PowerPoint for the Workshop on the Colonial Economy

1. Solving History’s Economic Mysteries
Dr. Deborah Kozdras
University of South Florida
Gus A. Stavros Center for Free
Enterprise and Economic Education
Stavros.coedu.usf.edu
dkozdras@usf.edu

2. Crash Course Colonial
• https://www.youtube.com/watch?v=o69TvQq
yGdg
• https://www.youtube.com/watch?v=p47tZLJb
dag&index=4&list=PL8dPuuaLjXtMwmepBjTS
G593eG7ObzO7s

3. Before Jamestown (1590)

4. Primary Source Analysis Tools:
Library of Congress
http://www.loc.gov/teachers/usingprimarysources/guides.html

5. How do we find a “Northwest Passage” around
this great landmass of the Americas?
Title
Nova totius terrarum
orbis geographica ac
hydrographica tabula
Contributor Names
Blaeu, Willem Janszoon,
1571-1638.
Ende, Josua van den,
approximately 1584-
approximately 1634.
Created / Published
Amstelodami :
Excudebat G.
Ianssonius, [1606]

6. 1606 Charter to Virginia Company to Build a Settlement
Merchantile policy =
“favorable balance of trade”
so gold and silver will not
flow out of Europe.
Two primary goals:
– Find gold
– Find water route to Asia
Source: The Thomas Jefferson
Papers Series 8. Virginia Records
Manuscripts. 1606-1737.
Virginia, 1606-92, Charters of the
Virginia Company of London; Laws;
Abstracts of Rolls in the Offices of
State
http://memory.loc.gov/master/mss/mtj/mtj8/062/0000/0004.jpg

7. Analyze the Charter

8. In April 1607, 100 members of the Virginia Company reached
Chesapeake Bay and established a settlement on an island up the
James River on May 14, naming it “James Towne” after the current
monarch, James I.
https://www.loc.gov/resource/g3880.ct000377/

10. Activity:
Relationships Between Settlers and Natives
Despite the hostility, the
natives and colonists often
engaged in trade, which
provided food for the settlers
at a time when they were only
beginning to clear land for
agriculture. The settlers wrote
about their interactions;
therefore, the writings were
heavily biased against the
Virginia Native Americans.
Analyze the written
documents to identify the
relationships. Find economic
reasons for relationships.
http://www.history.org/history/teaching/jamestown/images/jamestown.pdf

11. What are the economic implications of the artifacts and the
relationships. How were wants satisfied? What were scarcity
issues? What was produced? Who produced it? Where was it
produced? What was traded? Why? How did both sides benefit
from trade?
http://www.history.org/history/teaching/jamestown/images/jamestown.pdf

12. Council for Economic Education:
Colonial Economy Mystery
North America offered
no known gold or
silver for the taking.
There were no spices
to trade. Eventually,
however, the colonies
were able to prosper.
Why?

13. Economic Venture . . . What Was Scarce?
• Colonists ill-equipped for
difficult life
• Mostly middlemen – not
farmers or laborers who
could support the colony
• Counted on native
peoples willing to trade
goods (food, furs, skins,
gold, silver, etc.)
• Physical challenges: poor
hygiene, dirty water, cold
weather, food shortages,
illnesses, pests.
http://cdn.loc.gov/service/pnp/cph/3b00000/3b01000/3b01900/3b01980r.jpg

14. Work? Who me?
• Most who came with
the Virginia Company
were aristocrats who
refused to demean
themselves with
agricultural labor.
• What would happen if a
new colony started on
Mars and nobody
wanted to work to
make food?
• http://cdn.loc.gov/servi
ce/pnp/cph/3b00000/3
b00000/3b00400/3b00
423r.jpg
http://cdn.loc.gov/service/pnp/cph/3b00000/3b00000/3b00400/3b00423r.jpg

15. Hostility between colonists and natives, led by Chief Powhatan,
led the settlers to establish forts.
http://www.history.org/history/teaching/jamestown/images/jamestown.pdf

