Inflation and Deflation in Early America, 1634–1860: Patterns of Change in the British American Economy

Harris, P. M. G.

doi:10.1017/s0145553200017533

Cited by 2 publications

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“…Ours is the cost of a bundle of staple consumer goods, data supplied by Robert Allen ( http://gpih.ucdavis.edu/tables.htm, within the folder ‘American incomes ca 1650–1870’, download ‘Allen subsistence bundle costs, colonial America versus England, as of 2013’). This price series disagrees with those of Harris, ‘Inflation and deflation’, and used by McCusker, ‘Colonial statistics’, data ser. Eg247.…”

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American colonial incomes, 1650–1774

Lindert

Williamson²

2015

The Economic History Review

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New data now allow conjectures on the levels of real and nominal incomes in the 13 American colonies. New England was the poorest region, and the South was the richest. Colonial per capita incomes rose only very slowly if at all, for five reasons: productivity growth was slow; population in the low-income (but subsistence-plus) frontier grew much faster than that in the high-income coastal settlements; child dependency rates were high and probably even rising; the terms of trade were extremely volatile, presumably suppressing investment in export sectors; and the terms of trade rose very slowly, if at all, in the North, although faster in the South. All of this checked the growth of colony-wide per capita income after a seventeenthcentury boom. The American colonies led Great Britain in purchasing power per capita from 1700, and possibly from 1650, until 1774, even counting slaves in the population. That is, average purchasing power in America led Britain early, when Americans were British. The common view that American per capita income did not overtake that of Britain until the start of the twentieth century appears to be off the mark by two centuries or more. bs_bs_banner 1 Mancall, Rosenbloom, and Weiss, 'Conjectural estimates'; Rosenbloom and Weiss, 'Economic growth'. 2 Lindert and Williamson, 'American incomes'. 3 Our exploration of these issues is subject to two omissions.The first is that we exclude Native Americans, due to the paucity of information on their living conditions. Second, we see no way to place any monetary value on freedom, nor can we quantify inhumane treatment. Thus, we only estimate slave consumption, a much narrower concept than their well-being. 4 It was probably not the richest of all the British American colonies in terms of white incomes. What little we know about white wealth, and indirectly about income, in the BritishWest Indies suggests that white incomes were higher there than in any mainland colony. So thought McCusker and Menard, Economy of British America, tab. 3.3, p. 61, and Higman, 'British West Indies', 'Prodigious riches',, has made the comparison more concrete, based on especially rich data for Jamaica. He finds that in 1774 the average white man in the British West Indies had over 17 times the physical wealth of his counterpart in the Thirteen Colonies, and the corresponding per capita ratio was nearly 2.5 even after including slaves in the population denominator.These ratios might be lowered a bit if one divided these sterling figures by the cost of living, which was presumably higher in the West Indies, yet it is hard to imagine that the ratios would be reduced to parity.

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confidence: 56%