The Economic Undercurrents of the American Revolution

Portrayals of British oppression have dominated the American “origin story” through centuries; however, these perspectives highlight a political tyranny that was overshadowed by an economic one. The pecuniary interests of private citizens drove the desire for independence, as the ideals of capitalism and individualism grew from the Enlightenment period in Europe. Liberalism, in the classical sense, conceived of property rights within the framework of natural law, and shifted the focus of commerce away from establishing artificial trade surpluses and towards maximizing individual profit. British fiscal policy rejected these new economic ideas in favor of a mercantilist system; the semi-protectionist Navigation Acts, for example, mandated that all exports from the colonies travel by British ships and be sold by British merchants. British legislation like this slashed colonists’ earning potential - independence would ensure a new degree of economic freedom. The 18th century engendered a sense of nation that the founders disguised as political and moral, but the freedom they sought was first financial, and civic second. New economic ideals of private property and free markets shaped the inception of the US, rather than the values of equality and freedom that had been exalted previously.

American nationalist rhetoric has helped to promulgate a narrative of liberation and deliverance that was largely superficial; freedom and liberty were neither novelties unique to the United States, nor were they widespread during the nation’s infancy. In fact, social stratification was baked into the very bones of the union some 150 years before even the American Revolution. John Winthrop, one of the founders of the Massachusetts Bay Colony, wrote in his sermon, A Model of Christian Charity, that “God Almighty in His most holy and wise providence, hath so disposed of the condition of mankind, as in all times some must be rich, some poor, some high and eminent in power and dignity; others mean and in subjection” (62). It is by God’s design, argues Winthrop, that socioeconomic divisions persist and prevent absolute egalitarianism. Benjamin Banneker, in a letter to Thomas Jefferson, highlights the ethical disparity between institutional subjugation and revolution in the name of freedom:

“Sir, I have long been convinced, that if your love for your Selves, and for those inesteemable laws which preserve to you the rights of human nature, was founded on Sincerity, you could not but be Solicitous, that every Individual of whatsoever rank or distinction, might with you equally enjoy the blessings thereof, neither could you rest Satisfyed, short of the most active diffusion of your exertions, in order to their promotion from any State of degradation, to which the unjustifyable cruelty and barbarism of men may have reduced them” (Banneker).

In essence, Banneker posits that anything other than the propagation of freedom on the broadest possible basis not only renders the founders’ words disingenuous but also damages the very institution of freedom that was considered central to the national consciousness. This romanticization of American liberty has not been superimposed by historians today -- the concept of “freedom” was being exploited as a rhetorical tool while the reality was that the rights citizens enjoyed at the turn of the 19th century did not expand greatly after independence. Many of these privileges were still confined to a very small demographic of literate, landed, white men - the disenfranchisement of the majority and the continued enslavement of a large portion of the population hardly renders the infant United States a “free state.” That the colonists felt they were not represented in the British government was a tremendous success of the colonial propaganda machine, while any argument from Paine or others that Britain is not the “mother country” can be quite simply answered with the fact that Britain either put up the capital for or acquired each colony. While historical debate continues over whether the colonists had a legitimate claim to independence, the fact remains that once it was won, freedom and equality were made into the artificial watchwords of the American Republic.

Instead, the concept of property, coupled with the rise of free markets, established the economic framework for the nation and defined political theory in the 18th century. While some of the earliest property rights date back to Roman law, feudalism and the medieval period eroded much of the thinking around property ownership. The Enlightenment and the beginnings of liberalism, largely developed by men like Locke, Smith, and Voltaire, revolutionized the ideas of wealth, resources, and property. Locke, in particular, appeals to natural law in his explanation of ownership: 

“individual man has a property in his own person; this is something that nobody else has any right to. The labour of his body and the work of his hands, we may say, are strictly his. So when he takes something from the state that nature has provided and left it in, he mixes his labour with it, thus joining to it something that is his own; and in that way he makes it his property” (11).

Private property was critical to the development of the colonies; anything from the plantation economies in the South to the market-based economies in the North relied heavily on more modern understandings of property and value. The role in colonial America played by the advent of private property has been severely understated. First, it gave new political impetus to colonists who sought to protect property rights and lower taxes based on property interests. Second, property in the context of the Enlightenment shaped economic philosophy and influenced colonial leaders. Third, and resultingly, American contract and property law have their roots in the founding documents; the Constitution states that “No State shall…pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts.” The Bill of Rights places further emphasis on the protection of private property, beyond just contractual law, in Amendments IV and V, which prohibit unreasonable search and seizure and ensure that the government cannot seize private property without just compensation, respectively. Protection of property from the Crown was a critical motivation in the Independence movement and therefore features heavily in these documents. Alongside private property, free markets played an especially formative role in colonial America and the new republic. 18th-century economists like Adam Smith helped dismantle the previous framework of mercantilism, in favor of a more productive, better-reasoned, free-market economy. Smith and others explained that trade takes place between private actors, not the state, and in fact, those private actors being empowered to pursue their economic interests benefit the state further. A deregulated market fosters competition and lets supply and demand dictate value: the “invisible hand” of the market. British mercantilist policies like the Navigation Acts were a barrier to these new theories, as well as having a more practical result of draining further money out of the coffers of colonists. In addition to the stringent Navigation Acts which were, in the aftermath of the 7 Years’ War, more strictly enforced, Thomas Paine suggests that British rule would critically damage American trade: “As Europe is our market for trade…whenever a war breaks out between England and any foreign power, the trade of America [were it a British colony] goes to ruin” (4). Commerce that might still occur, indirectly per the Navigation Acts, would cease in the event of another conflict with France, for example. In the interest of separating British politics from American markets, independence became a more pressing imperative.

The new nation was the realization of an economic revolution. Older historical framings of the founding narrative overemphasize political ideals of democracy and equality and diminish the more common human interest in expediency. The transition to free-market capitalism was economically expedient for the colonies. The founders appealed to human passions - they emphasized the age-old struggle for freedom from tyranny, disguising economic ideals with political rhetoric. The weaponization of freedom is as old as freedom itself and, in this case, freedom from Britain was a means to an economically beneficial end. Over time, the American definition of freedom has evolved to reflect the economic imperatives of early America.

Works Consulted

Winthrop, John. “A Model of Christian Charity.” In Constructing America Reader 1. 62-64. New York: Riverdale Country School, 2023.

Library of Congress, Washington, D.C. “Copy of a Letter from Benjamin Banneker to the Secretary of State, with His Answer.” Class Handout. New York: Riverdale Country School, 2023.

Locke, John. “Second Treatise.” Class Handout. New York: Riverdale Country School, 2023.

Paine, Thomas. “Common Sense.” In Constructing America Reader 2. 3-6. New York: Riverdale Country School, 2023.