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The Entrepreneurial Spirit in Colonial America: The Foundations of Modern Business History

Published online by Cambridge University Press:  13 December 2011

Edwin J. Perkins
Edwin J. Perkins
Affiliation:
Edwin J. Perkins is professor of history at the University of Southern California.
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Abstract

This wide-ranging discussion of the extent of entrepreneurship in colonial America surveys the recent historiography of the field and offers a reconceptualization. The article advances the view that a society “with pervasive entrepreneurial values” existed from the first years of English settlement in North America, and it examines the activities and goals of the primary occupational groups to demonstrate that thesis.

Type
Surveys and Debates–II
Information
Business History Review , Volume 63 , Issue 1: Entrepreneurs in Business History , Spring 1989 , pp. 160 - 186
Copyright
Copyright © The President and Fellows of Harvard College 1989

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References

1 Greene, Jack P. and Pole, J. R., “Reconstructing British-American Colonial History: An Introduction,” the lead essay in their coedited anthology, Colonial British America: Essays in the New History of the Early Modern Era (Baltimore, Md., 1984)Google Scholar, quotation from p. 4.

2 Bailyn, Bernard, The New England Merchants in the Seventeenth Century (Cambridge, Mass., 1955).Google Scholar

3 McCusker, John and Menard, Russell, The Economy of British America, 1607–1789 (Chapel Hill, N.C., 1985).Google Scholar Other surveys of recent literature include Walton, Gary M. and Shephard, James F., The Economic Rise of Early America (New York, 1979)Google Scholar, and Perkins, Edwin J., The Economy of Colonial America, 2d ed. (New York, 1988).Google Scholar

4 Cochran, Thomas, Business in American Life: A History (New York, 1972), 57.Google Scholar Verification of the rising price of land in settled areas can be found in Main, Jackson Turner, Society und Economy in Colonial Connecticut (Princeton, N.J., 1985), 31–33Google Scholar, and Beeman, Richard, The Evolution of the Southern Backcountry: A Case Study of Lunenburg County, Virginia, 1746–1832 (Philadelphia, Pa., 1984), 33, 64.Google Scholar For an even earlier advocacy of themes related to the pervasiveness of capitalist attitudes in early American society, see Hartz, Louis, The Liberal Tradition in America: An Interpretation of American Political Thought since the Revolution (New York, 1955).Google Scholar

5 Cochran, , 200 Years of American Business (New York, 1977), 4Google Scholar, and Frontiers of Change: Early Industrialism in America (New York, 1981), 11.

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7 Robertson, James Oliver, America's Business (New York, 1985), 11–46.Google Scholar

8 The Degler, Carl quotation is a chapter subtitle from Out of Our Past: The Forces That Shaped Modern America (New York, 1959), 1.Google ScholarCrowley, J. E., This Sheba, Self: The Conceptualization of Economic Life in Eighteenth-Century America (Baltimore, Md., 1974), 77Google Scholar; Bailyn, Bernard, Voyagers to the West: A Passage in the Peopling of America on the Eve of the Revolution (New York, 1986), 200.Google Scholar

9 Heyrman, Christine L., Commerce and Culture: The Maritime Communities of Colonial Massachusetts, 1690–1750 (New York, 1984)Google Scholar; McCusker's, review appeared in the Business History Review 60 (Summer 1986): 296–97.CrossRefGoogle Scholar

10 Martin, John Frederick, “Entrepreneurship and the Founding of New England Towns: The Seventeenth Century” (Ph.D. diss., Harvard University, 1985).Google Scholar His book is forthcoming from the University of North Carolina Press.

