Farmers, Lace Makers, and Adam Smith: Plowing Through the Agrarian Dream of Economics
When Economics Meets the Plow
If economics had a scent, this chapter would smell like soil. Not because it's dirty, but because it's grounded. In Book IV Chapter 7 of Adam Smith’s masterpiece, The Wealth of Nations, we're not diving into stock markets or luxury silk trades—we're stepping into muddy fields, watching farmers, and exploring how one of the most “fertile” economic theories ever imagined places agriculture at the heart of national wealth.
Imagine Adam Smith himself, sitting at the edge of a farm instead of a university lecture hall, observing a plow at work while scribbling in his notebook, “The Wealth of Nations begins here—in the mud.” This mental image fits well with the Physiocrats, a group of 18th-century French thinkers who believed land is the only true source of wealth. In their eyes, farmers were the saints of the economy. Everyone else? Freeloaders.
Smith didn’t completely dismiss their logic. He admired their originality and their defense of agriculture against urban bias. But he also saw the cracks massive ones. He believed any system that declares farmers the only productive class oversimplifies the complexities of a working economy. It was like saying only the singer makes music, not the band, not the composer, not even the sound engineer.
So let’s walk through this chapter together. We'll break it down layer by layer like preparing soil before planting sprinkled with a bit of humor, some gentle anecdotes, and Smith’s signature sharp insight. Ready to plow some intellectual fields? Let’s go.
The Agricultural System: A Fertile Theory That Never Bore Fruit
The agricultural system claims that agriculture is the only true source of value and national wealth. This idea was championed by the Physiocrats, led by François Quesnay—a court physician who preferred economic diagrams to thermometers. According to them, only the land produces a surplus; trade and industry just recycle existing value.
Ironically, despite their strong opinions, no nation actually implemented this system. Like a trendy new diet that everyone talks about but no one really sticks to, the agricultural system lived in essays, philosophical salons, and the minds of French intellectuals—but never in policy. It was the avocado toast of its time: beautiful on paper, impractical in execution.
Smith wasn’t alarmed by the theory after all, it had done no harm. But because of its popularity, he took the time to point out its limitations. He respected its intentions but dismissed its usefulness. He likened it to a dazzling blueprint for a futuristic house… with no working plumbing. Stylish, yes. Livable? Not really.
More importantly, Smith pointed out that wealth isn't only cultivated from fields—it’s also forged in workshops, ships, and market stalls. A nation thrives not just because it grows wheat, but because it grinds it into flour, bakes it into bread, and sells it with a smile. Economies are ecosystems, not single-crop farms.
Social Classes According to the Physiocrats: Farmers as Heroes, Merchants as Freeloaders?
In the Physiocratic model, society is neatly sliced into three economic classes. At the top are the landowners, who collect rent. In the middle are the cultivators farmers and agricultural laborers whom they call the productive class. And at the bottom? Everyone else craftsmen, merchants, manufacturers piled into the unproductive class.
That’s right. According to this theory, if you're a lace maker or a baker, you're “unproductive.” Even if you turn a penny’s worth of flax into a £30 lace masterpiece, you’re not seen as generating real wealth. That’s like saying a chef isn’t productive because the food gets eaten. As Smith might say, “That’s not just wrong it’s dangerously silly.”
Smith strongly opposed this view. He argued that blacksmiths, weavers, traders, and artisans all add value just in different forms. A farmer needs a plow, and someone needs to build that plow. That plow then helps produce more crops. Voilà productivity! It's a chain reaction, not a one-man show.
Labeling everyone outside agriculture as parasitic doesn’t just ignore their contributions it threatens economic balance. If you uplift farmers and ignore everyone else, the economy collapses like a three-legged stool missing two legs. Even the farmer can’t farm without boots, a market, and someone to fix his cart wheel.
Related Posts
Farmers: The Saints of the Economy?
The Physiocrats glorified the farmer like an economic superhero strong, honest, productive. They saw him as the only one who truly adds new value to the world by creating surplus from nature itself. Everyone else merely rearranged existing stuff. The farmer feeds the nation, they argued. So give him the crown.
Smith, ever the realist, didn’t deny the importance of farming. But he questioned the idea that only farming creates surplus. What about the shoemaker who equips the farmer? The carpenter who builds his barn? The merchant who sells his corn in the city? They may not plant seeds, but they’re part of the harvest.
He likened this thinking to comparing apples and hammers. Both are useful but in different ways. Just because a farmer grows something edible doesn’t mean a tailor’s work is lesser. Economics isn’t a contest of nobility it’s a network of functions.
