The Economic Causes And Consequences History Essay

The American Revolution led to the independency and nationhood of the United States of America. The Revolution began as an unfastened struggle between the 13 settlements and Britain in 1775.The history of the causes of the American Revolution attributes many factors as lending to the Revolution. These factors included economic, political, geographical considerations, enlightenment and the overall mentality of the American people. Similarly, the effects were multidimensional in mature. Though these factors were interrelated and sometimes hard to extricate, this essay focuses chiefly on the economic causes and effects of the American Revolution.

The economic causes concentrated on the efforts of Britain to revenue enhancement and curtail the trade of the settlers while the effects focused on the drafting of the American fundamental law which had economic deductions, the pecuniary cost of the war, the initial commercial jobs, the provinces and national debts, creative activity of common markets and committedness to liberate market economic policies and lower revenue enhancement.

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Section II of the essay provides a comprehensive history of the chief economic causes while Section III concentrates on the cardinal economic effects. Section IV eventually concludes the essay.

II.Economic causes of the American Revolution

The history of America starts with the colony of the Pilgrims in 1620. Harmonizing to Robert A. Peterson1, the Pilgrims spent about 11 old ages in Holland when they left England in 1609. The 11 twelvemonth stay in Holland allowed them to get the followers experiences which contributed vastly to their life in the United States ; ( I ) freedom of worship and spiritual tolerance, ( two ) exposure to market economic system, ( three ) no authorities handouts or subsidies, ( four ) professional version from farming to textile industry, and ( V ) self-determination. Gary North besides argues that the colonist ‘s initial effort in common ownership, particularly in land, served as inducements to waste and hence led finally to private belongings and free market in the purchase and sale of land2. The motion to private belongings and its attendant voluntary exchange or free market constitutes one of the most far making economic doctrines adopted by the Americans. In reexamining Dilorenzo ‘s book on capitalist economy, Lawrence Vance argues that Dilorenzo considers private belongings as the most of import distinguishing characteristic of free market capitalism3. Vance argues that Dilorenzo concludes that free market capitalist economy is significantly characterised by secure belongings rights, the division of labor, freedom of contract, and voluntary exchange on the free market. Free market doctrine is besides characterised by the absence of inordinate authorities regulation/intervention in economic activities with its attender higher revenue enhancement.

Therefore on the Eve of the American Revolution, the cardinal economic characteristics of America were ( I ) free market based on voluntary exchange and free trade, ( two ) limited authorities intercession, ( three ) lower revenue enhancement, ( four ) private belongings ownership, ( V ) freedom of contract, and ( six ) freedom of association and business. The economic causes of the American Revolution were the factors that impacted on these cardinal economic characteristics bing on the Eve of the Revolution. The infliction of British mercantile system on the American settlements was clearly one of these causes. Again following the triumph of the Gallic and Indian war, King George III and British Parliament enacted series of Torahs with the purpose of doing the settlements contribute to the debts of the war and to keep colony beyond the Appalachian Mountains. The cardinal Torahs enacted with economic deductions included ; the Navigation Acts, the Coercive Acts/the Intolerable Acts, the Boston Port Act, the Quartering Act, the Sugar Act, the Stamp Act, the Townshend Act and the Tea Act. The other developments besides these Torahs which contributed to the Revolution were the Boston Tea Party and more significantly the formation of the Continental Congresses affecting all the 13 settlements. Each of these factors is discussed in greater item below.


The indispensable characteristics of mercantile system included an absorbing involvement in foreign trade and through that the acquisition of cherished metals which in bend were cardinal to the military strength and the power of the province. Under mercantile system hence, the economic life was circumscribed and controlled by the authorities. Indeed Clarence B. Carson argues that under mercantile system, “ the authorities controlled exports and imports, gave subsidies, premiums and grants to promote certain projects, prohibited others, gave patents, charters and other signifiers of monopolies to persons and companies, enforced trade ordinances and maintained much power over the lands of the kingdom ” 4. The pattern of mercantile system by Britain with regard to the settlements involved the acquisition of natural stuffs from the settlements and their industry into goods which were exported to other states for aggregation of cherished metals in return. Mercantilism hence led to discontent in the settlements and was one of the economic causes of the Revolution.

