Chapter 1 - The Pattern of Politics and Economics
I Europe in 1610; The Setting;
Dr. Friedrich concludes after some discussion: "the modern state may
therefore be said to have emerged. It happened in these fifty years between
1610 and 1660".
Compare this with Bobbitt's more detailed and lengthy description of the entire
process of the creation of the concept of 'state' between 1500 and the present.
But this was the era of the transition from 'princely' to 'kingly' state.
Friedrich focuses on the Holy Roman Empire (German) and Bobbitt also includes
the changes it underwent.
Friedrich again, "In 1660 all of this was gone. The Empire had become an
adjunct of the house of Hapsburg's Austrian dominions, while all other German
princes, large and small, were 'sovereign' notably the elector of Brandenburg
whose impending challenge to Sweden foreshadowed the Prussian career. France
was clearly and incontestably a modern, national state, absolute in its sway as
the Roi Soleil took over the reins in the following year".
A state to be sure but not a 'modern national state' - rather a 'kingly' state.
"The contrast is not so striking, perhaps, in the economic as in the
political field. For the growing forces of capitalism extended their sway
throughout the period, as they had done before and continued to do
Friedrich notes, however, that the locus of expanding capitalistic economy did
shift from the old dominant cities from Venice and Augsburg and Cologne to the
growing centers of England and Netherlands and France as "the universally
regarded focal points of European economic life". "The joint stock
company, though well under way in 1610, was by 1660 becoming the pacemaker of
economic progress, while mercantilism had achieved pretty universal acceptance
as the sound policy of increasing 'the wealth of nations'".
"The revolution of political and economic thought and action is all
symbolized in the word and concept of the 'state'". "While in 1606
Knolles could still translate Bodin's famous six books on the 'republic' as a
work dealing with the problems of 'commonwealth', in England as on the
continent it was the state that was acknowledged in 1660 to be the triumphant
form of political organization. When Samuel Pufendorf, disguised as Monzambano,
described the remnants of the empire as a monstrosity, he was applying the
standards of 'reason of state'".
Yes indeed. but read Bobbitt's discussion of Pufendorf as the champion of the
'kingly state'. And 'reason of state' dated already back to 1500 Italy. So
Friedrich is a bit late on the origin of the concept of 'state' but also a bit
early in terming it a 'nation state'.
"It was not until after 1660 that the full significance of vital
statistics was appreciated by those who concerned themselves with the new
national states. Hence, in spite of the great stress laid by the mercantilists
upon the interrelation between population and general prosperity, our knowledge
in matters of population is inferential rather than based upon statistical data
in the modern sense".
III Commerce and Finance;
"As already indicated, trade routes underwent a steady change during the
first half of the seventeenth century. The United Provinces forged ahead
against Spain, while Britain grew strong enough under the Protectorate to
challenge the Dutch successfully in the first national trade war of modern
history. Meanwhile the financing of these ever-widening commercial activities
likewise passed from Italian and German into Dutch and British hands".
"Sombart has asserted that 'the modern state emerged from the silver mines
of Mexico and Peru and the gold mines of Brazil'; while this may be considered
as exaggeration, the great influx of precious metals undoubtedly played a
significant role, and occasionally the capture of treasure fleets vitally
affected the course of events, as will be described in later chapters".
"Besides this overseas trade, there was of course a great deal of exchange
trade going on throughout Europe. The seventeenth century is, of course, the
heyday of the trading companies, merchant adventurers and the like".
"While these commercial organizations were getting under way, backed as
they were by the rising national states, it stands to reason that the older
patterns disintegrated". "That the masters of the great territorial
states, like France and England, should seek to free themselves of 'foreign'
dependence, such as their financing by Florentine and German bankers, is rather
"The ever-increasing need for funds to carry on the wars had obliged the
princes to go to these early capitalists and bankers for help. But in our
period, these requirements became so large that the shrinking resources of
houses like the Fuggers were no longer able to meet them. What happened in our
period was that the state itself became the source of credit, rather than the
financial houses who had hitherto loaned funds".
Indeed, the 'state' was conceived for the financial purpose for funding the
waging of war. First the princes and cities relied on this to justify seeking
such financing, and then the kings took over and used the 'state' itself as
their mechanism for extracting finances from their own populations.
"The one really sound state, from a financial standpoint, was the
Netherlands. Here, in a merchants' oligarchy, the state dealt directly with the
lenders. Besides, the Bank of Amsterdam, founded in 1609 and following the
Italian patterns. provided a remarkably steady management for the currency
resources of the country. Throughout our period, this great bank was the
financial center of northern Europe".
