324 Chapter 17
four, but often more) without pay. Upon the comple-
tion of their training, apprentices became journeymen
and were expected to leave the town of their training
and journey to work for wages with masters in other
towns. The journeyman carried papers identifying him
and his experience, signed by each of the masters for
whom he had worked. Only after several years of such
travels could a craftsman hope for acceptance as the
master of a trade.
Master craftsmen were important figures in a town.
They controlled the guilds and therefore most of the
occupations. Masters were expected to marry and to
lead respectable lives. They usually maintained their
workroom, shop, and residence in the same building.
Women were generally excluded from an independent
role in a guild, but they were an integral part of the
craftsman’s family economy. The wife of a master usu-
ally handled sales in the shop, kept the accounts for her
husband’s business, and managed the household. If a
master died, his widow had the right to keep their
shop, to hire the journeymen to work in it, and to man-
age the business.
The lower rungs of the urban social structure were
domestic servants and the laboring poor. At the begin-
ning of the eighteenth century, domestic service was al-
ready becoming one of the largest sources of
employment for the unskilled. Studies have found that
7 percent of the population of Ypres (Belgium), 15 per-
cent of Münster (western Germany), and 20 percent of
London were working as domestic servants. They
lacked the independence and economic prospects of ar-
tisans, but they escaped from the poverty of unskilled
labor while finding some comfort and security in the
homes of their employers. For unmarried women, do-
mestic service was often the only respectable employ-
ment available.
National Economies: The Doctrine
of Mercantilism
Economicsis an ancient word whose derivation goes back
to Aristotle’s Oikonomia,but economics as a field of
study and theory is a recent development. In the eigh-
teenth century economics in the modern sense formed
a small part of the study called moral philosophy. The
first university professorship in political economy was
created at the University of Naples in 1754, and the
field of political economy (the precursor of modern
economics) chiefly prospered in Scotland under the
leadership of theorists such as Adam Smith, the most
important founder of modern capitalism.
Despite the limited study of political economics
in the Old Regime, governments followed a well-
developed economic philosophy known as the mercan-
tile system. The doctrine of mercantilism did not stress
the predominant feature of the economy of the Old
Regime (agriculture) or the greatest form of wealth of
that world (land). Instead, the mercantile system chiefly
concerned manufactures, trade, wealth in gold and sil-
ver, and the role of the state in encouraging these. The
basic principle of mercantilism was a concept called au-
tarky—the idea that a state should be self-sufficient in
producing manufactured goods and should import as
few foreign goods as possible. Simultaneously, the state
sought export markets for its own goods. To achieve a
favorable balance of trade and the consequent accumu-
lation of wealth in gold required government regulation
of the economy.
An important aspect of the mercantilist regulation
of the economy was state support for manufactures
and commerce. Many governments of the Old
Regime chartered monopolies on the models of the
British East India Company and the Dutch East India
Company. During the 1720s alone, the Austrians
chartered the Ostend Company to control trade with
the Indies, the French merged several trading monop-
olies as the French Indies Company, and the Spanish
gave the Chartered Company of Guipuzcoa (Caracas)
a monopoly of the American trade. The shareholders
in these mercantilist monopolies usually became rich.
The Ostend Company, for example, paid its investors
137 percent interest in its first seven years (nearly
20 percent per annum) while serving the emperor’s in-
terests by reviving the port of Ostend, stimulating
Belgian business, and bringing Austria closer to self-
sufficiency.
The mercantilist practice of creating chartered
companies with protected privileges applied to much
manufacturing in Europe. The French monarchy, for
example, held a state monopoly in tapestries and
porcelain, high-quality manufactures that could be
profitably traded abroad. Prussia created a state tobacco
monopoly and Russia held a state salt monopoly. Many
countries followed the Dutch example by chartering a
national bank similar to the Bank of Amsterdam (1609).
These banks served many important functions, such as
supplying the mint with metals for coinage or provid-
ing the trading monopolies with credit. Parliament
chartered the Bank of England in 1694 and gave it the
privilege of printing paper money in 1718. The French