and new economic structures could arise only in oases thus privileged, and not on the broad bases of whole states. So long as this selfish feeling of community within comparatively narrow circles also brought about an energetic movement forward, it justified itself, in spite of a coarseness and violence which we to-day not only disapprove but even scarcely understand:(2*) not until the system began to support an easy luxuriousness and sloth did it degenerate. it had then to be replaced by other mass-psychological elements and processes, and by other social forms and organisation.
Some limitations were, doubtless, always imposed on communal selfishness by the legal and moral ties created by the common life of the church, by the existence of the German empire, and, so far as the rural districts were concerned, by the power of the territorial principalities, which early began to make their appearance. But in the earlier period these limitations were so lax, so meaningless, that they were scarcely regarded, so long as neither empire, church, nor territory had given birth to any economic life of its own or any powerful economic organisation.
With the transformation and enlargement of commerce, the growth of the spirit of union, and the consciousness of interests common to whole districts, with the augmented difficulties in the way of a proper organisation of economic life on the basis merely of town and village interests, and the increasing hopelessness of victory over the anarchy of endless petty conflicts, efforts and tendencies everywhere made their appearance towards some larger grouping of economic forces.
The town-leagues, reaching over the heads of the princes and of the inhabitants of the rural districts, but still maintaining the old, selfish policy towards the country immediately around, aimed at satisfying certain farther-reaching interests and needs of trade; but such an attempt could not permanently succeed. The greater cities sought to widen themselves into territorial.
states by the acquisition of villages, estates, lordships, and country towns. In this the great italian communes succeeded completely, certain Swiss towns and German imperial cities at least in part; some also of the more vigorous Dutch provinces, though they were not so originally, came to be hardly distinguishable from enlarged town-territories. In Germany, however, it was, as a rule, the territorial princedom, founded on the primitive association of the tribe, and, resting on the corporate Estates of communes and knights, which created the new political unit, - a unit which had for its characteristic the association of town and country, the association of a large number of towns on one side, and, frequently, on the other side, of several hundred contiguous square miles of country subject to the same authority During the period from the fifteenth to the eighteenth century, these territories, in constant struggle with other institutions, grew not only into political but also into economic bodies. It was now the territorial organism that carried progress forward, and formed the vehicle of economic and political development. Territorial institutions now became the main matters of importance, just as municipal had been; like them, they found a centre round which to gravitate; and they sought to shut themselves off from the outer world, and to harmonise and consolidate their forces at home. And thus arose an enclosed territorial area of production and consumption, a territorial division of labour, a territorial system of measures and weights and currency, - an independent territorial economic body, which had its own centre of gravity, was conscious of it, and acted as a unit in accordance therewith.
No doubt this policy was pursued with varying vigour and success in the different territories. Where the impulse was given by a highly-developed and all-powerful industrial or commercial town, - as in the cases of Florence, Milan, and Venice,- there we very early find an economic policy pursued with great success; a policy which rose out of the older municipal interests, and which performed wonders. The House of Luxemburg, in Bohemia, and the House of Burgundy, in Flanders and on the lower Rhine, were, also, both of them able at an early period to guide their lands in the direction of a territorial policy on a large scale. But, in Germany, most of the princes were without the extensive dominions necessary for the purpose: in some places the towns, in other the knights, remained outside the new territorial commonweal. The most distinguished princes at the beginning of the sixteenth century, those of the Saxon house, were the lords of lands scattered in fragments all along the military thoroughfare of central Germany, from Hesse to Silesia; and, to make things worse, frequently partitioned these lands among the various branches of the family. And even what one of the Saxon princes happened to rule at any particular time was made up of a number of separate districts, geographically distinct. The situation of the other territories had much the same disadvantages.