11 Henretta, James, “Families and Farms: Mentalité in Pre-Industrial America,” William & Mary Quarterly 35 (1978): 3–32CrossRefGoogle Scholar; the quotation comes from Henretta's printed reply to a rebuttal letter from James Lemon “(Comment on James A. Henretta's ‘Families and Farms: Mentalité in Pre-Industrial America’ “), ibid. 37 (1980): 699. The broader parameters of this debate are reviewed in much greater depth in the second revised edition of my Economy of Colonial America, 67–71; the accompanying bibliographical essay lists much of the pertinent literature published through the mid-1980s. Because so many participants espouse such divergent views, the question about whether colonial society was capitalist or precapitalist appears unresolvable—at least for years to come. Some historians have tried to take an intermediate position between the two extremes—among them Michael Bellesiles, T. H. Breen, and Bettye Hobbs Pruitt; see Bellesiles, “Community Strategies for Dealing with Poverty: The New England Frontier, 1760–1820,” unpublished paper distributed at the University of California's economic history conference, Laguna Beach, May 1986; Breen, , “Back to Sweat and Toil: Suggestions for the Study of Agricultural Work in Early America,” Pennsylvania History 49 (1982): 241–58Google Scholar; and Pruitt, , “Self-Sufficiency and the Agricultural Economy of Eighteenth-Century Massachusetts,” William & Mary Quarterly 41 (1984): 333–64.CrossRefGoogle Scholar For a broader theoretical discussion of related issues in a wider perspective, see Hirschman, Albert O., Rival Views of Market Society and Other Recent Essays (New York, 1986).Google Scholar

12 Clark, Christopher, “Household Economy, Market Exchange, and the Rise of Capitalism in the Connecticut Valley, 1800–1860,” Journal of Social History 13 (1979): 169–89CrossRefGoogle Scholar; Merrill, Michael, “Cash Is Good to Eat: Self-Sufficiency and Exchange in the Rural Economy of the United States,” Radical History Review 3 (1977): 42–71Google Scholar; and Mutch, Robert, “Yeoman and Merchant in Pre-Industrial America: Eighteenth-Century Massachusetts as a Case Study,” Societas 7 (1977): 279–302.Google ScholarKulikoff, Allan focuses on the evolution of the agricultural economy in “The Transition to Capitalism in Rural America,” William & Mary Quarterly, 46 (1989): 120–44CrossRefGoogle Scholar; I disagree with Kulikoffs thesis because I believe little transition was required.

13 Lemon, “Comment,” 688–700; Shammas, Carol, “How Self-Sufficient Was Early America?” Journal of Interdisciplinary History 13 (1982): 247–72CrossRefGoogle Scholar, and “Consumer Behavior in Colonial America,” Social Science History 6 (1982): 67–86; Rothenberg, Winifred, “The Market and Massachusetts Farmers, 1750–1855,” Journal of Economic History 41 (1981): 283–314CrossRefGoogle Scholar; and “Markets, Values, and Capitalism: A Discourse on Method,” ibid. 44 (1984): 174–78.

14 Her definition of utility maximization is found in Rothenberg's book review of Hahn, Steven and Prude, Jonathan, eds., The Countryside in the Age of Capitalist Transformation: Essays in the Social History of Rural America in Reviews in American History 15 (1987): 633.Google Scholar She endorsed the term “commercial mentalité” in “The Market and Massachusetts Farmers, 1750–1855.”

15 Harald Livesay was the inspiration for the term “maintainers”; he proposed it while serving as discussant on a panel at the Economic and Business Historical Society's annual convention, Toronto, Canada, 1988. If the focus here were on the post-revolutionary era, it would be tempting to label artisans and others who aimed mainly at achieving independence from employers—or landlords—and who feared excessive concentrations of wealth in society as persons exhibiting “republican virtues.” I do not believe that terminology or that conceptual context is appropriate for the colonial period, however. Forrest McDonald, in discussing the intellectual origins of the Constitution, observed that, although historians have devoted much energy to analyzing the tensions between republican virtues and aristocratic vices, they had unfortunately inadequately addressed the counterpart tensions between communitarian consensus and possessive individualism; see his Novus Ordo Seclorum: The Intellectual Origins of the Constitution (Lawrence, Kans., 1985), viii.

16 An excellent source on the role and functions of merchants is Bruchey, Stuart, ed., The Colonial Merchant: Sources and Readings (New York, 1966).Google Scholar

17 To cite one prominent example, see Price, Jacob, Capital and Credit in British Overseas Trade: The View from the Chesapeake, 1700–1776 (Cambridge, Mass., 1980).CrossRefGoogle Scholar

18 Doerflinger, Thomas, A Vigorous Spirit of Enterprise: Merchants and Economic Development in Revolutionary Philadelphia (Chapel Hill, N.C., 1986).Google Scholar

19 Sec, for example, Main, Colonial Connecticut, and Clemens, Paul and Simler, Lucy, “Rural Labor and the Farm Household in Chester County, Pennsylvania, 1750–1820,” in Work and Labor in Early America, ed. Innes, Stephen (Chapel Hill, N.C., 1988).Google Scholar