The Navigation Acts

The Navigation Acts implemented facets of mercantile system by imparting the flow of colonial natural stuffs and maintaining foreign goods and vass out of colonial ports. The Navigation Acts were multiple Torahs created over a period of clip and with mercantile system in head restricted free trade. For illustration, the Navigation Act of 1651 banned imported goods from other states, unless the ship or lading had an all-British crew.

The Gallic and the Indian War

At the terminal of the Gallic and Indian war, the winning British authorities became about belly-up from the war costs. Therefore get downing in 1765, King George III of Britain enacted series of revenue enhancement Torahs for the American settlers, who have benefited from the protection of the British ground forces to lend to the payment of the war costs. All these revenue enhancement Torahs were enacted by the British Parliament and the responses in America were non positive because of ( I ) the settlements were non represented in British Parliament and these settlements believe in the axiom that there should be ‘no revenue enhancement without representation ‘ , and ( two ) more significantly the invasion upon the delicate liberty of the settlements after about a century of self-determination through their ain legislative assemblies. Before these revenue enhancement Torahs nevertheless, the Proclamation Act of 1763 prohibited colony beyond the Appalachian Mountains and many settlers took offense with that jurisprudence. Again the currency Act of 1764 prevented the settlements to publish and utilize their ain money based on the statement that the colonial currency had caused devaluation harmful to British trade. The revenue enhancement Torahs which angered and frustrated the settlers most were ; ( I ) the Sugar Act of 1764, ( two ) the Stamp Act of 1765, and ( three ) the Townshend Act of 1767. Other relevant Torahs with economic deductions which were non acceptable to the settlers were the Quartering Act, the Intolerable Acts and the Tea Act. The drumhead commissariats of these Torahs are given below.

The Sugar Act of 1764

The jurisprudence levied/imposed revenue enhancements on imported sugar from West Indies into America. The aim was to raise gross to assist pay for the disbursals of colonial disposal.

The Stamp Act of 1765

This jurisprudence taxed all sorts of printed paper from volitions, licences, newspapers and even playing cards. The revenue enhancement was intended for the settlements to pay for defense mechanism. The settlers in the face of this overplus of revenue enhancements started talking out against the new revenue enhancements and in October 1765, representatives of nine of the settlements met in New York City and held treatments on the Stamp Act. They concluded that the Stamp Act and all other revenue enhancement Torahs were illegal because the settlements were non represented in British Parliament and there can be no revenue enhancement without representation. The representatives hence requested for the abrogation of the Stamp Act but the British authorities did non mind to their petition. Alternatively, new revenue enhancements like the Townshend Act were imposed on the settlements.

The Townshend Act of 1767

This Act placed revenue enhancements on imported glass, paper, pigments and tea and the returns from these revenue enhancements were to do British Officials independent of the settlers. Many of the settlers were against these revenue enhancements and led to the boycott of British goods.

Besides the revenue enhancement Torahs there were other Torahs enacted by Britain which infuriated the Americans. These included the Tea Act, the Coercive/Intolerable Acts, the Boston Port Act and the Quartering Act.

The Tea Act of 1773

This Act was intended to assist the British East India Company to sell its tea in America without the payment of the colonial revenue enhancement. In consequence the jurisprudence granted the company a monopoly position because their low monetary values destroyed competition in tea trading since American tea bargainers had to pay revenue enhancements to Britain. The Tea Act led to the Boston Tea Party.

