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Introduction: The Ambiguities of Risk in the Early Republic

Published online by Cambridge University Press:  13 December 2011

Cathy Matson
Cathy Matson
Affiliation:
CATHY MATSON is professor of history at theUniversity of Delawareand director of the Program in Early American Economy and Society in Philadelphia.
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Abstract

In the half-century following the American Revolution, journalists and promoters of economic activities wrote paeans to the independence movement, celebrating its release of economic energies and anticipating that it would enable citizens to improve, produce, and consume more and thus sustain their virtuous republican character as a people. Writers predicted that imminent prosperity would result in the construction of mills, forges, and retail networks throughout the hinterlands; they envisioned boldly experimental internal improvements and expanding commerce under the independent auspices of the newly formed states and locales. Liberated Americans could look forward to blending certain kinds of regulatory protections and government encouragements, such as they had experienced under the rule of the empire, and to the aggressive pursuit of economic opportunities: creating new kinds of taxation and currency systems, expanding commerce to foreign ports, extending agriculture to the limits of available technologies and capital, and testing modest manufactures. For two generations following the Revolution, until at least the panic of 1819, many optimists were confirmed in their expectations of a bright future for the new nation's economy, and they embraced the risks involved in mobilizing tremendous amounts of human energy and capital because they believed that economic development would resolve foreign nations' doubts about the new republic and obliterate the crushing debts and dislocations of the revolutionary war.

Type
Special Forum: Reputation and Uncertainty in Early America
Information
Business History Review , Volume 78 , Issue 4 , Winter 2004 , pp. 595 - 606
Copyright
Copyright © The President and Fellows of Harvard College 2004

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References

1 For further discussion and documentation of the source base for this public discourse of optimism, see Matson, Cathy and Onuf, Peter, A Union of Interests: Political and Economic Thought in Revolutionary America (Kansas, 1990Google Scholar); and Matson, Cathy, “Capitalizing Hope: Economic Thought and the Early National Economy,” in Gilje, Paul, ed., Wages of Independence: Capitalism in the Early American Republic (Madison, 1997), 117–36Google Scholar.

2 Matson, “Capitalizing Hope”; Matson, Cathy, “A House of Many Mansions: Some Thoughts on the Field of Economic History,” in Matson, , ed., The Economy of Early America: Past and Recent Directions (University Park, Penn., forthcomingGoogle Scholar), ch. 1; and for a discussion about the differences among historians and economists about the nature of risk-taking, see McCloskey, Donald, “Conditional Economic History: A Reply to Komlos and Landes,” Economic History Review 44 (1991), 128–32CrossRefGoogle Scholar. The program and papers for the Program in Early American Economy and Society conference, entitled “Risk and Reputation,” may be found at www.librarycompany.org/Economics/2002Conference/index.htm.

3 For a sampling, see Mathias, Peter, “Risk, Credit, and Kinship in Early Modern Enterprise,” in McCusker, John J. and Morgan, Kenneth, eds., The Early Modern Atlantic Economy (New York, 2000Google Scholar); Doerflinger, Thomas, A Vigorous Spirit of Enterprise: Merchants and Economic Development in Revolutionary Philadelphia (Chapel Hill, 1986Google Scholar); Hancock, David, Citizens of the World: London Merchants and the Integration of the British Atlantic Community, 1735–1785 (New York, 1995Google Scholar); Matson, Cathy, Merchants and Empire: Trading in Colonial New York (Baltimore, 1998Google Scholar); Countryman, Edward, “The Uses of Capital in Revolutionary America: The Case of the New York Loyalist Merchants,” William and Mary Quarterly 49 (Jan. 1992): 3–22CrossRefGoogle Scholar; Price, Jacob, Capital and Credit in the British Overseas Trade: The View from the Chesapeake, 1700–1776 (Cambridge, Mass, 1980), 121–29CrossRefGoogle Scholar; and Mann, Bruce, Republic of Debtors: Bankruptcy in the Age of American Independence (Cambridge, Mass, 2002), 55–57Google Scholar. Older work often embeds examples of commercial risk without explicitly analyzing the concept apart from the empirical evidence of exchange relations. See, e.g., Tooker, Elva, Nathan Trotter, Philadelphia Merchant: 1787–1853 (Cambridge, Mass, 1953Google Scholar); and White, Philip, The Beekmans of New York in Politics and Commerce, 1647–1877 (New York, 1956Google Scholar). Later, the risks of canal construction and steamboat manufacture and navigation would produce greater horror and fascination among Americans; see the review in Seller, Charles, The Market Revolution: Jacksonian America, 1815–1846 (New York, 1991), 41–45Google Scholar, and endnotes.

4 Toby Ditz, “Shipwrecked; or, Masculinity Imperiled: Mercantile Representations of Failure and the Gendered Self in Eighteenth-Century Philadelphia,” Journal of American History (June 1994): 51–80.

