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An Inquiry Into The Nature And Causes Of The Wealth Of Nations - Book 3, Chapter 1

1. Introduction And Plan Of The Work

2. Book 1, Chapter 1

3. Chapter 2

4. Chapter 3

5. Chapter 4

6. Chapter 5

7. Chapter 6

8. Chapter 7

9. Chapter 8

10. Chapter 8 continue

11. Chapter 9

12. Chapter 10

13. Chapter 10 continue

14. Chapter 11

15. Chapter 11 continue

16. Chapter 11 continue.

17. Chapter 11 continue..

18. Chapter 11 continue...

19. Conclusion of the Chapter 11

20. Book 2 Introduction

21. Chapter 1

22. Chapter II

23. Chapter II continue

24. Chapter II continue

25. Chapter 3

26. Chapter 4

27. Chapter 5

28. Book 3, Chapter 1

29. Chapter 2

30. Chapter 3

31. Chapter 4

32. Book 4, Chapter 1

33. Chapter 1 continue

34. Chapter 2

35. Chapter 3, Part 1

36. Chapter 3, Part 2

37. Chapter 4

38. Chapter 5

39. Chapter 5 continue

40. Chapter 6

41. Chapter 7, Part 1

42. Chapter 7, Part 2

43. Chapter 7, Part 3

44. Chapter 7, Part 3 continue

45. Chapter 8

46. Chapter 9

47. Book 5, Chapter 1, Part 1

48. Chapter 1, Part 2

49. Chapter 1, Part 3

50. Chapter 1, Part 3 continue

51. Chapter 1, Part 3 continue B

52. Chapter 1, Part 4

53. Chapter 2, Part 1

54. Chapter 2, Part 2

55. Chapter 2, Part 2 continue

56. Chapter 2, Part 2 continue B

57. Chapter 2, Part 2 continue C

58. Chapter 2, Part 2 continue D

59. Chapter 3

60. Chapter 3 continue

Book III. Of The Different Progress Of Opulence In Different Nations

Chapter I. Of The Natural Progress Of Opulence.

The great commerce of every civilized society is that carried on between
the inhabitants of the town and those of the country. It consists in the
exchange of rude for manufactured produce, either immediately, or by the
intervention of money, or of some sort of paper which represents money.
The country supplies the town with the means of subsistence and the
materials of manufacture. The town repays this supply, by sending back a
part of the manufactured produce to the inhabitants of the country.
The town, in which there neither is nor can be any reproduction of
substances, may very properly be said to gain its whole wealth and
subsistence from the country. We must not, however, upon this account,
imagine that the gain of the town is the loss of the country. The gains
of both are mutual and reciprocal, and the division of labour is in
this, as in all other cases, advantageous to all the different persons
employed in the various occupations into which it is subdivided. The
inhabitants of the country purchase of the town a greater quantity of
manufactured goods with the produce of a much smaller quantity of their
own labour, than they must have employed had they attempted to prepare
them themselves. The town affords a market for the surplus produce
of the country, or what is over and above the maintenance of the
cultivators; and it is there that the inhabitants of the country
exchange it for something else which is in demand among them. The
greater the number and revenue of the inhabitants of the town, the more
extensive is the market which it affords to those of the country; and
the more extensive that market, it is always the more advantageous to
a great number. The corn which grows within a mile of the town, sells
there for the same price with that which comes from twenty miles
distance. But the price of the latter must, generally, not only pay the
expense of raising it and bringing it to market, but afford, too, the
ordinary profits of agriculture to the farmer. The proprietors and
cultivators of the country, therefore, which lies in the neighbourhood
of the town, over and above the ordinary profits of agriculture, gain,
in the price of what they sell, the whole value of the carriage of the
like produce that is brought from more distant parts; and they save,
besides, the whole value of this carriage in the price of what they
buy. Compare the cultivation of the lands in the neighbourhood of any
considerable town, with that of those which lie at some distance
from it, and you will easily satisfy yourself bow much the country is
benefited by the commerce of the town. Among all the absurd speculations
that have been propagated concerning the balance of trade, it has never
been pretended that either the country loses by its commerce with the
town, or the town by that with the country which maintains it.

As subsistence is, in the nature of things, prior to conveniency and
luxury, so the industry which procures the former, must necessarily
be prior to that which ministers to the latter. The cultivation and
improvement of the country, therefore, which affords subsistence, must,
necessarily, be prior to the increase of the town, which furnishes only
the means of conveniency and luxury. It is the surplus produce of
the country only, or what is over and above the maintenance of the
cultivators, that constitutes the subsistence of the town, which can
therefore increase only with the increase of the surplus produce. The
town, indeed, may not always derive its whole subsistence from the
country in its neighbourhood, or even from the territory to which it
belongs, but from very distant countries; and this, though it forms no
exception from the general rule, has occasioned considerable variations
in the progress of opulence in different ages and nations.

