Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
36 Cards in this Set
- Front
- Back
|
Path Dependence
|
This is one of the reasons economic history so fascinating. One decision in history can affect the future in a big way. An example of this is the long run effects of slavery. Other reasons that make economic history so important is learning from history (Britain and their colonies) and a need to understand origins of the issues we are still dealing with today.
|
|
|
Cliometrics
|
Economic history is the study of the environment that brought about specific historic outcomes. The main tool to study economic history is cliometrics. Cliometrics is the use of economic theory and statistical measurement in the study of economic history. Not all historians agree, but they give us something to work.
|
|
|
Cape of Good Hope
|
During the late 1300's Italy was the center of trade due to location, superior production, commercial skills, and knowledge. Italy dominated old world long distance trade for centuries. In order to get spices out of Italian hands, countries had to find overland route which was a disaster. Prince Henry of Portugal then tried to find a path south, so he sent Bartolomeu Dias and he found Cape of Good Hope. Spain looked west and found New World. As a result, they signed Treaty of Tordesillas in 1494 where Portugal got East and Spain got West. This lead to mercantilism as a philosophy.
|
|
|
Treaty of Tordesillas (1494)
|
Italy dominated old world long distance trade for centuries. In order to get spices out of Italian hands, countries had to find overland route which was a disaster. Prince Henry of Portugal then tried to find a path south, so he sent Bartolomeu Dias and he found Cape of Good Hope. Spain looked west and found New World. As a result, they signed Treaty of Tordesillas in 1494 where Portugal got East and Spain got West. Spain was a ruler, not a colonizer (gold and silver flowed in from America’s and made Spain rich). In 1600, Spain swallowed Portugal. This lead to the spread of mercantilism, which became the main goal of a country. There were two ways to accumulate gold/wealth. One was to find gold (Spain), and the other was to have a favorable trade balance (promoted colonialism).
|
|
|
Joint Stock Companies
|
As Spanish fought wars, nation-states took the opportunity to begin their own settlements in New World. There were three main motivations to immigrate. They were a desire to own land, higher standard of living, and religion. People who came either were wealthy individuals (unsuccessful) or through companies established with a charter, granted by the crown. This gives merchants in a company the monopoly on trade with a specific region for a given number of years and strong legal power. Such undertakings tie up large sums of money for long periods before profits seen including capital costs on ship crews lasting months or years. Need large number of speculators to share the risk. This is a joint stock company – a group of investors holding stock in the company. For the most part, the joint stock companies established an initial colonial foothold, not a long run presence. The London Company and Plymouth Company were joint stock companies.
|
|
|
London Company (Virginia Company)
|
Most immigrants surmounted the cost of living through companies with a charter. One of these joint stock companies was the London Company. London Company established a settlement at Jamestown. Found fool's gold. By 1607, 67 of the 105 had died. In 1609 they reorganized under new name (Virginia Company), brought 800 new settlers to Jamestown and by the following year only 60 people remained. Early settlers had a life expectancy of two years and were financial disasters. For the most part, the joint stock companies established an initial colonial foothold, not a long run presence. Settlers were promised “planter shares” of the settlement’s profits to be distributed after 5 years. In the 5 years the company paid for them to live and they were required to work for the company. They were under a collective arrangement where it doesn’t matter who is more productive because profits are shared equally. Led to in fighting, laziness and there was little incentive to improve land or make innovations in the production process. Once these problems were realized, there was a push for private ownerships of land.
|
|
|
The Plymouth Company
|
Most immigrants surmounted the cost of living through companies with a charter. One of these joint stock companies was the Plymouth Company. Plymouth was found in 1620, and was the original Pilgrim settlement. They suffered a casualty rate similar to the London Company. It was later taken over by the better organized Massachusetts Bay Company. They carried its own charter and avoided costly direction and absentee control from England. Massachusetts' economy prospered due to subsistence agriculture and port services.
|
|
|
Iron
|
Iron was an industry that was limited by the crown. Finished iron production was not allowed even though iron was found in colonies. The colonies provided 15% of the world output of iron.
|
|
|
Mercantilism
|
After the Treaty of Tordesillas was signed where Portugal got East and Spain got West, Spain became a ruler, not a colonizer. Gold and silver flowed in from America’s and made Spain rich and they swallowed Portugal. This became the foundation for the spread of mercantilism. There were two ways to accumulate gold/wealth. One was to find gold (Spain), and the other was to have a favorable trade balance (promoted colonialism). To keep a favorable trade balance, a country must promote exports and restrict imports to accumulate wealth. That was the main goal of a country. This resulted in colonization as there would be less need to import if you took their resources and the possibility of finding gold. - Mercantilism as a dominant ideal drove the desire to accommodate colonies abundant in resources that the mother country did not have herself. This resulted in the desire of countries to start settlements in the New World.