20 Doerflinger, Vigorous Spirit of Enterprise.

21 The artisanal origins of many early manufacturers is documented in Ross, Steven J., Workers on the Edge: Work, Leisure, and Politics in Industrializing Cincinnati, 1788–1890 (New York, 1985).Google Scholar

22 Lemon makes a similar argument in his “Comment,” 688–96.

23 Shammas, “How Self-Sufficient Was Early America?”

24 According to Bruce Daniels, the typical farmer in Connecticut by the 1770s owned 10 cattle, 16 sheep, 6 pigs, 2 horses, a team of oxen, and some poultry; see his “Economic Development in Colonial and Revolutionary Connecticut: An Overview,” William & Mary Quarterly 37 (1980): 427–50. Alice Hanson Jones estimated for the same period that middling farmers throughout the colonies (estates of £100 to £400) held about 15 percent of their total wealth in livestock, with smaller farmers (estates under £99) holding just over 25 percent in livestock; the data are from tables 7.21 and 7.22 in Wealth of a Nation To Be: The American Colonies on the Eve of the Revolution (New York, 1980). The colonists' expansion of livestock herds presaged the business strategies of many rural households in the modern U.S. economy. In the late twentieth century, the bulk of all harvested grain ends up as fodder for gigantic herds of hogs and cattle since high income levels permit Americans to exercise their preference for obtaining a disproportionate share of their nourishment from meat and dairy products. Although colonial farms were a far cry from the modern mechanized farm, the increased size of crop surpluses and their allocation to boost the output of meat and dairy products was a trend already under way by the eighteenth century.

25 Kim, Sung Bok, Landlord and Tenant in Colonial New York: Manorial Society, 1664–1775 (Chapel Hill, N.C., 1978)Google Scholar; Innes, Stephen, “Land Tenancy and Social Order in Springfield, Massachusetts, 1652 to 1702,” William & Mary Quarterly 35 (1978), 33–56CrossRefGoogle Scholar, and Labor in a New Land: Economy and Society in Seventeenth-Century Springfield (Princeton, N.J., 1983); Main, Gloria, Tobacco Colony: Life in Early Maryland (Princeton, N.J., 1982)Google Scholar; Clemens, and Simler, , “Rural Labor”; and Schweitzer, Mary, Custom and Contract: Household, Government, and the Economy in Colonial Pennsylvania (New York, 1987).Google Scholar

26 Downwardly mobile tenants are the focus of Stiverson, Gregory, Poverty in a Land of Plenty: Tenancy in Eighteenth-Century Maryland (Baltimore, Md., 1977).Google Scholar

27 In “Rural Labor,” Clemens and Simler identified a significant number of tenant farmers in eastern Pennsylvania who earned a living from a combination of activities: producing crops on rented land, periodic day labor in the landlord's fields, and occasional craft work for the landlord. Indeed, landlords often charged very low rents for contiguous farms because they wanted to hold nearby a “captive” source of supplementary day labor during certain critical weeks in the cycle of planting and harvesting, and they anticipated that tenants would bring new land under the plow. When wheat began to ripen, farmers with sizable commitments to commercial agriculture were always willing to pay occasional day laborers substantial wages—up to 4 shillings per day (about $23 in 1990 prices)—if extra hands were available in the surrounding countryside.

28 The inclusion of southern planters in the entrepreneurial category is incompatible with the Marxian analysis of southern slave society advanced by Elizabeth Fox-Genovese and Eugene Genovese. They are unwilling to grant the U.S. slave society the status of full-fledged capitalism. Instead, they view the slave South as a region that “emerged as a bastard child of merchant capital and developed as a non-capitalist society.” Their depiction of the slave south is outlined in Fruits of Merchant Capital: Slavery and Bourgeois Property in the Rise and Expansion of Capitalism (New York, 1983); quotation from p. 5.

29 T. H. Breen recently estimated the share of households qualifying for great planter status to be in the range of 3 to 10 percent; see his Tobacco Culture: The Mentality of the Great Tidewater Planters on the Eve of Revolution (Princeton, N.J., 1985), 32–38.

