An Economic Price Worth Paying

 

What is the relationship between the American Revolution, the subsequent Founding, the rapid economic growth enjoyed by the United States since the 1790s, and America’s eventual emergence as the world’s economic superpower by the 1890s? That is a core question analyzed by Vincent Geloso and Antoine L. Noël in their essay, and a central issue with which the subsequent responses grapple. This goes hand-in-hand with a more speculative question: did the American Revolutionaries effectively give up, at least in the short-term, opportunities for economic growth because they subordinated the prospects for economic gain to their quest for liberty?

Comparative historical and economic analysis of the type in which Geloso and Noël engage is potentially rewarding but also risky to the extent that it involves engaging in what-might-have-been conjectures as well as consideration of counterfactuals. Every counterfactual, for instance, opens up the possibility of others, including some that would likely cancel out the imagined historical impact of the original.

The American colonies might well have benefited from British efforts at trade liberalization in the last quarter of the eighteenth century had they not rebelled and thus remained part of the British Empire. But that absence of rebellion would presumably have meant that none of the economic growth-inducing effects of the political developments that flowed from the drafting, ratification, and institutionalization of the US Constitution would have occurred. Assessing precisely where, economically speaking, the American colonies would have subsequently ended up is a very speculative exercise. That is why I generally prefer, to use C. Bradley Thompson’s words, “a reality-based approach to historical questions.”

That said, Geloso and Noël’s paper does underscore the vital role of human choices and agency in explaining how and why nations do (or do not, as the case may be) embark on particular courses of action that have major economic consequences. The men who signed the Declaration of Independence in July 1776 surely knew that they were effectively opting for a long and difficult war with what was, after all, one of the great military and financial powers of the age. They also recognized that the economic cost of that war for them personally and for the colonies that they represented would be considerable, if not devastating.

A strictly economic weighing of the likely costs of rebellion and revolution may well have resulted in such a declaration never being issued. Indeed, the economic damage inflicted by Britain's efforts to crush the rebellion between April 1775 and July 1776 was already before the eyes of American revolutionaries, whether in the form of the blockade imposed by the British navy or the ravages inflicted on states like Massachusetts by the soldiers of George III. The revolutionaries had reason to hope that French intervention in their conflict with Britain might help them prevail in the long-term, but they neither knew whether Louis XVI would commit France to supporting their revolution nor the form that any such intervention might take or the price that France might demand for its commitment.

And yet despite the certainty of the severe economic consequences of declaring independence and a plethora of political unknowns, the men of 1776 went ahead anyway. As Geloso and Noël remark, “That is saying that there truly is something historically exceptional about America’s founding moment.” Economic growth and stability truly matter, but they are not everything. Some things—such as liberty and the defense of our natural rights grounded in natural law—matter even more and are worth paying a large economic price.