The Coercive Acts/Intolerable Acts

The Coercive Acts were passed in 1774 and were known in America as the Intolerable Acts. These Torahs were passed in response to the Boston Tea Party. Some of the Torahs under the Coercive Acts which had economic reverberations for the settlers were the Boston Port Act and the Quartering Act. The Boston Port Act closed the seaport of Boston to all commercialism until its citizens paid for the tea that were destroyed in the Boston Tea Party. The Quartering Act ordered the settlers to house and feed British soldiers and the settlers considered that as a signifier of indirect revenue enhancement in which the Americans were forced to utilize their money for the benefit of the British Monarchy

The Boston Tea Party of 1773

The Boston Tea Party was one of the effects of the Tea Act which granted monopoly in tea trading to the British East India Company by relieving them from British revenue enhancement. This angered the American settlers because all the other bargainers had to pay revenue enhancements to Britain. Consequently a group of settlers disguised as Indians dumped tea overboard from three ships in Boston Harbour. This event became known as the Boston Tea Party. Most historiographers would hold that this was one of the most of import events that led to the start of the American Revolution.

The other major cause of the American Revolution with economic deductions was the outgrowth of Continental Congresses. The settlements met at these United states congresss to take a unvarying determination against the British authorities. At the 1775 Congress all the 13 settlements were represented for the first clip in Philadelphia and had hoped that all their grudges would be met by King George III. The King instead proclaimed the settlements in rebellion and instantly the issue of contending for independency came to the bow. George Washington was named the caput of the Continental ground forces. In 1776 another Continental Congress met at the Pennsylvania State House and took a concluding determination on independency. Thomas Jefferson was given the occupation of composing the Declaration of Independence. By July 4, 1776, the Declaration of Independence was approved by the Continental Congress. Independence was won on the battleground and was confirmed at the Paris conference in 1783

III.Economic Consequences of the American Revolution

The first of the economic effects of the American Revolution was the drafting of the American Constitution. This is because though the Constitution was foremost and first, a legal papers, it besides contained some commissariats with economic deductions. Commissariats associating to the contract clause, the commercialism clause and the unvarying revenue enhancement clause evidently had clear economic reverberations. The Constitution besides created the largest common market in history by prohibiting States to impose duties against each other. Again the Constitution protected belongings rights including patents and right of first publications.

Another economic effect was the pecuniary costs of the war. The war was the joint attempt between the States and Congress. The debts of both the States and Congress were financed by bond issues and increased money supply. Consequently the value of the currency fell quickly doing rising prices. Therefore, much of the war debts were paid for through the depreciation of people ‘s nest eggs and this undermined the public assurance of the new authorities. Another effect was the freedom of American trade from British mercantile system. There were initial commercial jobs nevertheless, for though Americans could now merchandise straight with Europe, it brought economic losingss of a much larger magnitude than expected. Furthermore, under the advice of Alexander Hamilton, the Treasury Secretary, America did non prosecute free trade because its commercial policy was based on protectionism which was anchored on the baby industry statement. This policy compounded the initial trade jobs but finally allowed America to construct and spread out its fabrication industry. The cherishing of the public recognition was another effect of the American Revolution. One method of care foring public recognition is to utilize it every bit meagerly as possible and that apart from doing war, public adoption and accretion of debt were to be discouraged. Alexander Hamilton helped reconstruct religion in the public recognition and the dollar, whose value fell ab initio, regained its value and was put on the bimetallistic criterion of Ag and gold. The authorities under Thomas Jefferson and his Swiss moneyman and economic expert, Albert Gallatin was committed to limited authorities and free market policies which contributed significantly to the decrease in national debt and decrease in revenue enhancement. “ For the following eight old ages, Jefferson and Gallatin worked to cut down the state ‘s debt every bit good as its revenue enhancements. The national debt was cut from $ 83 million to $ 57 million, and the figure of Federal employees was reduced ” 5. Under Jefferson ‘s authorities besides America experienced no internal limitations and monopoly, no occupational limitations or exclusions and industry in every regard became absolutely free and unchained. In other words one of the most of import effects of the American Revolution was a liberalised economic environment which created a competitory industry with no limitations on employment.

