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Austerity means reducing government debt by increased taxation and/or reduced government spending. And yet the author talks about slavery, mercantilism, immigration, settlement, representation in Parliament and a lot more. Why put Austerity in the title at all?
In the article:
"Britain’s national debt had risen to £122 million, or over 150 percent of the Gross Domestic Product" ... "the British government abruptly changed course."
so the policies were about reducing the debt. The other stuff was part of the policies. I'll give you that the slavery stuff seems a bit distantly related.
As an aside:
"[T]hey believed that after a slight economic adjustment the gradual elimination of slavery would create a more diverse and dynamic economy."
It's amazing to me how close we came to having a totally different society.
An Act for the Gradual Abolition of Slavery, passed by the Pennsylvania legislature on 1 March 1780, was one of the first attempts by a government in the Western Hemisphere to begin an abolition of slavery [] http://www.ushistory.org/presidentshouse/history/gradual.htm
Wasn't likely to be picked up by the southern states. Was part of the foundations of the Absolutionist movement and also the reason why Pennsylvania was a force for the end of slavery for the history of it's congressmen (For the most part).
Where can I read more about the claim that many of the founders believed that slavery was bad from an economic perspective because slaves are not consumers? Is this supported by modern economic thought? Was this view held by southern founders?
Two years prior to the invention of the cotton gin the US (as it was at the time) as a whole produced only 900 tons of cotton a year. With the invention of the cotton gin production increased greatly as one of the major limiting factors had been removed by the invention of the gin. This lead to a land rush for cotton cultivation; the Alabama Fever. Now the limiting factor was farm hands; this lead to a big increase in the slave trade.
Obviously there was a slave trade prior to the invention of the cotton gin (1793, well after the Declaration of Independence (US)), but the significant growth of the slave trade in the US occurred after the invention of the cotton gin (which lead to the massive growth of the cotton trade; especially in the US southern states as they had a better climate for cotton growth).
It's just depressing reading this that the solution to a labor shortage was to buy bonded slaves.
I know it's something certainly not unique to the american south and it's still going on today. I guess the contrast to the declaration of independence and slavery is so telling. Most other slavery occurs under the watch of despots.
The problem with the labor shortage was less that there was insufficient free labor available, but rather that the wages that would be demanded by free labor under these circumstances would be much higher than the subsistence level required by slaves, which would reduce the profitability for the upper-class plantation owners.
Evsey Domar wrote a famous paper in 1970, arguing that slavery/serfdom may be instituted when there is a lot of available land and few available workers, citing episodes in Europe in the Middle Ages, Russia's eastward expansion, and the US South.
The primary cash crop -- cotton -- required so much manual labor, prior to the invention of the cotton gin, that cotton producers, even with access to slave labor, could only really operate on a small scale.
The cotton gin changed that, making large-scale cotton production profitable and drastically increasing the demand for slaves (and thus creating an incentive to find justifications for and defenses of the practice of slavery).
This is an instance of Jevon's paradox (http://en.wikipedia.org/wiki/Jevons_paradox): making a process more efficient in terms of resource requirements (in this case labour), causes the process to become more profitable and grow, therefore using more rather than less of the resource.
This is assuming sufficiently elastic demand (i.e. there is unfulfilled demand at the old price).
It's bad from that PoV because slaves can't reach their productive potential as if they were free. Literacy is forbidden, they can't switch jobs and can't advance their skills beyond manual labor, their families are frequently broken up and they're subjected to tremendous physical, psychological and often sexual abuse.
The die for sectional tensions was cast pretty early on. The South was a de facto British colony, arguably, until the Civil War (almost all Southern cotton was destined for British mills). The rapidly industrializing North represented a radically different future for the country, and the political conflict between North and South over economic and trade policy took shape very early on, particularly over tariffs. To people in the North, it made sense to protect burgeoning domestic industries from foreign (British) competition. Southerners, on the other hand, had no interest in manufactures and generally saw tariffs as taxes falling disproportionately on them, as they preferred cheap goods from Europe (Britain).
