Solving History’s Economic Mysteries

Dr. Deborah KozdrasUniversity of South Florida

Gus A. Stavros Center for Free Enterprise and Economic Education

Stavros.coedu.usf.edudkozdras@usf.edu

Crash Course Colonial

• https://www.youtube.com/watch?v=o69TvQqyGdg

• https://www.youtube.com/watch?v=p47tZLJbdag&index=4&list=PL8dPuuaLjXtMwmepBjTSG593eG7ObzO7s

Before Jamestown (1590)

Primary Source Analysis Tools: Library of Congress

http://www.loc.gov/teachers/usingprimarysources/guides.html

How do we find a “Northwest Passage” around this great landmass of the Americas?

TitleNova totius terrarum orbis geographica ac hydrographica tabulaContributor NamesBlaeu, Willem Janszoon, 1571-1638.Ende, Josua van den, approximately 1584-approximately 1634.Created / PublishedAmstelodami : Excudebat G. Ianssonius, [1606]

1606 Charter to Virginia Company to Build a Settlement

Merchantile policy = “favorable balance of trade” so gold and silver will not flow out of Europe.Two primary goals:

– Find gold– Find water route to Asia

Source: The Thomas Jefferson Papers Series 8. Virginia Records Manuscripts. 1606-1737.Virginia, 1606-92, Charters of the Virginia Company of London; Laws; Abstracts of Rolls in the Offices of State

http://memory.loc.gov/master/mss/mtj/mtj8/062/0000/0004.jpg

Analyze the Charter

In April 1607, 100 members of the Virginia Company reached Chesapeake Bay and established a settlement on an island up the James River on May 14, naming it “James Towne” after the current monarch, James I.

https://www.loc.gov/resource/g3880.ct000377/

Activity: Relationships Between Settlers and Natives

Despite the hostility, the natives and colonists often engaged in trade, which provided food for the settlers at a time when they were only beginning to clear land for agriculture. The settlers wrote about their interactions; therefore, the writings were heavily biased against the Virginia Native Americans. Analyze the written documents to identify the relationships. Find economic reasons for relationships.

http://www.history.org/history/teaching/jamestown/images/jamestown.pdf

What are the economic implications of the artifacts and the relationships. How were wants satisfied? What were scarcity issues? What was produced? Who produced it? Where was it produced? What was traded? Why? How did both sides benefit from trade?

http://www.history.org/history/teaching/jamestown/images/jamestown.pdf

Council for Economic Education:Colonial Economy Mystery

North America offered no known gold or silver for the taking. There were no spices to trade. Eventually, however, the colonies were able to prosper. Why?

Economic Venture . . . What Was Scarce?• Colonists ill-equipped for

difficult life• Mostly middlemen – not

farmers or laborers who could support the colony

• Counted on native peoples willing to trade goods (food, furs, skins, gold, silver, etc.)

• Physical challenges: poor hygiene, dirty water, cold weather, food shortages, illnesses, pests.

http://cdn.loc.gov/service/pnp/cph/3b00000/3b01000/3b01900/3b01980r.jpg

Work? Who me?

• Most who came with the Virginia Company were aristocrats who refused to demean themselves with agricultural labor.

• What would happen if a new colony started on Mars and nobody wanted to work to make food?

• http://cdn.loc.gov/service/pnp/cph/3b00000/3b00000/3b00400/3b00423r.jpg

http://cdn.loc.gov/service/pnp/cph/3b00000/3b00000/3b00400/3b00423r.jpg

Hostility between colonists and natives, led by Chief Powhatan, led the settlers to establish forts.

http://www.history.org/history/teaching/jamestown/images/jamestown.pdf

John Smith Solves Scarcity?• Among the first colonists who secured food through trade and

exploration. Secured good trade relationships with natives.• Most who came with the Virginia Company were aristocrats who

refused to demean themselves with agricultural labor.• Laziness, particularly among well-heeled colonists, put the settlement

in danger of starvation. • Sept 1608 elected president of local council and made rule: “He who

does not work, will not eat,” in order to increase the food supply. His strict leadership made him enemies.

• Oct 1609 Smith left Jamestown to seek medical treatment in London for gunpowder injury.

• Never returned and settlement experienced a winter known as the “starving time” during which only a few survived.

http://cdn.loc.gov/service/pnp/cph/3a50000/3a51000/3a51100/3a51181_150px.jpg

Apply the Guide to Economic Reasoning1. People choose. 2. People’s choices involve costs. 3. People respond to incentives in predictable

ways. 4. People create economic systems that influence

individual choices and incentives.5. People gain when they trade voluntarily. 6. People’s choices have consequences (positive

or negative) that lie in the future.

Jamestown Reemerges: Did Tobacco “Save” Jamestown?• John Rolfe: pioneer entrepreneur in the

tobacco industry.• Tobacco was native plant • Tobacco smoking was popular in Europe

since the 1580s so it became major export to England

• Jamestown became a boomtown off of the cash crop of tobacco.