17. John Smith Solves Scarcity?
• Among the first colonists who secured food through trade and
exploration. Secured good trade relationships with natives.
• Most who came with the Virginia Company were aristocrats
who refused to demean themselves with agricultural labor.
• Laziness, particularly among well-heeled colonists, put the
settlement in danger of starvation.
• Sept 1608 elected president of local council and made rule:
“He who does not work, will not eat,” in order to increase the
food supply. His strict leadership made him enemies.
• Oct 1609 Smith left Jamestown to seek medical treatment in
London for gunpowder injury.
• Never returned and settlement experienced a winter known
as the “starving time” during which only a few survived.
http://cdn.loc.gov/service/pnp/cph/3a50000/3a51000/3a51100/3a51181_150px.jpg

18. Apply the Guide to Economic Reasoning
1. People choose.
2. People’s choices involve costs.
3. People respond to incentives in predictable
ways.
4. People create economic systems that influence
individual choices and incentives.
5. People gain when they trade voluntarily.
6. People’s choices have consequences (positive
or negative) that lie in the future.

19. Jamestown Reemerges: Did Tobacco “Save” Jamestown?
• John Rolfe: pioneer entrepreneur in
the tobacco industry.
• Tobacco was native plant
• Tobacco smoking was popular in
Europe since the 1580s so it became
major export to England
• Jamestown became a boomtown off
of the cash crop of tobacco.
• Many Europeans became addicted to
tobacco, which created a demand. But
they preferred Caribbean tobacco.
• Rolfe reacted to consumer demand by
importing seed from the West Indies
• Private ownership of land provided an
incentive for more colonists to
produce and supply tobacco
• Indentured servants provided labor
• Tobacco takes a toll on soil, which
created a huge drive for more land.
http://cdn.loc.gov/service/pnp/cph/3a00000/3a08000/3a08500/3a08570r.jpg
• Rolfe ushered in peace when he
married Pocahontas in 1614.
• In 1620’s natives frustrated with
encroachment of settlers on their
land
• 1622 attacks on plantations
• 1624 James I revoked the charter

20. Indentured Servitude:
Why Sell Yourself into Bondage?

21. Visual 5.1 Background on Indentured
Servants
Contracts
• Indentured servants' contracts bound them to perform work
for an employer in North America.
• These contracts had the force of law, and they were enforced.
• Contracts typically called for three-to-seven years of service.
The average period of service was four years.
• Early in the colonial period, women were offered somewhat
shorter contracts than men.
• Contracts for harder work, such as growing tobacco, were
often for shorter terms than contracts for easier work, such as
performing household duties.

22. Visual 5.1 Background on Indentured Servants
• How the System Worked
– Advertisements were posted.
– In return for free passage to
they worked 4-5 years.
– Ordinarily a person would sign
with a ship owner or a
recruiting agent in England.
– As soon as the servant was
delivered alive to an American
port, the contract would be
sold to a planter or merchant.

23. Visual 5.2 Why Would Free People Sell
Themselves into Bondage?
• Many workers in colonial North America were indentured
servants.
• The work they performed was often difficult—clearing land,
planting tobacco, performing household services.
• The contracts signed by indentured servants had the force of
law.
– Terms of service could be increased, for example, if a
worker violated the indenture by trying to run away.
– Servants could even be sold to other owners.

24. Why did they come?
Workers were scarce in both England and North America.
Workers were more scarce in the colonies, however. How
could people sell their labor where it would have the
greatest value? The indentured servant market arose to
solve this problem.
Immigrants to the North American colonies were often
people who could not afford passage. Many came as
indentured servants. They signed contracts that provided
them passage in exchange for their promise to work for
an employer in North America.
The risks were great. Conditions on the voyage were
often difficult. Sickness and death were common.
Sometimes, people lacked complete information about
what life was really like in North America. Yet many
people chose to go. Why?

25. Activity 5.2 Indentured Servitude in North
America
• Patrick McHugh
Costs?
Benefits?
• William Heaton
Costs?
Benefits?
• Mary Morgan
Costs?
Benefits?
• Tom Holyfield
Costs?
Benefits?
• Christian Mueller
Costs?
Benefits?

