A new study of labor in France in the earlier nineteenth century seems justified for two reasons. First, a change in the point of view is desirable. Labor in that period has been treated as a movement related to political factors and to socialistic and other doctrines. I feel that it should be studied now in the light of the changes wrought in the lives of the French people by the advent of large-scale industry with its factories, machinery, and concentration of capital. It is important to realize that much of the unemployment from which French laborers suffered in this period was due to those recurrent crises in industry and trade which we now study as parts of the business cycle. We have been taught wrongly to believe that while England suffered from these crises early in the nineteenth century France was virtually exempt until 1857. Secondly, the study of French labor needs revision in the light of new evidence and of a reappraisal of some of the familiar evidence.

Economic history, as a subject of separate study, is now nearly a hundred years old. No other idea which has emerged from it has gained a tithe of the attention that scholars, teachers, and the general public have focused on the “industrial revolution.” Yet there is scarcely a conception in economic history more misleading than one which relates all the important problems of our modern civilization to economic changes that are represented as taking place in England between 1760 and 1832. There is scarcely a conception that rests on less secure foundations than one which finds the key to an understanding of the modern industrialized world in these seventy-two years of English economic history.

One influence of war has repeatedly asserted itself in the past—an effect on the costs of production and on the competitive position of the industries and firms of victorious or neutral nations. This subject needs more study, but certain facts suggest a hypothesis, of three parts. First: war expands some industries or concerns, increases their efficiency, enables them to operate, at the end of the struggle, on a comparatively low-cost basis, intensifies their competitive advantages, and improves their position in relation to foreign competitors. Second: war—for the duration—bolsters up some high-cost units by enabling them to sell at a profit all they can produce. The end of the war places such high-cost units at a disadvantage in the process of absorbing the shocks of the transition to a peacetime economy. Third: the history of postwar periods usually exhibits a sharp contest between such low-cost and high-cost enterprises. While “low cost” and “high cost” may refer to the relative positions of units within the same country, in most of this discussion, the terms will be applied to the producers of one country (either victor or neutral) to mean that their costs are low or high in comparison with those of their foreign competitors.

Only in recent years have the economic problems involved in the conduct of war begun to receive much attention from scholars. As a result of sad experience we now also have substantial groups engaged in studying the problems of postwar readjustment, but I know of no attempt to present a summary generalization of the more enduring reactions of American wars upon the economic life of the country. By the more enduring reactions I mean those which are felt after the postwar period of readjustment and which may be due either directly to the war or to the depression caused by the war.

In his autobiography, Cheerful Yesterdays, Thomas Wentworth Higginson, looking back on the long crusade that ended with the abolition of Negro bondage in the United States, declared: “The anti-slavery movement was not strongest in the educated classes, but was primarily a people's movement, based on the simplest human instincts and far stronger … in the factories and shoe-shops than in the pulpits and colleges.” Few people have challenged this statement, which Higginson made in 1898; probably because the scarcity of material on the subject has prevented a thorough examination of all its implications, and especially of the main argument that the laboring man was the real force behind the antislavery crusade.Yet there is sufficient evidence to throw serious doubt upon the accuracy of Higginson's statement, evidence which reveals that workers in shops and factories often exhibited an almost callous unconcern for the entire crusade.

In 1848, most wagons were still made in small scattered shops where general blacksmithing and wagonmaking were combined, although a few firms such as Wilson, Childe and Company of Philadelphia had achieved considerable size. In that year, Quincy, located in the middle of the corn belt in the westernmost part of Illinois on the Mississippi River, was a growing center of commerce, shipping, and manufacturing for the surrounding area. There had already been established here at least four wagon manufacturers.

Operating theories are more or less concealed in the structure of all historical writing. They are readily discerned when the theories are comprehensive and at variance with generally accepted ideas, as in the case of Thomism or Marxism. They are hard to detect when like Spencerianism they conform closely to the mores of American life. Writers may honestly deny in this latter case that they have any special theory; they are simply recording the “facts” from a “common-sense” viewpoint. But since theory must be either implicit or explicit, it is better for scholarly purposes that it should be explicit. Carefully formulated theory restricts unconscious bias, gives meaning to otherwise formless data, and is more likely to reveal unexpected relationships.

Strangely enough, up to the present day, commercial documents have contributed almost nothing to our knowledge of trade between Europe and India or China in the Middle Ages. The actual management of a voyage to “the Indies,” as India and China were designated in the thirteenth or fourteenth century, has remained obscure because our evidence about commerce has come from sources mainly concerned with other matters.

