The peasants had little use for anything else. They grew their own food and made their own clothes. What else did they need? Tools - either make it or do without.
So why will everyone not do that, make their own food and clothes? Why will we ever need to trade?
The comment specifically mentions people who are not peasants so in that model, there are people who do not grow food but do other things. If we already have a system like that, why will the farmer grow food and also spin clothes when they can just let someone else spin clothes and give them a bit of their food in exchange for that?
How do you think trade guilds started?
As I said, the comment had parts of truth but overall it simplies economics to an extent of a children's book.
I was under the impression that if you go back far enough to a millennium ago, peasants weren't trading for iron or having a miller grind their grain, and they were definitely spinning their own yarn.
There is a continuum. As iron became cheaper (even before the industrial revolution) peasants started trading for iron tools. It started with "the big man" owning a plow that everybody borrowed, but eventually the richer in the village would save up to buy their own (most families operated on a cycle of rich and poor depending on how grown up the kids where - just before they left home to seek their fortunes the farm was rich, just after the one heir had to support the aging parents, and the babies making them poor). Weather was the other factor, you could only save up if the crops did well.
A large part of this was legal ability. If only the "big man" could own a plow there was no point in trying to save up for one. This ability to have your own increased the farms productivity, in turn allowing the family to buy more (but often they would split the farm so two kids could inherit) While you could grind your own grain, often "the big man" wouldn't allow it.
I have to simplify to to a children's book to fit into a comment. The full picture of the complexity fills many many books. There are many different cultures in history with many different levels of monetization.
However for 95-99% of the per-indstrial population you are a peasant farmer. You don't need money because you can grow everything you need. (this doesn't mean you do, only that you can)
For the other 1-5% though things are different. The closer you get to 5% the more money everybody (including the peasants!) needs to support your way of life. At 1% you only have peasants and a few "big men". At 5% there are a lot of non-nobility who the farmers are supporting anyway. That is only possible if the farms specialize into whatever grows best for them. In turn that means the farmers need to import the other food items they might want meaning they need money to buy it.
The farmers also need to trust that if they have a crop failure they will still be able to eat. As soon as farmers don't trust they will be able to eat even in case of crop failure they will diversify - the farm will produce less food overall, but no one crop failure will make them starve to death! Either works fine for the farmer but all those city folks starve to death in the second case since the farmer is self sufficient on much less food production than it could produce.
