Essay on the Nature of Commerce

Richard Cantillon

[Part 2 of 7]

Chapter Twelve

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 mechanics 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 mechanics 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 sixth 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 mechanics 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 mechanics 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 merchandise. Hence the proprietors have need of the inhabitants as these have of the proprietors; but in this economy 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, mechanics 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.

Chapter Thirteen

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 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. ...

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 could 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 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 expense.

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.

Chapter Fourteen

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 price 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, mechanics 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. ...

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 mechanics 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 compensation 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 the 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.

Chapter Fifteen

The Increase and Decrease of the Number of People in a State chiefly depend on the taste, the fashions, and the modes of living of the proprietors of land

Experience shows that trees, plants and other vegetables can be increased to any quantity which the extent of ground laid out for them can support.

he same experience shows that all kinds of the animal creation are to be multiplied to any quantity which the land allotted to them can support. ...In a word, we can multiply all sorts of animals in such numbers as we wish to maintain even to infinity if we could find lands to infinity to to nourish them; and the multiplication of animals has no other bounds than the greater or less means allotted for their subsistence. It is not to be doubted that if all land were devoted to the simple sustenance of man the race would increase up to the number that the land would support in the manner to be explained. ...

If the proprietors of land had at heart the increase of population, if they encouraged the peasants to marry young and bring up children by promising to provide them with subsistence, devoting their land entirely to that purpose, they would doubtless increase the population up to the point which the land could support, according to the produce they allotted for each person whether an acre and a half or four to five acres a head.

But if instead of that the prince, or the proprietors of land, cause the land to be used for other purposes than the upkeep of the people: if by the prices they offer in the market for produce and merchandise they determine the farmers to employ the land for other purposes than the maintenance of man (for we have seen that the prices they offer in the market and their consumption determine the use made of the land just as if they cultivated it themselves) the people will necessarily diminish in number. Some will be forced to leave the country for lack of employment, others not seeing the necessary means of raising children, will not marry or will only marry late, after having put aside somewhat for the support of the household.

If the proprietors of land who live in the country go to reside in the cities far away from their land, horses must be fed for the transport into the city both of their food and that of all the domestic servants, mechanics and others whom their residence in the city attracts thither. ...

But when the nobility and proprietors of land draw from foreign manufactures their cloths, silks, laces, etc. and pay for them by sending to the foreigner their native produce they diminish extraordinary the food of the people and increase that of foreigners who often become enemies of the state. ...

When I said that the proprietors of land might multiply the population as far as the land would support them, I assumed that most men desire nothing better than to marry if they are set in a position to keep their families in the same style as they are content to live themselves. That is, if a man is satisfied with the produce of an acre and a half of land he will marry if the is sure of having enough to keep his family in the same way. But if he is only satisfied with the produce of five to ten acres he will be in on hurry to marry unless he thinks he can bring up his family in the same manner. ...

In Europe the children of the nobility are brought up in affluence; and as the largest share of the property is usually given to the eldest sons, the younger sons are in no hurry to marry. They usually live as bachelors, either in the army or in the cloisters, but will seldom be fond unwilling to marry if they are offered heiresses and fortunes, or the means of supporting a family on the footing which they have in view and without which they would consider themselves to make their children wretched. ...

If the proprietors of land help to support the families, a single generation suffices to push the increase of population as far as the produce of the land will supply means of subsistence. ...

The increase of population can be carried furthest in the countries where the people are content to live the most poorly and to consume the least produce of the soil. In countries where all the peasants and labourers are accustomed to eat meat and drink wine, beer, etc. so many inhabitants cannot be supported. ...

Men multiply like mice in a barn if they have unlimited means of subsistence; and the English in the colonies will become more numerous in proportion in three generations than they would be in thirty in England, because in the colonies they find for cultivation new tracts of land from which they drive the savages.

In all countries at all times men have waged wars for the land and the means of subsistence. When wars have destroyed or diminished the population of a country, the savages and civilised nations soon repopulate in in times of peace; especially when the prince and the proprietors of land lend their encouragement.

A state which has conquered several provinces may, by tribute imposed on the vanquished, acquire an increase of subsistence for its own people. The Romans drew a great part of their subsistence from Egypt, Sicily and Africa and that is why Italy then contained so many inhabitants.

A state where mines are found, having manufactures which do not require much of the produce of the land to send them into foreign countries, and drawing from them in exchange plentiful merchandise and produce of the land, acquires an increased fund for the subsistence of its subjects. ...

But all these advantages are refinements and exceptional cases which I mention only incidentally. The natural and constant way of increasing population in a state is to find employment for the people there, and to make the land serve for the production of their means of support.

It is also a question outside of my subject whether it is better to have a great multitude of inhabitants, poor and badly provided, than a smaller number, much more at their ease: a million who consume the produce of 6 acres per head or 4 million who live on the product of an acre and a half.

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