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Chapter 3



The inhabitants of cities and towns were, after the fall of the Roman
empire, not more favoured than those of the country. They consisted, indeed,
of a very different order of people from the first inhabitants of the
ancient republics of Greece and Italy. These last were composed chiefly of
the proprietors of lands, among whom the public territory was originally
divided, and who found it convenient to build their houses in the
neighbourhood of one another, and to surround them with a wall, for the sake
of common defence. After the fall of the Roman empire, on the contrary, the
proprietors of land seem generally to have lived in fortified castles on
their own estates, and in the midst of their own tenants and dependants. The
towns were chiefly inhabited by tradesmen and mechanics, who seem, in those
days, to have been of servile, or very nearly of servile condition. The
privileges which we find granted by ancient charters to the inhabitants of
some of the principal towns in Europe, sufficiently show what they were
before those grants. The people to whom it is granted as a privilege, that
they might give away their own daughters in marriage without the consent of
their lord, that upon their death their own children, and not their lord,
should succeed to their goods, and that they might dispose of their own
effects by will, must, before those grants, have been either altogether, or
very nearly, in the same state of villanage with the occupiers of land in
the country.

They seem, indeed, to have been a very poor, mean set of people, who seemed
to travel about with their goods from place to place, and from fair to fair,
like the hawkers and pedlars of the present times. In all the different
countries of Europe then, in the same manner as in several of the Tartar
governments of Asia at present, taxes used to be levied upon the persons and
goods of travellers, when they passed through certain manors, when they went
over certain bridges, when they carried about their goods from place to
place in a fair, when they erected in it a booth or stall to sell them in.
These different taxes were known in England by the names of passage,
pontage, lastage, and stallage. Sometimes the king, sometimes a great lord,
who had, it seems, upon some occasions, authority to do this, would grant to
particular traders, to such particularly as lived in their own demesnes, a
general exemption from such taxes. Such traders, though in other respects of
servile, or very nearly of servile condition, were upon this account called
free traders. They, in return, usually paid to their protector a sort of
annual poll-tax. In those days protection was seldom granted without a
valuable consideration, and this tax might perhaps be considered as
compensation for what their patrons might lose by their exemption from other
taxes. At first, both those poll-taxes and those exemptions seem to have
been altogether personal, and to have affected only particular individuals,
during either their lives, or the pleasure of their protectors. In the very
imperfect accounts which have been published from Doomsday-book, of several
of the towns of England, mention is frequently made, sometimes of the tax
which particular burghers paid, each of them, either to the king, or to some
other great lord, for this sort of protection, and sometimes of the general
amount only of all those taxes. {see Brady's Historical Treatise of Cities
and Boroughs, p. 3. etc.}

But how servile soever may have been originally the condition of the
inhabitants of the towns, it appears evidently, that they arrived at liberty
and independency much earlier than the occupiers of land in the country.
That part of the king's revenue which arose from such poll-taxes in any
particular town, used commonly to be let in farm, during a term of years,
for a rent certain, sometimes to the sheriff of the county, and sometimes to
other persons. The burghers themselves frequently got credit enough to be
admitted to farm the revenues of this sort winch arose out of their own
town, they becoming jointly and severally answerable for the whole rent.
{See Madox, Firma Burgi, p. 18; also History of the Exchequer, chap. 10,
sect. v, p. 223, first edition.} To let a farm in this manner, was quite
agreeable to the usual economy of, I believe, the sovereigns of all the
different countries of Europe, who used frequently to let whole manors to
all the tenants of those manors, they becoming jointly and severally
answerable for the whole rent ; but in return being allowed to collect it in
their own way, and to pay it into the king's exchequer by the hands of their
own bailiff, and being thus altogether freed from the insolence of the
king's officers; a circumstance in those days regarded as of the greatest

At first, the farm of the town was probably let to the burghers, in the same
manner as it had been to other farmers, for a term of years only. In process
of time, however, it seems to have become the general practice to grant it
to them in fee, that is for ever, reserving a rent certain, never afterwards
to be augmented. The payment having thus become perpetual, the exemptions,
in return, for which it was made, naturally became perpetual too. Those
exemptions, therefore, ceased to be personal, and could not afterwards be
considered as belonging to individuals, as individuals, but as burghers of a
particular burgh, which, upon this account, was called a free burgh, for the
same reason that they had been called free burghers or free traders.

