July 11th, at Our lives as localized and global believers should be an open readiness to expend all for our brothers. July 13th, at 2:
Understanding Capitalism Part V: Evolution of the American Economy By - March 15, When the United States of America was founded in it was the most egalitarian Western nation in the world for citizens of European descent, indeed one of the most egalitarian major societies in all of human history.
It was the relative equality of white American society that made America such an attractive place for European immigrants and a "land of opportunity".
Understanding capitalism, its impact on economies in general, and its impact on America in particular, requires both a knowledge of American economic history and an understanding of economic theory.
Let's first take a look at the history of the American economy, and then delve into economic theory as is relates to the history of the American economy and capitalism in general.
Overview of American Economic History Colonial and Antebellum America When America was founded noble aristocracies ruled Europe, and virtually every major nation on earth was dominated by a feudal system of some sort or another. In Japan, China, India, the Ottoman Empire, and across Europe, massive under-classes of property-less peasants were dominated by a relative few who owned and controlled the property of the nation.
The Industrial Revolution was just beginning to dawn in England, but the economies of the world were still dominated by agriculture. As such, land was of course the most significant form of capital and virtually all of the land in every "civilized" nation was owned by a relative few, being split primarily among the nobility and religious institutions.
In the British colonies of America, however, the rule of aristocracies had never been solidly established. Though aristocrats coming to America from Europe enjoyed initial advantages in the "New World", the widespread availability of land and the small population meant that there was more than enough land for everyone who came to America from Europe to obtain their own land at little or no cost.
During the early colonial period land could be obtained simply by "right of discovery", which meant that anyone could claim any land that was not already claimed by other Christians. This right was granted in the colonial charters issued by the English crown, and similar such charters were issued by other European nations for their colonies.
When land was found that was inhabited by natives, the natives were either killed, driven off, or some trade agreement was made to ensure that the natives would leave the land and allow the Europeans to take it over.
Property rights in the British colonies were still based on the English feudal system however. All of the land was technically owned by the king of England, and was considered on loan to the title holders.
This made little difference in America in terms of land use, but understanding the feudal heritage of property right law is important for understanding the development of modern property rights. Under the feudal system labor was not recognized as imparting a right to property. This is because all property was owned by the king and titles were granted to a hierarchy of administrative lords who retained rights to the value produced using said property.
Recognizing a right to property created by labor would have unraveled the entire feudal system, since the feudal hierarchy was effectively a hierarchy of non-laborers who derived all of their income via ownership or title to property upon which laborers worked and created value, which was all then owned by the title holders - ultimately the king.
The aristocracy are not the farmers who work the land, and raise the produce, but are the mere consumers of the rent; and when compared with the active world, are the drones, a seraglio of males, who neither collect the honey nor form the hive, but exist only for lazy enjoyment.
The "labour" of his body and the "work" of his hands, we may say, are properly his. Whatsoever, then, he removes out of the state that Nature hath provided and left it in, he hath mixed his labour with it, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state Nature placed it in, it hath by this labour something annexed to it that excludes the common right of other men.
For this "labour" being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good left in common for others.
While the feudal system of property rights technically remained the same, the fact that almost everyone white males owned their own capital meant that white male individuals did retain ownership to the value created by their own labor, but that right to ownership remained granted through property rights, not through a right of labor.
Estimates from the colonial period show that land was by far the dominant form of capital during the colonial period. Ultimately land was granted in five ways within the colonies: The result of this was essentially that the most significant capital, land, was "free" or very cheap to acquire in the New World, which ultimately had the effect of bringing about the conditions whereby nearly every white male was able to own their own property, and to thus secure for themselves the right to ownership of the products of their own labor.
Not only was land cheap and easy to acquire in the New World, but importantly land owners had the right to do with the land whatever they wanted, with very few limits. However taxes had to be paid on land, which made simply holding large blocks of land and doing nothing with it generally unaffordable.
This drove a more equal distribution of land, because it was generally only affordable to own as much land as one could actively extract revenue from. The overall effect of this practice was to encourage widespread family farming in colonial America, which was by design.
The colonists, and indeed even the English Crown, wanted to encourage land use, not simply land acquisition for acquisition's sake. Nevertheless, land speculation became quite popular in the colonies and remained very popular well after the founding of the country.
Land speculation was the first major speculative market in America. Several factors made land speculation an almost no-lose proposition for the early inhabitants. Firstly, land could be acquired for next to nothing, and secondly the population was increasing rapidly, with new people arriving daily.
Obviously this meant that people could come to America, acquire a large amount of land at little cost, hold onto it for a short while, and then sell it for significant profits.
All of these factors contributed to the fact that early Americans strongly associated private capital ownership with both individual freedom and equality. In America the right of individuals to effectively own land and to actually be able to use it in practice, as well as to run their own businesses largely free of the taxes and regulations imposed on businesses by the Crown in England which were used to benefit the aristocracymade individuals more equal than they were in Europe.
In Europe all property was owned by kings, and was administered via a feudal hierarchy of nobles who collected taxes from their subjects, not for the benefit of the public or for use in creating public goods, but rather as their form of private income. In Europe massive inequality was a product of consolidated property ownership, where a relatively small number of people owned and controlled all of the property.
In Europe the "property owners" were the nobility and the church. As such, property rights in Europe were viewed completely differently than in America.HM Treasury is the government’s economic and finance ministry, maintaining control over public spending, setting the direction of the UK’s economic policy and working to achieve strong and.
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Understanding Capitalism Part V: Evolution of the American Economy. By - March 15, When the United States of America was founded in it was the most egalitarian Western nation in the world for citizens of European descent, indeed one of the most egalitarian major societies in .