Mandeville on the social cooperation which is required to produce a piece of scarlet cloth (1723)

Bernard Mandeville

The Anglo-Dutch doctor and writer Bernard Mandeville (1670-1733) was one of the first to note the extraordinary amount of social and economic cooperation which was required to produce something for sale on the market, in this case a piece of scarlet cloth:

What a Bustle is there to be made in several Parts of the World, before a fine Scarlet or crimson Cloth can be produced, what Multiplicity of Trades and Artificers must be employ’d! Not only such as are obvious, as Wool-combers, Spinners, the Weaver, the Cloth-worker, the Scourer, the Dyer, the Setter, the Drawer and the Packer; but others that are more remote and might seem foreign to it; as the Millwright, the Pewterer and the Chymist, which yet are all necessary as well as a great Number of other Handicrafts to have the Tools, Utensils and other Implements belonging to the Trades already named: But all these things are done at home, and may be perform’d without extraordinary Fatigue or Danger; the most frightful Prospect is left behind, when we reflect on the Toil and Hazard that are to be undergone abroad, the vast Seas we are to go over, the different Climates we are to endure, and the several Nations we must be obliged to for their Assistance.

In this Addendum to his “Fable of the Bees” (1705) Mandeville provides an early account of how interdependent markets had already become by the early 18th century. Fifty years later Adam Smith would explain that this cooperation, which was not planned by any individual person, was the result of the operation of an “invisible hand” which seemed to guide the activities of self-interested, profit-seeking individuals to produce a socially useful outcome which was not their primary consideration. Mandeville’s example was a piece of fashionable red cloth which, on the surface, might appear to be a rather useless luxury item, but which brought together thousands of dispersed individuals, or as he termed it “so many Hands, honest industrious labouring Hands”, from all over the world to produce items of enormous value for all of them. He also argues, prefiguring Adam Ferguson and Adam Smith, that these labours, by peacefully combining “so many voluntary Actions, belonging to different Callings and Occupations that Men are brought up to for a Livelihood,” results in a prosperous society “in which every one Works for himself, how much soever he may seem to Labour for others.” In Mandeville’s view, this was just another example of how a “private vice” like “Female Luxury” produces a “public benefit” which in this case was employment for the poor. Mandeville was only the first of many free market advocates to make this point: compare it with Bastiat’s story of “The Cabinet Maker & the Student” in Economic Harmonies (1850) and Leonard Read’s “I, Pencil” (December 1958).