ABSTRACT

The first is government action which, though I quite agree with Marx in holding that politics and policies are not independent factors but elements of the social process we are analyzing, may be considered as a factor external to the world of business for the purposes of this argument. The period from about 1870 to 1914 presents an almost ideal case. It would be difficult to find another equally free from either the stimuli or the depressants that may proceed from the political sector of the social process. The removal of the fetters from entrepreneurial activity and from industry and trade in general had largely been accomplished before. New and different fetters and burdens-social legislation and so on-were being imposed, but nobody will hold that they were major factors in the economic situation before 1914. There were wars. But none of them was economically important enough to exert vital effects one way or another. The Franco-German war that issued in the foundation of the German Empire might suggest a doubt. But the economically relevant event was after all the foundation of the Zollverein. There was armament expenditure. But in the circumstances of the decade ending in 1914 in which it assumed really important dimensions, it was a handicap rather than a stimulus.