In the ancient state of Europe, after the fall of the Roman Empire, agriculture was greatly discouraged by several causes. The rapine and violence which the barbarians exercised against the ancient inhabitants interrupted the commerce between the towns and the country; the towns were deserted and the country was left uncultivated. The western provinces of Europe sank into the lowest state of poverty, and the land, which was mostly uncultivated, was engrossed by a few great proprietors.
These lands might in the natural course of events have been soon divided again, and broken into small parcels by succession or by alienation; but the law of primogeniture hindered their division by succession, and the introduction of entails prevented their being divided by alienation. These hindrances to the division and consequently to the cultivation of the land were due to the fact that land was considered as the means not of subsistence merely, but of power and protection. In those disorderly times, every great landlord was a sort of petty prince.
Unfortunately these laws of primogeniture and entail have continued long after the circumstances which gave rise to them have disappeared. Unfortunately, because it seldom happens that a great landlord is a great improver. To improve land with profit requires an exact attention to small savings and small gains, of which a man born to a great fortune is seldom capable. And if little improvement was to be expected from the great proprietors, still less was to be hoped for from those who occupied the land under them. In the ancient state of Europe, the occupiers of land were all tenants at will, and practically slaves. To these succeeded a kind of farmers known at present in France by the name of "metayers," whose produce was divided equally between the proprietor and the farmer, after setting aside what was judged necessary for keeping up the stock, which still belonged to the landlord. To these, in turn, succeeded, though by very slow degrees, farmers properly so called, who cultivated the land with their own stock, paying a fixed rent to the landlord, and enjoying a certain degree of security of tenure. And every improvement in the position of the actual cultivation of the soil is attended by a corresponding improvement of the land and of its cultivation.
After the fall of the Roman empire the inhabitants of cities and towns were not more favoured than those of the country. The towns were inhabited chiefly by tradesmen and mechanics, who were in those days of servile, or nearly servile condition. Yet the townsmen arrived at liberty and independence much earlier than the country population; their towns became "free burghs," and were erected into commonalities or corporations, with the privilege of having magistrates and a town council of their own, of making by-laws for their own government and of building walls for their own defence. Order and good government, and the liberty and security of individuals, were thus established in cities at a time when the occupiers of land in the country were exposed to every sort of violence.
The increase and riches of commercial and manufacturing towns thenceforward contributed to the improvement and cultivation of the countries to which they belonged, in three different ways. First, by affording a great and ready market for the rude produce of the country. Secondly, the wealth acquired by the inhabitants of cities was employed in purchasing uncultivated lands and in bringing them under cultivation; for merchants are ambitious of becoming country gentlemen, and when they do so, are generally the best of all improvers. And lastly, commerce and manufactures gradually introduced order and good government, and with them the liberty and security of individuals, among the inhabitants of the country.
IV.—The Mercantile System
From the mistaken theory that wealth consists in money, or in gold and silver, there has arisen an erroneous and harmful system of political economy and of legislation in the supposed interests of manufacture, of commerce, and of the wealth of nations. A rich country is supposed to be a country abounding in money; and all the nations of Europe have consequently studied, though to little purpose, every possible means of accumulating gold and silver in their respective countries. For example, they have at times forbidden, or hindered by heavy duties, the export of these metals. But all these attempts are vain; for on the one hand, when the quantity of gold and silver imported into any country exceeds the effectual demand, no vigilance can prevent their exportation; and on the other hand, if gold and silver should fall short in a country, there are more expedients for supplying their place than that of any other commodity. The real inconvenience which is commonly called "scarcity of money" is not a shortness in the medium of exchange, but is a weakening and diminution of credit, due to over-trading. Money is part of the national capital, but only a small part and always the most unprofitable part of it.
The principle of the "commercial system" or "mercantile system" is, that wealth consists in money, or in gold and silver. It is an utterly untrue principle. But once it had been established in general belief that wealth consists in gold and silver, and that these metals can be brought into a country which has no mines only by the "balance of trade," that is to say, by exporting to a greater value than it imports, it necessarily became the great object of political economy to diminish as much as possible the importation of foreign goods for home consumption, and to increase as much as possible the exportation of the produce of domestic industry. Its two great engines for enriching the country, therefore, were restraints upon importation and encouragements to exportation.