The old handicraft (Handwerk) began to convert itself into a domestic industry (Hausindustrie); the old staple trade, carried on in person by the travelling merchants, began to assume its modern shape with agents, commission dealers, and speculation.

These forces all converging impelled society to some large economic reorganisation on a broader basis, and pointed to the creation of national states with a corresponding policy. Germany itself had made a brilliant start in many respects, - in the matter of traffic, of manufacturing processes and division of labour, and even in its foreign trade but neither its imperial or Hanseatic cities, nor, as a rule, its territorial states, were capable of making the most of it. Still less did the imperial power know how to set about the great task of the economic consolidation of the empire which was now so urgently called for:

in the sixteenth century it was exclusively occupied in the maintenance of the religious peace; in the seventeenth century it was altogether subservient to the Austrian and Catholic policy of the Hapsburg dynasty. England's cloths were flooding the German market. Sweden and Denmark were organising themselves as maritime and commercial powers: Spain, Portugal, and Holland divided the colonial trade between themselves. Everywhere, save in Germany, economic bodies were stretching out and becoming political;everywhere new state systems of economy and finance were arising, able to meet the new needs of the time. Only in our Fatherland did the old economic institutions become so petrified as to lose all life; only in Germany were the foreign trade, the manufacturing skill, the supply of capital, the good economic usages, connections and traditions, which the country had possessed up to I62O, more and more completely lost.