Essai sur la Nature du Commerce in Général (Essay on the Nature of Trade in General)
Part I, Chapter VII
The Labour of the Husbandman is of less Value than that of the Handicrafts-Man
A Labourer's Son at seven or twelve years of age begins to help his Father either in keeping the Flocks, digging the ground, or in other sorts of Country Labour which require no Art or Skill.
If his Father puts him to a Trade he loses his Assistance during the Time of his Apprenticeship and is necessitated to cloath him and to pay the expenses of his Apprenticeship for some years. The Son is thus an expense to this Father and his Labour brings in no advantage till the end of some years. The [working] life of Man is estimated but at 10 or 12 years, and as several are lost in learning a Trade most of which in England require seven years of Apprenticeship, a Husbandman would never be willing to have a Trade taught to his Son if the Mechanics did not earn more than the Husbandmen.
Those who employ Artisans or Craftsmen must needs therefore pay for their labour at a higher rate than for that of a Husbandman or common Labourer; and their labour will necessarily be dear in proportion to the time lost in learning the trade and the cost and risk incurred in becoming proficient.
The Craftsmen themselves do not make all their Children learn their own mystery: there would be too many of them for the needs of a City or a State; many would not find enough work; the work, however, is naturally better paid than that of Husbandmen.
Part I, Chapter VIII
Some Handicrafts-Men earn more, others less, according to the different Cases and Circumstances
Supposing two Tailors make all the cloaths of a Village, one may have more customers than the other, whether from his mode of attracting business, or because he works better or more durably than the other, or follows the fashions better in the cut of the garments.
If one dies, the other finding himself more pressed with work will be able to raise the price of his labour, giving some customers a preference in point of expedition to others, till the Villagers find it to their advantage to have their cloaths made in another Village, Town, or City losing the time spent in going and returning, or till some other Tailor comes to live in their Village and to share in the business of it.
The Crafts which require the most Time in training or most Ingenuity and Industry must necessarily be the best paid. A skillful Cabinet-Maker must receive a higher price for his work than an ordinary Carpenter, and a good Watchmaker more than a Farrier.
The Arts and Crafts which are accompanied by risks and dangers like those of Founders, Mariners, Silver miners, etc. ought to be paid in proportion to the risks. When over and above the dangers skill is needed they ought to be paid still more, e.g. Pilots, Divers, Engineers, etc. When Capacity and trustworthiness are needed the labour is paid still more highly, as in the case of Jewellers, Bookkeepers, Cashiers and others.
By these examples and a hundred others drawn from ordinary experience it is easily seen that the difference of price paid for daily work is based upon natural and obvious reasons.
Part I, Chapter IX
The Number of Labourers, Handicraftsmen and others, who work in a State is naturally proportioned to the Demand for them
If all the Labourers in a Village breed up several Sons to the same work there will be too many Labourers to cultivate the Lands belonging to the Village, and the surplus Adults must go to seek a livelihood elsewhere, which they generally do in Cities: if some remain with their Fathers, as they will not all find sufficient employment they will live in great poverty and will not marry for lack of means to bring up children, or if they marry, the children who come will soon die of starvation with their Parents, as we see every day in France.
Therefore if the Village continue in the same situation as regards employment, and derives its living from cultivating the same portion of Land, it will not increase in population in a thousand years.
The Women and Girls of this Village can, it is true, when they are not working in the fields, busy themselves in spinning, knitting or other work which can be sold in the Cities; but this rarely suffices to bring up the extra children, who leave the Village to seek their fortune elsewhere.
The same may be said of the Tradesmen of a Village. If a Tailor makes all the cloaths there and breeds up three Sons to the same trade, as there is but work enough for one successor to him the two others must go to seek their livelihood elsewhere: if they do not find enough employment in the neighbouring Town they must go further afield or change their occupations to get a living and become Lackeys, Soldiers, Sailors, etc.
By the same process of reasoning it is easy to conceive that the Labourers, Handicraftsmen and others who gain their living by work, must proportion themselves in number to the employment and demand for them in Market Towns and Cities.
But if four Tailors are enough to make all the cloaths for a Town and a fifth arrives he may attract some custom at the expense of the other four; so if the work is divided between the five Tailors neither of them will have enough employment, and each one will live more poorly.
