Look at it as hiring. As an example, a single city offers 1000 coins as a salary for every scribe that it can employ and for simplicity's sake can employ 1000 scribes. They get 1500 applicants. A second city springs up and offers 1000 coins as a salary (all else being equal) for every scribe it can employ, and they get 500 applicants. That leaves them with a 500 person deficit, as 2/3 of the people that were qualified to be a scribe and were willing to take a 1000 coin salary is already employed. So the second city needs to raise its salaries to be able to attract more scribes.
As more cities are built, eventually it will reach the point that no amount of coins will be able to secure an additional scribe. The remainder of the population is either unqualified, or has no interest in scribing. And even if you had all the farmers in the world, it turns out you can't effectively run a city if you don't have specialized professions to run it.
It isn't solely a manpower issue, where you can fulfill every possible role with interchangeable population units, but a skill, ability, drive, and competition issue. Obviously other factors, such as distance, political rights, and infrastructure can play a role, but they can also be rolled into the generic coin (or utility point).