1. Define mercantilism

Mercantilism: From the 15^th to the 18^th century, when the modern nation-state was being born, mercantilism developed as an economic system based on: 

1. private property
2. the use of markets for basic organization of economic activity
3. a focus on self-interest of the sovereign (the state), not the self-interest of the individual owners of economic resources. Therefore, the basic purpose of economic policy is to strengthen the national state and to further its aims. 

4. the government exercising much control over production, exchange, and consumption

5.  the state being preoccupied with accumulating national wealth in form of gold and silver
6. the best way to acquire gold and silver being through trade--a surplus of exports over imports

Further explanation: http://mars.acnet.wnec.edu/~grempel/courses/wc2/lectures/mercantilism.html

2. What was an indentured servant?

6. Why did black slavery develop less in the North than in the southern colonies?

For further information about Jamestown (first of the Southern colonies), see: http://www.historyisfun.org/jyf1/education.html

Take a virtual tour of Plimoth (first colony in New England: http://www.plimoth.org/

From the Pennsylvania Historical Society, information on the Quaker province: http://www.phmc.state.pa.us/bah/pahist/quaker.asp?secid=31

An example of the African American "culture of resistance" is the Underground Railroad: http://www.ugrr.org/

From PBS Africans in America: http://www.pbs.org/wgbh/aia/home.html

Narrative of an escaped slave, 1850s: http://vi.uh.edu/pages/mintz/13.htm

7. Define subsistence economy. What is a yeoman farmer?

See an interactive site from the Henry Ford Museum on colonial life for white property-owning families:
http://www.hfmgv.org/smartfun/colonial/intro/index.html

8. How does Thatcher Ulrich help you understand how ordinary Euro-Americans in colonial New England went about the daily business of living? 

9. How does Martha Ballard's story help you understand the home and community as centers of economic life in early 19^th century America?

10. What is industrial capitalism? What does industrialization develop more in the Northeast than in the South? What is a machine? What is technology? What is a factory? The working class? The middle class?

As time went on in Europe, mercantilism gradually evolved into economic practices that would eventually be called capitalism. Capitalism is based on the same principle as mercantilism: the large-scale realization of a profit by acquiring goods for lower prices than one sells them. But capitalism as a practice is characterized by the following: 

1. The  accumulation of the means of production (materials, land, tools) as property into a few hands; this accumulated property is called "capital" and the property-owners of these means of production are called "capitalists." 
2. Productive labor—the human work necessary to produce goods and distribute them—takes the form of wage labor. That is, humans work for wages rather than for product. One of the aspects of wage labor is that the laborer tends not to be invested in the product. Labor also becomes "efficient," that is, it becomes defined by its "productivity"; capitalism increases individual productivity through "the division of labor," which divides productive labor into its smallest components. The result of the division of labor is to lower the value (in terms of skill and wages) of the individual worker; this would create immense social problems in Europe and America in the nineteenth and twentieth centuries. 
3. The means of production and labor is manipulated by the capitalist using rational calculation in order to realize a profit.  
   
   As a way of thinking, capitalism involves the following: 
   

1. Capitalism as a way of thinking is fundamentally individualistic, that is, that the individual is the center of capitalist endeavor. This idea draws
   on all the Enlightenment concepts of individuality: that all individuals are different, that society is composed of individuals who pursue their own interests, that individuals should be free to pursue their own interests
   (this, in capitalism, is called "economic freedom"), and that, in a democratic sense, individuals pursuing their own interests will
   guarantee the interests of society as a whole. 
2. Capitalism as a way of thinking is fundamentally based on the Enlightenment idea of progress; the large-scale social goal of unregulated capitalism is to produce wealth, that is, to make the national economy wealthier and more affluent than it normally would be. Therefore, in a concept derived whole-cloth from the idea of progress, the entire structure of capitalism as a way of thinking is built on the idea of "economic growth." This economic growth has no prescribed end; the purpose is for nations to grow steadily wealthier. 
3. Economics, the analysis of the production and distribution of goods,
   has to be abstracted out of other areas of knowledge. In other words,
   capitalism as a way of thinking divorces the production and distribution of goods from other concerns, such as politics, religion, ethics, etc., and treats production and distribution as independent human endeavors. In this view, the fundamental purpose and meaning of human life is productive labor. Marxism, which has more in common with capitalism than it has differences, also bases itself on these ideas. 
4. The economic world view treats the economy as if it were mechanical, that is, subject to certain predictable laws. This means that economic behavior can be rationally calculated , and these rational calculations are always future-directed . So, the mechanistic view of the economy leads to an exclusively teleological world picture; capitalism as a manipulation of the "machine" of the economy is always directed to the
   future and intentionally regards the past as of no concern. This, in part, is one of the fundamental origins of modernity, the sense that the cultural present is discontinuous with the past. 
5. The fundamental unit of meaning in capitalist and economic thought is the object , that is, capitalism relies on the creation of a consumer culture, a large segment of the population that is not producing most of what it is consuming. Since capitalism, like mercantilism, is fundamentally based on distributing goods—moving goods from one place to another—consumers have no social relation to the people who produce the goods they consume. In non-capitalist societies, such as tribal societies, people have real social relations to the producers of the goods they consume. But when people no longer have social relations with others who make the objects they consume, that means that the only relation they have is with the object itself. So part of capitalism as a way of thinking is that people become "consumers," that is, they define themselves by the objects they purchase rather than the objects they produce. 