It often happens that Labourers and Handicraftsmen have not enough employment when there are too many of them to share the business. It happens also that they are deprived of work by accidents and by variations in demand, or that they are overburdened with work according to circumstances. Be that as it may, when they have no work they quit the Villages, Towns or Cities where they live in such numbers that those who remain are always proportioned to the employment which suffices to maintain them; when there is a continuous increase of work there is gain to be made and enough others arrive to share in it.
From this it is easy to understand that the Charity-Schools in England and the proposals in France to increase the number of Handicraftsmen, are useless. If the King of France sent 100,000 of his Subjects at his expense into Holland to learn Seafaring, they would be of no use on their return if no more Vessels were sent to Sea than before. It is true that it would be a great advantage to a State to teach its Subjects to produce the Manufactures which are customarily drawn from abroad, and all the other articles bought there, but I am considering only at present a State in relation to itself.
As the Handicraftsmen earn more than the Labourers they are better able to bring up their children to Crafts; and there will never be a lack of Craftsmen in a State when there is enough work for their constant employment.
Part I, Chapter X
The Price and Intrinsic Value of a Thing in general is the measure of the Land and Labour which enter into its Production
One Acre of Land produces more Corn or feeds more Sheep than another. The work of one Man is dearer than that of another, as I have already explained, according to the superior Skill and Occurrences of the Times. If two Acres of Land are of equal goodness, one will feed as many Sheep and produce as much Wool as the other, supposing the Labour to be the same, and the Wool produced by one Acre will sell at the same Price as that produced by the other.
If the Wool of the one Acre is made into a suit of coarse Cloth and the Wool of the other into a suit of fine Cloth, as the latter will require more work and dearer workmanship it will be sometimes ten times dearer, though both contain the same quantity and quality of Wool. The quantity of the Produce of the Land and the quantity as well as the quality of the Labour, will of necessity enter into the Price.
A pound of Flax wrought into fine Brussels Lace requires the Labour of 14 persons for a year or of one person for 14 years, as may be seen from a calculation of the different processes in the Supplement, where we also see that the price obtained for the Lace suffices to pay for the maintenance of one person for 14 years as well as the profits of all the Undertakers and Merchants concerned.
The fine steel spring which regulates an English Watch is generally sold at a price which makes the proportion of material to Labour, or of Steel to Spring, one to one million*3 so that in this case labour makes up nearly all the value of the spring. See the calculation in the Supplement.
On the other hand the price of the Hay in a Field, on the spot, or a Wood which it is proposed to cut down, is fixed by the matter or produce of the Land, according to its goodness.
The price of a pitcher of Seine Water is nothing, because there is an immense supply which does not dry up; but in the Streets of Paris people give a sol for it—the price or measure of the Labour of the Water-carrier.
By these examples and inductions it will, I think, be understood that the Price or intrinsic value of a thing is the measure of the quantity of Land and of Labour entering into its production, having regard to the fertility or produce of the Land and to the quality of the Labour.
But it often happens that many things which have actually this intrinsic value are not sold in the Market according to that value: that will depend on the Humours and Fancies of men and on their consumption.
If a gentleman cuts Canals and erects Terraces in his Garden, their intrinsic value will be proportionable to the Land and Labour; but the Price in reality will not always follow this proportion. If he offers to sell the Garden possibly no one will give him half the expense he has incurred. It is also possible that if several persons desire it he may be given double the intrinsic value, that is twice the value of the Land and the expense he has incurred.
If the Farmers in a State sow more corn than usual, much more than is needed for the year's consumption, the real and intrinsic value of the corn will correspond to the Land and Labour which enter into its production; but as there is too great an abundance of it and there are more sellers than buyers the Market Price of the Corn will necessarily fall below the intrinsic price or Value. If on the contrary the Farmers sow less corn than is needed for consumption there will be more buyers than sellers and the Market Price of corn will rise above its intrinsic value.
There is never a variation in intrinsic values, but the impossibility of proportioning the production of merchandise and produce in a State to their consumption causes a daily variation, and a perpetual ebb and flow in Market Prices. However in well organized Societies the Market Prices of articles whose consumption is tolerably constant and uniform do not vary much from the intrinsic value; and when there are no years of too scanty or too abundant production the Magistrates of the City are able to fix the Market Prices of many things, like bread and meat, without any on having cause to complain.
