I did always wonder about the general standard of living in the Shire - always seemed suspiciously high to me.

Decent amount of manufactured goods, always enough food, no sign of a serf labouring class or any manufacturing to speak of.

It's 18th(ish) century rural England, without all the stuff that made 18th century rural England a relatively comfortable place, which is to say colonies, the slave trade, the early industrial revolution and so on.

Because it's attempting mythisimilitude, not verisimilitude.