Along with this grant, the important privileges, above mentioned, that they
might give away their own daughters in marriage, that their children should
succeed to them, and that they might dispose of their own effects by will,
were generally bestowed upon the burghers of the town to whom it was given.
Whether such privileges had before been usually granted, along with the
freedom of trade, to particular burghers, as individuals, I know not. I
reckon it not improbable that they were, though I cannot produce any direct
evidence of it. But however this may have been, the principal attributes of
villanage and slavery being thus taken away from them, they now at least
became really free, in our present sense of the word freedom.

Nor was this all. They were generally at the same time erected into a
commonalty or corporation, with the privilege of having magistrates and a
town-council of their own, of making bye-laws for their own government, of
building walls for their own defence, and of reducing all their inhabitants
under a sort of military discipline, by obliging them to watch and ward;
that is, as anciently understood, to guard and defend those walls against
all attacks and surprises, by night as well as by day. In England they were
generally exempted from suit to the hundred and county courts : and all such
pleas as should arise among them, the pleas of the crown excepted, were left
to the decision of their own magistrates. In other countries, much greater
and more extensive jurisdictions were frequently granted to them. {See
Madox, Firma Burgi. See also Pfeffel in the Remarkable events under Frederick
II. and his Successors of the House of Suabia.}

It might, probably, be necessary to grant to such towns as were admitted to
farm their own revenues, some sort of compulsive jurisdiction to oblige
their own citizens to make payment. In those disorderly times, it might have
been extremely inconvenient to have left them to seek this sort of justice
from any other tribunal. But it must seem extraordinary, that the sovereigns
of all the different countries of Europe should have exchanged in this
manner for a rent certain, never more to be augmented, that branch of their
revenue, which was, perhaps, of all others, the most likely to be improved
by the natural course of things, without either expense or attention of
their own ; and that they should, besides, have in this manner voluntarily
erected a sort of independent republics in the heart of their own dominions.

In order to understand this, it must be remembered, that, in those days, the
sovereign of perhaps no country in Europe was able to protect, through the
whole extent of his dominions, the weaker part of his subjects from the
oppression of the great lords. Those whom the law could not protect, and who
were not strong enough to defend themselves, were obliged either to have
recourse to the protection of some great lord, and in order to obtain it, to
become either his slaves or vassals; or to enter into a league of mutual
defence for the common protection of one another. The inhabitants of cities
and burghs, considered as single individuals, had no power to defend
themselves; but by entering into a league of mutual defence with their
neighbours, they were capable of making no contemptible resistance. The
lords despised the burghers, whom they considered not only as a different
order, but as a parcel of emancipated slaves, almost of a different species
from themselves. The wealth of the burghers never failed to provoke their
envy and indignation, and they plundered them upon every occasion without
mercy or remorse. The burghers naturally hated and feared the lords. The
king hated and feared them too ; but though, perhaps, he might despise, he
had no reason either to hate or fear the burghers. Mutual interest,
therefore, disposed them to support the king, and the king to support them
against the lords. They were the enemies of his enemies, and it was his
interest to render them as secure and independent of those. enemies as he
could. By granting them magistrates of their own, the privilege of making
bye-laws for their own government, that of building walls for their own
defence, and that of reducing all their inhabitants under a sort of military
discipline, he gave them all the means of security and independency of the
barons which it was in his power to bestow. Without the establishment of
some regular government of this kind, without some authority to compel their
inhabitants to act according to some certain plan or system, no voluntary
league of mutual defence could either have afforded them any permanent
security, or have enabled them to give the king any considerable support. By
granting them the farm of their own town in fee, he took away from those
whom he wished to have for his friends, and, if one may say so, for his
allies, all ground of jealousy and suspicion, that he was ever afterwards to
oppress them, either by raising the farm-rent of their town, or by granting
it to some other farmer.