26. • Patrick McHugh believed there was little for
him to do in Ormskirk, England. He had lost
his farm. His only work was intermittent farm
work lasting a few weeks at one time. He had
no money. His parents were aged and poor.
One market day in the village, he heard men
talking about opportunities to work in a
tobacco-growing colony. The work was
difficult — clearing land. The indenture would
last for four years.
• What were the costs?
• What were the benefits?

27. • William Heaton felt he had been cheated out of his
share of the family estate. His father had been a
merchant of moderate means living in Southport,
England. William’s father had died. His mother, who
remarried a man of less wealth, moved to Liverpool.
Having little money left, William’s mother gave him 12
shillings and told him that was all she could do for him.
He set out for London and soon spent nearly all his
money. In the spring of 1725, he stood outside the
Royal Exchange and read the notices about
opportunities in America. In a few minutes he was
approached by a man who offered to buy him a mug of
beer while they discussed signing a con- tract to go to
work in Philadelphia. The agent thought that a man of
William’s background should be able to sign on with an
artisan — perhaps a watchmaker.
• What were the costs?
• What were the benefits?

28. • Mary Morgan lived in a small village outside of
Norwich, a town east of London. Not much is known
about her. She was an orphan. Her uncle, a farmer,
took care of her until she reached age 14. She knew
she had always been a burden for the family of eight
children. There were few young men in the village, and
she had no prospects for marriage. One day, while
walking in Norwich’s town center, she was told by an
agent of a shipowner about a Puritan family in
Massachusetts that wanted an indentured servant to
sew, spin, knit and do other household chores. Room
and board were to be provided for five years, at which
point she would be released from the contract.
• What were the costs?
• What were the benefits?

29. • Tom Holyfield was a thief. His life began well
enough. He grew up on a farm outside Blackpool,
England. As the youngest male in the family, Tom
stood no chance to inherit the farm. He was
apprenticed at age 13 to a cooper — a maker of
barrels. He worked for room and board on the
promise that he would be trained as a cooper. But
Tom grew impatient and fell in with a gang of
thieves. It wasn’t long before he and his friends
were caught. Found guilty of a felony, Tom could
be hanged — or he could accept a contract to
work in the tobacco-growing colonies.
• What were the costs?
• What were the benefits?

30. • In 1750, Christian Mueller was a teacher and an
organist by trade. He had read pamphlets about
America. Pennsylvania was described as a land of
opportunity: “He who goes there as a servant,
becomes a lord; as a maid becomes a gracious
lady; as a peasant, a nobleman; as a com- moner,
as a craftsman, a baron.” Christian left his wife
and child, traveled down the Rhine River, and
signed on board a ship headed for America. The
agent agreed to pay for his passage and promised
that his skills would be welcomed in North
America. Christian planned to send for his family
after his four-year indenture.
• What were the costs?
• What were the benefits?

31. Would You Sell Your Labor?
• Would you agree to
perform two years of
community service in
exchange for a
significant reduction in
college tuition?
• Costs?
• Benefits?

32. Why did they trade?
http://www.econedlink.org/teacher-lesson/301/Economic-Spotter-Trade-Colonial-History

33. • Tell the students that they are going to be
given a chance to go back in history on a time
machine. This journey is going to take them
back to Boston Harbor in 1680, but their job is
to be an economic spotter. Can they spot and
explain economic concepts within a historical
time frame?

34. Trade
• When two people exchange goods and
services or money, it is called trade. And
trading goods and services with people for
other goods and services or money is called
exchange.
• Have you ever traded something with another
person?
• Were you and the other person happy after
you traded?

35. Voluntary Trade
When people trade voluntarily -- because they want
to -- both parties usually think that they are better
off after the trade. You should never trade
something when you are going to be unhappy after
the trade. You should be better off after the
exchange, or you shouldn't have traded.
• Did you ever use money as an exchange for candy
or gum?
• Were you happy that you exchanged money for
those goods?
• Was the store happy with the money that you
exchanged for the candy or gum?