Land is the matter and Labour the form of all produce and Merchandise, and as those who labour must subsist on the produce of the Land it seems that some relation might be found between the value of Labour and that of the produce of the Land: this will form the subject of the next chapter.
Notes for this chapter
The Essai says "un à un"—a printer's error, or a slip of the pen. Postlethwayt has "one million." See post, p. 385.
End of Notes
Part I, Chapter XI
Of the Par or Relation between the Value of Land and Labour
It does not appear that Providence has given the Right of the Possession of Land to one Man preferably to another: the most ancient titles are founded on Violence and Conquest. The Lands of Mexico now belong to the Spaniards and those at Jerusalem to the Turks. But howsoever people come to the property and possession of Land we have already observed that it always falls into the hands of a few in proportion to the total inhabitants.
If the Proprietor of a great Estate keeps it in his own hands he will employ Slaves or free men to work upon it. If he has many Slaves he must have Overseers to keep them at work: he must likewise have Slave craftsmen to supply the needs and conveniencies of life for himself and his workers, and must have trades taught to others in order to carry on the work.
In this oeconomy he must allow his Labouring Slaves their subsistence and wherewithal to bring up their Children. The Overseers must allow Advantages proportionable to the confidence and authority which he gives them. The Slaves who have been taught a craft must be maintained without any return during the time of their Apprenticeship and the artisan Slaves and their Overseers who should be competent in the crafts must have a better subsistence than the labouring Slaves, etc. since the loss of an Artisan would be greater than that of a Labourer and more care must be taken of him having regard to the expense of training another to take his place.
On this assumption the labour of an adult Slave of the lowest class is worth at least as much as the quantity of Land which the Proprietor is obliged to allot for his food and necessaries and also to double the Land which serves to breed a Child up till he is of age fit for labour, seeing half the children that are born die before the age of 17, according to the calculations and observations of the celebrated Dr Halley. So that two children must be reared up to keep one of them till working age and it would seem that even this would not be enough to ensure a continuance of Labour since adult Men die at all ages.
It is true that the one half of the Children who die before 17 die faster in the first years after birth than in the following, since a good third of those who are born die in their first year. This seems to diminish the cost of raising a Child to working age, but as the Mothers lose much time in nursing their Children in illness and infancy and the Daughters even when grown up are not the equals of the Males in work and barely earn their living, it seems that to keep one of two Children to manhood or working age as much Land must be employed as for the subsistence of an adult Slave, whether the Proprietor raises them himself in his house or has the children raised there or that the Father brings them up in a House or Hamlet apart. Thus I conclude that the daily labour of the meanest Slave corresponds in value to double the produce of the Land required to maintain him, whether the Proprietor give it him for his subsistence and that of his Family or provides him and his Family subsistence in his own house. It does not admit of exact calculation, and exactitude is not very necessary; it suffices to be near enough to the truth.
If the Proprietor employ the Labour of Vassals or free Peasants he will probably maintain them upon a better foot than Slaves according to the custom of the place he lives in, yet in this case also the Labour of a free Labourer ought to correspond in value to double the produce of Land needed for his maintenance. But it will always be more profitable to the Proprietor to keep Slaves than to keep free Peasants, because when he has brought up a number too large for his requirements he can sell the surplus Slaves as he does his cattle and obtain for them a price proportionable to what he has spent in rearing them to manhood or working age, except in cases of old age or infirmity.
In the same way on may appraise the Labour of slave craftsmen at twice the produce of the Land which they consume. Overseers likewise, allowing for the favours and privileges given to them above those who work under them.
When the Artisans or Labourers have their double portion at their own disposal they employ one part of it for their own upkeep if they are married and the other for their Children. If they are unmarried they set aside a little of their double portion to enable them to marry and to make a little store for housekeeping; but most of them will consume the double portion for their own maintenance.
For example the married Labourer will content himself with Bread, Cheese, Vegetables, etc., will rarely eat meat, will drink little wine or beer, and will have only old and shabby clothes which he will wear as long as he can. The surplus of his double portion he will employ in raising and keeping his children, while the unmarried Labourer will eat meat as often as he can, will treat himself to new cloaths, etc. and employ his double portion on his own requirements. Thus he will consume twice as much personally of the produce of the Land as the married man.
