Economic history of the United States

The economic history of the United States is about characteristics of and important developments in the U.S. economy from colonial times to the present. The emphasis is on economic performance and how it was affected by new technologies, the change of size in economic sectors and the effects of legislation and government policy. Specialized teams and business history are covered in American business history.

The colonial economy differed significantly from that of most other regions in that land and natural resources were abundant in America but labor was scarce.

From 1700 to 1775 the output of the thirteen colonies increased 12 fold, giving the colonies an economy about 30% the size of Britain's at the time of independence. Population growth was responsible for over three-quarters of the economic growth of the British American colonies. The free white population had the highest standard of living in the world. There was very little change in productivity and little in the way of introduction of new goods and services.

Under the colonial system Britain put restrictions on the type of products that could be made in the colonies and put restrictions on trade outside the British Empire.

Initial colonization of North America was extremely difficult and the great majority of settlers before 1625 died in their first year. Settlers had to depend on what they could hunt and gather plus what they brought with them and on uncertain shipments of food, tools and supplies until they could build shelters and forts, clear land and grow enough food and build gristmills, sawmills, iron works and blacksmith shops to be self-supporting. They also had to defend themselves against hostile Native Americans. After permanent settlements were established population growth of the North American British colonies was very rapid due to high birth rates (8 children per family versus 4 in Europe) and lower death rates than in Europe, and immigration. The long life expectancy of the colonists was due to the abundant supply of food and firewood and the low population density that limited spread of infectious diseases. The warmer climate of the colonies compared to Europe also contributed to longer life expectancy; however, the death rate from diseases was higher in the warm, humid southern colonies than in New England.

The higher birth rate was due to better employment opportunities. Many young adults in Europe delayed marriage for financial reasons. Also there were many servants in Europe who were not permitted to marry. The population of white settlers grew from an estimated 40,000 in 1650 to 235,000 in 1700. In 1690 there were an estimated 13,000 black slaves. The population grew at an annual rate of over 3% throughout the 18th century, doubling every 25 years or less. By 1775 the population had grown to 2.6 million, of which 2.1 million were white, 540,000 black and 50,000 Native American, giving the colonies about one third of the population of Britain. The three most populated colonies in 1775 were Virginia, with a 21% share, and Pennsylvania and Massachusetts with 11% each.

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