PER CAPITA WEALTH AND INCOME, 1774

Reflection upon the ordeals of first settlement, such as “the lost colony” at Roanoke and the “starving time” in early Jamestown, projects a stark contrast to the economic

WHY GROWTH RATES MATTER

What does a 0.5 percent growth rate tell us about changes in material standards of living? A very useful tool, known as the Rule of 70, shows the impact of different growth rates. If r is the rate of growth in percentage terms, and t is the number of years it takes a

Quantity to double, then r x t = 70; or t = 70/r. If r is 10%, the doubling time is 7 years; if r is 7%, t is 10 years; for r = 2% approximately the U. S. growth rate for most of the twentieth century, incomes double every 35 years. In the colonial period our growth estimates suggest it took 140 years for living standards to double.

Conditions of colonial life on the eve of the Revolution. From distant Scotland in 1776, Adam Smith declared in his Wealth of Nations:

There are no colonies of which the progress has been more rapid than that of the English in North America. Plenty of good land, and liberty to manage their affairs their own way, seem to be the two great causes of the prosperity (Bruchey 1966).

Contemporaries in the colonies also supported this view. As early as 1663, the Reverend John Higginson of Boston could observe, “We live in a more plentifull and comfortable manner than ever we did expect” (Bruchey 1966). By the 1740s, Benjamin Franklin could remark, “The first drudgery of settling new colonies, which confines the attention of people to mere necessities, is now pretty well over; and there are many in every province in circumstances that set them at ease” (Bruchey 1966, 1). Indeed, by most any standards of comparison, the quality of life and standards of material well-being were extraordinarily high for free Americans by the end of the colonial period. They lived longer and better than populations of other nations and places at the time, and better than most people throughout the world today.