There were other effects of the American Revolution which indirectly had economic deductions. These included the separation of church and province which positively affected the care of democracy. Most economic experts believe that democratic institutional agreements are positively related to economic growing and in that sense the separation of province and church can be classified indirectly as one of the economic effects of the American Revolution. Another effect which indirectly had economic deductions was the beginning of the terminal of bondage. The realization that bondage was non a good thing had major economic deductions in footings of production, exchange and distribution of goods. The 3rd effect which indirectly had economic deductions was the positive effects of the Revolution on adult females since it allowed adult females to actively take part in economic activities by running and pull offing concerns and by taking lead places in both the populace and private sectors of the economic system. The 4th effect which indirectly had economic deductions was the growing of American patriotism. The growing of American patriotism gave individuality to Americans and united them in the battle for economic growing, prosperity and higher life criterions.

Therefore, the economic effects of the American Revolution integrating the rules of self-government, belongings rights, free markets and limited civil authorities yielded positive dividends in the signifier of higher economic growing and prosperity after the revolution.


The American Revolution was basically the American war of independency. The economic causes of the Revolution can be loosely grouped under pattern of mercantile system by Britain and the infliction of revenue enhancements by the British authorities on the American settlements. There were other of import causes which included political, geographical, enlightenment, and the overall mentality of the Americans. The effects were besides multidimensional in nature and included economic, societal, legal and political effects. The economic doctrine of mercantile system discouraged free trade with other states and Britain ‘s pattern of mercantile system had a negative consequence on the economic growing of the settlements. The negative effects included higher duties on imported goods which led to higher monetary values and sometimes complete prohibition on the importing of some selected goods. Besides the usage of duties and complete prohibition, Britain enacted Navigation Acts as another vehicle for the execution of its mercantile system. The overplus of revenue enhancements imposed on the settlements limited their wealth creative activity and economic growing through inefficient resource allotment and the restriction on the coevals of nest eggs for capital accretion. Furthermore, the Tea Act in peculiar was prejudiced in that it favoured the British East India Company by allowing it a monopoly position. Meanwhile these revenue enhancements were imposed without the settlements ‘ representation in British Parliament. The settlements were hence defeated and angered by these patterns and policies of Britain. The natural consequence was for the settlements to come together and contend against these patterns and policies. The Continental Congress hence emerged as an establishment to unify the settlements for the battle of the war of independency following the declaration of independency on July 4, 1776. The war eventually led to American independency ensuing in the drafting of the American Constitution as the first effect of the Revolution. The Constitution, though chiefly a legal papers, contained commissariats which had economic deductions. The other economic effects of the American Revolution included the creative activity of a common market, protection of belongings rights, the freedom from the difficult effects of British mercantile system, the initial addition in money supply to finance war debts that led to rising prices and the autumn in the value of the dollar, the subsequent recovery of the dollar to be put on the bimetallistic criterion of Ag and gold, the Restoration of religion in public recognition and committedness to limited authorities and free market economic policies.


Peterson, Robert A. , “ The Pilgrims in Holland ” , The Freeman/Ideas on Liberty. Vol. 38/Issue 11, November 1988 ; pp 1 ; hypertext transfer protocol: //

North, Gary, “ The Puritan Experiment in Common Ownership ” , The Freeman/Ideas on Liberty. Vol. 24/Issue 4, April 1974 ; pp 3 ; hypertext transfer protocol: //

Vance, Lawrence M. , Book Review on “ How Capitalism Saved America: The untold history of our State from the Pilgrims to the Present by Thomas J. Dilorenzo, New York: Crown Forum, 2004 ” The Quarterly Journal of Austrian Economics vol.8, No. 1 ( Spring 2005 ) ; pp 83

Carson, Clarence B. , “ George Washington on Liberty and Order ” , The Freeman/Ideas on Liberty, vol. 33/Issue 2, February 1983 ; pp 1 ; hypertext transfer protocol: //

Peterson, Robert A. , “ A narrative of Two Revolutions ” , The Freeman/Ideas on Liberty. Vol. 39/Issue 8, August 1989 ; pp 7, hypertext transfer protocol: //



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