The Wealth of Nations

THAT THE DIVISION OF LABOUR IS
LIMITED BY THE EXTENT OF THE MARKET.

As it is the power of exchanging that gives occasion to the division of
labour, so the extent of this division must always be limited by the
extent of that power, or, in other words, by the extent of the market.
When the market is very small, no person can have any encouragement to
dedicate himself entirely to one employment, for want of the power to
exchange all that surplus part of the produce of his own labour, which is
over and above his own consumption, for such parts of the produce of other
men’s labour as he has occasion for.

There are some sorts of industry, even of the lowest kind, which can be
carried on nowhere but in a great town. A porter, for example, can find
employment and subsistence in no other place. A village is by much too
narrow a sphere for him; even an ordinary market-town is scarce large
enough to afford him constant occupation. In the lone houses and very
small villages which are scattered about in so desert a country as the
highlands of Scotland, every farmer must be butcher, baker, and brewer,
for his own family. In such situations we can scarce expect to find even a
smith, a carpenter, or a mason, within less than twenty miles of another
of the same trade. The scattered families that live at eight or ten miles
distance from the nearest of them, must learn to perform themselves a
great number of little pieces of work, for which, in more populous
countries, they would call in the assistance of those workmen. Country
workmen are almost everywhere obliged to apply themselves to all the
different branches of industry that have so much affinity to one another
as to be employed about the same sort of materials. A country carpenter
deals in every sort of work that is made of wood; a country smith in every
sort of work that is made of iron. The former is not only a carpenter, but
a joiner, a cabinet-maker, and even a carver in wood, as well as a
wheel-wright, a plough-wright, a cart and waggon-maker. The employments of
the latter are still more various. It is impossible there should be such a
trade as even that of a nailer in the remote and inland parts of the
highlands of Scotland. Such a workman at the rate of a thousand nails
a-day, and three hundred working days in the year, will make three hundred
thousand nails in the year. But in such a situation it would be impossible
to dispose of one thousand, that is, of one day’s work in the year. As by
means of water-carriage, a more extensive market is opened to every sort
of industry than what land-carriage alone can afford it, so it is upon the
sea-coast, and along the banks of navigable rivers, that industry of every
kind naturally begins to subdivide and improve itself, and it is
frequently not till a long time after that those improvements extend
themselves to the inland parts of the country. A broad-wheeled waggon,
attended by two men, and drawn by eight horses, in about six weeks time,
carries and brings back between London and Edinburgh near four ton weight
of goods. In about the same time a ship navigated by six or eight men, and
sailing between the ports of London and Leith, frequently carries and
brings back two hundred ton weight of goods. Six or eight men, therefore,
by the help of water-carriage, can carry and bring back, in the same time,
the same quantity of goods between London and Edinburgh as fifty
broad-wheeled waggons, attended by a hundred men, and drawn by four
hundred horses. Upon two hundred tons of goods, therefore, carried by the
cheapest land-carriage from London to Edinburgh, there must be charged the
maintenance of a hundred men for three weeks, and both the maintenance and
what is nearly equal to maintenance the wear and tear of four hundred
horses, as well as of fifty great waggons. Whereas, upon the same quantity
of goods carried by water, there is to be charged only the maintenance of
six or eight men, and the wear and tear of a ship of two hundred tons
burthen, together with the value of the superior risk, or the difference
of the insurance between land and water-carriage. Were there no other
communication between those two places, therefore, but by land-carriage,
as no goods could be transported from the one to the other, except such
whose price was very considerable in proportion to their weight, they
could carry on but a small part of that commerce which at present subsists
between them, and consequently could give but a small part of that
encouragement which they at present mutually afford to each other’s
industry. There could be little or no commerce of any kind between the
distant parts of the world. What goods could bear the expense of
land-carriage between London and Calcutta? Or if there were any so
precious as to be able to support this expense, with what safety could
they be transported through the territories of so many barbarous nations?
Those two cities, however, at present carry on a very considerable
commerce with each other, and by mutually affording a market, give a good
deal of encouragement to each other’s industry.