In Claude-Henri de Rouvroy, comte de Saint-Simon, three great movements have taken their origin. The first is characterized by the names Enfantin and Bazard, the second by those of Comte and Taine, the third by Lesseps and Péreire. Enfantin and Bazard were men of imagination, Comte and Taine men of science, Lesseps and Péreire men of action. No other father has engendered such different children. Enfantin and Bazard made Saint-Simon the bearer of a new gospel of salvation; in his name they founded a church and strove to win for it all nations. Comte and Taine made Saint-Simon the founder of a new philosophy; from his ideas they developed a system of knowledge and gained for it the nineteenth century. Lesseps and Péreire made Saint-Simon the pioneer of a new world; from his inspiration they created waterways and railways, banks and factories.

Industry and commerce developed rapidly in China during the last three centuries before Christ, as they did also in the Mediterranean world. Contemporary Hellenistic and Roman businessmen made extensive use of slave labor, and slavery gradually developed an industrial character. Nothing comparable occurred in China. Private and government slavery had a marked growth under the Han empire, but the use of slaves for industrial purposes—even commercial farming— did not become an important characteristic of the Chinese institution. This fact raises questions concerning the “style” of ancient Chinese slavery, and concerning the economic organization of which it was a part.

Perhaps in no other stage in history has a rapidly changing pattern of economic life raised so many acutely disturbing economic problems as it did in England during the last decade of the eighteenth and the first few decades of the nineteenth century, even as there have been few periods in which the body of economic thought has been more enriched. The era that included the Napoleonic Wars (1793–1814) and the postwar period witnessed such historic events as the suspension of specie payments by the Bank of England, modification of the corn laws, industrial depression, widespread introduction of machine technology, and the Luddite riots. Little wonder that the brilliant minds of Malthus, Ricardo, James Mill, Bentham, and many others were stimulated by the troublesome issues of the day.

Two propositions are suggested by a preliminary examination of the marketing of brass and brass products a century ago: first, that the manufacturer's quest for a near-monopoly market through product differentiation is not a new development; second, that this very quest of the manufacturer for near-monopoly has been the life blood of manufacturing progress.

Systems resembling modern étatisme can be traced to antiquity. So can other measures: planned economy in various fields, monopolies with their fixed prices and other burdens, forms of state control which benefited the state or particular individuals, but which compromised the best interests of the people. On the other hand, paying salaries to the poor, unemployed citizens to avert the outbreak of social revolutions, “soaking the rich” by excessive and even ruinous taxation were among the economic measures known to the ancient world also. So were other present-day phenomena: the presence of “haves and have-nots,” inflation, strikes, and the low purchasing power of the masses.

The steamboat was the first great American contribution to modern technology. First developed to the point of practical commercial success in this country, the steamboat was quickly incorporated into the economic structure of the nation and within a few years became the principal vehicle of transportation on the main channels of inland commerce. Eventually the influence of the American steamboat was felt all over the globe, and there were few great river systems that in time did not feel the beat of the paddlewheels by which it was propelled.

After 1865 Southerners found their communities generally in a state of economic chaos. This was particularly true of the mercantile system. Before the war numerous small towns and villages were in the process of development, and the more localized system of merchandising was reaching out into the general trade. The merchants of the new stores were rapidly cutting into the virtually monopolistic control previously exercised by the system of cotton factorage on which the larger planters depended for supplies, for with the establishment of local stores, cotton planters looked more and more to their home merchants. During the four years of war these local stores were practically forced out of business by a lack of stock. The end of the war brought to the merchant a complete economic revolution. He was now to engage in a system of storekeeping which was unique in every respect except the name. Southern general stores became country stores whether they existed in the country or not, for the bulk of their trade was that of ”country” supply.

In accordance with the proper procedures of economic history and nicely within the limitations of my own knowledge, my comments upon the three papers presented take the form of recollections of some of the business conditions met with in my forty-four years of service with a single manufacturing and selling company.

The pamphlet literature and the public documents of our early national period show that in spite of repeated instances of governmental interference in economic life, a great deal of thinking was being done along laissez-faire lines. This thought was unsystematic. It was pragmatic rather than philosophical, never doctrinaire, concerned primarily with defending and attacking specific measures of public policy. Nevertheless, it was serious thought, and in many instances had an important influence on legislative action. It was not restricted to any political group, but pervaded to a greater or less degree the thinking of all leaders of the community. Owing little to the teachings of contemporary European economists, American libertarianism deserves analysis as an indigenous body of theory, growing out of, and adjusted to American conditions.