the seventeenth and eighteenth centuries, in France, Holland, and England.  The regulation before attempted by towns and villages was employed on a larger scale by national governments with their industrial systems.  The colonies in America were used for the economic ends of the “mother country” and for the selfish interests of the home merchants in Europe.  The American Revolution was one of the bitter fruits of the English policy of trade restriction.

Sec. 13. #Adam Smith’s influence#.  “The Wealth of Nations,” the first great work on political economy, was published in the year 1776.  That was the “psychological moment” for its appearance, as public thought was so prepared for it that it had its maximum possible influence.  The year of the American Declaration of Independence gave the most striking object lesson on the evils of a selfish colonial policy that interfered on a grand scale with economic freedom.  The old customs had become ill fitted to life, ill adapted to the rapid industrial changes that were going on.  What was needed in many directions, both in politics and in industry, was merely negative action by the government, the repeal of the old laws, the overthrow of old abuses.  The French Revolution, following a few years later, emphasized this thought in the political field.  The philosophers of the time believed in a “natural law” in industry and politics.  The reformers of the time wished to throw off the trammels of the past and to give men opportunity to exert themselves “naturally.”  In America the old abuses never had taken deep root, as the conditions of a new continent were not favorable to monopoly and privilege.  Altho the movement for the repeal of medieval laws has continued in Europe from 1776 till the present time, yet custom still is stronger to-day in Europe than in America.  Serfdom was not abolished until the first half of the nineteenth century in Austria and southeastern Europe, and not until the last half in Russia.  Many economic and cultured forces furthered this movement, but the most powerful intellectual force in its favor was the work of Adam Smith.  So strong an impression did Smith’s book make, that in the minds of men “free trade” became almost identical in thought with political economy, whereas that was but the temporary economic problem of the eighteenth century.

Many men then thought that in “free and unlimited competition” had been found a solution of all economic problems for all time.  But soon, it was apparent that it was no such simple and absolute solution.  Indeed many of the present economic problems—­in one sense all of them—­center around this one:  to determine the proper forms and limits of competition.  The varied aspects that this problem takes will appear in every portion of the following pages.