industry greatly increased in size. The economies of organized
wholesale production were soon made apparent; and the tendency to
increase the size of the factory and to amalgamate the various
branches of industry under corporate control has continued to the
present. The complexity of business operations also increased
with the development of transportation and the expansion of the
empire of trade. A world market took the place of the old town
market, and the world market necessitated credit on a new and
infinitely larger scale.

No less important than the revolution in industry was the
revolution in economic theory which accompanied it. Unlimited
competition replaced the state paternalism of the mercantilists.
Adam Smith in 1776 espoused the cause of economic liberty,
believing that if business and industry were unhampered by
artificial restrictions they would work out their own salvation.
His pronouncement was scarcely uttered before it became the
shibboleth of statesmen and business men. The revolt of the
American colonies hastened the general acceptance of this
doctrine, and England soon found herself committed to the
practice of every man looking after his own interests. Freedom of
contract, freedom of trade, and freedom of thought were vigorous
and inspiring but often misleading phrases. The processes of
specialization and centralization that were at work portended the
growing power of those who possessed the means to build factories
and ships and railways but not necessarily the freedom of the
many. The doctrine of laissez faire assumed that power would
bring with it a sense of responsibility. For centuries, the
old-country gentry and governing class of England had shown an
appreciation of their duties, as a class, to those dependent upon