When the colonies were founded, they had been formed with an economy based on mercantilism in mind. Britain and the colonies both benefited from this trade immensely with both sides gaining profits. The colonies exported raw materials and Britain exported finished goods. Though the colonies were discouraged from trading with Britain’s competitors like France or Spain, Britain made sure that the colonial traders were given bonuses for trading with them. Trade with Britain protected the colonists from the harshness of the global market where you did not have guaranteed sales and buyers. Each colony developed their own economy of exports, ranging from tobacco in Virginia to rice in the Carolinas for the southern colonies, while the northern colonies had a more varied but less stable export of livestock, fur, and fish. Britain’s interference with the colonial economy may have helped it to survive at first, but later on it only stymied the economy’s growth by preventing it from expanding to more markets.
At the onset of the American Revolution, the colonial economy was starting to suffer from the various boycotts and commerce problems of the colonial protests. This set back the colonial economy, but it also helped the colonists to become more independent of the goods from Britain. Prior to the boycotts, colonists had relied on Britain for most of their goods and manufactured products, but the lack of importation meant that the colonists had to learn how to make goods of their own. this set the colonies free of some of the economical chains that had tied them down from true economical freedom. During the war however, colonial economy suffered greatly from a lack of farmers to grow agricultural products. Britain’s blockades were also having a bad effect on colonial exports. Closer to home, loyalists stirring up trouble and soldiers scavenging food had a negative impact on farm production.
After the victory of the war and the signing of the peace treaty in Paris, Americans were saddled with a massive debt to France for the money lent during the war. Not surprisingly, this slowed down economic growth along with the various tariffs and inconsistencies of the Articles of Confederation era of America. The federal government had no power to regulate the states or help the economy which led to bankruptcy and loss of property for many farmers. Farmers were none too happy about losing their only means of survival and reacted angrily. One famous example of this would be Shay’s rebellion, ignited by an angry farmer and a former soldier. The economy would get better but only after the creation of a stronger central government.
Kulikoff Alan, Colonial American Economy, History, Oct. 15, 2012, Web.
Economy in The American Revolution, Shmoop, Oct. 15, 2012, Web.
Leizelt, Balthasar Friedrich, Vuë de Salem, 177X, Oct. 15, 2012, Digital.