The princes who lived upon the worst terms with their barons, seem
accordingly to have been the most liberal in grants of this kind to their
burghs. King John of England, for example, appears to have been a most
munificent benefactor to his towns. {See Madox.} Philip I. of France lost
all authority over his barons. Towards the end of his reign, his son Lewis,
known afterwards by the name of Lewis the Fat, consulted, according to
Father Daniel, with the bishops of the royal demesnes, concerning the most
proper means of restraining the violence of the great lords. Their advice
consisted of two different proposals. One was to erect a new order of
jurisdiction, by establishing magistrates and a town-council in every
considerable town of his demesnes. The other was to form a new militia, by
making the inhabitants of those towns, under the command of their own
magistrates, march out upon proper occasions to the assistance of the king.
It is from this period, according to the French antiquarians, that we are to
date the institution of the magistrates and councils of cities in France. It
was during the unprosperous reigns of the princes of the house of Suabia,
that the greater part of the free towns of Germany received the first grants
of their privileges, and that the famous Hanseatic league first became
formidable. {See Pfeffel.}

The militia of the cities seems, in those times, not to have been inferior
to that of the country ; and as they could be more readily assembled upon
any sudden occasion, they frequently had the advantage in their disputes
with the neighbouring lords. In countries such as Italy or Switzerland, in
which, on account either of their distance from the principal seat of
government, of the natural strength of the country itself, or of some other
reason, the sovereign came to lose the whole of his authority; the cities
generally became independent republics, and conquered all the nobility in
their neighbourhood; obliging them to pull down their castles in the
country, and to live, like other peaceable inhabitants, in the city. This is
the short history of the republic of Berne, as well as of several other
cities in Switzerland. If you except Venice, for of that city the history is
somewhat different, it is the history of all the considerable Italian
republics, of which so great a number arose and perished between the end of
the twelfth and the beginning of the sixteenth century.

In countries such as France and England, where the authority of the
sovereign, though frequently very low, never was destroyed altogether, the
cities had no opportunity of becoming entirely independent. They became,
however, so considerable, that the sovereign could impose no tax upon them,
besides the stated farm-rent of the town, without their own consent. They
were, therefore, called upon to send deputies to the general assembly of the
states of the kingdom, where they might join with the clergy and the barons
in granting, upon urgent occasions, some extraordinary aid to the king.
Being generally, too, more favourable to his power, their deputies seem
sometimes to have been employed by him as a counterbalance in those
assemblies to the authority of the great lords. Hence the origin of the
representation of burghs in the states-general of all great monarchies in

Order and good government, and along with them the liberty and security of
individuals, were in this manner established in cities, at a time when the
occupiers of land in the country, were exposed to every sort of violence.
But men in this defenceless state naturally content themselves with their
necessary subsistence ; because, to acquire more, might only tempt the
injustice of their oppressors. On the contrary, when they are secure of
enjoying the fruits of their industry, they naturally exert it to better
their condition, and to acquire not only the necessaries, but the
conveniencies and elegancies of life. That industry, therefore, which aims
at something more than necessary subsistence, was established in cities long
before it was commonly practised by the occupiers of land in the country.
If, in the hands of a poor cultivator, oppressed with the servitude of
villanage, some little stock should accumulate, he would naturally conceal
it with great care from his master, to whom it would otherwise have
belonged, and take the first opportunity of running away to a town. The law
was at that time so indulgent to the inhabitants of towns, and so desirous
of diminishing the authority of the lords over those of the country, that if
he could conceal himself there from the pursuit of his lord for a year, he
was free for ever. Whatever stock, therefore, accumulated in the hands of
the industrious part of the inhabitants of the country, naturally took
refuge in cities, as the only sanctuaries in which it could be secure to the
person that acquired it.

