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British Policy and Colonial Growth: Some Implications of the Burden from the Navigation Acts

  • Roger L. Ransom (a1)

Extract

Very few issues in American economic history have stirred as many contrasting views as the debate regarding the effects of the British Navigation Acts on the Thirteen American Colonies. The most recent entry in the long argument is Robert Thomas' analysis of the problem. Thomas constructs quantitative estimates of the impact of the Acts which are designed “… to measure, relative to some hypothetical alternative, the extent of the burdens and benefits stemming from imperial regulation of the foreign commerce of the 13 colonies.” He presents these estimates to test the hypothesis that: “… membership in the British Empire, after 1763, did not impose a significant hardship upon the American Colonies.” Thomas has employed new data in constructing his estimates, and he has carefully brought economic theory explicitly into the discussion. His framework requires the construction of a “counterfactual” hypothesis against which to evaluate the impact of policy. As he views it: “The only reasonable alternative in this case is to calculate the burdens or benefits of British regulation relative to how the colonists would have fared outside the British Empire, but still within a mercantilist world.” Given such a model, the value of the burden and benefit is estimated in terms of market prices and the pattern of trade which would have emerged had the colonies been free in 1763.

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1 Thomas, R., “A Quantitative Approach to the Study of the Effects of British Imperial Policy Upon Colonial Welfare,” JOURNAL, OF ECONOMIC HISTORY XXV (12. 1965). The first quantitative estimates were constructed by Lawrence Harper in “The Effects of the Navigation Acts on the Thirteen Colonies,” reprinted in H. N. Scheiber, ed., United States Economic History (New York: Knopf, 1964), pp. 42–78.

2 Ibid., p. 615.

3 Ibid., p. 616.

4 Ibid., p. 616.

5 Ibid., p. 638. The original text incorrectly read “.54 of one per cent” and been corrected in accordance with a letter from the author.

6 The arbitrariness of such adjustments to favor particular groups was a source of irritation to the Colonies, but they did not always lose by these changes. Thus, the relaxing of restrictions to allow rice to be shipped directly to points south of Cape Finisterre increased the returns to that staple after 1731. Major adjustments of this sort were rare; the point is that they could be made.

7 , Harper, “The Effects,” p. 70.

8 North, Douglass C., in Growth and Welfare in the American Past (Englewood Cliffs, N.J.: Prentice-Hall, 1966), p. 47, argues that Harper “did not use a single consistent hypothetical alternative” against which to measure the impact of the Acts. I think it is clear, however, that with regard to I.A. and I.B. of Table 2 Harper considers a free access to the world market as his hypothetical alternative. This is the same result as Thomas' assumption that the colonists are free.

9 Thomas estimates these gains to be about £90,000 on an increased volume of 53,000 tons in 1770, assuming the colonists left the Empire. Remaining in the Empire would increase this to about £100,000 since the colonial share of the trade would increase the tonnage by some 10 percent.

10 In 1770 the southern colonies accounted for 75.4 percent of the total colonial exports to Britain, and 47.8 percent of the imports (Historical Statistics of the United States (Washington, D.C.: U.S. Government Printing Office, 1960), series Z 21–34), p. 757.

11 Ibid., p. 757.

12 Over the decade 1763–72 the value of southern exports to Britain averaged £924,000 per year (Historical Statistics, p. 757). Thomas estimates a smaller burden for the decade average (see Table 1); thus the increase would be closer to 45 percent of the exports. However, Jacob Price argues that the entire period of the late 1760's and early 1770's is an interval characterized by low tobacco exports. He feels that Thomas' decade estimate understates the magnitude of the burden in later years. See Price, J., “Comment,” Journal Of Economic History XXV (12. 1965).

13 Taylor, G. R., “American Economic Growth Before 1840: An Exploratory Essay” and A. Fishlow, “Comment” (on Bjork), JOURNAL OF ECONOMIC HISTORY XXIV (12. 1964).

14 David, P., “The Growth of Real Product in the United States Before 1840,” JOURNAL OF ECONOMIC HISTORY XXVII (05 1967).

15 Ibid. For 1800 the figure is from Table 8; for 1790 in footnote 69, p. 187. It should be emphasized that both figures are highly “conjectural,” and that the 1790 figure is less reliable than the 1800 figure.

16 Bjork, G., “The Weaning of the American Economy: Independence, Market Changes, and Economic Development” and A. Fishlow, “Comment” (on Bjork), JOURNAL OF ECONOMIC HISTORY XXIV (12. 1964).

17 The level of income in 1770 was taken to be $55–60 in 1840 prices. The Warren-Pearson index of wholesale prices was used to convert the estimate to current dollars (Historical Statistics, p. 116).

18 Using the per capita income figures above, southern income would be between $101 million and $108 million. Population was 1,345,000, including slaves.

19 The net benefit for the South was derived by allocating the $1,775,000 of total benefit to the southern colonies on the basis of population in 1770. The total implied benefits would then be $1.07 million for the South.

20 Dickerson, Oliver, The Navigation Acts and the American Revolution, (Philadelphia: University of Pennsylvania Press, 1951), pp. 118–22.

21 Gray, L. C., A History of Agriculture in the Southern United States to 1860 (Baltimore: Waverly Press, Inc.; 1933), p. 258.

22 See Thomas, pp. 618–19 for comments relating to the importance of trade with Britain to the Colonies in 1769. In 1772–73, “North America” received 25 percent of all British exports and accounted for 13 percent of all British imports (Abstract of British Historical Statistics (Cambridge, [Eng.]: The University Press, 1962), p. 312). This does not account for the very large trade with the West Indies. Price makes the same point in his comment on Thomas' paper (p. 656–57).

23 See North, D. C., Economic Growth of the United States, 1790–1860 (Engle-wood Cliffs, N.J.: Prentice-Hall, 1960), pp. 1723, especially the quote by Thomas Jefferson.

24 Andrews, Charles, “The American Revolution: An Interpretation,” American Historical Review XXXI (01. 1926), 232.

British Policy and Colonial Growth: Some Implications of the Burden from the Navigation Acts

  • Roger L. Ransom (a1)

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