The American Economy without the Revolution

Hey all,

Suppose Britain gets a dose of good sense/the traitors in Boston realize how good they have it/<other nationalities' preferred explanation of the Revolution here>. Let's also keep the POD after 1763. How does America's economy develop?

Some thoughts:

In OTL, the era saw Yankee traders expanding across the globe, trading in Southeast Asia, Canton, the Mediterranean. A lot of this is just the development of prewar trends, but IMO it's rather notable in light of the lack of ah, a navy in this era. Would the American presence be even greater in these regions?

Industrialization: More or less? On the one hand, if New England is under HMG then you might see attempts to stop textile mills from being set up in the region. On the other hand, America in general is probably more prosperous, with readier access to Britain's banking system.

Thoughts?
 
On the one hand, the American shipping industry would probably be much better off than in OTL, with no revolutionary war, separation from British markets (especially in the west Indies) blockade or war of 1812 to repeatedly hamstring it. On the other hand, though, no industrial tariffs could hurt American industrial development badly. A wash?
 
Interesting question.

Simply "turning the Revolution spigot off" (without considering what happens instead) is likely to forestall the accumulation of the massive debt the colonies incurred to fight the Revolution, the inflation resluting from the issuanace of Continental Currency, and the deflation that hit in the mid 1780s. Also, the nature of speculation in western lands should be affected as well.

Moving into the early 19th century, things are a bit hazy. I agree that Yankee merchants are likely to fare pretty well, given the greater protection of the British navy. You probably do change the nature of industrialization without the tariff wall, but not hugely. I assume that the laws Britain passed OTL to keep textile techonology from being exported would be a bit weaker with regards the colonies (if only because reinforcing the mercantilist system after the 1770s would only be another way to piss off the New Englanders). Accordingly, someone could very well try to set up a mill in North America assuming they had access to capital. Probably they do, since their access to British capital should be eased somewhat and the British banking system was more stable than the colonial system. Hence, you'll get some industry, but it's of a poorer quality than the Home Islands. The South is probably pretty happy since they were the big advocates for Free Trade.

Also, many of the colonies had all sorts of odd rights: VA and PA could actually set their own tariffs on some goods, according to some sources. If the mish-mash continues, that will do very odd things to development patterns.

Now, the hard part comes when you consider a likely history without the Revolution, having to supply the counterfactual events. I've attempted something of the sort here (pages 12-16), for what seems to have become a collaborative TL of sorts. I'm not sure of it's plausibility and increasingly find details which may not jive, but the gist works.

In short, you a few key aspects of the "solution to the ARW problem" that would have big economic consequences:

1) Settlement of western lands. By the mid-1770s, it's clear the Proclomation of 1763 can't hold for much longer, if for no other reason than that the colonists will start fighting each other. Check out the Pennmanite-Yankee War. Allowing more settlement might very well create the conditions for speculation. In the outline linked above, I've manufactured my own economic downturn on the basis of such a tendancy.

2) Taxation. Either Britain totaly caves and the colonies taxes are way lower than they were after the Revolution (when they had to pay for the war and service their debts) or Britain manages to raise some sort of revenue.

3) Currency. Even if points 1 and 2 are resolved, the British colonies lacked a uniform currency. If you leave things as status quo in 1776, they'll start to experiment and that's a recipe for all sorts of trouble.

Bound up with the ARW problem are the results of those changes. The one likely to have the biggest potential for changes is whether or not the French Revolution occurs and then whether or not Britain finds itself at war for the next 25 years or so. If something of the sort does occur, then the colonies probably benefit since they get to sell to Britain with less of a barrier than OTL. Maybe they even get to build ships for the RN (at the very least, they supply naval stores). Also, they probably get to do some conquering (or at least attempt some), since they'll border Spanish and / or French possessions.

If you give the colonies a huge amount of land to settle, the colonies are likely to remain a bit more agricultural and commercially oriented for a bit longer. When industry does come in, it's probably a bit more explicitly British (British firms with American factories). However, not much will change since British capital and investment played a huge role in American industrialization OTL. Though that presumes that as a part of the growing liberalization of British politics and economics, they also reform / destroy the mercantilist system which would previously have made such things illegal. British politicians probably still hope to keep Britain the center of all real industry, but since Britain tolerated Canadian and Australian protectionist policies, I'd imagine they might also do likewise some American efforts along similar lines (though muted since the British wouldn't have the example of the ARW).
 
I assume that the laws Britain passed OTL to keep textile technology from being exported would be a bit weaker with regards the colonies (if only because reinforcing the mercantilist system after the 1770s would only be another way to piss off the New Englanders). Accordingly, someone could very well try to set up a mill in North America assuming they had access to capital.
I eee it the other way, with British Law still being enforced there will be no Francis Cabot Lowell, to smuggle the plans for the textile machines to the Americas.
Anyone who tried would just be arrested.

The American economy would remain very weak for several decades after the 70's..
Britain had banned the production of Iron, and shut down the largest Iron Furnace in the Americas.
They had also banned paper money, causing a terrible money collapse.
[Massachusetts tried to issue wooded coins but got caught by Inflation -saying about Wooden Nickels]

After that a lot depends on the Timing of the Virginia & Georgia Gold Strikes.
While I don't see the Virginia strike being any earlier [Later maybe due to no DC]
The sending of Convicts to Georgia, has the potential of moving the Georgia strike forward by up to 20 years.
A assured supply of Gold for minting, has the possibility of rapidly expanding the American economy.
 
1750

The English Parliament passed a law limiting the erection of iron mills and forges in America, so as to compel the importation of wrought iron from England.

This policy had been used already in connection with other manufactured products, but only in this instance was an infant industry stifled. It was a part of England's mercantile policy to confine the colonies to the production of raw materials.

Fortunately for America, it only stopped the Large industrial operations.
The small Cottage mills in the back woods rapidly expanded to take up the slack.
 
Fortunately for America, it only stopped the Large industrial operations.
The small Cottage mills in the back woods rapidly expanded to take up the slack.

It's very true that this happened, but I would venture to suppose that such restrictions would need to be lifted or at least revised in order to actually avoid the Revolution (and squelch future movements along the same lines) so as to actually consider the economy of British North America including "the Thirteen Colonies."
 
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