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Posts Tagged ‘markets’

The British took cattle to the market faire; Americans took cattle to the butcher’s stall. According to a new study, that simple difference tells us a lot about the deep nature of “American exceptionalism.”

A recurring controversy among historians concerns the origin of Americans’ exceptional adherence, both in practice and in ideology, to the “free market.” Has this distinctive commitment been there from the earliest years of settlement or was it a much-later development of the nineteenth century? One side argues that from virtually the start New World conditions enabled and encouraged European-Americans to act and think in terms of independent, unregulated, self-interested entrepreneurs. The other side argues that the colonists originally behaved much as people in their European home countries did: Being community-oriented, they adhered to local norms and to local authorities that limited economic activities, for example, dictating prices for necessities. Then, after the American Revolution, commercial interests, empowered politically and riding a new laissez-faire ideology, swept away that earlier “moral economy” and created the distinctive, decide-it-yourself, American capitalism we know today. (For discussion of this debate, see pp. 101ff of Made in America. Earlier, related posts are here and here.) The contemporary political implication of this debate, by the way, is the question of how deep and therefore perhaps hard to change this aspect of American exceptionalism may be.

Emily Holt, a historian in Scotland, writing in the William & Mary Quarterly compares the cattle business in colonial Philadelphia and South Carolina to that in Glasgow and London. Her story leans in the direction of early exceptionalism, albeit with complexities.

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Builders of the American republic in the decades either side of 1800 grasped and employed new philosophical and ideological tools for its construction.  The revolutionary idea of inherent political equality – “all men are created equal” with “inalienable rights” – however limited its reality then seems looking back from now, was the Next Big Thing of the day. Also critical were economic analyses originating with Adam Smith and his British colleagues. “Free market” arguments asserted that self-interested actors uncontrolled by authorities combine to create the greatest good for the greatest number.

John Lauritz Larson, in a recent presidential address to the Society for Historians of the Early American Republic, notes a couple of important similarities between the political theories and the economic theories of America’s revolutionary era. Both sets of ideas demanded that the king’s government get off people’s backs, especially by stopping its interference in commerce. And both sets of ideas asserted, based 18th-century “scientific” analysis, that state rule distorted the God- or Providence- or Nature-given order of things. Men, advocates argued, were naturally equal and self-governing; similarly, markets were naturally productive and self-governing.

Larson goes on to make the point that there was nothing natural about the ascendency of the naturalistic argument for the laissez-faire philosophy. But we live with its seeming naturalness to this day.

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In February, 1917, thousands of women stormed the streets in the poorer parts of Brooklyn, New York, overturning pushcarts and setting them on fire. It took police hours to restore order. [1] The women were protesting rapid increases in the prices of food staples and decried the injustice of hungry children. Congress was soon in debate. One senator warned that the disorders showed that “the country is dividing into two great classes–the very poor and the very rich.” [2] In fact, the U.S. had had many earlier commodity riots, going back to the founding of the nation; it was a frequent response to market pressures.[3]

Pushcarts in New York (Source)

Pushcarts in New York (Source)

In 1779, Philadelphia artisans mobilized to demand that merchants’ prices on “necessaries” be restrained. A free market was dividing the city into rich and poor, they charged, and they wanted “a just and regulated price.” The merchants association replied that “the limitations of prices is … unjust … by compelling a person to accept less in exchange for his goods than he could otherwise obtain, and therefore acts as a tax upon one part of the community only.” Moreover, they argued, allowing the market to dictate prices meant less hoarding and more efficient distribution of necessities. [4] The debate about price justice continued in Philadelphia that year (more below), but it largely ended in America over a century ago – the housewives’ riot of 1917 notwithstanding. The merchants won. (more…)

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