New World Economies: The Growth of the Thirteen Colonies and Early Canada

Published by EH.NET (August 2001)

Marc Egnal, New World Economies: The Growth of the Thirteen Colonies and

Early Canada. New York: Oxford University Press, 1998. xix + 236 pp.

$49.95 (cloth), ISBN: 0-19-511482-5.

Reviewed for EH.NET by Allan Kulikoff, Department of History, University of

Georgia.

I am writing this review from Beijing, capital of one of the most vibrant

capitalist economies in the world. Foreign trade has clearly underwritten

China’s remarkable growth, but what is most apparent, sitting at my

father-in-law’s computer, is the astonishing growth of China’s domestic

economy. Since my last visit in 1997, Beijing has built thousands of new

apartment blocks, constructed hundreds of kilometers of limited-access roads,

and opened dozens of new department stores. Middle-class Chinese have

purchased and remodeled their apartments; they have bought stylish clothes,

air conditioners, multi-language DVD players, and computers (and signed up for

email and surfed the internet).

While reveling in this newfound abundance, I read Marc Egnal’s interpretation

of the much more modest economic growth of the eighteenth-century British and

French mainland colonies, which averaged perhaps a half percent a year. Even

such modest growth meant that mid eighteenth-century families lived in greater

abundance, with more varied possessions (forks and knives, higher grades of

cloth) than their parents.

Building on a long tradition (of the so-called staple thesis), Egnal argues

that colonial prosperity depended upon the mother country and its demand for

staples the colonies produced. Using a mountain of data, some newly uncovered,

he documents long economic cycles in England and France and connects them to

levels of colonial exports and imports. He traces the substantial temporal

differences in growth in Quebec, the British Northern colonies, the Chesapeake

colonies, and the lower South to patterns of demand for colonial staples.

Egnal traces the different rhythms of growth in the four regions to the

economic experiences of major export partners: France for Quebec, England for

the northern colonies, England and western Europe for the Chesapeake, western

Europe and the West Indies for the lower South.

Egnal critiques the staple thesis for its lack of quantitative precision and

its failure to take other parts of the colonial economy (such as cultural

differences, capital accumulation, and shifts in the terms of trade) into

consideration. And unlike staple theorists, he emphasizes two long swings in

the colonial economy that stretched from roughly the 1710s to the 1780s, ones

heavily dependent upon government spending and warfare (that poured money into

the colonies but reduced prospects for trade). Yet the book follows staple

theorists in making foreign trade central and for economic development and in

downplaying the importance of the domestic economy. Most of Egnal’s measures

of credit and capital formation, for instance, strongly depend upon trade.

The book’s great strength is in its use of simple (but ingenious) statistical

measures of trade, credit, growth, prices, economic cycles, and consumption.

There are 103 figures and 17 tables in the 159 pages of the book’s main text,

taking up something like two-fifths of the text pages — but nary a regression

equation in sight. Egnal, for instance, measures trade by comparing exports

and imports, and using the difference (when imports outpaced exports) to

calculate the level of credit; and he uses relative prices (of staple exports

and manufactured imports) to determine the changing terms of trade.

The major arguments of New World Economies are generally persuasive.

The non-capitalist social formations that the expansion of the world

capitalist economy created in the European periphery did depend on the

European core for its survival. And trade was clearly of central importance in

the colonists’ well being. When tobacco prices dropped, Chesapeake planters

suffered; when French subsidies lagged or European fashions changed, Quebec

habitants descended toward subsistence. As Egnal shows, colonists’ attempts to

foster manufacturing usually failed, forcing them to import such basic

necessities as cloth and eating utensils. In developing economies, where both

labor and capital remained scarce, colonists needed a steady supply of credit,

even on the eve of the Revolution.

This reviewer nonetheless has several reservations about the thrust of Egnal’s

arguments. Can one truly compare the regions chosen? Quebec, in particular,

seems too different from the other regions to allow a coherent contrast.

Granted, its population grew as rapidly as that of the thirteen colonies, but

far fewer French peasants came there than English wage laborers, dispossessed

peasants, and yeomen came to the British colonies. Slavery thrived everywhere

in the colonies (even, to a small degree, in New England), but was generally

absent in Quebec. Perhaps Egnal should have compared the mainland British

colonies to the West Indies. Such a strategy would have allowed comparisons of

four British slave-holding societies and avoided the problem of contrasting

what Egnal knows were profoundly different cultures.

More importantly, Egnal seriously underestimates the significance of the

domestic economy. At first, colonists did have to import nearly all consumer

goods, could acquire credit only from abroad, and faced starvation and

nakedness if English supplies faltered. But by the early eighteenth century,

colonists had procured the basic necessities of life and could pass them on to

the next generation. During the Atlantic depression of the late seventeenth

and early eighteenth centuries (one that affected, as Egnal shows, both the

northern and Chesapeake colonies), farmers and planters took up home

manufacturing. Although colonists still imported textiles and finished

ceramics and metal ware more cheaply than that they made them, they gradually

acquired spinning, weaving, and smithing skills and readily made simple cloth,

clothing, and metal goods. Since Egnal uses imports as a proxy for growth, he

has no way of writing about, much less measuring, the significance of the

domestic economy.

Work on colonial crafts and domestic manufacture is just beginning, but

historians are beginning to measure its impact. The most promising work

revolves around craft skills (there are important articles and books on

seventeenth-century New England artisans, Connecticut furniture makers,

Pennsylvania weavers, and Eastern Shore artisans) and detailed considerations

of consumer goods found in probate inventories and store account records. A

recent issue of the William and Mary Quarterly examined the issue, from

a theoretical point of view, in some detail. If a historical economist as

imaginative as Egnal turns his or her mind toward measuring the domestic

economy, this reviewer is certain that robust numbers can be calculated.

These quibbles to the contrary notwithstanding, Egnal’s book is an essential

analysis of eighteenth-century international commerce, adding essential

details and arguments to Shepherd and Walton’s and McCusker and Menard’s

earlier works. Every economic and early American historian ought to read it.

Allan Kulikoff is Abraham Baldwin Professor of the Humanities at the

University of Georgia. His most recent book is From British Peasants to

Colonial American Farmers (University of North Carolina Press, 2000), an

examination of the early modern English economy, early immigration to the

colonies, the relations of farmers and Indians, and colonial population, land

acquisition, and household formation. He is currently working on three books:

a methodological examination of the theoretical bases of early American

history, an examination of farmer identity in eighteenth-century America

(The Making of the American Yeoman Class), and an analysis of the

impact of the American Revolution in the countryside (The Farmer’s

Revolution).