"The Bank of Amsterdam also developed a thriving exchange which, while
much concerned with the trade in various goods, also started the trade in the
stock of joint stock companies. London followed suit later; in both cases the
development of these exchanges became a mighty factor in the expansion of the
capital market and an extension of the credit system, both public and private.
It is challenging to reflect upon the interrelationship between these thriving
business marts and the 'golden age' of Dutch art and culture".
IV Industry and Agriculture;
"It may seem strange to link industry and agriculture, since it has been
customary, in view of the industrial revolution, to treat these two realms of
economic activity as strictly antithetical. But in the period here under
consideration, both appeared so closely bound up with each other as the
country's productive base, that they were often treated together by writers in
the mercantilist tradition". "Production increased slowly, but
steadily, throughout the period from 1610 - 1660, in the advancing nations,
while in Germany and Spain it fell off quite markedly".
"A slow extension of the factory system took place; for it must not be
supposed that the factory had to await the machine; since times immemorial,
especially in antiquity, large numbers of workers had been gathered in one
place of productive effort. Not only in textiles, but in numerous other lines,
the 'spirit of capitalism' made itself felt in the setting up of larger
industrial establishments. Printing works, sawmills, sugar refineries,
breweries, distilleries, soap-boiling and candle-making works. tanneries,
various chemical and dyestuff works, as well as the finishing processes in the
textile field, like dyeing and fulling, were among those which profited from
"It is curious how relatively limited a role inventions and innovations
played in the industrial advance during this period".
"Not infrequently, the innovations which as ingenious inventor had made
available, like the ribbon loom were actually forbidden by the authorities, as
depriving men of their living, being 'devilishe invention'. So advanced a
nation as the Dutch repeatedly restricted its use during our period. Finally
the desire of the authorities to develop manufactures took the form of
forbidding the export of particular raw materials; thus England throughout the
period maintained strict laws against the export of wool".
Dr. Friedrich continues with more details on industry and agriculture.
V Mercantilism as a System of Power;
"All these varied activities wee encompassed within the set of economic
and political doctrines which became known as mercantilism. As the name
suggests, by mercantilism is understood a welter of ideas about how to organize
commerce; commerce however was very broadly interpreted to mean economic
activity in general. There has been a great deal of controversy about the true
meaning of mercantilism, as there were many arguments among those who expounded
Dr. Friedrich discusses these various ideas and concludes: "With that
ultimate power objective clearly in one's mind, one can say that 'national
wealth through the regulation and protection of commerce' was the mercantilist
"Mercantilism is what one might call' cash box thinking' and indeed the
mercantilists became unduly preoccupied with the gathering of 'treasure', more
especially gold and silver". "Having witnessed the decisive effect of
gold upon the fate of governments, it is understandable that mercantilist
writers should have concentrated upon how to acquire gold or its equivaments as
the prince's main concern".
VI The State versus the Estates;
"None of these economic doctrines are really comprehensible unless they
are viewed against the background of political thought about the state itself.
Such political theory in turn calls for a brief sketch of the institutional
evolution which it sought to rationalize and for which it set the frame".
Dr. Friedrich discusses the authors and their literature relating to the
concept of the 'state' and its legitimacy itself and the legitimacy of its
actions. He includes the theorists on which Bobbitt focuses in his treatment of
VII The Law of Nature and the Laws of Nature, Althsius and Grotius;
VIII State and Sovereignty;
IX Thomas Hobbes: Philosopher of Power;
X English Constitutional Ideas: Milton and Harrington;
XI The Bourgeois Element;
"Contract is an idea intimately linked with the life and work of the
trading middle classes; it is a symbol of the shop. Hence it was well suited to
serve as an idea of great potency in the circles in which political thought was
being secularized throughout this age. It is noteworthy that the four leading
thinkers whom we have mainly considered here were all commoneres. Althusius was
German, Grotius was of the Dutch commercial aristocracy. Hobbes, was connected
with the mercantile development of London, Spinoza also belonged to Dutch city
"These writers were members of the bourgeoisie, of the capitalist middle
class which in this period occupied, politically speaking, a varying
position". "It was undoubtedly a part of this bourgeois spirit of the
newer political thought, secularized and urban in its orientation, that it
tended to eliminate the church from any role in the political sphere".
"Who is to say whether the modern state emerged in this period because
some of its most striking representatives were filled with this sense of power,
or whether they were filled with this sense of power because the modern state