The American Response to British Industrialization
By the latter half of the eighteenth century, the British Empire was large, thoroughly mercantilist, and deeply in debt. Mercantilism has been defined for you but let me be more blunt—mercantilism was economic war. European mercantilist nations did not believe wealth could be created. They saw the world merely in terms of having a fixed amount of wealth for which all nations were in constant competition. Up until the new Agricultural Revolution and the Industrial Revolution in Britain, the winner in the global competition for gold had been Spain whose New World empire had proven quite lucrative. France had also founded an empire in the New World whose wealth came out of North America in the form of furs. Britain did more to earn supremacy. They worked harder and longer at it, but they were thus slower. Three times in the 1700s the economic competition sparked by mercantilism broke out in actual, shooting wars among these three powers, but ultimately England came out on top.
Victory was costly. The final military showdown in North America was known in Europe as the Seven Years War, but in America where it went on longer (1754-1763) it was known as the French and Indian War. The British Prime Minister, William Pitt, had said, “Britain will pay,” and then financed the formation of a 50,000-man army and destroyed French (and Huron Indian) power in the New World. An already heavily taxed British population was now saddled with a huge war debt. Furthermore, British troops came back to England saying the Americans lived in great plenty and were hardly taxed at all. Being the first nation to industrialize, however, made England confident she could manufacture, trade, and tax her way out of trouble. Besides, she had secret weapons.
In the mercantilist economic model, colonies were secret weapons, and Britain had twenty-two by the outbreak of the Seven Years War. Those colonies that would become the United States of America were the thirteen least important, or least productive, England possessed. Far more valuable than rocky New England, the bustling Middle Colonies, or the aristocratic Southern colonies (one of which was a prison camp), were the sugar-producing colonies of the Caribbean islands. All of the colonies were a boon in an economic war, however, because they prevented England from doing what all mercantilist nations dreaded—buying goods from their enemies. When lumber, tobacco, grain, sugar, or other raw materials were bought from a nation’s own New World colonies, merchants back home could expect to see the money they spent come back when they sold manufactured goods to the agrarian colonists (19/20 British colonists were farmers). That strength was the secret. A nation with many colonies with many and varied raw materials could carry on a favorable balance of trade with—itself! English gold stayed in English hands.
In the years after 1745, colonial trade with the Mother Country grew exponentially and became a key part of the British economy. Half of the ships that left England to trade were bound for North America. The colonists imported 25% of all English exports. In turn, exports from America more than doubled in value from 1747-1765 from £700,000 to £1.5 million. In the same time period the value of British imports in America rose from £900,000 to £2 million. By the Seven Years War, Britain had lost the ability to feed its burgeoning population and had to import more foodstuffs than she exported. The British Isles had also been almost totally deforested. As a matter of national security pine trees in colonial America were stamped with the king’s seal and preserved under penalty of death as masts for the Royal Navy. Everyone was happy at first. The British were years away from discovering that mercantilism is a flawed economic idea (wealth can be created), and they were finally coming out financially ahead of both the Spanish and the French after years of toil, investment, and war. For their part, Americans saw the prices for their agricultural products climb giving them a rapidly rising standard of living. Not just the wealthy plantation owners but normal Americans could afford more British luxury items. Benjamin Franklin dutifully reported in his autobiography that his wife noted the change by buying a silver spoon and china bowl to replace their pewter spoon and earthen bowl. This record is a bit of an understatement because soon, by being the official printer for the Crown, Franklin became the richest man in America. Remember his father was a candle maker.
Rising levels of wealth and taste set off rising levels of consumption. American colonists naturally sought to invest some of their wealth in manufacturing just as their kinsmen had done back in England. Crude cloth and shoes come into production in shops across the land. Markets expanded as transportation and communication systems were improved. Benjamin Franklin invented the Post Office in the 1750s and could get a letter from Philadelphia to Boston in just three weeks! By 1768 colonial cobblers hammered up eight thousand pairs of shoes a year to be sent to Philadelphia, the biggest city. Massachusetts became adept at two key industries—shipbuilding and the manufacture of rum. Before the American Revolution, 40% of all the ships England possessed were made in America. On the other hand rum, distilled from molasses, became a key international trade commodity. Virtually every town in America began rudimentary iron works. There, England began to draw the line.
