A body of institutions, like a living body, begins by passing through a period of formation, growth, and consolidation, after which decay inevitably follows; it becomes feeble, disintegrates, decomposes, and finally dissolves. Death is thus presented as the natural term of life with its constant wear and tear, as the necessary end of the spontaneous development peculiar to living beings. But it is also determined by the pressure of outside forces, by the action of environment. Thus the guild system held within itself elements of dissolution, and at the same time met with destructive forces from without; it declined and decayed under the combined influences of internal and external causes. It seems fitting to begin with the external causes, since these were the most important. In an unchanging environment living beings could exist for long unchanged, but the changes ever at work without hasten changes within, from the very fact that the organism is itself at work. Thus it was that the guilds were first of all affected by the profound changes going on around them. The sphere in which they had to work was both extended and modified. We must follow out the consequences of both these changes. 1. _The Extension of the Market and its Results._--The fifteenth century saw the formation of the great States in Europe. France, which felt herself to be a nation when she was trampled under foot by the English, was the first to become a unity, and for several centuries drew her power and her greatness from the start which she thus gained. Spain was concentrated under the authority of Ferdinand and Isabella. England, worn out after a terrible civil war, found rest under the Tudor dynasty. In Germany, which was still very divided, the Hanseatic League included twenty-four cities. Even in Italy the restless republics, ever jealous of their independence, were absorbed into larger territories and placed under a common supremacy. Everywhere the endless subdivision of the Middle Ages gave place to larger groupings, possessing fuller life and wider interests. Hence a new situation arose for the cities; among those which in every state had up till now been on an equal footing one rose to be the capital, the others, with diminished prestige and importance, were only secondary centres. They also ceased to be islets where the people lived lives apart; from henceforward they formed an integral part of a whole which surrounded them and no longer allowed of a proud isolation; they could no longer treat their neighbours as foreigners or enemies; they found themselves bound together by the necessity of obeying the same laws and the same sovereign.