I do not here take into account the expense of the Wife. I suppose that her Labour barely suffices to pay for her own living, and when one sees a large number of little Children in one of these poor families I suppose that charitable persons contribute somewhat to their maintenance, otherwise the Parents must deprive themselves of some of their necessaries to provide a living for their Children.
For the better understanding of this it is to be observed that a poor Labourer may maintain himself, at the lowest computation, upon the produce of an Acre and a half of Land if he lives on bread and vegetables, wears hempen garments, wooden shoes, etc., while if he can allow himself wine, meat, woollen cloaths, etc. he may without drunkenness or gluttony or excess of any kind consume the produce of 4 to 10 acres of Land of ordinary goodness, such as most of the Land in Europe taking part with another. I have caused some figures to be drawn up which will be found in the Supplement, to determine the amount of Land of which one man can consume the produce under each head of Food, Clothing, and other necessaries of life in a single year, according to the mode of living in Europe where the Peasants of divers countries are often nourished and maintained very differently.
For this reason I have not determined to how much Land the Labour of the meanest Peasant corresponds in Value when I laid down that it is worth double the produce of the Land which serves to maintain him: because this varies according to the mode of living in different countries. In some southern Provinces of France the Peasant keeps himself on the produce of one acre and a half of Land and the value of his Labour may be reckoned equal to the product of Three Acres. But in the County of Middlesex the Peasant usually spends the produce of 5 to 8 acres of Land and his Labour may be valued at twice as much as this.
In the country of the Iroquois where the inhabitants do not plough the Land and live entirely by Hunting, the meanest Hunter may consume the produce of 50 Acres of Land since it probably requires so much to support the animals he eats in one year, especially as these Savages have not the industry to grow grass by cutting down the trees but leave everything to nature. The Labour of this Hunter may then be reckoned equal in value to the product of 100 acres of Land. In the southern Provinces of China the Land yields Rice up to three crops in one year and a hundred times as much as is sown, owing to the great care which they have of Agriculture and the fertility of the soil which is never fallow. The Peasants who work there almost naked live only on Rice and drink only Rice water, and it appears that one Acre will support there more than 10 Peasants. It is not surprising, therefore, that the population is prodigious in number. In any case it seems from these examples that Nature is altogether indifferent whether the Earth produce grass, trees, or grain, or maintains a large or small number of Vegetables, Animals, or Men.
Farmers in Europe seem to correspond to Overseers of labouring Slaves in other Countries, and the Master Tradesmen who employ several Journeymen to the Overseers of Artisan Slaves. These Masters know pretty well how much work a journeyman Artisan can do in a day in each Craft, and often pay them in proportion to the work they do, so that the Journeymen work for their own interest as hard as they can without further inspection.
As the Farmers and Masters of Crafts in Europe are all Undertakers working at a risk, some get rich and gain more than a double subsistence, others are ruined and become bankrupt, as will be explained more in detail in treating of Undertakers; but the majority support themselves and their Families from day to day, and their Labour or Superintendence may be valued at about thrice the produce of the Land which serves for their maintenance.
Evidently these Farmers and Master Craftsmen, if they superintend the Labour of 10 Labourers or Journeymen, would be equally capable of superintending the Labour of 20, according to the size of their Farms or the number of their customers, and this renders uncertain the value of their Labour or Superintendence.
By these examples and others which might be added in the same sense, it is seen that the value of the day's work has a relation to the produce of the soil, and that the intrinsic value of any thing may be measured by the quantity of Land used in its production and the quantity of labour which enters into it, in other words by the quantity of Land of which the produce is allotted to those who have worked upon it; and as all the Land belongs to the Prince and the Landowners all things which have this intrinsic value have it only at their expense.
The Money or Coin which finds the proportion of Values in exchange is the most certain measure for judging of the Par between Land and labour and the relation of one to the other in different Countries where this Par varies according to the greater or less produce of the Land allotted to those who labour.
If, for example, one man earn an ounce of silver every day by his work, and another in the same place earn only half an ounce, one can conclude that the first has as much again of the produce of the Land to dispose of as the second.
