The principal commerce in every civilized society is that between the towns people and the country folk. The raw
materials from the country are exchanged for the manufactured products from the towns. This exchange is mutually beneficial. While the country supplies the town with the means of subsistence, the town provides a market for the surplus produce of the country.
The author says that the natural order of things is that capital is first invested in agriculture, afterwards in manufacture, and last of all in foreign commerce. But, partly due to government intervention, this natural order has been inverted.
Under normal circumstances, large estates are divided and broken up into smaller plots with the passage of time. But the law of primogeniture (the right of the first born son to inherit the entire estate) prevented this from taking place. The lords of these large estates were more interested in defending – and enlarging – their territories than paying attention to the cultivation and the improvement of their lands. As for their tenants, they were mostly serfs, and possessed neither the means nor the motivation to improve the land. Besides, there were certain restrictions placed on the farmers – the export of corn was banned and inland commerce (in farm produce) was restricted.
The author says that the feudal order did not give rise to these developments – rather, the feudal order arose out of these developments. Jurisdiction over their tenants in civil and criminal matters, the power of making laws, of raising troops and of coining money were all rights enjoyed by the lords much before the feudal law came into place. All the feudal law did was to convert an existing state of affairs into a legal one.
The earliest inhabitants of towns were tradesmen and mechanics; though poor and taxed, they were more independent than the inhabitants of the country. They had their own magistrates and town councils, they made their own laws, and they were responsible for their own defense. In other words, they were largely self-governing, and were independent of the feudal lords. In some countries, these cities began to send deputies to the general assemblies of the state, whereas in others they even became independent republics. Secure in their towns and cities, these free men and women could enjoy the fruits of their labors.
The increase in the wealth of trading and manufacturing towns led (in turn) to an increase in the wealth of the countryside. By providing a ready market for the produce of the country, the towns encouraged the cultivation and further improvement of the countryside. The wealth acquired by city dwellers (mostly by merchants) was often used for purchasing lands in the countryside. Following the example of the towns and cities, liberty and freedom also spread to the country. The author concludes his arguments by saying that the capital acquired by means of commerce and manufacture is an uncertain possession unless and until it has been secured by way of the improvement and cultivation of the land.
Interestingly, when the landed lords maintained their tenants, the tenants were answerable to them and to them alone. When a wealthy man maintains a trader or manufactures by purchasing his products, the trader or manufacturer concerned is answerable to all of his (hundreds / thousands) customers – in effect, he is answerable to none.