Urban and Rural Trade

⁴⁸ The greatest and most important commerce of every nation is the commerce between the town and the countryside.

The townspeople draw raw materials and subsistence from the countryside.

• They pay for these by processing some of these raw materials and sending them back as manufactured goods to the countryside, ready for use.

This is a trade in rude produce exchanged for manufactured produce.

• The dearer the manufactured produce, the cheaper the rude produce.

Whatever raises the price of manufactured produce in any country, lowers the price of the rude produce and discourages agriculture.

• The exchangeable value of rude produce will be lower if it can buy fewer manufactured goods.
• The landlord will be discouraged from increase this cheap rude produce by land improvements.
• The farmer will be discouraged from increasing cheap this rude produce through cultivation.

The home market is the most important market for rude produce. This is why having fewer artificers and manufacturers also reduces the home market and consequently discourages agriculture.

⁴⁹ Those systems which prefer agriculture impose restraints on manufactures and foreign trade.

• They act contrary to the very end which they propose.

They are more inconsistent than even the mercantile system.

The mercantile system encourages manufactures and foreign trade more than agriculture.

• It turns the capital of society towards supporting, manufactures, a less advantageous industry.
• But it really encourages manufactures.

Those agricultural systems, on the contrary, really and ultimately discourage agriculture.

⁵⁰ Thus, economic systems can subvert the great purpose they mean to promote if they:

• draw, by extraordinary encouragements, more of society’s capital towards a particular industry, than what would naturally go to it, and
• force, by extraordinary restraints, from a particular industry some of the capital which would otherwise be employed in it.

Such systems retard the progress of society towards real wealth and greatness instead of accelerating it.

• They reduce the real value of the national annual produce, instead of increasing it.

⁵¹ When preference or restraint is completely removed from all systems, the obvious and simple system of natural liberty establishes itself of its own accord.

Every man is left perfectly free to pursue his own interest his own way as long as he does not violate the laws of justice.

Every man is free to bring his industry and capital into competition with others.

The sovereign is completely discharged from a duty which would always expose him to innumerable delusions.

No human wisdom or knowledge could ever be sufficient to properly perform this duty of:

• superintending the industry of private people,
• directing private industry towards employments most suitable to the interest of society.

According to the system of natural liberty, the sovereign has only three important duties which are plain and intelligible to common understandings:

• The duty of protecting society from violence and invasion of other independent societies
• The duty of establishing an exact administration of justice
• The duty of protecting every member of society from the injustice or oppression of its other members.
• The duty of building and maintaining public works and institutions
• No single person might have an interest to build and maintain such works because the profit could never repay its cost to any individual, although it might frequently repay itself when done by a large society.

⁵² The proper performance of those duties necessarily incurs a certain cost.

This cost necessarily requires a certain revenue to support it.

Book 5 shall explain in 3 chapters:

• what are the sovereign’s necessary expences,
• which of those expences should be defrayed by the contribution of:
  • the whole society, and
  • a particular part or members of society only.
  • the ways how society may be made to contribute towards defraying the expences incumbent on the whole.

The principal advantages and inconveniences of each of those methods.

The reasons and causes which have induced modern governments to contract debts or mortgage part of this revenue. What were the effects of those debts on the society’s real wealth.