• Many Europeans became addicted to tobacco, which created a demand. But they preferred Caribbean tobacco.

• Rolfe reacted to consumer demand by importing seed from the West Indies

• Private ownership of land provided an incentive for more colonists to produce and supply tobacco

• Indentured servants provided labor• Tobacco takes a toll on soil, which created a

huge drive for more land.

http://cdn.loc.gov/service/pnp/cph/3a00000/3a08000/3a08500/3a08570r.jpg

• Rolfe ushered in peace when he married Pocahontas in 1614.

• In 1620’s natives frustrated with encroachment of settlers on their land

• 1622 attacks on plantations• 1624 James I revoked the charter

Indentured Servitude: Why Sell Yourself into Bondage?

Visual 5.1 Background on Indentured Servants

Contracts• Indentured servants' contracts bound them to perform work

for an employer in North America.• These contracts had the force of law, and they were enforced.• Contracts typically called for three-to-seven years of service.

The average period of service was four years.• Early in the colonial period, women were offered somewhat

shorter contracts than men.• Contracts for harder work, such as growing tobacco , were

often for shorter terms than contracts for easier work, such as performing household duties.

Visual 5.1 Background on Indentured Servants

• How the System Worked– Advertisements were posted.– In return for free passage to

they worked 4-5 years.– Ordinarily a person would sign

with a ship owner or a recruiting agent in England.

– As soon as the servant was delivered alive to an American port, the contract would be sold to a planter or merchant.

Visual 5.2 Why Would Free People Sell Themselves into Bondage?

• Many workers in colonial North America were indentured servants.

• The work they performed was often difficult—clearing land, planting tobacco, performing household services.

• The contracts signed by indentured servants had the force of law. – Terms of service could be increased, for example, if a

worker violated the indenture by trying to run away. – Servants could even be sold to other owners.

Why did they come?Workers were scarce in both England and North America. Workers were more scarce in the colonies, however. How could people sell their labor where it would have the greatest value? The indentured servant market arose to solve this problem. Immigrants to the North American colonies were often people who could not afford passage. Many came as indentured servants. They signed contracts that provided them passage in exchange for their promise to work for an employer in North America. The risks were great. Conditions on the voyage were often difficult. Sickness and death were common. Sometimes, people lacked complete information about what life was really like in North America. Yet many people chose to go. Why?

Activity 5.2 Indentured Servitude in North America

• Patrick McHughCosts?Benefits?• William HeatonCosts?Benefits?• Mary MorganCosts?Benefits?

• Tom HolyfieldCosts?Benefits?• Christian MuellerCosts?Benefits?

• Patrick McHugh believed there was little for him to do in Ormskirk, England. He had lost his farm. His only work was intermittent farm work lasting a few weeks at one time. He had no money. His parents were aged and poor. One market day in the village, he heard men talking about opportunities to work in a tobacco-growing colony. The work was difficult — clearing land. The indenture would last for four years.

• What were the costs? • What were the benefits?

• William Heaton felt he had been cheated out of his share of the family estate. His father had been a merchant of moderate means living in Southport, England. William’s father had died. His mother, who remarried a man of less wealth, moved to Liverpool. Having little money left, William’s mother gave him 12 shillings and told him that was all she could do for him. He set out for London and soon spent nearly all his money. In the spring of 1725, he stood outside the Royal Exchange and read the notices about opportunities in America. In a few minutes he was approached by a man who offered to buy him a mug of beer while they discussed signing a con- tract to go to work in Philadelphia. The agent thought that a man of William’s background should be able to sign on with an artisan — perhaps a watchmaker.

• What were the costs? • What were the benefits?

• Mary Morgan lived in a small village outside of Norwich, a town east of London. Not much is known about her. She was an orphan. Her uncle, a farmer, took care of her until she reached age 14. She knew she had always been a burden for the family of eight children. There were few young men in the village, and she had no prospects for marriage. One day, while walking in Norwich’s town center, she was told by an agent of a shipowner about a Puritan family in Massachusetts that wanted an indentured servant to sew, spin, knit and do other household chores. Room and board were to be provided for five years, at which point she would be released from the contract.

• What were the costs? • What were the benefits?

• Tom Holyfield was a thief. His life began well enough. He grew up on a farm outside Blackpool, England. As the youngest male in the family, Tom stood no chance to inherit the farm. He was apprenticed at age 13 to a cooper — a maker of barrels. He worked for room and board on the promise that he would be trained as a cooper. But Tom grew impatient and fell in with a gang of thieves. It wasn’t long before he and his friends were caught. Found guilty of a felony, Tom could be hanged — or he could accept a contract to work in the tobacco-growing colonies.

• What were the costs? • What were the benefits?

• In 1750, Christian Mueller was a teacher and an organist by trade. He had read pamphlets about America. Pennsylvania was described as a land of opportunity: “He who goes there as a servant, becomes a lord; as a maid becomes a gracious lady; as a peasant, a nobleman; as a com- moner, as a craftsman, a baron.” Christian left his wife and child, traveled down the Rhine River, and signed on board a ship headed for America. The agent agreed to pay for his passage and promised that his skills would be welcomed in North America. Christian planned to send for his family after his four-year indenture.