5 In addition to A. Glenn Crothers's article in this issue, see Lamoreaux, Naomi, “Banks, Kinskip, and Economic Development: The New England Case,” Journal of Economic History 46 (Sept. 1986): 647–67CrossRefGoogle Scholar; Thornton, Tamara P., “Between Generations: Boston Agricultural Reform and the Aging of New England, 1815–1830,” New England Quarterly 59 (June, 1986): 189–211CrossRefGoogle Scholar; and Murphy, Sharon, “A Matter of Life and Death: Life Insurance and the Emergence of the Modern American Economy” (Ph.D. diss., University of Virginia, 2004Google Scholar).

6 For a sampling, see, e.g., on banks, Wright, Robert E., Origins of Commercial Banking in America, 1750–1800 (Lanham, Md., 2001Google Scholar), and Terry Bouton, “Moneyless in Pennsylvania: Privatization and the Depression of the 1780s,” in Matson, ed., Economy of Early America, ch. 7; on liability, Perkins, Edwin J., American Public Finance and Financial Services, 1700–1815 (Columbus, 1989Google Scholar); on currency risks, Mihm, Stephen, “Making Money: Bank Notes, Counterfeiting, and Confidence, 1789–1877” (Ph.D. diss., New York University, 2002Google Scholar). For risk being mitigated by increasing attention to calculating, accounting, and numeracy, see, e.g., Cohen, Patricia Cline, A Calculating People: The Spread of Numeracy in Early America (Chicago, 1982Google Scholar).

7 See Matthew Mulcahy's article in this special forum; see also Wright, Gavin and Kunreuther, Howard, “Cotton, Corn, and Risk in the Nineteenth Century,” Journal of Economic History 35 (Sept. 1975): 526–51CrossRefGoogle Scholar. Sarah McMahon examines risk in antebellum northern agriculture in “Laying Foods By: Gender, Dietary Decisions, and Technology of Food Preservation in New England Households, 1750–1850,” in McGaw, Judith, ed., Early American Technology: Making and Doing Things from the Colonial Era to 1850 (Chapel Hill, 1994Google Scholar). See also Rothenberg, Winifred Barr, From Market-Places to a Market Economy: The Transformation of Rural Massachusetts, 1750–1850 (Chicago, 1992Google Scholar). Space limitations do not permit consideration of frontier risks; older literature contesting the claims of F. J. Turner has addressed generalities about the risks of land claiming and clearing, investing in markets and goods at long distances, and bringing development and manufactures into the West that would transform the landscape only gradually.

8 In addition to Brian Luskey's article in this issue, see Cawelti, John G., Apostles of the Self-Made Man (Chicago, 1965Google Scholar), ch. 1; Rilling, Donna, Making Houses, Crafting Capitalism: Builders in Philadelphia, 1790–1850 (Philadelphia, 2001Google Scholar); Chandler, Alfred D. Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass, 1977Google Scholar); and John, Richard, “Elaborations, Revisions, Dissents: Alfred D. Chandler Jr.'s, The Visible Hand after Twenty Years,” Business History Review 71 (Summer, 1997): 151–200CrossRefGoogle Scholar; and for risks of the new labor arrangements in this era, see Jonathan Prude, “Capitalism, Industrialization, and the Factory in Post-Revolutionary America,” in Gilje, ed., Wages of Independence, 81–101.

9 Blumin, Stuart, The Emergence of the Middle Class: Social Experience in the American City, 1760–1900 (New York, 1989), 114–16Google Scholar. In general, Blumin does not develop much of his narrative around the issues of risk and failure, but rather focuses on the documentary sources that demonstrate economic successes. A similar narrative of success appears in Appleby, Joyce, Inheriting the Revolution: The First Generation of Americans (Cambridge, Mass, 2000Google Scholar).

10 For a few examples, see Vickers, Daniel, Farmers and Fishermen: Two Centuries of Work in Essex County, Massachusetts, 1630–1850 (Chapel Hill, 1994Google Scholar); and Vickers, Daniel, “Competency and Competition: Economic Culture in Early America,” William and Mary Quarterly 47 (Jan. 1990CrossRefGoogle Scholar); Clark, Christopher, The Roots of Rural Capitalism: Western Massachusetts, 1780–1860 (Ithaca, 1990Google Scholar); Gross, Robert A., “Culture and Cultivation: Agriculture and Society in Thoreau's Concord,” Journal of American History 69 (June, 1982CrossRefGoogle Scholar).

11 Balleisen, Edward J., Navigating Failure: Bankruptcy and Commercial Society in Antebellum America (Chapel Hill, 2001Google Scholar).

12 See, e.g., Daniel Dupre, “The Panic of 1819 and the Political Economy of Sectionalism,” in Matson, ed., Economy of Early America, ch. 9; and Rezneck, Samuel, “The Social History of an American Depression, 1837–1843,” American Historical Review 40 (July 1935): 662–87CrossRefGoogle Scholar

13 Mann, Republic of Debtors, ch. 1; Mihm, “Making Money.”

14 See Horowitz, Morton, The Transformation of American Law, 1780–1860 (Cambridge, Mass, 1977)Google Scholar.