Alexis de Tocqueville famously noted the differences in industrial development between slave and free states. But Southerners (at least those with slaves) generally defended slavery as an institution and equated the plantation system with the "Southern way of life". And, by all accounts, even if they hadn't, white supremacism was so deep and broad it's unlikely any kind of economic concerns would have been able to overcome it in any policy debate.
Slavery was a economic issue at this time for the monied or land owning classes. Money trumps morals.
West Africans had resistance to malaria (including sickle cell anemia) and the Southern landowner with slaves made more money than the landowner with European indentured servants where anywhere from 40-70% would be dead or otherwise not working due to disease.
The author of the article is inaccurate. The Declaration of Independence made it quite clear the reasons colonists separated from Britain.
http://www.archives.gov/exhibits/charters/declaration_transc...
The British government was forcing colonists to house their troops, which allowed them "free" housing and food. It also acted as a mechanism to restrict free speech and to spy on the colonists. Who would speak against what the King and government was doing if you had his soldiers living in your house?
The British government was also eliminating laws the colonists had made for themselves, and instantiating his own. The government was kidnapping people, taking them overseas to be tried for false crimes. The government started domestic insurrections.
The government also regulated the colonists' trade with other countries, trying to enrich itself and pay for its irresponsible Keynesian "stimulus". Therefore the government also imposed taxes on the colonists, without giving them any representation in parliament. The government actually tried to compromise with a lower tax, but the colonists were unwilling to have no say in their government, hence the Boston Tea Party (a demonstration against taxes).
The government also created a multitude of new government offices and harassed the colonists with regulations of every sort. The government also hired mercenaries to terrorize towns, causing great damage and death. They additionally conscripted colonists into their army to fight their own towns.
All of this the colonists called tyranny, and you can read more in the Declaration.
So the colonists were not revolting because government was not spending enough. They decided to form their own government which was only funded by import duties (and in the early times, taxes on "vice" products like snuff). No income tax, no social security tax, no death tax, no gift tax, nothing.
It was this practically non-existent government (yet a respect and protection of private property) that allowed the United States to go from a 3rd world nation to the most powerful nation on earth. By 1900, the US was a scientific and manufacturing powerhouse. Permanent income taxes and a central bank would not come around till 1913.
The US government was not weak or non-existent until the 1900s. It was actually quite aggressive and strong, relatively speaking, from roughly 1789 onwards, and especially after the Civil War in the 1860s.
The first US government, founded under the Articles of Confederation, ended in abysmal failure only a few years after it was formed because it was "practically non-existent" when its own army revolted (the Whiskey Rebellion). This resulted in the US Constitution, which dramatically strengthened the powers of the federal government, and the Bill of Rights, which placed some limits on the powers of the federal government, but essentially no limits on the powers of the state government. (Some of those limits would be extended to the state governments after the Civil War via the 14th Amendment).
Nor were the early years of US history a libertarian wonderland. Despite the Bill of Rights, the First Congress passed numerous laws restricting free speech, including for example, the Sedition Act, which prohibited any criticisms of the government that could be deemed "scandalous" or having the intent to bring the US government, Congress, or the President "into contempt or disrepute." Almost all states had laws restricting when businesses could be open, and almost all states had morality-based laws that many people would find offensive by today's standards. Many roads, bridges, and many waterways were subject to private monopolies granting their owners the right to levy tolls.
Though the Industrial Revolution began around the same time as the founding of the U.S., the US economy remained largely agrarian until the 1840s, when the completion of a national water transportation system along the Great Lakes powered industrial growth in the Northeast.
You skip over the part where a weak central government utterly failed to meet the most basic expectations of the citizens of the new republic.
Also, I think Keynes should win a posthumous award solely on the basis of your comment. It's quite a feat to retroactively influence the policy of a government across a chasm of almost two centuries.
It is not austerity, it increased taxes without a say in teh matter.
Author is trying to say it is American to live beyond our means, when from 1779 to 1930 it was the opposite. Sad.