Licences

But it was not due entirely to the demands of economic life that recourse was had to this very radical and illegal practice, which in many cases was not only tolerated, but actually facilitated by the authorities themselves. This was usually accomplished by means of a system of licences, which assumed larger or smaller dimensions, according to circumstances, but which were almost always of importance. This licence system, therefore, must almost always be taken into account as an ever-present means of circumventing the nominally valid ordinances. The licences undoubtedly often originated in favouritism, bribery, and similar forms of corruption; but not infrequently their origin lay deeper. Partly they were intended to satisfy the insatiable demands of trade, which made themselves felt either within or in opposition to the law, and which, accordingly, it was often considered best to satisfy silently beforehand; but partly also, and at least as often, they arose from the constant need of money on the part of the government. This latter consideration gave rise to what one might call fiscalism, that is, to the tendency to change a policy with a certain economic aim—whether rightly or wrongly conceived—under the pretext of bringing revenue into the coffers of the state. On this rock a great deal of the economic policy of the mercantilist period, to say nothing of that of earlier mediaeval times, had suffered shipwreck; and this, too, was to be of fundamental importance in relation to the Continental System. As a characteristic example of the combined effect of smuggling and the licence system, it may be mentioned that in the last decade of the seventeenth century there were discovered in England traces of a great conspiracy organized to facilitate the importation of prohibited French silks under false or stolen labels of the kind prescribed to indicate the fact that the goods involved had either been imported under licence or else had been manufactured within the country.

The actual intercourse between two countries thus followed a course which diverged considerably from that laid out by their professed policies. But if this was always the case at times of more or less state interference in the economic domain, it was especially the case in the eighteenth century. During that period, in fact, the old policy was exposed to undermining currents flowing from two different quarters, namely, from the general transformation in all conditions of production which had received the nowise exaggerated name of Industrial Revolution, on the one side, and from the new social philosophy which was slowly paving the way for economic liberalism, on the other. Both of these factors were destined gradually to put an end to the old economic order; but in the long run it was the change in the conditions of production that may be said to have exerted the greater influence. In spite of that, however, a direct influence on commercial policy came from the new social philosophy. Curiously enough, this impulse originated in France, where the new ideas were very far from being common property, as the following development should show very clearly. But just as Turgot, in his capacity of minister of finance under the autocratic King Louis XVI, succeeded in 1776 in carrying through a quite revolutionary reform of internal industrial legislation—a reform which by no means had any favourable public opinion behind it—so one of his pupils, as foreign minister, succeeded ten years later in bringing about a change in external trade policy, just because there was no representative assembly to oppose his measures.