The Simplified Wealth of Nations by Adam Smith -- Book 3, Chapter 4b: Dynasties and Natural Development
Chapter 4b: Dynasties and Natural Development
16 Very old families are very rare in commercial countries.
Such are families which have possessed some considerable estate from father to son for many successive generations.
On the contrary, they are very common in countries which have little commerce such as Wales or the highlands of Scotland.
The Arabian histories seem to be all full of genealogies.
There is a history written by a Tartar Khan
It is translated into European languages
It contains nothing else
It is a proof that ancient families are very common in those nations
In countries where a rich man can only spend his revenue in maintaining many people, he is not apt to run out
He is seldom so benevolent as to maintain more than he can afford.
But if he could spend his wealth on his own person, his spending frequently has no limits
His vanity is frequently limitless
In commercial countries, riches very seldom remain long in the same family, despite the most violent laws to prevent their dissipation.
Among simple nations, on the contrary, they frequently do without any laws.
Among nations of shepherds, such as the Tartars and Arabs, the consumable nature of their property renders all such regulations impossible.
17 In this way, the greatest revolution to the public happiness was brought about by two orders of people who did not intend to serve the public.
To gratify the most childish vanity was the sole motive of the great proprietors.
The merchants and artificers were much less ridiculous
They acted merely from a view to their own interest
They pursued their own pedlar principle of turning a penny wherever a penny was to be got.
Neither of them had knowledge or foresight of that great revolution that was gradually being brought about by:
the folly of the proprietors
the industry of the merchants
18 Thus through most of Europe, the commerce and manufactures of cities caused the improvement and cultivation of the country, instead of being its effect.
19 This order was contrary to the natural course of things
It is slow and uncertain.
Compare the slow progress of those European countries with the rapid advances of our North American colonies.
The wealth of European countries depends very much on their commerce and manufactures
The wealth our North American colonies is founded in agriculture.
The population in Europe is not supposed to double in less than 500 years.
In our North American colonies, the population doubles in 20 or 25 years.
In Europe, the law of primogeniture and perpetuities prevent the division of great estates.
They hinder the multiplication of small proprietors.
A small proprietor is generally the most industrious, intelligent, and successful of all improvers if:
He knows every part of his little territory
He views it all with the affection small property naturally inspires
He takes pleasure in cultivating and adorning it
The same regulations keep so much land out of the market that:
There are always more capitals to buy than there is land to sell
The land sold always sells at a monopoly price.
The rent never pays the interest of the purchase-money
It is burdened with repairs and other charges which the interest of money is not liable.
"To purchase land is everywhere in Europe a most unprofitable employment of a small capital."
For the sake of superior security, a man of moderate circumstances who retires from business, will sometimes choose to lay out his little capital in land.
A man of profession too, whose revenue is derived from another source, often secures his savings in the same way.
But a young man must bid farewell forever to great fame and fortune if he employs his capital of £2,000-3,000 to buy and cultivate a small piece of land, instead of using it for business or some profession, where he can have the same chance of acquiring fortune as other people.
He might live very happily and very independently with his small land.
He will often disdain to be a farmer
But he cannot aspire at being a proprietor
The small quantity of land brought to market at a high price prevents capitals from being employed in its cultivation and improvement.
In North America, £50 or £60 is often enough to begin a plantation.
The purchase and improvement of uncultivated land is there the most profitable employment of the smallest and the greatest capitals.
It is the most direct road to all the fame and fortune which can be acquired in that country.
In North America, such land can be had for almost nothing or at a price much below the value of the natural produce
This price is impossible in Europe or in any country where all lands have long been private property.
"If estates were divided equally among all the children upon the death of any proprietor who left a numerous family, the estate would generally be sold."
"So much land would come to market that it could no longer sell at a monopoly price."
"The free rent of the land would go nearer to pay the interest of the purchase-money,"
A small capital might be employed in purchasing land as profitably as in any other way.
20 England is perhaps as well fitted by nature as any large European country to be the seat of foreign commerce, manufactures for distant sale, and all improvements because of:
The natural fertility of the soil
The great extent of the sea-coast in proportion to the whole country
Its many navigable rivers which allow water carriage to its most inland parts.
