FREEDOM OF INDUSTRY IN 18TH CENTURY 71 trade in independence.1 So very different were the monopolist trade regulations of these corporations from the industrial monopolies of the Stuarts that a High Court Judge, in a celebrated judgment in 1711, denied altogether the monopolist character of such local restrictions on trade. Though wrong in the abstract, this legal distinction was clearly based on the obvious but far-reaching difference in the economic importance of two systems of trade organisation both clearly forms of monopoly. In any case, no gild regulation could lead to the concentration in the hands of a few privileged persons of the control over capitalist industries working for a national market or even for exportation on a large scale, as would have happened with the Stuart monopoly system. By the end of the seventeenth century, therefore, the most essential half of Free Trade had been won for English industry. Even though, as Prof. Brentano has excellently shown, the coming of the modern “industry" as opposed to the handicraft was delayed by antiquated gild regulations, and especially by the Law of Apprentices, this fact only affected the competition between the old and new forms of trade. Within the bounds of industrial capitalism the way was open for competition. No man who wished to put capital into a rising industry found himself hampered by the prior rights of others or by legal decisions restricting competition. This freedom of trade was won at a time in which English industry and industrial capitalism were in their infancy. Had not the monopoly system so quickly fallen through its excesses and become a standing abomination to the English people, who knows that Parliament in the eighteenth century, in its ardour for the Mercantile System, would not have tried that method of State interference in commercial matters also? It was the part played by Parliament itself in the battle against industrial monopoly which made this impossible. The 1F. Moy Thomas, London 1900, p. 12. 2 Hirst, pp. 98, 99. 3 Brentano, p. 47 ff., pp. 70, 71. 72 FREEDOM OF INDUSTRY IN 18TH CENTURY mighty growth of industrial capitalism in England which began in the eighteenth century and reached its climax in the Industrial Revolution, followed in the train of a previously won freedom of trade. The difference between capitalist organisation in the seventeenth and eighteenth centuries, as regards liberty of trade, comes out very clearly in the history of industrial monopoly in England. A comparison with the country that has longest known legal restrictions of competition in capitalist industry shows for what a long time the freedom won so early in England was in striking contrast to the organisation of other industrially advancing nations. A short digression on the growth and duration of German monopolist restrictions shall therefore conclude this subject. CHAPTER IV COMPARISON WITH GERMAN DEVELOPMENT A FEW preliminary observations are necessary. In the first place, Germany has never had so uniform a system of monopoly as that existing in England under Elizabeth, James I., and Charles I. The peculiarities of particular trade privileges alone made that impossible. The phenomenon of a prince attempting systematically to unite industry wherever possible in great national monopolies was unknown. The movement towards monopoly started amongst capitalists, and found support partly in the administration of trade by a bureaucracy imbued with "mercantile❞ principles, partly in the craft gilds, and partly in the mining regulations. The princes did not play the part of eagerly speculative "Promoters" of capitalist undertakings, while personal enrichment and the trade interests of courtiers, so widespread in England, never had a decided influence on the monopolist organisation of German industry. Perhaps just for the reason that these shady sides of the system were unknown, it remained longer in existence than in England and was abolished without leaving such general hatred behind it. It is hardly necessary to say that in speaking of the monopolist organisation of early capitalism in German industry it is not implied that this organisation always appeared in concrete form. Certain forms of trade monopolies existed, like the privileged companies or the creation of a "staple" of capitalist merchants. But very often the monopolist organisation of industry was only seen in restrictions of some kind set on new enterprises by law, which accordingly put particular merchants in the position of monopolists. When in spite of such provisions competition between existing factories arose, such works might still have a monopoly against subsequent fresh competitors. If in any such cases special organisation further improved the monopolists' position, the importance of their prior rights increased. In any case, however, legal limitations on fresh competition gave monopolist protection to the existing concerns. We must, therefore, take into consideration all laws which introduced such restrictions, even if they did not lead to the grosser forms of English monopolies. An enquiry into the effect and importance of monopolist organisation on the growth of German economic life would be outside the scope of our present discussion. We are only concerned to develop a descriptive comparison between the growth of industrial organisation in Germany and England, and to answer the question to what extent the monopolist organisation of early industrial capitalism, the rise and fall of which in England we have described, lasted longer in Germany. To criticise this system would necessitate a very different examination of details than is required for the purpose of this book. It will be enough for the present to give a sufficiently detailed picture of German industrial monopolies to enable us to institute a comparison between their history and the early disappearance of monopoly in England. In Germany, as in England, mining is an important industry for trade monopolies. Owing to transport advantages certain areas of production had down to the nineteenth century and retain in part even to-day a natural" monopoly in markets at some distance from them. In such cases restrictions imposed by law on competition were much more effective in creating monopolies than where producers had to compete for a market with other industrial regions. From the latter part of GERMAN MINING MONOPOLIES 75 the eighteenth century up to about 1865 mining was especially subject to monopoly where the so-called Direktionsprinzip" or system of State administration, a characteristic instance of the mercantile theory in mining, obtained. When freedom of mining had been declared by virtue of the rights of the Crown, every person who found specified deposits in any place was entitled to permission to occupy that place as a miner. This grant was regarded as the consequence of the share in mining rights assured him by private law. This freedom, which could only be limited by the reserved rights of the State, gave considerably greater facilities than had formerly existed for the continued growth of new undertakings. The Prussian Government regarded the threatened competition of many new mines as by no means desirable. Accordingly the royal share of the mining rights was used to retain for the State the power to make regulations which might allow or refuse the creation of new enterprises. A distinction was drawn between the grant of the royal rights, the grant of a mining area, and the exercise of those rights1 (in other words, the commencement of an enterprise) and by decisions concerning the last, the competition allowed by the declaration of free mining could again be restricted at will. That was the case in coal mining in Rhenish Westphalia, which, after being up till the end of the eighteenth century of only local importance, became thenceforward a leading branch of German mining. The rich coal deposits in the neighbourhood of the Ruhr, originally only used by coaldigging peasants, were first systematically mined in the time of Frederick the Great, when the trade was regulated by a mining ordinance, and put under the control of the State department of mines. In the area of the Cleve-Mark mining ordinance the working of coal seams was dependent on the permission of the royal officials. The probability of obtaining such permission could be estimated from instructions issued in May 1783, at the instigation of the 1C. F. Gerber, 'System des Deutschen Privatrechts,' Jena 1852, p. 144. |