The major economic activity in the colonies was agriculture, and progress in this sector had a particularly strong bearing on total colonial production. Because agriculture was such a significant part of total output, total average gains were significantly influenced by advances (or lack of advances) in this sector. Moreover, it is important to remember that economic progress in real per capita terms stems primarily from human efforts to raise productivity—the increase of output relative to the inputs of labor, capital, and land. Therefore, we will devote particular attention to periods of change in productivity and to the agricultural improvements that were introduced.
Tobacco in the Upper South An obvious starting point is the dominant colonial staple, tobacco. Information on tobacco prices in the Chesapeake Bay area, as shown in Figure 5.1, suggests that most of the increases in the productivity of tobacco occurred very early in the colonial period. Ranging between 20d. and 30d. sterling per pound in the early 1620s, tobacco prices fell to less than 3d. per pound around 1630. A second
FIGURE 5.1
Chesapeake Farm Tobacco Prices, 1618-1710
Sources: Compiled from Menard 1973, 85; and 1976, 401-410.
Phase, lasting approximately four decades, followed that precipitous decline. This time, the average price decreased to about a penny per pound. Of course, short-term periods of cyclical variations occurred, but tobacco prices stayed at that low price throughout most of the remaining peacetime years. Open competitive markets ruled out monopoly pricing.
Little doubt exists that these two early periods of declining tobacco prices represented major surges in productivity. According to Allan Kulikoff (1979), tobacco output per worker doubled between 1630 and 1670. The demand for tobacco in Europe was persistently growing, and the costs of the labor and land required to produce tobacco did not decrease over these years. Therefore, declining wages or rents cannot explain the lower costs of tobacco; these declines must have been largely caused by increases in output per unit of input (land, labor, and capital in combination)—that is, by gains in productivity. Terry Anderson and Robert Thomas (1978) also estimate very high productivity advances in tobacco: over the last three quarters of the seventeenth century, the advance was nearly 1.5 percent per year on average. Very little productivity advance occurred in tobacco in the eighteenth century, however, and undoubtedly, the major period of progress in tobacco cultivation was during the seventeenth rather than the eighteenth century.
This characteristic of rapid early gains and subsequent periods of slower advance has always been common to the growth patterns of production in firms and industries. In colonial times, before the age of widespread technological advances, productivity gains stemmed primarily from trial and error and learning-by-doing. In agriculture, the fruits of these efforts generally materialized within a few decades of crop introduction. Sometimes, as in the case of tobacco, the introduction of a new seed type generated a surge of crop productivity. Also, in the early phases of experimentation, the colonists found ways to combine and adjust soils, seeds, labor implements, and other agricultural inputs to their optimum uses. In later stages of agricultural development, improvements were more gradual, based on a slower-paced accumulation of knowledge about the most productive uses of available soils and resources. In some instances, such as the colonists’ futile attempts at wine production and silk cultivation, these efforts ceased in the experimentation phase.
Grain and Livestock in the Middle Colonies In grain and livestock production, as in tobacco, gains in productivity appear to have been modest, indeed low, throughout most of the eighteenth century. The most visible change in Pennsylvania farms was the sharp decline in average farm size, from about 500 acres in 1700 to about 140 acres at the end of the century. But this decrease did not indicate a fall in the ratio of “effective land” to labor. Instead, it was the consequence of population expansion and the subdivision of uncleared acres into new farms. Because the amount of uncleared land per farm exceeded the minimum needs for fuel and timber, these acreage reductions had no noticeable effect on agricultural output. Because the average number of cleared acres per farm changed little, the effective input of land per farm remained almost constant throughout the entire eighteenth century.
Alternatively, additional implements, structures, and accumulated inventories raised the amount of capital inputs per farm. Meanwhile, the average family size was shrinking. Consequently, in the predominantly family farm areas such as Pennsylvania, the amount of labor per farm decreased. Therefore, both the capital-labor ratio and the cleared land-labor ratio rose. Given the increase of inputs per worker, we would expect output per worker to expand.
Indeed, the evidence reveals that output per farm was increasing (see Ball and Walton 1976). Not only were farms producing more livestock and grains (mainly wheat and maslin, a combination of wheat and rye), but also by the late colonial period, a small but growing portion of farm labor time was being diverted to nonagricultural production, including milling, smithing, cabinet making, chair making, and tanning. Overall, average output per farm increased by about 7 percent between the first and third quarters of the eighteenth century. When the gain in output is compared with the change in total input,1 it appears that total productivity advanced approximately 10 percent during these decades. Expressed in terms of rates of change, total productivity expanded by 0.1-0.2 percent per year, with the most rapid change (0.3 percent) occurring in the first decades of the eighteenth century. Finally, the growth of output per worker was somewhat higher (approximately 0.2-0.3 percent per year) over the first three quarters of the century.21 22
Specific evidence on the precise sources of these advances is almost entirely lacking. The low measured rate of advance, however, does reinforce historical descriptions. For instance, in their classic study of agriculture, Bidwell and Falconer assert that in the colonies north of the Chesapeake, “The eighteenth century farmers showed little advance over the first settlers in their care of livestock,” and “little if any improvement had been
The tranquility of this eighteenth-century rural colonial setting belies the hard work and varied daily tasks of family farming.
Made in farm implements until the very close of the eighteenth century” (1925, 107, 123). Another study of Pennsylvania agriculture specifically concludes that “economic conditions throughout the century prohibited major changes and encouraged a reasonably stable and uniform type of mixed farming that involved fairly extensive use or superficial working of the land” (Lemon 1972, 150-151). It seems reasonable to conclude that farmers were probably beginning to learn to use the soil and their implements more effectively. But there is little indication of input savings, either from technological improvements or from economies of scale in terms of larger farms. Better organized and more widespread market participation, however, may have contributed somewhat to gains in agricultural productivity.
These findings and conclusions come as no surprise when examined in light of agricultural developments in later periods. For instance, investigations by Robert Gallman indicate total productivity gains of approximately 0.5 percent per year over the nineteenth century (1972, 1975). However, in the first half of the century, combined output per unit of land, labor, and capital advanced at a rate of 0.1-0.2 percent. In the second half of the century, the productivity rate rose to 0.8 percent. Undoubtedly, the
Additions of capital and the specialization of tasks raised productivity per worker in colonial tobacco production.
Slower-paced first half of the nineteenth century—before the transition to animal power and increased mechanization—would be more suggestive of the eighteenth-century experience. In short, agricultural progress throughout most of the colonial period was sporadic, limited, and slow paced.
World History
