Production is Directed by Landowners
The owner of a larger estate will cultivate it according to his own fashions and fancies. He will, as he must, direct the use of his land first to provide for the maintenance of hos household, including the laborers, artisans, and overseers he employs and, those needs satisfied, use the rest as he pleases - for gardens, parks, fruit trees, vineyards, meadows, or whatever is necessary to serve his pleasure.
Let us suppose that rather than managing the lands himself, he divides his estate into plots and gives overseers or laborers the responsibility for maintaining individual plots, owing their landlord only a rent equal to a third of their product. Each tenant then manages a plot of land to the very same ends: to produce first for need, then for pleasure. In aggregate, the outcome is not very different than that which would occur were the owner directing their efforts.
The chief difference being that the lesser landowners, having no fortune to sustain them, will seek as well to put their land to profitable use: to produce of it those things that are desired by others in order to engage in trade to obtain those things they desire.
It is also reckoned that an undertaker has greater motivation than a mere overseer to take care and seek satisfaction in producing for their own consumption and apply themselves with greater interest to producing goods in the quantity and quality that best contributes to their own profit.
The danger in granting the liberty of choice to smaller producers is that each manages his own estate with less certainty of the aggregate: if wheat is profitable, many will sow it, and there will be a great abundance of wheat and a scarcity of other things; if wool is profitable, many will seek to raise sheep, and there will be an abundance of wool and a scarcity of other goods.
Such problems are remedied by the market: goods that are produced in too much quantity fetch lower prices and those produced in insufficient quantity fetch higher, giving incentive to those who produce what is not needed to produce that which is needed, and over the cycle of a number of years a balance will be achieved such that each good is produced in the quantity in which it is demanded.
The manner in which man meets his needs and indulges his fancies is highly subjective - oats or what can feed a man, wool or cotton can clothe him, so it makes little difference which is produced. But in their tastes the noblemen follow a prince, the landowners follow the nobles, and the peasants follow the landowners. Each imitates the better class in the choice of what to eat and what to wear, and what leisure pursuits to fancy.
(EN: It is less true in present society, in which such choices are more individualistic, but there are still those who influence the consumptive preferences of others and many more who seem to be striving to become trend-setters.)
There is also a direct impact on the economy as a result of changing tastes: if the prince takes a fancy to horses, and lets his land go fallow to pasture them, then the work of laborers who planted those fields is no longer needed, nor is the labor of those who worked to support the enterprise. When the nobles and landlords take to the same fancy, many fields in the nation are let to go fallow and the laborers and artisans drift to different trades.