Understanding the #UnitedStatesofAmerica - The Wealth of Nations: Book One, Chapter Ten (Part Seven) "Town Verses Country"

BOOK I

CHAPTER TEN: OF WAGES AND PROFITS IN THE DIFFERENT EMPLOYMENTS OF LABOR AND STOCK
Pages: 36 (pages 24 to 27)

·TOWN VERSUS COUNTRY

Pg 106

The aim in establishing all corporations and most corporation laws is to prevent his reduction of price, and consequently of wages and profit, by restraining the free competition that would most certainly cause it. In many parts of Europe in earlier times all that was needed to establish a corporation was the permission of the town corporate—·the self-governing town·—in which it was established. In England a charter from the king was also needed, but the purpose of this seems to have been to extort money from the subject rather than to defend the common liberty against oppressive monopolies. . . .

Pg 107

The government of towns-corporate was altogether in the hands of traders and artificers, and it was obviously in the interests of every particular class to ‘prevent the market from being overstocked’, as they commonly express it, which is actually to keep it always understocked. Each class was. . . . obliged to buy the goods they needed from others within the town at a higher price than they otherwise might have had to pay; but in recompense for this they were able to sell their own just as much dearer; so that in the mutual dealings of the different classes within the town none were losers by these regulations. But in their dealings with the country they were all great gainers; and the whole trade that supports and enriches every town consists in its dealings with the country.
Every town gets from the country its whole subsistence and all the materials of its industry. It pays for these chiefly in two ways:
(i) by sending back to the country a part of those materials in the form of manufactured articles;
(ii) by sending to the country raw materials and manufactured products that have been imported into the town from other countries or from distant parts of the same country.
In the case of (i) their price is increased by the wages of the workmen and the profits of their masters or immediate employers; this is the advantage the town gets by its manufactures. In the case of (ii) the original price of those goods is increased by the wages of the carriers or sailors, and by the profits of the merchants who employ them; this is the advantage the town gets by its inland and foreign trade. The wages of the workmen and the profits of their various employers make up the whole of what is gained in both. So any regulations that tend to increase those wages and profits tend to enable the town to purchase the product of a quantity of the country’s labor with a smaller quantity of its own labor.

Pg 108

They give the traders and artificers in the town an advantage over the landlords, farmers, and laborers in the country, and break down the natural equality there would otherwise be in the commerce between them. The whole annual product of the society’s labor is annually divided between those two sets of people,. those regulations increase the share of it that goes to the inhabitants of towns, at the expense of those who live in the country. . . .
Without needing any complex computations, we may satisfy ourselves by one obvious observation that work done in towns is, everywhere in Europe, more advantageous than
work done in the country. Compare •the number of people who have acquired large fortunes from small beginnings through trade and manufactures, the industry that properly belongs to towns, with •the number who have made fortunes through the raising of rude product by the improvement and cultivation of land, the industry that properly belongs to the country. It is about a hundred to one! So industry must be better rewarded, the wages of labor and the profits of stock must be greater, in towns than in the country. . . .
The inhabitants of a town, being collected into one place, can easily combine together. The most insignificant trades in towns have been incorporated in some place or other; and even where they haven’t yet been incorporated, the corporation-spirit—the jealousy of strangers, the reluctance to take apprentices or to communicate the secret of their trade—generally prevails in them. They learn how by voluntary associations and agreements to prevent the free competition that they can’t prohibit by by-laws. The trades that employ only a few hands enter most easily into such combinations. Half-a-dozen wool-combers, perhaps, are needed to keep a thousand spinners and weavers at work.

Pg 109

By combining not to take apprentices they can not only capture all the employment but reduce the whole manufacture into a sort of slavery to themselves, raising the price of their labor far above what is due to the nature of their work.

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