The inhabitants of a city, it is true, must always ultimately derive their
subsistence, and the whole materials and means of their industry, from the
country. But those of a city, situated near either the sea-coast or the
banks of a navigable river, are not necessarily confined to derive them from
the country in their neighbourhood. They have a much wider range, and
may draw them from the most remote corners of the world, either in exchange
for the manufactured produce of their own industry, or by performing the
office of carriers between distant countries, and exchanging the produce of
one for that of another. A city might, in this manner, grow up to great
wealth and splendour, while not only the country in its neighbourhood, but
all those to which it traded, were in poverty and wretchedness. Each of
those countries, perhaps, taken singly, could afford it but a small part,
either of its subsistence or of its employment ; but all of them taken
together, could afford it both a great subsistence and a great employment.
There were, however, within the narrow circle of the commerce of those
times, some countries that were opulent and industrious. Such was the Greek
empire as long as it subsisted, and that of the Saracens during the reigns
of the Abassides. Such, too, was Egypt till it was conquered by the Turks,
some part of the coast of Barbary, and all those provinces of Spain which
were under the government of the Moors.

The cities of Italy seem to have been the first in Europe which were raised
by commerce to any considerable degree of opulence. Italy lay in the centre
of what was at that time the improved and civilized part of the world. The
crusades, too, though, by the great waste of stock and destruction of
inhabitants which they occasioned, they must necessarily have retarded the
progress of the greater part of Europe, were extremely favourable to that of
some Italian cities. The great armies which marched from all parts to the
conquest of the Holy Land, gave extraordinary encouragement to the shipping
of Venice, Genoa, and Pisa, sometimes in transporting them thither, and
always in supplying them with provisions. They were the commissaries, if one
may say so, of those armies ; and the most destructive frenzy that ever
befel the European nations, was a source of opulence to those republics.

The inhabitants of trading cities, by importing the improved manufactures
and expensive luxuries of richer countries, afforded some food to the vanity
of the great proprietors, who eagerly purchased them with great quantities
of the rude produce of their own lands. The commerce of a great part of
Europe in those times, accordingly, consisted chiefly in the exchange of
their own rude, for the manufactured produce of more civilized nations. Thus
the wool of England used to be exchanged for the wines of France, and the
fine cloths of Flanders, in the same manner as the corn in Poland is at this
day, exchanged for the wines and brandies of France, and for the silks and
velvets of France and Italy.

A taste for the finer and more improved manufactures was, in this manner,
introduced by foreign commerce into countries where no such works were
carried on. But when this taste became so general as to occasion a
considerable demand, the merchants, in order to save the expense of carriage,
naturally endeavoured to establish some manufactures of the same kind in
their own country. Hence the origin of the first manufactures for distant
sale, that seem to have been established in the western provinces of Europe,
after the fall of the Roman empire.

No large country, it must be observed, ever did or could subsist without
some sort of manufactures being carried on in it ; and when it is said of
any such country that it has no manufactures, it must always be understood
of the finer and more improved, or of such as are fit for distant sale. In
every large country both the clothing and household furniture or the far
greater part of the people, are the produce of their own industry. This is
even more universally the case in those poor countries which are commonly
said to have no manufactures, than in those rich ones that are said to
abound in them. In the latter you will generally find, both in the clothes
and household furniture of the lowest rank of people, a much greater
proportion of foreign productions than in the former.

Those manufactures which are fit for distant sale, seem to have been
introduced into different countries in two different ways.