30 Kulikoff, Allan, Tobacco and Slaves: The Development of Southern Cultures in the Chesapeake, 1680–1800 (Chapel Hill, N.C., 1986), 118–61.Google Scholar

31 The contributions of these scholars include Galenson, , White Servitude in Colonial America: An Economic Analysis (New York, 1981)Google Scholar; Grubb, , “Immigration and Servitude in the Colony and Commonwealth of Pennsylvania: A Quantitative Economic Analysis” (Ph.D. diss., University of Chicago, 1984)Google Scholar, plus numerous derivative articles, including “Immigrant Servant Labor: Their Occupation and Geographic Distribution in the Late Eighteenth-Century Mid-Atlantic Economy,” Social Science History 9 (1985): 249–75; “The Market for Indentured Immigrants: Evidence on the Efficiency of Forward-Labor Contracting in Philadelphia, 1745–1773,” Journal of Economic History 45 (1985): 855–68; “Colonial Labor Markets and the Length of Indenture: Further Evidence,” Explorations in Economic History 24 (1987): 101–6; and Bailyn, Voyagers to the West. Two very useful essays are James Horn, “Servant Emigration in the Chesapeake in the Seventeenth Century,” 51–95, and Lois Green Carrand Russell Menard, “Immigration and Opportunity: The Freedman in Early Colonial Maryland,” 206–42, in The Chesapeake in the Seventeenth Century: Essays on Anglo-American Society, ed. Tate, Thad and Ammerman, David (Chapel Hill, N.C., 1979).Google Scholar An excellent survey of the literature on both forms of bonded labor is Richard Dunn, “Servants and Slaves: The Recruitment and Employment of Labor,” in Greene and Pole, Colonial British America, 157–94. A lengthy bibliography is found in Perkins, Economy of Colonial America, 110–14.

32 In Tobacco Colony, Gloria Main estimated freedom dues in Maryland at around £3.5 in the seventeenth century—or about $350 in 1990 prices.

33 For details relating to the indenture contracts of the native-born, see Schweitzer, Custom and Contract.

34 The best data on work patterns during a male's life cycle are found in Jackson Turner Main, Colonial Connecticut. Information on females is sketchier, but Schweitzer, Custom and Contract, and Shammas, , “The Female Social Structure of Philadelphia in 1775,” Pennsylvania Magazine of History and Biography 107 (1983): 69–83Google Scholar, are useful sources.

35 Morgan, Philip, “Black Life in Eighteenth-Century Charleston,” Perspectives in American History, n.s. 1 (1984): 187–232.Google Scholar

36 Rediker, Marcus, Between the Devil and the Deep Blue Sea: Merchant Seamen, Pirates, and the Anglo-American Maritime World, 1700–1750 (New York, 1987).Google Scholar On the economic status of seamen, mariners, and captains, see Main, Colonial Connecticut, 280–95. Eighty percent of all ship captains in the colony listed land in their estates.

37 Jensen, Joan, Loosening the bonds: Mid-Atlantic Farm Women, 1750–1850 (New Haven, Conn., 1986).Google Scholar

38 Salmon, Marylynn, Women and the Law of Property in Early America (Chapel Hill, N.C., 1986).Google Scholar A strictly lifetime interest meant that, on the widow's death, the property was turned over to whoever was named in the husband's will or, alternatively, it was divided according to the customs and laws of the colony. In neither case did the widow have the right to alter or dictate the disposition of the property on which she had relied for economic support during her widowhood.

39 Shammas, “Female Social Structure,” 69–83.

40 A good source on the special status of women as managers of farms and commercial enterprises is Matthaei, Julie A., An Economic History of Women in America: Women's Work, the Sexual Division of Labor, and the Development of Capitalism (New York, 1982).Google Scholar With the explicit consent of their husbands, women in some colonies were granted the privilege of opening business enterprises, usually small mercantile firms; they received all managerial powers, including the right to negotiate contracts, under the legal device called feme sole.

41 For information on differing provincial laws, see Carole Shammas, Marylynn Salmon, and Dahlin, Michel, Inheritance in America: From Colonial Times to the Present (New Brunswick, N.J., 1987).Google Scholar

42 Eliza Lucas, who later married a Pinckney, is perhaps the best example of a colonial business woman. She managed successfully several rice and indigo plantations for extended periods of time on two separate occasions—the first at the bidding of her father and once again following the death of her husband. Predictably, after her sons had matured, they eventually assumed ownership and managerial control over the plantation properties.