36. Keep a list of all the ways trade is used
in the Colonial Economy
http://www.econedlink.org/interactives/EconEdLink-interactive-tool-player.php?filename=em301_history.swf&lid=301

37. Why did they trade?
• How did climate, geographic features, and other
available resources distinguish the three colonial
regions from each other?
• How did people use the natural resources of their
region to earn a living or have their basic needs
met?
• What are the benefits of specialization and trade?
• How did political and social life evolve in each of
the three regions?
http://chnm.gmu.edu/tah-loudoun/blog/lessons/differences-among-colonial-regions/

38. Hook
• Have you ever thought of living in a place that
is totally different from here? like an island or
a farm, in a big city or perhaps in the
mountains. Take a moment to pick one place
that is different from here. Describe the
climate and the weather. Name some natural
resources in that environment. What kind of
job could you/most of your neighbors have?

39. https://www.loc.gov/item/gm71000621/

40. Expert Groups With 4-5 Pictures From One Region:
Examine, Analyze, and Write . . .

41. Assessment
• Students will demonstrate knowledge of their assigned
region by creating a rough draft of a poster or brochure
that will describe life in the colonial age. Students will
select a region or colony to feature in a letter to a
family member urging them to join the student in the
new land OR create a poster/brochure that advertises
the features of the region. Students will provide details
on how people interacted with their environment to
produce goods and services. In order to exceed the
Standard, student will need to include an example of
interdependence among the regional economies. The
student creation will be graded on a four-point
formative rubric scale.

42. http://www.fmschools.org/webpages/jworm/files/chapter%204%20-%20english%20colonies%20packet.pdf
1. Why might the New England region make money doing other things than farming?
2. Explain a difference between crops grown in the Middle and Southern regions.
3. Why might New England be more successful than the Southern region at fishing,
whaling, lumbering and shipbuilding?
4. Based on the chart and what else you have learned, explain how geography can affect
the economy or the way people make money.

43. http://www.fmschools.org/webpages/jworm/files/chapter%204%20-%20english%20colonies%20packet.pdf
• What is the subject of the chart?
• What appears to be the pattern of English tobacco imports
from colonial America?
• What does this pattern suggest about the importance of the
tobacco trade to the colonial economy?

44. Activity 3.2
Be A Planet Planner
• The Spanish and the
English had much in
common. Both were
powerful European
colonial powers. But the
results of colonial
development led to
different outcomes in
North and South America.
Why?

45. Be A Planet Planner
• You have just been appointed by Dr. Julie Verne to the United Nations
Intergalactic Development Administration (UNIDA) Task Force for
Planet Z93.
• Your job is to advise Dr. Verne on Z93 development plans by applying
two rules:
1. People respond to incentives in predictable ways. Rewarding
people for their work, for example, encourages them to be productive.
2. People create economic systems that influence individual choices
and incentives. In order for an economy to grow, its rules must include
a system of incentives that encourages people to produce.

46. English Development
• England by the 17th century had transferred some power
from the king to the parliament. Individual property rights
were better defined and enforced.
• The Pilgrims experimented with common land ownership
but nearly starved.
• In 1623, they replaced group land ownership with
individual ownership.
• “This had very good success for it made all hands very
industrious, so as much more corn was planted than
otherwise would have been by any means the Governor or
any other could use.”
William Bradford
Of Plymouth Plantation, 1620-1647

47. Spanish Development
• Spain in the 16th century was an absolute
monarchy. Individual property rights were not
well defined and enforced.
• Economic decisions were not made by
individuals. Many goods and services were
produced by guilds (organizations of merchants
or craftsmen) that operated as monopolies.
• The plan for development was to seek gold and
riches - - a transfer of wealth, not expansion.

48. Questions for Discussion
Questions for Discussion
• How did the political institutions differ between Spain
and England?
• Describe ways in which Spain influenced the economic
development of South and Central America?
• Describe ways in which the English developed the
eastern coast of North America?
Policy Recommendations
• Who should be allowed to own property in Z93?
Individuals? Government? Why?