The Online Library of Liberty

A project of Liberty Fund, Inc.

• Introduction, By Henry Higgs
• Previous Editions, By Henry Higgs
• Essay On the Nature of Trade In General
• Part One
• Part I, Chapter I: Of Wealth
• Part I, Chapter II: Of Human Societies
• Part I, Chapter III: Of Villages
• Part I, Chapter IV: Of Market Towns
• Part I, Chapter V: Of Cities
• Part I, Chapter VI: Of Capital Cities
• Part I, Chapter VII: The Labour of the Husbandman Is of Less Value Than That of the Handicrafts-man
• Part I, Chapter VIII: Some Handicrafts-men Earn More, Others Less, According to the Different Cases and Circumstances
• Part I, Chapter IX: The Number of Labourers, Handicraftsmen and Others, Who Work In a State Is Naturally Proportioned to the Demand For Them
• Part I, Chapter X: The Price and Intrinsic Value of a Thing In General Is the Measure of the Land and Labour Which Enter Into Its Production
• Part I, Chapter XI: Of the Par Or Relation Between the Value of Land and Labour
• Part I, Chapter XII: All Classes and Individuals In a State Subsist Or Are Enriched At the Expense of the Proprietors of Land
• Part I, Chapter XIII: The Circulation and Exchange of Goods and Merchandise As Well As Their Production Are Carried On In Europe By Undertakers, and At a Risk
• Part I, Chapter XIV: 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-prices of All Things
• Part I, Chapter XV: 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
• Part I, Chapter XVI: The More Labour There Is In a State the More Naturally Rich the State Is Esteemed
• Part I, Chapter XVII: Of Metals and Money, and Especially of Gold and Silver
• Part Two
• Part Ii, Chapter I: Of Barter
• Part Ii, Chapter II: Of Market Prices
• Part Ii, Chapter III: Of the Circulation of Money
• Part Ii, Chapter IV: Of Further Reflection On the Rapidity Or Slowness of the Circulation of Money In Exchange
• Part Ii, Chapter V: Of the Inequality of the Circulation of Hard Money In a State
• Part Ii, Chapter VI: Of the Increase and Decrease In the Quantity of Hard Money In a State
• Part Ii, Chapter VII: Continuation of the Same Subject
• Part Ii, Chapter VIII: Further Reflection On the Same Subject
• Part Ii, Chapter IX: Of the Interest of Money and Its Causes
• Part Ii, Chapter X: Of the Causes of the Increase and Decrease of the Interest of Money In a State
• Part Three
• Part Iii, Chapter I: Of Foreign Trade
• Part Iii, Chapter II: Of the Exchanges and Their Nature
• Part Iii, Chapter III: Further Explanations of the Nature of the Exchanges
• Part Iii, Chapter IV: Of the Variations In the Proportion of Values With Regard to the Metals Which Serve As Money
• Part Iii, Chapter V: Of the Augmentation and Diminution of Coin In Denomination
• Part Iii, Chapter VI: Of Banks and Their Credit
• Part Iii, Chapter VII: Further Explanations and Enquiries As to the Utility of a National Bank
• Part Iii, Chapter VIII: Of the Refinements of Credit of General Banks
• Richard Cantillon and the Nationality of Political Economy, By W. Stanley Jevons
• Life and Work of Richard Cantillon, By Henry Higgs
• Appendix a
• Appendix B: Bibliography

Part I, Chapter XIV

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-prices 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, Mechanicks 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.

Let us now suppose that to avoid so much care and trouble he makes a bargain with the Overseers of the Labourers, gives them Farms or pieces of Land and leaves to them the responsibility for maintaining in the usual manner all the Labourers they supervise, so that the Overseers, now become Farmers or Undertakers, give the Labourers for working on the land or Farm another third of the Produce for their Food, Clothing and other requirements, such as they had when the Owner employed them; suppose further that the Owner makes a bargain with the Overseers of the Mechanicks for the Food and other things that he gave them, that he makes the Overseers become Master-Craftsmen, fixes a common measure, like silver, to settle the price at which the Farmers will supply them with wool and they will supply him with cloth, and that the prices are such as to give the Master-Craftsmen the same advantages and enjoyments as they had when Overseers, and the Journeymen Mechanicks also the same as before, the Labour of the Mechanicks will be settled by the day or by the piece: the merchandise which they have made, Hats, Stockings, Shoes, Cloaths, etc. will be sold to the Landowner, the Farmers, the Labourers, and the other Mechanicks reciprocally at a price which leaves to all of them the same advantages as before; and the Farmers will sell, at a proportionate price, their produce and raw material.

It will then come to pass that the Overseers become Undertakers, will be the absolute masters of those who work under them, and will have more care and satisfaction in working on their own account. We suppose then that after this change all the people on this large Estate live just as they did before, and so all the portions and Farms of this great Estate will be put to the same use as it formerly was.

For if some of the Farmers sowed more corn than usual they must feed fewer Sheep, and have less Wool and Mutton to sell. Then there will be too much Corn and too little Wool for the consumption of the Inhabitants. Wool will therefore be dear, which will force the Inhabitants to wear their clothes longer than usual, and there will be too much Corn and a surplus for the next year. As we suppose that the Landowner has stipulated for the payment in silver of the third of the produce of the Farm to be paid to him, the Farmers who have too much Corn and too little Wool, will not be able to pay him his Rent. If he excuses them they will take care the next year to have less corn and more Wool, for Farmers always take care to use their land for the production of those things which they think will fetch the best price at Market. If, however, next year they have too much Wool and too little Corn for the demand, they will not fail to change from year to year the use of the land till they arrive at proportioning their production pretty well to the consumption of the Inhabitants. So a farmer who has arrived at about the proportion of consumption will have part of his Farm in grass, for hay, another for Corn, Wool and so on, and he will not change his plan unless he sees some considerable change in the demand; but in this example we have supposed that all the People live in the same way as when the Landowner cultivated the Land for himself, and consequently the Farmers will employ the Land for the same purposes as before.

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 Mechanicks 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 consumption 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 a 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.