• What were the costs? • What were the benefits?

Would You Sell Your Labor?

• Would you agree to perform two years of community service in exchange for a significant reduction in college tuition?

• Costs?• Benefits?

Why did they trade?

http://www.econedlink.org/teacher-lesson/301/Economic-Spotter-Trade-Colonial-History

• Tell the students that they are going to be given a chance to go back in history on a time machine. This journey is going to take them back to Boston Harbor in 1680, but their job is to be an economic spotter. Can they spot and explain economic concepts within a historical time frame?

Trade

• When two people exchange goods and services or money, it is called trade. And trading goods and services with people for other goods and services or money is called exchange.

• Have you ever traded something with another person?

• Were you and the other person happy after you traded?

Voluntary Trade

When people trade voluntarily -- because they want to -- both parties usually think that they are better off after the trade. You should never trade something when you are going to be unhappy after the trade. You should be better off after the exchange, or you shouldn't have traded.• Did you ever use money as an exchange for candy or

gum?• Were you happy that you exchanged money for those

goods?• Was the store happy with the money that you

exchanged for the candy or gum?

Keep a list of all the ways trade is used in the Colonial Economy

http://www.econedlink.org/interactives/EconEdLink-interactive-tool-player.php?filename=em301_history.swf&lid=301

Why did they trade?

• How did climate, geographic features, and other available resources distinguish the three colonial regions from each other?

• How did people use the natural resources of their region to earn a living or have their basic needs met?

• What are the benefits of specialization and trade?• How did political and social life evolve in each of

the three regions?

http://chnm.gmu.edu/tah-loudoun/blog/lessons/differences-among-colonial-regions/

Hook

• Have you ever thought of living in a place that is totally different from here? like an island or a farm, in a big city or perhaps in the mountains. Take a moment to pick one place that is different from here. Describe the climate and the weather. Name some natural resources in that environment. What kind of job could you/most of your neighbors have?

https://www.loc.gov/item/gm71000621/

Expert Groups With 4-5 Pictures From One Region: Examine, Analyze, and Write . . .

Assessment• Students will demonstrate knowledge of their assigned region

by creating a rough draft of a poster or brochure that will describe life in the colonial age. Students will select a region or colony to feature in a letter to a family member urging them to join the student in the new land OR create a poster/brochure that advertises the features of the region. Students will provide details on how people interacted with their environment to produce goods and services. In order to exceed the Standard, student will need to include an example of interdependence among the regional economies. The student creation will be graded on a four-point formative rubric scale.

http://www.fmschools.org/webpages/jworm/files/chapter%204%20-%20english%20colonies%20packet.pdf

1. Why might the New England region make money doing other things than farming?2. Explain a difference between crops grown in the Middle and Southern regions.3. Why might New England be more successful than the Southern region at fishing,

whaling, lumbering and shipbuilding?4. Based on the chart and what else you have learned, explain how geography can affect

the economy or the way people make money.

http://www.fmschools.org/webpages/jworm/files/chapter%204%20-%20english%20colonies%20packet.pdf

• What is the subject of the chart?• What appears to be the pattern of English tobacco imports

from colonial America?• What does this pattern suggest about the importance of the

tobacco trade to the colonial economy?

Activity 3.2Be A Planet Planner

• The Spanish and the English had much in common. Both were powerful European colonial powers. But the results of colonial development led to different outcomes in North and South America. Why?

Be A Planet Planner• You have just been appointed by Dr. Julie Verne to the United Nations

Intergalactic Development Administration (UNIDA) Task Force for Planet Z93.

• Your job is to advise Dr. Verne on Z93 development plans by applying two rules:

1. People respond to incentives in predictable ways. Rewarding people for their work, for example, encourages them to be productive.

2. People create economic systems that influence individual choices and incentives. In order for an economy to grow, its rules must include a system of incentives that encourages people to produce.

English Development• England by the 17th century had transferred some power from

the king to the parliament. Individual property rights were better defined and enforced.• The Pilgrims experimented with common land

ownership but nearly starved.• In 1623, they replaced group land ownership with

individual ownership.• “This had very good success for it made all hands very

industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use.”

William BradfordOf Plymouth Plantation, 1620-1647

Spanish Development

• Spain in the 16th century was an absolute monarchy. Individual property rights were not well defined and enforced.

• Economic decisions were not made by individuals. Many goods and services were produced by guilds (organizations of merchants or craftsmen) that operated as monopolies.

• The plan for development was to seek gold and riches - - a transfer of wealth, not expansion.

Questions for DiscussionQuestions for Discussion• How did the political institutions differ between Spain

and England?• Describe ways in which Spain influenced the economic

development of South and Central America?• Describe ways in which the English developed the

eastern coast of North America?

Policy Recommendations• Who should be allowed to own property in Z93?

Individuals? Government? Why?