Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: 55 CHAPTER V. THIRD MODERN PHASE: SYSTEM OF NATURAL LIBERTY. The changes introduced during the third phase in the in- ternal organisation of the industrial world were (1) the more complete separation of banking from general commerce, and the wider extension of its operations, especially through the system of public credit; and (2) the great development of the use of machinery in production. The latter did not become very prominent during the first half of the eighteenth century. Whilst tending to promote the dignity of the working classes by relieving them from degrading and exhausting physical labour, it widened the gulf between them and the capitalist employers. It thus became plain that for the definitive constitution of in- dustry a moral reform was the necessary preliminary condition. With respect to the political relations of industry, a remarkri able inversion now showed itself. The systematic encourage- ments which the European Governments had extended to it in the preceding phase had been prompted by their desire to use it.as an instrument for achieving the military superiority which was the great end of their policy. Now, on the contrary, the military spirit subordinated itself to the industrial, and the armies and the diplomacy of governments were placed / at the service of commerce. The wars which filled a large part of the eighteenth century were essentially Commercial wars, arising out of the effort to sustain or extend the colonial establishments founded in the previous phase, or to deprive rival nations of the industrial advantages connected with the possession of such establishments. This change of attitude, notwithstanding its deplorable tendency to foster international enmities and jealousies, marked a real and important progress by pointing to... --This text refers to the Paperback edition.