1. Rise of Market: Dual economies exist--a staple- exporting seaboard economy  combined with inland subsistence-oriented farming communities. Subsistence-oriented farming characterizes inland U.S. in regions beyond fall line of rivers and outside about a 20-mile radius where no roads or water provide transportation to town markets with a non-agricultural populations. Economy is based on use-values; labor is exchanged for food, goods, services, or "cash if required." After 1815 concurrent and mutually stimulated transportation (turnpikes, canals, steamboats and railroads) and market revolutions (ca. 1815-50) create national market system in U.S. interior, bringing about dramatic decreases in shipment time and costs (Example: Shipping goods from Cincinnati to New York took 50 days in 1815 at 30-70 cents per ton-mile. The same trip took 6-8 days via R.R. in 1850 at 2-9 cents per ton-mile.) A profit-oriented money-value economy with production specialization emerges. Market revolution marks the transition between the staple-exporting mercantile economy of the colonial period and the industrial revolution of the mid-nineteenth century.
2. Population: Population pressure on land stimulates gradual inland migration, 1750-1800, creating agrarian, subsistence-oriented economy. Ninety percent of inhabitants of southern New England (for example) are subsistence-oriented farmers living in inland towns. Sixty-seven percent live in townships (40 square miles) of 1,000-2,000 people. Only 3 out 437 townships have more than 10,000 inhabitants. Average farm covers 100-200 acres. After 1815, population pressure coupled with market revolution and resolution of Indian lands stimulates great migration to Mississippi and Ohio valleys, with clearing of new lands.
3. Social Relations: Subsistence farming regions exhibit little social stratification and lack economic specialization. They show greater equality in wealth distribution than do seaboard areas, owing to absence of non-agricultural markets.  Social stratification is based primarily on age-stratification. Tools are shared and labor is exchanged. Non-agricultural communities that develop in same regions after market revolution exhibit wider range of stratification and specialization patterns.
4. Attitudes: Crèvecoeur in Pennsylvania and New York (1782) and Jefferson in Virginia (1787) idealize the subsistence farmer as the backbone of the democratic agrarian-based economy. Post market-revolution commentators such as Calvin Colton (1844) eulogize the "self-made man" and "his" ability to accumulate wealth and profit through hard work, industry, and merit, achieved through the "inexhaustible wealth" of the country's seemingly limitless abundance of natural resources.
   
   Capital refers to the materials that are necessary for production, trade and commerce. It consists of all tools, equipment, factories, raw materials and goods in process, means of transporting goods, and money. The essence of the capitalist system is the existence of a class of capitalists who own the capital stock. It is by virtue of their ownership of this capital that they derive their profits. These profits are then plowed back, or used to augment the capital stock. The further accumulation of capital leads to more profits, which leads to more accumulation, and the system continues in an upward spiral. The term capitalism describes this system of profit-seeking and accumulation very well." --E.K. Hunt, 1975, Property and Prophets, 2nd ed
5. 
   Links to further information:

Adam Smith, The Wealth of Nations

 The Two Countries That Invented The Industrial Revolution 

 Factories Change the Way America Works 

Market/Industrial Revolution

11. Out of the developing capitalist, industrial economy of the early 1800s, how does the American middle-class redefine manhood? Womanhood? Why? How does the middle class restructure family in order to take advantage of the new market economy?

Definition of "Cult of Domesticity": http://www.library.csi.cuny.edu/dept/history/lavender/386/truewoman.html

12. Who were the first industrial workers in the U.S.? Why? Who were the first industrial workers to go on strike in the U.S.? Why?

Mill girls Lowell Mills

13. How does Page Smith argue that the railroad is a symbol of mid-nineteenth century America? 

14. What are some of the consequences to human life and to the environment of the developing American emphasis on making more, having more material comfort?

15. Why did it make sound economy sense for the South to continue in the developing market economy as agrarian based?

For a short text on Southern plantation history from the National Parks Service, see: http://www.cr.nps.gov/history/slave.htm

Take a virtual tour of Thomas Jefferson's plantation Monticello: http://www.monticello.org/index.html

Exam 1