Sir William Petty, in a little manuscript of the year 1685,*4 considers this Par, or Equation between Land and Labour, as the most important consideration in Political Arithmetic, but the research which he has made into it in passing is fanciful and remote from natural laws, because he has attached himself not to causes and principles but only to effects, as Mr Locke, Mr Davenant and all the other English authors who have written on this subject have done after him.
Notes for this chapter
Published in 1691, Political Anatomy of Ireland, ch. ix.
End of Notes
Part I, Chapter XII
All Classes and Individuals in a State subsist or are enriched at the Expense of the Proprietors of Land
There are none but the Prince and the Proprietors of Land who live independent; all other Classes and Inhabitants are hired or are Undertakers. The proof and detail of this will be developed in the next Chapter.
If the Prince and Proprietors of Land close their Estates and will not suffer them to be cultivated it is clear that there would be neither Food nor Rayment for any of the Inhabitants; consequently all the Individuals are supported not only by the produce of the Land which is cultivated for the benefit of the Owners but also at the Expense of these same Owners from whose property they derive all that they have.
The Farmers have generally two thirds of the Produce of the Land, one for their costs and the support of their Assistants, the other for the Profit of their Undertaking: on these two thirds the Farmer provides generally directly or indirectly subsistence for all those who live in the Country, and also Mechanicks or Undertakers in the City in respect of the Merchandise of the City consumed in the Country.
The Proprietor has usually one third of the produce of his Land and on this third he maintains all the Mechanicks and others whom he employs in the City as well, frequently, as the Carriers who bring the Produce of the Country to the City.
It is generally calculated that one half of the Inhabitants of a kingdom subsist and make their Abode in Cities, and the other half live in the Country; on this supposition the Farmer who has two thirds or four sixths of the Produce of the Land, pays either directly or indirectly one sixth to the Citizens in exchange for the Merchandise which he takes from them. This sixth with the one third or two sixths which the Proprietor spends in the City makes three sixths or one Half of the Produce of the Land. This Calculation is only to convey a general Idea of the Proportion; but in fact, if half of the Inhabitants live in the Cities they consume more than half of the Land's Produce, as they live better than those who reside in the Country and spend more of the Produce of the Land being all Mechanicks or Dependents of the Proprietors and consequently better maintained than the Assistants and Dependents of the Farmers.
But let this Matter be how it will, if we examine the Means by which an Inhabitant is supported it will always appear in returning back to the Fountain-Head, that these Means arise from the Land of the Proprietor either in the two thirds reserved by the Farmer, or the one third which remains to the Landlord.
If a Proprietor had only the amount of Land which he lets out to one Farmer the Farmer would get a better living out of it than himself; but the Nobles and large Landowners in the Cities have sometimes several hundreds of Farmers and are themselves very few in number in proportion to all the Inhabitants of a state.
True there are often in the Cities several Undertakers and Mechanicks who live by Foreign Trade, and therefore at the Expense of Foreign Landowners: but at present I am considering only a State in regard to its own Produce and Industry, not to complicate my argument by accidental circumstances.
The Land belongs to the Proprietors but would be useless to them if it were not cultivated. The more labour is expended on it, other things being equal, the more it produces; and the more its products are worked up, other things being equal, the more value they have as Merchandize. Hence the Proprietors have need of the Inhabitants as these have of the Proprietors; but in this oeconomy it is for the Proprietors, who have the disposition and the direction of the Landed capital, to give the most advantageous turn and movement to the whole. Also everything in a State depends on the Fancy, Methods, and Fashions of life of the Proprietors of Land in especial, as I will endeavour to make clear later in this Essay.
It is need and necessity which enable Farmers, Mechanicks of every kind, Merchants, Officers, Soldiers, Sailors, Domestic Servants and all the other Classes who work or are employed in the State, to exist. All these working people serve not only the Prince and the Landowners but each other, so that there are many of them who do not work directly for the Landowners, and so it is not seen that they subsist on the capital of these Proprietors and live at their Expense. As for those who exercise Professions which are not essential, like Dancers, Actors, Painters, Musicians, etc. they are only supported in the State for pleasure or for ornament, and their number is always very small in proportion to the other Inhabitants.