That order of things which necessity imposes, in general, though not in
every particular country, is in every particular country promoted by the
natural inclinations of man. If human institutions had never thwarted
those natural inclinations, the towns could nowhere have increased
beyond what the improvement and cultivation of the territory in which
they were situated could support; till such time, at least, as the whole
of that territory was completely cultivated and improved. Upon equal,
or nearly equal profits, most men will choose to employ their capitals,
rather in the improvement and cultivation of land, than either in
manufactures or in foreign trade. The man who employs his capital in
land, has it more under his view and command; and his fortune is
much less liable to accidents than that of the trader, who is obliged
frequently to commit it, not only to the winds and the waves, but to the
more uncertain elements of human folly and injustice, by giving great
credits, in distant countries, to men with whose character and situation
he can seldom be thoroughly acquainted. The capital of the landlord, on
the contrary, which is fixed in the improvement of his land, seems to be
as well secured as the nature of human affairs can admit of. The
beauty of the country, besides, the pleasure of a country life, the
tranquillity of mind which it promises, and, wherever the injustice
of human laws does not disturb it, the independency which it really
affords, have charms that, more or less, attract everybody; and as to
cultivate the ground was the original destination of man, so, in every
stage of his existence, he seems to retain a predilection for this
primitive employment.

Without the assistance of some artificers, indeed, the cultivation of
land cannot be carried on, but with great inconveniency and continual
interruption. Smiths, carpenters, wheelwrights and ploughwrights, masons
and bricklayers, tanners, shoemakers, and tailors, are people whose
service the farmer has frequent occasion for. Such artificers, too,
stand occasionally in need of the assistance of one another; and as
their residence is not, like that of the farmer, necessarily tied down
to a precise spot, they naturally settle in the neighbourhood of one
another, and thus form a small town or village. The butcher, the brewer,
and the baker, soon join them, together with many other artificers and
retailers, necessary or useful for supplying their occasional wants, and
who contribute still further to augment the town. The inhabitants of
the town, and those of the country, are mutually the servants of
one another. The town is a continual fair or market, to which the
inhabitants of the country resort, in order to exchange their rude for
manufactured produce. It is this commerce which supplies the inhabitants
of the town, both with the materials of their work, and the means of
their subsistence. The quantity of the finished work which they sell to
the inhabitants of the country, necessarily regulates the quantity of
the materials and provisions which they buy. Neither their employment
nor subsistence, therefore, can augment, but in proportion to the
augmentation of the demand from the country for finished work; and this
demand can augment only in proportion to the extension of improvement
and cultivation. Had human institutions, therefore, never disturbed the
natural course of things, the progressive wealth and increase of the
towns would, in every political society, be consequential, and in
proportion to the improvement and cultivation of the territory of

In our North American colonies, where uncultivated land is still to be
had upon easy terms, no manufactures for distant sale have ever yet
been established in any of their towns. When an artificer has acquired a
little more stock than is necessary for carrying on his own business
in supplying the neighbouring country, he does not, in North America,
attempt to establish with it a manufacture for more distant sale, but
employs it in the purchase and improvement of uncultivated land. From
artificer he becomes planter; and neither the large wages nor the easy
subsistence which that country affords to artificers, can bribe him
rather to work for other people than for himself. He feels that an
artificer is the servant of his customers, from whom he derives his
subsistence; but that a planter who cultivates his own land, and derives
his necessary subsistence from the labour of his own family, is really a
master, and independent of all the world.

In countries, on the contrary, where there is either no uncultivated
land, or none that can be had upon easy terms, every artificer who has
acquired more stock than he can employ in the occasional jobs of the
neighbourhood, endeavours to prepare work for more distant sale. The
smith erects some sort of iron, the weaver some sort of linen or woollen
manufactory. Those different manufactures come, in process of time, to
be gradually subdivided, and thereby improved and refined in a great
variety of ways, which may easily be conceived, and which it is
therefore unnecessary to explain any farther.

In seeking for employment to a capital, manufactures are, upon equal or
nearly equal profits, naturally preferred to foreign commerce, for the
same reason that agriculture is naturally preferred to manufactures. As
the capital of the landlord or farmer is more secure than that of the
manufacturer, so the capital of the manufacturer, being at all times
more within his view and command, is more secure than that of the
foreign merchant. In every period, indeed, of every society, the surplus
part both of the rude and manufactured produce, or that for which there
is no demand at home, must be sent abroad, in order to be exchanged
for something for which there is some demand at home. But whether the
capital which carries this surplus produce abroad be a foreign or a
domestic one, is of very little importance. If the society has not
acquired sufficient capital, both to cultivate all its lands, and to
manufacture in the completest manner the whole of its rude produce,
there is even a considerable advantage that the rude produce should
be exported by a foreign capital, in order that the whole stock of the
society may be employed in more useful purposes. The wealth of ancient
Egypt, that of China and Indostan, sufficiently demonstrate that a
nation may attain a very high degree of opulence, though the greater
part of its exportation trade be carried on by foreigners. The progress
of our North American and West Indian colonies, would have been much
less rapid, had no capital but what belonged to themselves been employed
in exporting their surplus produce.

According to the natural course of things, therefore, the greater
part of the capital of every growing society is, first, directed to
agriculture, afterwards to manufactures, and, last of all, to foreign
commerce. This order of things is so very natural, that in every society
that had any territory, it has always, I believe, been in some degree
observed. Some of their lands must have been cultivated before any
considerable towns could be established, and some sort of coarse
industry of the manufacturing kind must have been carried on in those
towns, before they could well think of employing themselves in foreign

But though this natural order of things must have taken place in some
degree in every such society, it has, in all the modern states of
Europe, been in many respects entirely inverted. The foreign commerce
of some of their cities has introduced all their finer manufactures, or
such as were fit for distant sale; and manufactures and foreign commerce
together have given birth to the principal improvements of agriculture.
The manners and customs which the nature of their original government
introduced, and which remained after that government was greatly
altered, necessarily forced them into this unnatural and retrograde

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