The period since the breakdown of the Guilds has been a period of national and international economy. From the point of view of economic organization, it falls into two contrasted halves--a period of State supremacy in which the State assumed the supreme direction of industrial affairs, and a period of State abdication in the nineteenth century, during which there was no collective organization, and economic matters were left to the free play of economic forces working in a _milieu_ of competition. Positively, these two periods stand to each other in sharp contrast; negatively there is a point of close resemblance between them. In neither was there any functional organization co-ordinating and expressing the economic life of the nation. In the first period the State regulated industry as a universal and sovereign authority; in the second period nobody at all was allowed to regulate industry, which was supposed to regulate itself by a sort of pre-ordained harmony of economic law. In both periods the purely economic organizations directed to the performance of specific functions which were characteristic of mediaeval organization had disappeared, or at all events had ceased to be the vital regulating authorities in industrial affairs. Local functional organizations had ceased to be adequate to the task of control; national functional organizations had not yet come into being, or, at all events, had not yet secured recognition. To-day we stand at the beginning of a new period of economic history. The Trade Union movement, created mainly as a weapon of defence, is beginning to challenge capitalist control of industry, and to suggest the possibility of a new form of functional organization adapted to the international economy of the modern world. Already in Russia chaotic but heroic experiments in workers' control are taking place, and, in every country, the minds of the workers are turning to the idea of control over industry as the one escape from the tyranny of capitalism and the wage system. It is, then, of the first importance that, in framing the functional democracy of twentieth-century industry, we should cast back our minds to the functional industrial democracy of the Middle Ages, in order that we may learn what we can from its successes and its failures, and, even more, gain living inspiration from what is good and enduring in the spirit which inspired the men who lived in it and under it. G. D. H. COLE. _November 1918._ CHAPTER I ORIGIN AND GEOGRAPHICAL DISTRIBUTION