An Economic History of the United States

From 1607 to the Present

Ronald Seavoy

• Editorial: Routledge
• Año: 2013
• ISBN:
  9781135862763
• Edición: 1
• Categoría: Economics
• Categoría: Economic History

An Economic History of the United States is an accessible and informative survey designed for undergraduate courses on American economic history. The book spans from 1607 to the modern age and presents a documented history of how the American economy has propelled the nation into a position of world leadership. Noted economic historian Ronald E. Seavoy covers nearly 400 years of economic history, beginning with the commercialization of agriculture in the pre-colonial era, through the development of banks and industrialization in the nineteenth century, up to the globalization of the business economy in the present day.

Chapter 1

English Commercial Revolution of the Seventeenth Century

Examined from the perspective of the twentieth century, colonial societies in English-speaking North America had to be pervasively commercialized during the colonial era; otherwise, the industrialization that accelerated after the War for Independence could not have been sustained. During the colonial era over 90 percent of the population cultivated the land; therefore, analysis of the commercializing policies of colonial governments in North America must begin with the extent of commercial agriculture.

This chapter examines how commercial agriculture was being enforced in England in the seventeenth and eighteenth centuries, and how some English peasants sought to escape the performance of commercial labor norms by immigrating to America. Chapters two and three describe the extent of commercial agriculture in southern and northern colonies during the colonial era, and how it operated. Chapter four describes the scope and size of colonial commerce and manufacturing, and how Americans participated in the British commercial empire. Analysis also comprehends the similarities and differences of those who preferentially immigrated to southern and northern colonies and how the social values that accompanied them evolved into differing institutions of governance, taxation, and commerce.

The key questions are:

1. Who emigrated from Britain to North America?

2. Why did they emigrate?

3. Where did they go?

4. What kind of governments were established by the colonists?

5. Who participated in governance?

Before we can answer these questions in chapters two, three, and four, it is necessary to understand what was happening to English agriculture in the seventeenth and eighteenth centuries, and how commercializing policies in England propelled continuous immigration. Understanding the impact of English commercializing policies on the colonization of North America requires that readers understand the revolutionary difference between subsistence and commercial labor norms.

Subsistence Social Values

Peasants perform subsistence labor norms in agriculture and measure their social security by control of land use, not monetary incomes. Control of land use allows them to perform subsistence labor norms. They produce marginal food and commodity surpluses for market sale in normal crop years. Peasants know that every crop year is not normal but they willingly endure seasons of hunger in years of hardship in order to minimize agricultural labor. Furthermore, they willingly risk famine conditions in consecutive years of poor crops in order to preserve subsistence labor norms.

They believe that a fixed amount of labor in years of normal crop production produces adequate harvests to feed all village households at a subsistence level of nutrition, plus a small surplus that is a tribute to feudal landowners who allow peasant communities to control land use, in addition to a small surplus to feed a clergy. After subsistence food needs have been satisfied, indolence is the proper way to enjoy life.

The peasant concept of the good life is the minimum expenditure of physical labor. When applied to food production, peasants attempt to grow enough food to last until the next harvest with the minimum expenditure of labor, on the assumption that every year will be a normal crop year. This defines the subsistence compromise.¹

In order to maximize indolence, adults in peasant households seek to transfer as much labor as possible to others. The principal means of doing this is having many children. Sharecropping and slavery are other means of transferring labor. Peasants also seek to minimize the risks of seasonal hunger and famine conditions. When they control land use, communal councils equalize the distribution of cultivation units among village households and equalize the distribution of harvests in years of poor yields. Maintaining equality in the size of cultivation units requires some variety of communal tenure in order to periodically redistribute land on the basis of the subsistence needs of new households.

Subsistence food production means that, in years of normal crop production, minimal amounts of food are available for sale on anonymous markets in order to purchase a limited variety of artisan manufactured products. In contrast, in years of low yields no food is sold. The lack of an assured food surplus means that food to feed city residents and artisan manufacturers (who produce products for sale on anonymous markets) is not available on an annual basis. This imbalance places a huge restraint on increasing commercial wealth because only commercial agriculture can produce assured food surpluses in all crop years that are essential for feeding artisan manufacturers or urban factory workers.

