Chapter 21 On the Natural Development of Wealth

The important commerce of a civilized society is the trade between the inhabitants of the cities and the inhabitants of the country.Some of this kind of commerce is the direct exchange of raw products and manufactured products, and some of them are exchanged through the medium of money or banknotes.The country supplies the city with means of subsistence and materials of manufacture, and the city supplies the country dwellers with a part of its manufactures.The city, which no longer produces, nor can reproduce, the means of subsistence, may be said to derive all its wealth and all its means of subsistence from the country.But we should not, on the basis of this, say that the gains of the cities are the losses of the countryside.They have a mutual stake.Here the result of the division of labor, as in other respects, is to benefit the inhabitants of the various occupations on both sides.The country dwellers would rather engage in this exchange than to labor themselves to produce the manufactures they want, because by this exchange they may purchase a greater quantity of manufactures with the produce of a lesser quantity of their own labour.The city is the market for the surplus products of the countryside. What the peasants can't use, they take to the city to exchange for the things they need.The more inhabitants there are in a city, the greater will be the income of its inhabitants, and the greater will be the market for the surplus produce of the country.The wider the market, the better it will be for the people.The corn produced a mile from the city will sell for the same price in the market as that produced twenty miles from the city.But the latter receive a sale which, generally speaking, not only compensates their production and marketing costs, but also furnishes the farmer with the ordinary profit of agriculture.The farmers and cultivators near the cities, therefore, receive from the sale of their corn, not only the ordinary profits of agriculture, but the whole value of the cost of transporting it from distant lands for sale.Moreover, on the purchase price of the things they buy, they save the whole value of the long-distance shipping of those things.Try to compare the cultivation of the various villages near the city with those remote from it, and you will see how the commerce of the cities is to the advantage of the country.Even among all the fallacies that propagate the balance of trade, there is none that dares to say that the trade between town and country is detrimental to the cities or to the countryside.

As the means of subsistence, according to the nature of things, precede conveniences and luxuries, the industry which produces the former must precede that which produces the latter.The cultivation and improvement of the country, which furnishes the means of subsistence, must precede the increase of the town, which furnishes but luxuries and conveniences.The country dwellers must first sustain themselves, and only the products left to sustain the city dwellers.Therefore, we must first increase the surplus of rural products before we can talk about adding cities.But since the means of subsistence of the cities do not have to be supplied to the nearby villages, or even to the villages within the country, but can be brought in from afar, this, though not an exception to the general principle, has made all ages and countries The process of progress and prosperity varies accordingly.

The state of affairs in which the country preceded the city was forced in most countries by necessity, but in all by human nature.So long as man-made institutions do not suppress human nature, cities can never be added beyond what the cultivation and improvement of the country can support until the land within the borders is fully cultivated and improved.If the profits were equal, or nearly equal, the majority would prefer to invest in improving and cultivating land, than in manufactures and foreign commerce.Capital invested in land is more directly scrutinized by the investor himself; his property is less subject to accidents than the capital of a merchant.A merchant's property is not only constantly at risk of storms and waves, but, as a merchant is often obliged to lend credit to exurbs, whose customs and conditions are not familiar, it is also exposed to the still less reliable factors of human folly and injustice.The landlord's capital, on the other hand, may be fixed in improvements to the land, but only with the security which can be obtained as best as humanly possible.Moreover, the beauty of the country scenery, the joy of country life, the tranquility of the country mind, and the independence that the country affords, provided that this independence is not artificially persecuted, have a great fascination for everyone.Cultivation of the land is the original goal of man, so, in all stages of human existence, this primitive occupation will always be loved by mankind.

