England and America have but recently been fully developed in Germany while the German people have a great faculty for obedience they thus differ from the English whose strength of will makes them capable of thorough discipline when strong occasion arises but who are not naturally docile the control of industry by government is seen in its best and most attractive forms in Germany and at the same time the special virtues of private industry its figure, its elasticity and its resource are beginning to be seen in full development there in consequence the problems of the economic functions of government have been studied in Germany with great care and with results that may be very instructive to English speaking people provided they recollect that the arrangements best suited for the German character are perhaps not quite the best for them since they could not if they would rival the Germans in their steadfast assility and in their easy contentment with inexpensive kinds of food, clothing, house room and amusements and Germany contains a larger number than any other country of the most cultivated members of that wonderful race who have been leaders of the world in intensity of religious feeling and in keenness of business speculation in every country but especially in Germany much of what is most brilliant and suggestive in economic practice and an economic thought is of Jewish origin and in particular to German Jews we owe many daring speculations as to the conflicts of interest between the individual and society and as to their ultimate economic causes and their possible socialistic remedies but we are trenching on a subject of Appendix B here we have seen how recent is the growth of economic freedom and how new is the substance of the problem with which economic science has now to deal we have next to inquire how the form of that problem has been fashioned by the progress of events and the personal peculiarities of great thinkers End of Appendix A, sections 9 through 17 Recording by Rhonda Fetterman