And here’s the kicker: even a farmer’s surplus is made possible by others. Tools, markets, roads, and even loans come from sectors the Physiocrats ignored. Remove them, and even the most fertile soil goes silent. The theory, Smith argued, ignores the hidden hands that support the hand that sows.
Are Merchants and Craftsmen Really “Unproductive”?
One of the boldest claims from the Physiocrats is that merchants and manufacturers don't produce real wealth. To them, these people merely maintain capital, using up as much as they generate. If you're a carpenter making chairs, you’re just turning wood into furniture of equal value, not creating surplus. By that logic, you're economically sterile.
Smith raises an eyebrow probably both. He argues that craftsmen and traders actually boost economic efficiency, spur innovation, and enable specialization. That’s not “unproductive”—that’s the lifeblood of a thriving economy. If everyone had to grow their own food and sew their own clothes, we'd still be living in caves. And naked.
He adds that division of labor increases productivity exponentially. If a farmer doesn’t have to make his own tools or market his own produce, he can focus on what he does best farming. And that makes the whole system work better. It’s not just about what you produce, but how your role allows others to produce more too.
So, calling non-farming labor “barren” is not only unfair it’s false. A world without craftsmen and traders wouldn’t just be less convenient. It would be unrecognizable. Even the farmer, whom the Physiocrats put on a pedestal, would quickly topple without their “unproductive” allies.
Agrarian vs. Commercial Nations: Rivals or Dance Partners?
Physiocrats idealized nations like France, rich in farmland and full of farmers. They viewed nations like Holland—busy with trade and manufacturing as economically hollow. Smith laughed at this. Comparing France and Holland economically, he said, is like comparing a potato and a smartphone. Both serve a need, but one clearly evolves faster.
Agrarian nations grow stuff. Commercial nations move, refine, and distribute stuff. Which one is better? Smith said: neither. They complement each other. A farming country without trade is like a bakery without customers. A trading nation without food is a fleet of ships with nothing to eat.
Smith also warned against protectionism policies that block foreign goods. He said such barriers hurt everyone, especially farmers, because they make imports more expensive and reduce markets for exports. If you make it harder to trade, you're not protecting farmers you’re choking them.
Bottom line? It’s not a war between plow and port. It's a partnership. When trade and farming work together, nations prosper. When they compete like jealous siblings, everyone ends up grounded.
Freedom: The Fertilizer of Economic Growth
After demolishing the walls of the agricultural system, Smith lays the cornerstone of his alternative: economic freedom. Let each person do what they do best. Let the market guide production. And let government focus on three things: security, justice, and public works.
Smith wasn’t an anarchist he believed in smart governance. But he rejected the idea that the state should micromanage the economy. Overregulation, he argued, stifles initiative and innovation. Give people the liberty to trade, farm, build, and invent, and they’ll surprise you. Give them too many rules, and they'll stop trying.
Freedom isn’t chaos. It’s an organic balance where incentives align with outcomes. And in this system, prosperity doesn’t have to be forced it grows naturally. Like a well-tended crop, wealth will flourish where sunlight (opportunity) and water (resources) flow.
So if we want a healthy economy, said Smith, don’t play favorites. Let farmers, merchants, craftsmen, and traders compete fairly. Don’t fence the field fertilize it.
The Lace Maker, the Landlord, and the Patient Cow
Let’s end with a gentle parable from Smith’s perspective. Imagine a field. A cow pulls a plow. A man walks behind, guiding it. Now ask: who’s doing the real work? The cow? The man? The blacksmith who made the plow? The tailor who made the farmer’s clothes?
According to the Physiocrats, only the cow counts. Everyone else is just overhead. Smith saw the flaw in this. The cow needs guidance. The farmer needs clothes. The clothes need cloth. The cloth needs weaving. And round and round we go.
Economies don’t function because of one class. They flourish because of interdependence. Even the quietest job, like a lace maker toiling two years on a masterpiece, adds to the total wealth of the nation. Not because of the lace itself, but because of the system it supports and the value it sustains.
So next time someone says only farmers matter, channel your inner Smith and say, “Respect the lace.”
Download the Ebook Now
To access the FREE Ebook of The Wealth of Nations, simply click link below and enjoy reading one of the most influential books in the history of economics.
Disclaimer: The ebook you will receive from the link provided is free of charge and is not being sold or used for any commercial purposes. We simply wish to share this invaluable knowledge with you.
If you're eager to dive deeper into the concepts and explore more insights, you can easily download the full eBook. Simply follow the link below and start your journey toward gaining a better understanding!
