New World Economies: The Growth of the Thirteen Colonies and Early Canada

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New World Economies: The Growth of the Thirteen Colonies and Early Canada. By Marc Egnal. (New York and Oxford: Oxford University Press, 1998. Pp. xx, 236. $49.95, ISBN 0-19-511482-5.)

In Divergent Paths (New York, 1996) Marc Egnal argued that three colonial regions--the American North, American South, and Canada--shared fundamentally similar colonial economic starting points, including household production and family farming, but by the nineteenth century the regions diverged remarkably. The causes, according to Egnal, were cultural, and his definition of "culture" is expansive enough to include an array of institutions, manners, and so-called mindsets in his explanation of capitalist development. What he calls the "spirit of capitalism" is virtually synonymous with capitalism itself, and its greater abundance in the American North propelled that region into relatively greater prosperity than the other two. In this argument, the businesses and banks, labor systems, shifting political policies and court interpretations, technology and taxation, and other activities that might be associated with the rise of capitalism are collapsed into a model of all-embracing cultural determinism.

The argument in New World Economies is just as bold as its predecessor but quite different in nature. Culture is barely mentioned. This new work shifts focus away from the domestic economy toward imperial-colonial relations; away from cultural belief and individual material acquisition toward international staple crop economies; and away from regional divergence toward the parallel development (though at different rates) of New World economies with their mother countries. Egnal's goal is to demonstrate how "the pace of economic development in the colonies reflected the rate of growth in the mother country" (p. 3).

Happily, the old scholarly battle over whether colonists benefited from life in the French or British empire or lost opportunities for greater growth on their own is a non-starter for Egnal because the economic destinies of people throughout each empire are inextricably intertwined in one transatlantic system. Happily, too, Egnal criticizes the typical staples-thesis approach because it measures economic growth in monocausal terms (the commodity exported). Egnal's more satisfying multifaceted model measures development according to the international terms of trade, the credit flow from imperial centers to colonies (especially during wars), and the prices for selected imports (textiles mainly) in addition to agricultural exports.

We should applaud Egnal's effort to build a model that simultaneously compares New World regions and incorporates them into the transatlantic economy. And we need a more complicated approach to understanding colonial economic success, since no monocausal explanation of change can be satisfying. …