Part I, Chapter XIII
The circulation and exchange of goods and merchandise as well as their production are carried on in Europe by Undertakers, and at a risk
The Farmer is an undertaker who promises to pay to the Landowner, for his Farm or Land, a fixed sum of money (generally supposed to be equal in value to the third of the produce) without assurance of the profit he will derive from this enterprise. He employs part of the land to feed flocks, produce corn, wine, hay, etc. according to his judgment without being able to foresee which of these will pay best. The price of these products will depend partly on the weather, partly on the demand; if corn is abundant relatively to consumption it will be dirt cheap, if there is scarcity it will be dear. Who can foresee the number of births and deaths of the people in a State in the course of the year? Who can foresee the increase or reduction of expense which may come about in the families? And yet the price of the Farmer's produce depends naturally upon these unforeseen circumstances, and consequently he conducts the enterprise of his farm at an uncertainty.
The City consumes more than half the farmer's produce. He carries it to Market there or sells it in the Market of the nearest Town, or perhaps a few individuals set up as Carriers themselves. These bind themselves to pay the Farmer a fixed price for his produce, that of the market price of the day, to get in the City an uncertain price which should however defray the cost of carriage and leave them a profit. But the daily variation in the price of produce in the City, though not considerable, makes their profit uncertain.
The Undertaker or Merchant who carries the products of the Country to the City cannot stay there to sell them retail as they are consumed. No City family will burden itself with the purchase all at once of the produce it may need, each family being susceptible of increase or decrease in number and in consumption or at least varying in the choice of produce it will consume. Wine is almost the only article of consumption stocked in a family. In any case the majority of citizens who live from day to day and yet are the largest consumers cannot lay in a stock of country produce.
For this reason many people set up in a City as Merchants or Undertakers, to buy the country produce from those who bring it or to order it to be brought on their account. They pay a certain price following that of the place where they purchase it, to resell wholesale or retail at an uncertain price.
Such Undertakers are the wholesalers in Wool and Corn, Bakers, Butchers, Manufacturers and Merchants of all kinds who buy country produce and materials to work them up and resell them gradually as the Inhabitants require them.
These Undertakers can never know how great will be the demand in their City, nor how long their customers will buy of them since their rivals will try all sorts of means to attract customers from them. All this causes so much uncertainty among these Undertakers that every day one sees some of them become bankrupt.
The Manufacturer who has bought wool from the Merchant or direct from the Farmer cannot foretell the profit he will make in selling his cloths and stuffs to the Merchant Taylor. If the latter have not a reasonable sale he will not load himself with the cloths and stuffs of the Manufacturer, especially if those stuffs cease to be in the fashion.
The Draper is an Undertaker who buys cloths and stuffs from the Manufacturer at a certain price to sell them again at an uncertain price, because he cannot foresee the extent of the demand. He can of course fix a price and stand out against selling unless he gets it, but if his customers leave him to buy cheaper from another, he will be eaten up by expenses while waiting to sell at the price he demands, and that will ruin him as soon as or sooner than if he sold without profit.
Shopkeepers and retailers of every kind are Undertakers who buy at a certain price and sell in their Shops or the Markets at an uncertain price. What encourages and maintains these Undertakers in a State is that the Consumers who are their Customers prefer paying a little more to get what they want ready to hand in small quantities rather than lay in a stock and that most of them have not the means to lay in such a stock by buying at first hand.
All these Undertakers become consumers and customers one in regard to the other, the Draper of the Wine Merchant and vice versa. They proportion themselves in a State to the Customers or consumption. If there are too many Hatters in a City or in a street for the number of people who buy hats there, some who are least patronised must become bankrupt: if they be too few it will be a profitable Undertaking which will encourage new Hatters to open shops there and so it is that the Undertakers of all kinds adjust themselves to risks in a State.