Since such, therefore, are the advantages of water-carriage, it is natural
that the first improvements of art and industry should be made where this
conveniency opens the whole world for a market to the produce of every
sort of labour, and that they should always be much later in extending
themselves into the inland parts of the country. The inland parts of the
country can for a long time have no other market for the greater part of
their goods, but the country which lies round about them, and separates
them from the sea-coast, and the great navigable rivers. The extent of the
market, therefore, must for a long time be in proportion to the riches and
populousness of that country, and consequently their improvement must
always be posterior to the improvement of that country. In our North
American colonies, the plantations have constantly followed either the
sea-coast or the banks of the navigable rivers, and have scarce anywhere
extended themselves to any considerable distance from both.

The nations that, according to the best authenticated history, appear to
have been first civilized, were those that dwelt round the coast of the
Mediterranean sea. That sea, by far the greatest inlet that is known in
the world, having no tides, nor consequently any waves, except such as are
caused by the wind only, was, by the smoothness of its surface, as well as
by the multitude of its islands, and the proximity of its neighbouring
shores, extremely favourable to the infant navigation of the world; when,
from their ignorance of the compass, men were afraid to quit the view of
the coast, and from the imperfection of the art of ship-building, to
abandon themselves to the boisterous waves of the ocean. To pass beyond
the pillars of Hercules, that is, to sail out of the straits of Gibraltar,
was, in the ancient world, long considered as a most wonderful and
dangerous exploit of navigation. It was late before even the Phoenicians
and Carthaginians, the most skilful navigators and ship-builders of those
old times, attempted it; and they were, for a long time, the only nations
that did attempt it.

Of all the countries on the coast of the Mediterranean sea, Egypt seems to
have been the first in which either agriculture or manufactures were
cultivated and improved to any considerable degree. Upper Egypt extends
itself nowhere above a few miles from the Nile; and in Lower Egypt, that
great river breaks itself into many different canals, which, with the
assistance of a little art, seem to have afforded a communication by
water-carriage, not only between all the great towns, but between all the
considerable villages, and even to many farm-houses in the country, nearly
in the same manner as the Rhine and the Maese do in Holland at present.
The extent and easiness of this inland navigation was probably one of the
principal causes of the early improvement of Egypt.

The improvements in agriculture and manufactures seem likewise to have
been of very great antiquity in the provinces of Bengal, in the East
Indies, and in some of the eastern provinces of China, though the great
extent of this antiquity is not authenticated by any histories of whose
authority we, in this part of the world, are well assured. In Bengal, the
Ganges, and several other great rivers, form a great number of navigable
canals, in the same manner as the Nile does in Egypt. In the eastern
provinces of China, too, several great rivers form, by their different
branches, a multitude of canals, and, by communicating with one another,
afford an inland navigation much more extensive than that either of the
Nile or the Ganges, or, perhaps, than both of them put together. It is
remarkable, that neither the ancient Egyptians, nor the Indians, nor the
Chinese, encouraged foreign commerce, but seem all to have derived their
great opulence from this inland navigation.

All the inland parts of Africa, and all that part of Asia which lies any
considerable way north of the Euxine and Caspian seas, the ancient
Scythia, the modern Tartary and Siberia, seem, in all ages of the world,
to have been in the same barbarous and uncivilized state in which we find
them at present. The sea of Tartary is the frozen ocean, which admits of
no navigation; and though some of the greatest rivers in the world run
through that country, they are at too great a distance from one another to
carry commerce and communication through the greater part of it. There are
in Africa none of those great inlets, such as the Baltic and Adriatic seas
in Europe, the Mediterranean and Euxine seas in both Europe and Asia, and
the gulfs of Arabia, Persia, India, Bengal, and Siam, in Asia, to carry
maritime commerce into the interior parts of that great continent; and the
great rivers of Africa are at too great a distance from one another to
give occasion to any considerable inland navigation. The commerce,
besides, which any nation can carry on by means of a river which does not
break itself into any great number of branches or canals, and which runs
into another territory before it reaches the sea, can never be very
considerable, because it is always in the power of the nations who possess
that other territory to obstruct the communication between the upper
country and the sea. The navigation of the Danube is of very little use to
the different states of Bavaria, Austria, and Hungary, in comparison of
what it would be, if any of them possessed the whole of its course, till
it falls into the Black sea.