|
|
|
Immigration to the colonies
|
Immigration began as a result of mercantilism. Immigrants had three motivations to move. They had a desire to own land, a higher standard of living, and for religious purposes. The cost of moving was high, equivalent to one years income, so people who came either were wealthy individuals (unsuccessful) or through companies established with a charter, granted by the crown. 1610 to 1620 and 1630 to 1640 had 20% per year population growth. Population doubled every 3.5years. After 1640, between 2.5% and 4% per year growth. Late 1640 immigration virtually halted in England. More in 1720-35 and 1745-60.
|
|
|
Natural population growth
|
In US, 18th century, 45-55 births per 1,000 population/year and 20-25 deaths per 1,000 population/year. In England, 18th century, 35-40 births per 1,000 population/year and 25-35 deaths per 1,000 population/year. This is because of a younger average population relative to England and low rate of child mortality which indicates that conditions were better in the colonies. Healthier woman meant healthier babies. They had harsher winters, and inferior medical technology but plentiful supply of food, fuel and housing. On the eve of revolution (1775), 1/10 of white colonists were foreign born and 2.3/10 black colonies were foreign born.
|
|
|
Tobacco
|
Tobacco is a an example of mercantilism. Countries wanted to find resources that the mother country did not have so that they would not have to import the resource and lose wealth. Tobacco was the biggest form of agriculture (which comprised 85% of labor force) in the southern states. There was some protection from England in beginning but then colonies were able to compete with Spain. Before 1620, just a few thousand pounds of tobacco but by 1776, it grew to greater than 100 million. Cotton, rice and indigo were also cash crops. Large plantations with a lot of slaves were most profitable. Some estimate that price decreased while rapid increase in production. Tobacco was an enumerated good after the Navigation Acts and could only be exported to England (where it was often re-exported). Tobacco exporters got a lower price as a result due to higher shipping and transportation costs.
|
|
|
Agriculture in the colonies
|
Agriculture (85% of the labor force):
- Southern colonies – Tobacco (some protection from England in beginning but then colonies were able to compete with Spain). Before 1620, just a few thousand pounds of tobacco but by 1776, it grew to greater than 100 million. Cotton, rice and indigo were also cash crops. *Large plantations with a lot of slaves were most profitable - Middle colonies – Grain cultivation. Wheat was the most important. Wheat and flour were exported. Slaves were not used as much because it was expensive to have slaves when they only were needed for two parts of the year during harvesting and platning. - New England – Only subsistence (self sufficient) farming. Shipping and fishing was major source of economic activity. - Primary extensive (outward), not intensive (advances). Farming at end of period more capital intensive (Chester County) by end of 18th century. There was some decline in factor inputs (more capital, less labor, more land). Egnal asserts that there was an increase in productivity in Southern Agriculture. Irrigation advance and there was migration of crop from elevated ground to tidal river and swampland. |
|
|
Indigo
|
Indigo was a cash crop in the southern colonies along with tobacco. It was one of the colonial products that was subsidized due to the navigation acts.
|
|
|
Slavery
|
Slaves were one of the three sources of labor along with free whites and Europeans willing to be indentured. The higher the cost of labor, the more willing people were willing to pay to buy slaves. However, shipping costs decreased, and when combined with a decrease in indentured servants resulted in more slaves being brought to the colonies. They were in higher demand in the southern colonies. Slaves were not used as much in the middle colonies because it was expensive to have slaves when they only were needed for two parts of the year during harvesting and planting.
|
|
|
Navigation Acts (1651)
|
1) Trade carried out in English or colonial ships, commanded by English or colonial crew (3/4). Dutch could have provided shipping services more cheaply.