All the other Undertakers like those who take charge of Mines, Theatres, Building, etc., the Merchants by sea and Land, etc., Cook-shop keepers, Pastry Cooks, Innkeepers, etc. as well as the Undertakers of their own labour who need no Capital to establish themselves, like Journeymen artisans, Copper-smiths, Needlewomen, Chimney Sweeps, Water Carriers, live at uncertainty and proportion themselves to their customers. Master Craftsmen like Shoemakers, Taylors, Carpenters, Wigmakers, etc. who employ Journeymen according to the work they have, live at the same uncertainty since their customers may foresake them from one day to another: the Undertakers of their own labour in Art and Science, like Painters, Physicians, Lawyers, etc. live in the like uncertainty. If one Attorney or Barrister earn 5000 pounds sterling yearly in the service of his Clients or in his practice and another earn only 500 they may be considered as having so much uncertain wages from those who employ them.
It may perhaps be urged that Undertakers seek to snatch all they can in their calling and to get the better of their customers, but this is outside my subject.
By all these inductions and many others which might be made in a topic relating to all the Inhabitants of a State, it may be laid down that expect the Prince and the Proprietors of Land, all the Inhabitants of a State are dependent; that they can be divided into two classes, Undertakers and Hired people; and that all the Undertakers are as it were on unfixed wages and the others on wages fixed so long as they receive them though their functions and ranks may be very unequal. The General who has his pay, the Courtier his pension and the Domestic servant who has wages all fall into this last class. All the rest are Undertakers, whether they set up with a capital to conduct their enterprise, or are Undertakers of their own labour without capital, and they may be regarded as living at uncertainty; the Beggars even and the Robbers are Undertakers of this class. Finally all the Inhabitants of a State derive their living and their advantages from the property of the Landowners and are dependent.
It is true, however, that if some person on high wages or some large Undertaker has saved capital or wealth, that is if he have stores of corn, wool, copper, gold, silver or some produce or merchandise in constant use or vent in a State, having an intrinsic or a real value, he may be justly considered independent so far as this capital goes. He may dispose of it to acquire a mortgage, and interest from Land and from Public loans secured upon Land: he may live still better than the small Landowners and even buy the Property of some of them.
But produce and merchandise, even gold and silver, are much more subject to accident and loss than the ownership of land; and however one may have gained or saved them they are always derived from the land of actual Proprietors either by gain or by saving of the wages destined for one's subsistence.
The number of Proprietors of money in a large State is often considerable enough; and though the value of all the money which circulates in the State barely exceeds the ninth or tenth part of the value of the produce drawn from the soil yet, as the Proprietors of money lend considerable amounts for which they receive interest either by mortgage or the produce and merchandise of the State, the sums due to them usually exceed all the money in the State, and they often become so powerful a body that they would in certain cases rival the Proprietors of Lands if these last were not often equally Proprietors of money, and if the owners of large sums of money did not always seek to become Landowners themselves.
It is nevertheless always true that all the sums gained or saved have been drawn from the Land of the actual Proprietors; but as many of these ruin themselves daily in a State and the others who acquire the property of their land take their place, the independence given by the ownership of Land applies only to those who keep the possession of it; and as all Land has always an actual Master or Owner, I presume that it is from their property that all the Inhabitants of the State derive their living and all their wealth. If these Proprietors confined themselves to living on their Rents it would be beyond question, and in that case it would be much more difficult for the other inhabitants to enrich themselves at their Expence.
I will then lay it down as a principle that the Proprietors of Land alone are naturally independent in a State: that all the other Classes are dependent whether Undertakers or hired, and that all the exchange and circulation of the State is conducted by the medium of these Undertakers.
Part I, Chapter XIV
The Fancies, the Fashions, and the Modes of Living of the Prince, and especially of the Landowners, determine the use to which Land is put in a State and cause the variations in the Market-prices of all things
If the Owner of a large Estate (which I wish to consider here as if there were no other in the world) has it cultivated himself he will follow his Fancy in the use of which he will put it. (1) He will necessarily use part of it for corn to feed the Labourers, Mechanicks and Overseers who work for him, another part to feed the Cattle, Sheep and other Animals necessary for their Clothing and Food or other commodities according to the way in which he wishes to maintain them. (2) He will turn part of the Land into Parks, Gardens, Fruit Trees or Vines as he feels inclined and into meadows for the Horses he will use for his pleasure, etc.
