“The [feudal] lords despised the burghers, whom they considered not only as of 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.” (WN, III.iii.8)

In Chapter 3 of Book III of The Wealth of Nations (available here), Adam Smith surveys the rise of cities and towns in Europe after the collapse of the Roman Empire and explains why so many inhabitants of these urban enclaves, i.e. the burghers, became more and more wealthy over time while the vast majority of their counterparts in the countryside remained impoverished and subservient.

To begin, Smith tells us that, after the fall of Rome, “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.” (WN, III.iii.1) Nevertheless, despite their servile status — especially when compared with the great lords of the countryside — these humble artisans enjoyed a major advantage: they were outside the legal jurisdiction of the despotic feudal lords. In short, they were free! Or in the immortal words of Adam Smith: “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.” (WN, III.iii.3; my emphasis)

Among the freedoms (the adult male) inhabitants of towns and cities enjoyed were the right to marry off their daughters without a feudal lord’s permission, the right to dispose of their property by will (again, without a lord’s permission), and the right of appointing their own rulers and of making their own laws. (WN, III.iii.3-7) And furthermore, they were free to trade with whomever they pleased! For Smith, it was these economic and legal freedoms that led to the economic growth and development of the cities and towns of Europe in marked contrast to the despotic and feudal economic stagnation of the European countryside. On this note — the Smithian connection between freedom and economic growth and between the lack of freedom and economic stagnation — the wisdom of the Scottish political economist is worth quoting in full:

“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 conveniences 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.” (WN, III.iii.12-13; my emphasis)

If I could therefore sum up the main takeaway of Smith’s Wealth of Nation in a few words, I would say: “Legalize Freedom and Protect Property Rights.” But at the same time, Smith’s formula — his ringing defense of liberty along with his call for good government — poses a political paradox: governments enact and enforce laws, but laws, by definition, limit liberty. (To be continued …)