2) Foreign trade had to be conducted through England. This created more wealth for English dock works and merchants. England determined need for products not available in the empire. 3) Certain goods were allowed to be exported only to England (enumerated goods). Strategic goods only for English consumption. Paid primate (paid by shipper to crew and captain for taking care of the freight), peerage and loading, and warehousing twice. Winners: New England’s shipping and shipbuilding industry, subsidized colonial productions including indigo, and British was a protected market so there were higher prices on goods. This benefited colonial producers. Losers: Higher price for goods imported from non-imperial sources. 15% of colonial imports rerouted through England. Higher price for British goods that could be found cheaper. Exporters in the colonies: tobacco and rice got lower price for their exports due to inflated transportation and shipping costs. Impact - Thomas: - Burden on both imports and exports was 3.1million in 1770 without factoring advantages. It came out to $1.24/person in 1770 which accounted for 2% of colonial per capita income. If account for military being provided by England get $1/person. Overall burden of Navigation Acts not a big deal. However, the distribution of burden was unequal. |
|
|
French and Indian War (Seven Year War 1756-1763)
|
Territorial disputes between British and French and Native Americans. Native Americans tribes sided with French because fear that British would take their land. British had a very large debt left from the war including reimbursements to the colonial governments for their contributions. The British point of view was that it was time for colonies to start contributing to the empire. The American point of view was now that the French are gone, no need for the British. They wanted Native American land that was protected by the French. Also, colonial aristocracy gained convenience regarding their position against British Authority.
This lead to new taxes and stronger enforcement by colonial administrators |
|
|
Sugar Act of 1764
|
Following the French and Indian War where the British and Colonists differed on some key issues including taxes and Native American Land, the first Act by Britain was the Sugar Act of 1764. British West Indian Islands were struggling to compete in the sugar market, so British imposed high duties on foreign sugar molasses on rum imports. New Englander’s could not export rum. It was not every well enforced until the sugar act. Collecting the tax really upset the Northern Merchants (well educated). They boycotted imports from Britain which led to poor enforcement of the tax. From these new taxes, the colonists learned that they had control because they were a market for British goods and that persistence worked. The British learned that they needed greater military presence in the colonies to enforce laws.
|
|
|
Stamp Act of 1765
|
Following the French and Indian War where the British and Colonists differed on some key issues including taxes and Native American Land, the British enacted various legislations to raise revenue. One of which was the Stamp Act of 1765 (An internal tax just to make money). Stamps varying in cost from ½ penny to several pounds affixed to legal docs, contracts, newspapers and pamphlets. Colonists protested “internal” tax, not just on trade where they thought Brits had justification. Lawyers and printers were extremely upset and furnished articulate, able leadership and communication for British agitation. There was a new boycott and the Stamp Act was repealed and lowered tariffs on molasses to help rum producers. From these new taxes, the colonists learned that they had control because they were a market for British goods and that persistence worked. The British learned that they needed greater military presence in the colonies to enforce laws.
|
|
|
Quartering Act of 1765
|
Following the French and Indian War where the British and Colonists differed on some key issues including taxes and Native American Land, the British enacted various legislations to raise revenue. One of which was the Quartering Act of 1765. Lieutenants who had fought in the French and Indian War were upset because they were finding it hard to get colonial assemblies to pay for quartering fees. Parliament responded in a big way with Quartering Act of 1765 which allowed British soldiers to house in American public houses. Colonists were outraged and due to taxation without representation and the tax was circumvented and eventually expired. From these new taxes, the colonists learned that they had control because they were a market for British goods and that persistence worked. The British learned that they needed greater military presence in the colonies to enforce laws.
|
|
|
Townshend Acts 1767
|
Following the French and Indian War where the British and Colonists differed on some key issues including taxes and Native American Land, the British enacted various legislations to raise revenue. One of which was the Townshend Acts 1767. Attempted to raise revenues; taxed tea, glass, paper, red and white lead. It established a customs board, and colonial courts could issue search warrants “writs of assistance”. New court established for trying smuggling cases. Boycott backed by colonial governments (imports from British cut by 1/3 in 1768) and it was repealed in 1770.From these new taxes, the colonists learned that they had control because they were a market for British goods and that persistence worked. The British learned that they needed greater military presence in the colonies to enforce laws.
|
|
|
Boston Tea Party
|
In response to the Tea Act of 1773. There were direct shipments of tea without using colonial middlemen. East India Co. was given a monopoly on tea trade. There was a fear of British taking colonial merchants out of their place in other entrepreneurial affairs. It was a direct act of rebellion by destroying many crates of tea in Boston Harbor. The colonists actions led to the 1774 Intolerable Acts.
|
|
|
1774 Intolerable Acts
|
In response to the Boston Tea Party, the British enacted the 1774 Intolerable Acts. They closed port of Boston until East India Company was reimbursed. British officials could be tried for crimes committed in colonies, elsewhere. The rights of the people in Massachusetts could be taken away by the crown appointed governor. There were now troops quartered in Boston. In October 1774 there was a list of grievances sent to parliament from Continental Congress.
|
|
|
Quebec Act of 1774
|
After the Seven Year War, the Colonists felt that now that the French are gone, there was no need for the British. They wanted Native American land that was protected by the French. After many disputes and taxes, Parliament enacted the Quebec Act of 1774 in an attempt to keep colonists from settling on Native American land.