Let us now suppose that to avoid so much care and trouble he makes a bargain with the Overseers of the Labourers, gives them Farms or pieces of Land and leaves to them the responsibility for maintaining in the usual manner all the Labourers they supervise, so that the Overseers, now become Farmers or Undertakers, give the Labourers for working on the land or Farm another third of the Produce for their Food, Clothing and other requirements, such as they had when the Owner employed them; suppose further that the Owner makes a bargain with the Overseers of the Mechanicks for the Food and other things that he gave them, that he makes the Overseers become Master-Craftsmen, fixes a common measure, like silver, to settle the price at which the Farmers will supply them with wool and they will supply him with cloth, and that the prices are such as to give the Master-Craftsmen the same advantages and enjoyments as they had when Overseers, and the Journeymen Mechanicks also the same as before, the Labour of the Mechanicks will be settled by the day or by the piece: the merchandise which they have made, Hats, Stockings, Shoes, Cloaths, etc. will be sold to the Landowner, the Farmers, the Labourers, and the other Mechanicks reciprocally at a price which leaves to all of them the same advantages as before; and the Farmers will sell, at a proportionate price, their produce and raw material.
It will then come to pass that the Overseers become Undertakers, will be the absolute masters of those who work under them, and will have more care and satisfaction in working on their own account. We suppose then that after this change all the people on this large Estate live just as they did before, and so all the portions and Farms of this great Estate will be put to the same use as it formerly was.
For if some of the Farmers sowed more corn than usual they must feed fewer Sheep, and have less Wool and Mutton to sell. Then there will be too much Corn and too little Wool for the consumption of the Inhabitants. Wool will therefore be dear, which will force the Inhabitants to wear their clothes longer than usual, and there will be too much Corn and a surplus for the next year. As we suppose that the Landowner has stipulated for the payment in silver of the third of the produce of the Farm to be paid to him, the Farmers who have too much Corn and too little Wool, will not be able to pay him his Rent. If he excuses them they will take care the next year to have less corn and more Wool, for Farmers always take care to use their land for the production of those things which they think will fetch the best price at Market. If, however, next year they have too much Wool and too little Corn for the demand, they will not fail to change from year to year the use of the land till they arrive at proportioning their production pretty well to the consumption of the Inhabitants. So a farmer who has arrived at about the proportion of consumption will have part of his Farm in grass, for hay, another for Corn, Wool and so on, and he will not change his plan unless he sees some considerable change in the demand; but in this example we have supposed that all the People live in the same way as when the Landowner cultivated the Land for himself, and consequently the Farmers will employ the Land for the same purposes as before.
The Owner, who has at his disposal the third of the Produce of the Land, is the principal Agent in the changes which may occur in demand. Labourers and Mechanicks who live from day to day change their mode of living only from necessity. If a few Farmers, Master Craftsmen or other Undertakers in easy circumstances vary their expense and consumption they always take as their model the Lords and Owners of the Land. They imitate them in their Clothing, Meals, and mode of life. If the Landowners please to wear fine linen, silk, or lace, the demand for these merchandises will be greater than that of the Proprietors for themselves.
If a Lord or Owner who has let out all his lands to farm, take the fancy to change considerably his mode of living; if for instance he decreases the number of his domestic servants and increases the number of his Horses: not only will his Servants be forced to leave the Estate in question but also a proportionate number of Artisans and of Labourers who worked to maintain them. The portion of land which was used to maintain these Inhabitants will be laid down to grass for the new Horses, and if all Landowners in a State did the like they would soon increase the number of Horses and diminish the number of Men.
When a Landowner has dismissed a great number of Domestic Servants, and increased the number of his Horses, there will be too much Corn for the needs of the Inhabitants, and so the Corn will be cheap and the Hay dear. In consequence the Farmers will increase their grass land and diminish their Corn to proportion it to the demand. In this way the Fancies or Fashions of Landowners determine the use of the Land and bring about the variations of demand which cause the variations of Market prices. If all the Landowners of a State cultivated their own estates they would use them to produce what they want; and as the variations of demand are chiefly caused by their mode of living the prices which they offer in the Market decide the Farmers to all the changes which they make in the employment and use of the Land.
I do not consider here the variations in Market prices which may arise from the good or bad harvest of the year, or the extraordinary consumption which may occur from foreign troops or other accidents, so as not to complicate my subject, considering only a state in its natural and uniform condition.
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