Sometimes they have been introduced in the manner above mentioned, by the
violent operation, if one may say so, of the stocks of particular merchants
and undertakers, who established them in imitation of some foreign
manufactures of the same kind. Such manufactures, therefore, are the offspring
of foreign commerce; and such seem to have been the ancient manufactures of
silks, velvets, and brocades, which flourished in Lucca during the
thirteenth century. They were banished from thence by the tyranny of one of
Machiavel's heroes, Castruccio Castracani. In 1310, nine hundred families
were driven out of Lucca, of whom thirty-one retired to Venice, and offered
to introduce there the silk manufacture. {See Sandi Istoria civile de
Vinezia, part 2 vol. i, page 247 and 256.} Their offer was accepted, many
privileges were conferred upon them, and they began the manufacture with
three hundred workmen. Such, too, seem to have been the manufactures of fine
cloths that anciently flourished in Flanders, and which were introduced into
England in the beginning of the reign of Elizabeth, and such are the present
silk manufactures of Lyons and Spitalfields. Manufactures introduced in this
manner are generally employed upon foreign materials, being imitations of
foreign manufactures. When the Venetian manufacture was first established,
the materials were all brought from Sicily and the Levant. The more ancient
manufacture of Lucca was likewise carried on with foreign materials. The
cultivation of mulberry trees, and the breeding of silk-woms, seem not to
have been common in the northern parts of Italy before the sixteenth
century. Those arts were not introduced into France till the reign of
Charles IX. The manufactures of Flanders were carried on chiefly with
Spanish and English wool. Spanish wool was the material, not of the first
woollen manufacture of England, but of the first that was fit for distant
sale. More than one half the materials of the Lyons manufacture is at this
day foreign silk; when it was first established, the whole, or very nearly
the whole, was so. No part of the materials of the Spitalfields manufacture
is ever likely to be the produce of England. The seat of such manufactures,
as they are generally introduced by the scheme and project of a few
individuals, is sometimes established in a maritime city, and sometimes in
an inland town, according as their interest, judgment, or caprice, happen to

At other times, manufactures for distant sale grow up naturally, and as it
were of their own accord, by the gradual refinement of those household and
coarser manufactures which must at all times be carried on even in the
poorest and rudest countries. Such manufactures are generally employed upon
the materials which the country produces, and they seem frequently to have
been first refined and improved In such inland countries as were not,
indeed, at a very great, but at a considerable distance from the sea-coast,
and sometimes even from all water carriage. An inland country, naturally
fertile and easily cultivated, produces a great surplus of provisions beyond
what is necessary for maintaining the cultivators; and on account of the
expense of land carriage, and inconveniency of river navigation, it may
frequently be difficult to send this surplus abroad. Abundance, therefore,
renders provisions cheap, and encourages a great number of workmen to settle
in the neighbourhood, who find that their industry can there procure them
more of the necessaries and conveniencies of life than in other places. They
work up the materials of manufacture which the land produces, and exchange
their finished work, or, what is the same thing, the price of it, for more
materials and provisions. They give a new value to the surplus part of the
rude produce, by saving the expense of carrying it to the water-side, or to
some distant market ; and they furnish the cultivators with something in
exchange for it that is either useful or agreeable to them, upon easier
terms than they could have obtained it before. The cultivators get a better
price for their surplus produce, and can purchase cheaper other
conveniencies which they have occasion for. They are thus both encouraged
and enabled to increase this surplus produce by a further improvement and
better cultivation of the land; and as the fertility of she land had given
birth to the manufacture, so the progress of the manufacture reacts upon the
land, and increases still further it's fertility. The manufacturers first
supply the neighbourhood, and afterwards, as their work improves and
refines, more distant markets. For though neither the rude produce, nor even
the coarse manufacture, could, without the greatest difficulty, support the
expense of a considerable land-carriage, the refined and improved
manufacture easily may. In a small bulk it frequently contains the price of
a great quantity of rude produce. A piece of fine cloth, for example which
weighs only eighty pounds, contains in it the price, not only of eighty
pounds weight of wool, but sometimes of several thousand weight of corn, the
maintenance of the different working people, and of their immediate
employers. The corn which could with difficulty have been carried abroad in
its own shape, is in this manner virtually exported in that of the complete
manufacture, and may easily be sent to the remotest corners of the world. In
this manner have grown up naturally, and, as it were, of their own accord,
the manufactures of Leeds, Halifax, Sheffield, Birmingham, and
Wolverhampton. Such manufactures are the offspring of agriculture. In the
modern history of Europe, their extension and improvement have generally
been posterior to those which were the offspring of foreign commerce.
England was noted for the manufacture of fine cloths made of Spanish wool,
more than a century before any of those which now flourish in the places
above mentioned were fit for foreign sale. The extension and improvement of
these last could not take place but in consequence of the extension and
improvement of agriculture, the last and greatest effect of foreign
commerce, and of the manufactures immediately introduced by it, and which I
shall now proceed to explain.

Adam Smith

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