Commercialization of Agriculture

Commercial agriculture requires commercial land tenures and the performance of commercial labor norms. Commercial agriculture means fewer people working longer hours to produce substantially larger harvests compared to the subsistence labor norms of peasants. In the commercialization process,

central governments must put control of land use into the hands of commercially motivated persons or organizations (yeomen, farmers, plantations, collectives). This cannot be done unless central governments adopt policies that force the replacement of communal tenure with commercial tenure (freehold, leasehold, collective).²

Commercial tenure allows commercially motivated landowners to replace peasants with supervised paid laborers who perform commercial labor norms. Unneeded peasant households are evicted (displaced). They are forced to become full-time paid agricultural laborers; or migrate to cities and became full-time wage laborers; or live in hovels on the peripheries of common pastures and graze livestock (until commons are enclosed); or become vagabonds, vagrants, or sturdy beggars (masterless men); or emigrate to North America as indentured servants in search of subsistence opportunities.

Rents are raised on the remaining tenants. Higher rents induce the remaining households to increases per capita labor expenditures. Much of the labor is often performed by full-time paid laborers. Increased per capita labor produces an assured food surplus in all crop years, and this surplus is sold on anonymous markets.

In seventeenth-century England, cultivators who performed commercial labor norms were yeomen, farmers, and servants in husbandry. Servants in husbandry were full-time paid laborers hired by yeomen and farmers. Frequently, they were evicted peasants or the children of evicted peasants. Their labor was rewarded with sufficient money to constitute an income that was used to purchase food, clothing, and housing on an anonymous market.

The social security of paid agricultural laborer is like the social security of city residents. It depends on laboring every day to earn money incomes. This is very different from peasants. Although English society was thoroughly monetized in 1600, monetization is not the same as a money income. As long as peasants control land use they can live, if necessary, with minimal amounts of money—sufficient to pay a poll tax or to annually purchase a few metal tools.

After peasants lose control of land use, they have little choice except to perform continuous commercial labor norms on tasks assigned to them. If they fail to perform this labor, they can be replaced by people who will. All commercial cultivators and paid laborers (agricultural or factory workers) measure their social security by money incomes earned by producing products for sale on anonymous markets. Examined from another perspective, commercial food production meant substituting money incomes for control of land use as the means of obtaining social security.

The commercialization of English society rapidly accelerated during the seventeenth century. Commercialization was driven by agriculture because 70–80 percent of the population subsisted through cultivation of the land. Between 1600 and 1650, a substantial portion of English agriculture was commercialized; although, there were large numbers of peasants, particularly in the North, who continued to cultivate land in copyhold tenure. Copyhold tenure was a variety of communal tenure. It gave peasants a hereditary claim to land use and a legal right to control their labor expenditures. They lived in dwellings that paid no rent, and they harvested enough wool from sheep grazing on common pastures to spin into the thread that was woven into the cloth that clothed them.

During the commercializing process in the reigns of Elizabeth and the first two Stuart kings (1558–1640), there was a continuous outpouring of public concern and parliamentary statutes about the socially destabilizing conduct of evicted peasants because they wandered in rural areas and often engaged in petty thievery. Historians and economists usually call these people unemployed. They were not. They were displaced peasants who sought to avoid becoming full-time paid laborers. After 1630, avoidance was possible by immigrating to America where vacant land was known to be available.³

In spite of the social destabilization caused by commercializing policies, governance under Elizabeth and the Stuart kings encouraged landowners to commercialize agriculture because an assured food surplus was necessary to feed artisan manufacturers and urban residents who produced new wealth that could be taxed. The two principal ways the English government encouraged the commercialization of society were through (1) decisions by national courts, (2) parliamentary statutes favoring landowners who wanted to convert copyhold tenure (subsistence tenure) into freehold and leasehold tenures (commercial tenures). Parliament was controlled by landowners who were acutely aware that land had little commercial value unless there were laborers to cultivate it; and these laborers had to perform more labor than was required for subsistence. This was the origin of the Statute of Laborers (1349), the Statute of Artificers (1563), the Poor Law of 1601, and acts of parliament that authorized enclosure.

