Most 17th-century European states and towns instituted wage and price controls to regulate the local economy. Both the traditional concept of the “moral economy” (an economy regulated by social principles rather than market forces) and the newer theory of mercantilism (the idea that the state should regulate commerce in order to foster its own power) promoted the use of such controls. Moreover, early modern Europeans generally assumed that prices and wages should remain stable over time. Colonists often quibbled over the details of wage and price controls, but both the governors and the governed favored economic regulation.
The English Statute of Artificers (1562) provided a model for colonial regulations of laborers’ hours and wages. It was often difficult to adapt statutory law to local conditions, however, so in most cases justices of the peace actually set maximum and minimum wages. The scarcity of labor in the American colonies tended to drive wages up, to the consternation of those who believed that the real value of work varied little from one place to another. Wages in the American colonies remained higher than wages for comparable work in England, but colonial courts nevertheless indicted some laborers for accepting “excessive” wages. Local officials also regulated the fees that millers, tavern keepers, ferry owners, gravediggers, and other essential community functionaries were permitted to charge.
The quintessential price control was the assize of bread, which specified the proper size, quality, and price of a loaf of bread. Local officials regulated the price of other essential goods, such as meat, leather, bricks, and nails, as they thought necessary. Shipping costs naturally drove up the price of many imported goods, but colonists were initially reluctant to make allowances for this; in the early 17th century Boston merchant Thomas Keayne was prosecuted for incorporating shipping costs into the price of imported nails. Indeed, colonial courts vigorously punished individuals who violated the doctrine of the moral economy.
Colonial governments also outlawed market manipulations such as “engrossing” (creating a monopoly) and “forestalling” (buying up the entire stock of a particular commodity) to drive up the costs of goods.
Local economic regulations fell into decline in the mid-18th century. A new generation of economic theorists questioned the value of commercial regulation, while an increasingly diverse and mobile population questioned the concept of a moral economy structured to promote community welfare. Nevertheless, popular support for economic regulation occasionally resurfaced in wartime or during periods of rapid inflation. In the midst of Revolutionary boycotts in 1774, the Continental Congress called on colonial governments to punish price gougers.
Further reading: John J. McCusker and Russell R. Menard, The Economy of British America, 1607-1789 (Chapel Hill: University of North Carolina Press, 1985).
—Darcy R. Fryer
World History