Without the help of artisans, farming would be inconvenient and intermittent.Farmers often required the services of blacksmiths, carpenters, wheelwrights, plowwrights, masons, bricklayers, tanners, shoemakers, and seamstresses.These craftsmen, on the one hand, because they want to help each other, and on the other hand, because they don't need to have a fixed address like farmers, so they naturally gather together in one place. As a result, a small town or village is formed.Butchers, taverns, bakers, and many other artisans and merchants who were necessary or useful to them in so far as they supplied temporary needs joined in, and the town grew larger and larger.Villagers and citizens serve each other.A town is a bazaar or market to which villagers continually go to exchange their native produce for manufactured goods.It is by means of this exchange that the inhabitants of the city obtain the supply of materials for work and means of subsistence.The quantity of manufactures which they sell to the country-folk governs the quantity of materials and food which they purchase.The increase of their materials and provisions, therefore, can only be increased in proportion to the increase of the country's demand for manufactured goods, and this demand can only be increased in proportion to the development of cultivation and improvement.So, provided that artificial institutions do not disturb the natural tendencies of things, the increase in wealth and size of the towns, in whatever political society, is the result of, and in accordance with, the development of country cultivation and improvement. The ratio increases and expands.

In our North American colonies, where land was uncultivated and readily available, no manufactures for distant sale existed in any town.In North America, the artisan does not think of establishing a factory for the sale of distant trades when he acquires more capital than is required by the business which he pursues, whose purpose is to supply the neighboring villages.He generally prefers to use his surplus funds to buy or improve uncultivated land, and he changes from a mechanic to an agriculturalist.The high wages paid locally to the mechanic, and the comfortable life provided by the mechanic, are not enough to induce him to work for others, and he always prefers to work for himself.In his view, the artisan is the servant of the customer and depends on the customer for his life; as for the farmer who cultivates his own land and obtains food and clothing from the labor of his family, he is the real master and independent of the world.

On the other hand, in countries where all the land is cultivated or not readily available, the capital acquired by the artisans, if it can no longer be invested in the employments which are readily needed in the neighbourhood, the remainder is employed in expanding their trade for sale in distant lands.Blacksmiths will build ironworks, weavers will build linen mills and woolen mills.As time progresses, these various manufacturing industries will slowly carry out a precise division of labor and improve them in various ways.This is easy for everyone to come up with, and there is no need to choose carefully.

Under conditions of equal or nearly equal profits, men, in choosing the means of investment, prefer manufactures over foreign commerce for the same reason that they prefer agriculture over manufactures.The capital of a landowner or farmer is more secure than that of a manufacturer.In the same way, the capital of a manufacturer is more secure than that of foreign trade, because it is always under its own supervision.In any age, and in any society, it is true, the surplus of native produce and manufactures, or those which no one at home wants, must be sent abroad, in exchange for other things which are wanted at home.But it is of little importance that the capital which transports the surplus produce to foreign countries belongs to the country and becomes the property of the foreign country.If the capital of this country is not sufficient for us to cultivate all the land at the same time, and to manufacture all the native products completely, it is also of great interest to the country to have the surplus of the native products of the country transported abroad by foreign capital.For, by virtue of this capital, the whole capital of the country may be invested in more profitable uses.The wealth of China, India, and ancient Egypt fully proves the fact that even though most of the country's export industries are operated by foreigners, the wealth of the people of this country can still reach an extremely high level.If the North American colonies and the West Indian colonies had no foreign capital to export surplus products for them except for their own capital, their progress would have been much slower.

According to the natural tendency of things, the capital of an advanced society is, first of all, thrown in the greater part in agriculture, next in manufactures, and finally in foreign commerce.This order is quite natural; and I believe that in all societies with any number of territories, capital has always been employed to some extent in this order.Some land must be cleared before many cities can be founded; there must be some crude manufactures in the cities before anyone is willing to devote themselves to foreign trade. This natural sequence, though it has taken place to some extent in all progressive societies, appears in many respects to be quite the reverse in the case of the countries of Europe to-day.Their fine manufactures or manufactures suitable for distant sales are mostly brought out by foreign trade.Great improvements in agriculture have also been produced by manufactures and foreign trade.This degenerate sequence against nature is forced by custom.The nature of their former dominion has shaped their customs and customs into such a pattern.Afterwards, this rule changed greatly, but their customs remained little changed.CHAPTER II ON THE ROMAN EMPIRE