The Statute of Artificers was a national labor code that authorized justices of the peace to compel displaced peasants, and their children, to labor in either agriculture or handicraft manufacture as a way of banishing idleness… . It also authorized justices of the peace to fix wages annually in relation to food prices; to place persons in one year labor contracts where they had to labor for a fixed number of hours per day; and to punish laborers who did not complete their tasks.⁴

The Statute of Artificers was difficult to enforce in rural areas, and in 1572 a more workable statute was passed. The 1572 statute: “allowed local authorities to confine vagabonds to houses of correction (jails) where they had to card wool or spin thread. For repeated attempts to avoid useful labor they could be hung.” This statute proved to be unworkable in the famine year of 1597. Parliament revised the statute in 1601 based on the assumption that all people ought to be employed for wages and that those who were physically unable (the poor) ought to be supported in parish poor houses at public expense.⁵

The 1601 poor law had three purposes: 1) provide temporary relief for indigents; 2) put displaced peasants (who refused to perform paid labor) in workhouses where they had to perform useful labor; 3) punish sturdy beggars. In 1609, parish Overseers of the Poor were authorized to send able-bodied persons who refused to labor to houses of correction. There they would be forced to perform useful labor…. Workhouses supported by poor law taxation were to be schools to teach the virtue of disciplined commercial labor.⁶

The Statute of Artificers and the Poor Law were enforced in England until the nineteenth century. They were part of the intellectual and institutional baggage that royal governors carried across the Atlantic in the seventeenth and eighteenth centuries. The intent of these two statutes exactly coincided with the ambitions of royal governors and the governing elites in all North American colonies. Both agreed with mercantile writers:

that displaced peasants who were forced to become wage laborers (working poor) had to be kept poor or they would not perform continuous labor. Their admonition to employers to pay only subsistence wages recognized that most displaced peasants would labor only when they had no choice and only for as long as was necessary to supply their subsistence needs… . In the language of the time, mercantile writers said that the wealth of a nation depended on keeping its laborers poor. This is another way of saying that displaced peasants would not engage in paid labor or artisan manufacture unless hunger forced them.⁷

Converting subsistence tenure into commercial tenure by statute or judicial law was usually a prelude to enclosure (fencing fields) that allowed landowners to intensify cultivation by using supervised paid laborers to perform the commercial labor norms necessary to produce assured food surpluses. Enclosure also allowed landowners to change land use from the subsistence cultivation of food grains to grazing sheep or cattle in order to produce wool, butter, cheese, or meat for sale on anonymous markets. The sale of these commodities on anonymous markets increased the incomes of commercially motivated landowners.

Christopher Hill quotes an anonymous writer of 1677 to the effect: “Their masters allow wages so mean that they are only preserved from starving whilst they can work … In such circumstances men fought desperately to avoid the abyss of wage-labourer.” Immigration to America was a subsistence refuge.⁸

Servants in Husbandry

Servants in husbandry were full-time, supervised, paid agricultural laborers. Most were young male and female children of peasants, and a high percentage were illiterate. They usually began their journey to adulthood by becoming servants at about age fifteen. Their first experience as paid laborers often began when their parents took them to a hiring fair where they made an oral contract that placed a son or daughter in service for one year with a yeoman or farmer.

Yeomen were cultivators who owned or leased units of agricultural land (seventy-five to two hundred acres) and owned a full complement of agricultural implements and draft animals. They required one to four servants in husbandry every year. The servants they hired lived in the yeoman’s house, ate from his table, and worked side by side with him in the fields or at any other task that was required to optim...