Chapter 1: Natural economic development
The great commerce of every civilized society is the one done between the people of the town and those of the countryside.
- It consists in the exchange of rude for manufactured produce either immediately or with money or some paper which represents money.
- The countryside supplies the town with the means of subsistence and raw materials.
- The town repays this supply by sending back manufactured produce.
- The town cannot reproduce raw materials.
- It gains its whole wealth and subsistence from the countryside.
- The gain of the town, however, is not the loss of the country.
- "The gains of both are mutual and reciprocal"
- The division of labour is, as in all other cases, advantageous to all persons employed in it.
- The people of the countryside purchase more manufactured goods from the town with the produce of less labour of their own had they attempted to prepare those goods themselves.
- The town affords a market for the surplus produce of the countryside.
- The surplus produce of the country is what is over and above the maintenance of the cultivators.
- In towns, the inhabitants of the country exchange it for something else which is in demand among them.
- The more the people and revenue of the town, the more extensive and advantageous is its market for those of the countryside.
- The corn which grows within a mile of the town sells for the same price with corn that comes 20 miles away.
- But the price of distant corn must pay for transportation costs in addition to the cost of raising it with its ordinary profits to the farmer.
- Any rural area near a big town benefits more from that town's commerce than more distant rural areas.
- This is proven by its cultivation.
- The proprietors of these areas near the town do not have to pay high transportation costs.
- The balance of trade has created the most absurd speculations:
- That the countryside loses by its commerce with the town or
- The town loses by its commerce with the countryside which maintains it
2 Subsistence is prior to convenience and luxury.
- The industry which procures subsistence must be prior to the industry which procures luxury.
- The improvement of the countryside which affords subsistence, must be prior to the increase of the town.
- The town furnishes only convenience and luxury.
- Only the surplus produce of the countryside makes up the subsistence of the town.
- The subsistence of the town can increase only with the increase of this surplus produce.
- The town may not always derive its whole subsistence from nearby areas or even from its own province, but from very distant provinces.
- This has created considerable variations in the progress of opulence in different ages and nations.
Man's natural inclinations promotes that order of things in every country.
- If human institutions never thwarted those natural inclinations, the towns could not have increased beyond what could be supported by the improvement of their territory.
- Upon equal profits, most men will choose to improve land than doing manufactures or foreign trade.
- The man who employs his capital in land has more of it under his view and command.
- His fortune is much less liable to accidents than the trader.
- The trader is frequently obliged to commit his own fortune to uncertainty caused by mother nature and by human injustice.
- He gives great credits to men whom he is not thoroughly acquainted with in distant countries.
- The capital of the landlord, on the contrary, is fixed and well-secured in the improvement of his land.
- The land attracts everybody through:
- The beauty of the country
- The pleasures of a country life
- The tranquillity of mind it promises
- The independence it affords
- Cultivation of land was the original destination of man.
- All through one's life, we retain a predilection for this primitive employment.
Without the assistance of some artificers, land cultivation cannot be done without great inconvenience and continual interruption.
- The farmer frequently needs the service of smiths, carpenters, wheel-wrights, and plough-wrights, masons, and bricklayers, tanners, shoemakers, and tailors.
- Such artificers stand in need of one another.
- Their residence is not tied down to a precise spot.
- They settle near each other and form a small town.
- The butcher, the brewer, and the baker soon join them.
- Many other useful artificers and retailers join them for supplying their wants.
- They contribute still further to increase the town.
- The townspeople and those of the countryside are mutually the servants of one another.
- The town is a continual market where those from the countryside exchange their rude for manufactured produce.
- This commerce supplies the townspeople with subsistence and raw materials for their work.
- The amount of finished work the town sells to the countryside regulates how many materials and provisions the town buys.
- The employment and subsistence of the town can only be increased by the demand from the countryside for finished work.
- This demand for finished work can be increased only in proportion to the extension of improvement and cultivation.
- Had human institutions never disturbed the natural course of things, the progressive wealth and increase of the towns would be consequential and in proportion to the improvement and cultivation of the countryside.
In our North American colonies, uncultivated land is still available on easy terms.
- No manufactures for distant sale have ever been established in any town.
- When a North American artificer has more stock than needed for supplying the neighbouring countryside, he uses it to purchase and improve uncultivated land.
- He does not use it to establish a manufacture for distant sale.
- From artificer he becomes planter.
- He cannot be bribed by the the large wages or the easy subsistence artificers get from the countryside to work for other people.
- He feels that an artificer is the servant of his customers from whom he gets his subsistence.
- A planter who cultivates his own land derives his subsistence from the labour of his own family.
- A planter is really a master and independent of all the world.
On the contrary, in countries where there is no uncultivated land or none that can be had easily, every artificer with extra stock endeavours to use it for more distant sale.
- The smith starts an iron works.
- The weaver starts a linen or woollen factory.
- Those manufactures become gradually more subdivided, improved, and refined in very obvious ways that it is not necessary to explain any further.
Manufactures are naturally preferred to foreign commerce, upon equal profits, for the same reason that agriculture is naturally preferred to manufactures.
- The landlord or farmer's capital is more secure than that of the manufacturer.
- The manufacturer's capital, which is in always in view, is more secure than the capital of the foreign merchant.
- The surplus of rude and manufactured produce with no demand at home must be exchanged abroad for something in demand at home.
- It is not important whether the capital which exports this surplus is a foreign or domestic capital.
- If the society has insufficient capital to cultivate all its lands and to completely process all its rude produce, there is even a big advantage that its rude produce should be exported by a foreign capital.
- This will allow the whole stock of society to be employed for more useful purposes.
- The wealth of ancient Egypt, China, and India demonstrate that a nation may be very opulent even though foreigners carry most of its exportation.
- The progress of our North American and West Indian colonies would have been much less rapid if they used their own capital to export their own surplus produce.
Most of the capital of every growing society is naturally directed:
- First, to agriculture
- Afterwards to manufactures
- Last to foreign commerce.
This order is so very natural that I believe it has been observed to some degree in every society.
- Their lands must have been cultivated before any considerable towns could be established
- Some coarse manufacturing must have been carried on in those towns before they could think of employing themselves in foreign commerce.
Though this natural order must have taken place in some degree in every society, it was entirely inverted in all modern European states.
- The foreign commerce of some of their cities introduced fine manufactures for distant sale.
- The manufactures and foreign commerce created agricultural improvements.
- The manners introduced by their original government remained after that government was greatly altered
- These manners forced those states into this unnatural and retrograde order.
Next: Chapter 2: Land engrossment