|
|
|
Neo-Whig
|
An interpretation of what caused Revolutionary War. There was a conflict from the beginning, the early settlers were already mapping trend for colonial sovereignty. Ideology: wanted rights of “Englishmen”.
|
|
|
Progressives
|
An interpretation of what caused Revolutionary War. Lower classes wanted more rights in an undemocratic society. Joined revolutionary movement for great power and dedication to constitutional and democratic principles.
|
|
|
Egnal and Ernst Economic Interpretation of Revolutionary War
|
1) Growth of an elite class comprised of merchants and wealthy landowners in North and planters and merchants in South. They were powerful, self-aware, and successfully asserted autonomy on many local issues.
2) Growth of the lower order. They became not but the “poorer sort” of the city and less wealthy landowners articulating their own interests and questioning assumptions regarding society and politics. 3) Growth in Atlantic Trade (England, African Slave Coast, British West Indies and 13 colonies). Between 1720 and 1745, there was gradual trade growth. From 1745-1775, there was rapid trade expansion. i) There was an expansion of British Economy after hostilities ended in 1748. British imports soared. In the Northern Colonies, exports expanded to keep up with demand. Then there was depression in England and there were now excess inventories. The boycotts helped relieve bloated inventories. ii) Merchants frightened for their survival. Beginning of auctions for dry goods by British firms bypassed merchants. Agents from British firms sold directly to shopkeepers. As a result, merchant’s profits fell. iii) Southern Tobacco planters now dealing with a new credit system managed by local representatives of the great Glasgow tobacco houses. They gave credit to the planters but ran tobacco trade. They set prices, fixed exchanged rates, and dealt directly with smaller planters. Mercantilist restrictions were symbolic of the economic conflict that sent colonists into revolution. They wanted control of their own economic destiny. |
|
|
Indentured Servitude
|
By 1775, greater than 350,000 of the 500,000 that had immigrated to North America paid their way using an indenture contract. The coast of passage was 5 to 10 pounds, which was equal or greater than per capita income. The laborer signs indenture with shipper and the shipper then sold indenture to planter or merchant. The return was 11 to 15 percent above what a shipper could earn on a free person because of increased risk. The profile of an indentured servant according to Gallenson was male, late teens or early 20’s, very literate, and at the peak of productive ability. As a result, the market for indentured servants was “good” but not perfect. The more productive individuals had a shorter period of indenture. It ended because passage became less expensive, an increase of British salary, families in New World were able to help pay, and slavery was cheaper.
|
|
|
Shipping Industry
|
Majors source of economic activity in New England. Shipbuilding (5-10% of labor force employed).1631: a 30 ton sloop completed in Boston 1775: economists estimate one-third of the ships in British merchant marine were made inside the colonies. Proximity to lumber gave them the comparative advantage. Shepard and Walton: argued that ocean shipping was a major source of growth income per capita during colonial period. Approximately .8% per year. Specializing in specific cargoes and routes was common due to increase in trade volume. They spent shorter time at port. There were economies of scale and learning by doing. Removal of guns from merchant ship made them lighter and more efficient. Shipping costs decreased which affected labor force. Was a winner of Navigation Acts due to domination of shipping and trade had to be carried out in English or colonial ships.
|
|
|
Extensive Growth
|
Based on expansion by using little inputs on vast areas of land to increase outputs. English had most extensive settlements due to abundant land. Economic growth in agriculture was primarily extensive (outward), not intensive (advances).
|
|
|
Intensive Growth
|
Based on expansion by using large abouts of advances in inputs to increase outputs. Farming at end of period more capital intensive (Chester County) by end of 18th century. There was some decline in factor inputs (more capital, less labor, more land). Saw .1-.2% growth/year. - In tobacco, some estimate that price decreased while rapid increase in production. This must indicate that southern agriculture saw intensive growth (1720-1775). Egnal asserts that there was an increase in productivity in Southern Agriculture. Irrigation advance and there was migration of crop from elevated ground to tidal river and swampland.
|
|
|
Puritans
|
They were religious dissenters. - Puritans established settlements in New England had better luck with communal arrangement due to social cultural cohesion, homogeneous religious beliefs. However, private land ownership took over. By 1650 private owned family farms predominated in New England. Weber linked Protestants and capitalism
|
|
|
Napoleonic Wars
|
X
|
|
|
Constitution
|
X
|
|
|
Terms of Trade after the Revolution
|
X
|
|
|
Jefferson’s Embargo
|
X
|