From the beginning of the reign of Elizabeth, the English legislature has been peculiarly attentive to the interests of commerce and manufactures
There is no other country in Europe, Holland itself not excepted, which laws are more favourable to commerce and manufactures.
Commerce and manufactures have been continually and rapidly advancing during all this period.
The cultivation and improvement of the country has been gradually advancing too.
But it seems to have followed more slowly and at a distance.
Most of the country must probably have been cultivated before the reign of Elizabeth
Most of it still remains uncultivated or inferiorly cultivated to what it might be.
The law of England, however, favours agriculture indirectly by the protection of commerce and directly through encouragements.
Except in times of scarcity, the exportation of corn is free and encouraged by a bounty.
In times of moderate plenty, the importation of foreign corn is loaded with duties that equals a prohibition.
The importation of live cattle, except from Ireland, is prohibited at all times
It was only lately that it was permitted
Those who cultivate the land have a monopoly against their countrymen for bread and meat.
Bread and meat are the two greatest and most important produce of land.
These encouragements demonstrate the good intention of the legislature to favour agriculture
Though these encouragements are at the bottom and perhaps illusory as I shall show hereafter.
More importantly, they make the yeomanry of England as secure, independent, and respectable as possible under the law.
No country can give more encouragement to agriculture than England if that country:
Has the right of primogeniture
Admits perpetuities which are contrary to the spirit of the law
Despite these, England's cultivation is better.
What would Englahd's state of cultivation have been if the law did not directly encourage agriculture besides what arose indirectly from the progress of commerce and left the yeomanry in the same condition as in most European countries?
It is now more than 200 years since the beginning of the reign of Elizabeth
200 years is long as human prosperity usually endures.
21 France had a considerable share of foreign commerce a century before England was a distinguished commercial country.
The marine of France was considerable before the expedition of Charles VIIIth to Naples.
The cultivation and improvement of France is inferior to that of England.
The law of the country has never given the same direct encouragement to agriculture.
22 The foreign commerce of Spain and Portugal to the other parts of Europe, carried on in foreign ships, is very considerable.
That to their commerce to their colonies is carried on in their own, and is much greater, on account of the great riches and extent of those colonies.
But it has never introduced any manufactures for distant sale into those countries
Most of both still remains uncultivated.
The foreign commerce of Portugal is older than any great European country, except Italy.
23 Italy is the only great European country which seems to have been cultivated and improved in every part by means of foreign commerce and manufactures for distant sale.
According to Guicciardin that before the invasion of Charles 8th, Italy was cultivated not less in the most mountainous and barren parts of the country than in the plainest and most fertile.
The advantageous situation of the country and the great number of independent states which subsisted in it probably contributed to this general cultivation.
It is possible too, that Italy was at that time not better cultivated than England is at present.notwithstanding this general expression of one of the most judicious and reserved of modern historians,
24 The capital by commerce and manufactures is all a very precarious and uncertain until some part of it has been secured and realized in the cultivation and improvement of its lands.
A merchant is not the citizen of any particular country.
He is indifferent on from where he carries on his trade
He will remove his capital and all the industry it supports, from one country to another with very little disgust.
No part of it can belong to any particular country, until it has been spread in that country, in buildings or in the improvement of lands.
No vestige remains of the great wealth of the Hans towns except in the obscure histories of the 13th and 14th centuries.
It is even uncertain where some of them were situated or to what European towns their Latin names belong.
The misfortunes of Italy in the 15th and 16th centuries greatly reduced the commerce and manufactures of Lombardy and Tuscany.
Those countries however still continue to be among the most populous and best cultivated in Europe.
"The civil wars of Flanders and the Spanish government which succeeded them, chased away the great commerce of Antwerp, Ghent, and Bruges."
Flanders still continues to be one of the richest, best cultivated, and most populous provinces of Europe.
The ordinary revolutions of war and government easily dry up the sources of commercial wealth.
The wealth from agricultural improvements is much more durable
It can only be destroyed by more violent convulsions of hostile and barbarous nations for one or two centuries.
Such as those before and after the fall of the Western Roman empire.