Remember, the whole point of a colony in the mind of the British government was that the colony should benefit the Mother Country. Colonies were supposed to be markets, not competitors. To further make the American economy dependent on England, restrictions were passed on colonial manufacturing. Processed wool and even hats were barred from export. Neither skilled artisans nor machines could be imported, just as a little capital was becoming free in America for investment. England frowned on even these as attacks against mercantilism. The deliberate stifling of American industry was good policy for Britain and bad news for British colonists. Any chair, axe, or china plate shipped 3,000 miles across the Atlantic Ocean was going to be more expensive. Plus, various Parliamentary Acts also stifled the creation of new American banks and thus the supply of currency. The process of alienation through legislation had begun.
On top of Parliament’s economic coercion, which mercantilism fully justified by saying the sovereign should control the economy for the good of all, new taxes were imposed on British colonists in America without their consent. England reasoned that the colonists enjoyed peace on all sides for the first time in their history because of what the British Army had just done on borrowed money. They ignored the fact that half of William Pitt’s 50,000 men were American colonists. The colonists began to wonder if the standing army left in America after the Seven Years War ended was really intended to help keep the peace between Americans and Indians or to keep an eye on the Americans. Meanwhile, the population of colonial America was growing as fast as, or faster than, that of England under the full effect of the Industrial Revolution and Englishmen in most parts of America enjoyed a longer lifespan than their kindred back in England.
These factors and others would soon lead Benjamin Franklin to say what many thinking (Christian or Enlightened) Americans realized intuitively, “We’ve spawned a new race here—rougher, simpler, more violent, more enterprising. We’re a new nationality. We require a new nation.” We’ll investigate more closely the origins, ideas, and consequences of the American Revolution next and really for the rest of the course, but suffice it to say now that the Revolution happened as John Adams said, “In the minds and hearts of the people,” before events culminated in a War for Independence (after a Declaration of the same). Once the fragile new republic got on its feet with the first written constitution (with the exception of the Mayflower Compact) the economic dependency between England and America was realized and trade restored.
In short order, however, two Americans would set in motion (literally) key aspects of the Industrial Revolution in America. Samuel Slater, an English engineer born the son of a farmer, simply memorized the plans for a textile factory in his head since it was illegal to take such documents out of England in your hand. By 1793 he had built the first successful water-powered textile mill in America at Pawtuxet, Rhode Island. For this feat he became known as the Father of the Industrial Revolution in America. While begun in Britain, Slater’s rise is like that of Benjamin Franklin’s, a lesson in the American Dream.
The very next year Eli Whitney patented the cotton gin, the machine that was the key in making the plantation economy of the South successful. More importantly, Whitney invented the modern factory system, or the use of interchangeable parts, while making muskets for the government. Interchangeable parts are made by machine thus reducing the skill necessary to produce them but also increasing the speed with which they could be produced, thus boosting the productivity of the nation. The constitutional provision of the patent itself was also a crucial step in American industrialization because now inventors could reap the rewards of their ingenuity like when Cyrus McCormick invented the reaper. By the middle of the 19th century, Americans were receiving 25,000 patents per year. By the end of the 19th century, America surpassed Britain as a world economic power. Keep in mind, however, that this economic prowess was the result of the independent-mindedness born of a Christian religious revival as well as of the Enlightenment that were together manifested as a quest for political independence. Here’s where we give a nod in this course to that which you will study for days on end next year. You’ll keep on studying it all your life because you are a part of it and you are a thinking person. For a couple of days at least, the history of the world is your history.