This module delves into critical elements of Philadelphia and Pennsylvania’s economic base-building. After a short introduction-comment, I address the competitive hierarchical forces that exerted notable effect on character, timing, and effectiveness of Pennsylvania’s economic base development.
The major focus of this module, will be an extended discussion of four important dynamics which I think are essential to understanding Pennsylvania’s-Philadelphia’s economic base-building: (1) the self-sufficiency strategy nexus and a description of its export-import fundamental; (2) the rise and configuration of its commercial elite and the early years of its aristocracy; (3) Agglomerations and Clusters: the building block of Pennsylvania’s economic base; (4) the background, description and key dynamics of the rise of Pennsylvania-Philadelphia’s Artisan-Scientific proto-class.
A major focus of this module is how Pennsylvania’s self-sufficiency strategy as implemented shaped Pennsylvania’s class configuration and dynamics.
Background—First, Pennsylvania was arguably the last of the major colonies to be founded. New York, Boston, Baltimore, Newport and Charleston preceded Philadelphia by a half-century or more.
Secondly, Pennsylvania geography/climate/topography, and its relationship with its Native American tribes, offered opportunities that other colonies did not have at the time of their initial settlement. Also, Pennsylvania eastern Appalachian soils, are especially fertile compared to its provincial rivals.
Pennsylvanians–had at times the fortune and at times the misfortune, to settle on some of the richest land on the globe. For more than three centuries, German immigrants and their descendants, have maintained much of the soil in Berks, York, and Lancaster counties as among the most productive non-irrigated agricultural regions in the world. During the colonial era, Pennsylvania was the leading producer of raw iron in the British Empire, outside of the British Isles themselves [99] Randall M. Miller and William Pencak, Pennsylvania: a History of the Commonwealth (Pennsylvania State University Press, 2002), p. xxviii
Fourth, Founded inland or a river, Philadelphia’s waterfront, the door to the European lifeline, could, and did, stretch for miles (not without some disadvantages, however); Atlantic routes to the Chesapeake basin were safer than rival ports, and its mid-Atlantic location was not as close to Britain’s chief enemies, France or Spain. Philadelphia, nestled upriver, possessed an extra measure of security, from both enemies and sea-borne natural disasters. Pennsylvania was no “perfect storm” of opportunity, but it had excellent prospects given the opportunity to grow in relative isolation from the Canadian or West Indies battlegrounds. War would catch up to Pennsylvania by mid-18th century, but its first half-century, the childhood of its economic base-building, its location was among the best the colonies could offer:
Of all the northern seaports, Philadelphia was least affected by the turn of the [18th] century wars. The Quaker -controlled government argued shrewdly that the immature state of the colony, the pacifist beliefs of most of its inhabitants, and its greater distance from the zone of Anglo-French rivalry made Pennsylvania participation unfeasible. So Philadelphians contributed virtually no men to the war efforts, and had to tax themselves only lightly to provide token support for what were supposed to be intercolonial campaigns. On a per capita basis they contributed less than one-twentieth as much as Bostonians did in town and provincial taxes…. By 1725 the median wealth left [at death] by all Bostonians except the upper tenth was half or less …that left by Philadelphians.[99] Gary B. Nash, The Urban Crucible: the Northern Seaports and the Origins of the American Revolution(Harvard University Press, 1986), pp. 43-4
Context–In addition several takeaways from other modules will be helpful in catching implications from discussion/comments in this module:
The Pennsylvania policy system is especially weak compared to other provincial policy systems. More than anything the political civil war between Proprietor and Legislature started from nearly Day One of its founding and never completely abated during the colonial period. For most of that period the policy system was hopeless polarized, fragmented, occasionally of the point of incoherence. With the public sector so weakened, the private sector played a considerable, sometimes major role in economic base-building. We call this dynamic “privatization” and it is a major theme developed in other modules.
Secondly, if the private sector is the key actor in Pennsylvania’s colonial economic base-building, several observations follow from it: (1) the guiding spirit in guiding private decision-making is making profits (avoiding losses). Private initiatives result from a perceived opportunity to make a profit by assuming risk. We call this entrepreneurship. Profit and risk-taking entrepreneurship can be strongly affected by ethnicity and religion. That means the underlying drivers of mainstay economic development strategies reflect private sector dynamics and goals. Public action is either legitimizing, in support of private initiatives or reactive.
An important mitigating factor regarding Pennsylvania that Quakers generally display a strong willingness to be entrepreneurial, but the Quaker political culture tempers pure self-interest with its religious values/beliefs. Quakers also display an exceptionally strong bias against government and restrictions on personal liberty and taxes. The reader might anticipate difference between the Quaker trader/commercial elite and the Massachusetts Puritan Yankee commercial elite. In any case, what coherence there was among Pennsylvania’s private actors devolved primarily from the logic of the colony’s imposed self-sufficiency strategy, which, to a surprising extent, will be left to each individual’s interpretation?
Thirdly. It is the individual “entrepreneur”, assisted by those who supply him/her with capital and resources that will be the default principal decision-maker implementing the strategies and initiatives associated with the self-sufficiency nexus that, in aggregate, created the initial economic base. Accordingly, there was no basic “plan” (once Penn’s Plan and Society of Free Traders were marginalized); it was the obvious and compelling adoption of a self-sufficiency strategy that led to opportunistic herding by its young, fragile commercial elite. That it followed along paths already paved by Massachusetts in particular predisposed it to trade, particularly trade in the relatively closer West Indies is not difficult to understand as Massachusetts as all British North American colonies confronted.
Fourth, the North American colonies exist in the netherworld in which the early mercantilist/late medieval class structure weaves its way into a “modern” capitalist, diversified economic base. In this module we are well in advance of any “modern” economy or class system. As the new class system is still light years in the future. Its path throughout colonial America remains predominantly hinterland and agricultural. Still north of the Mason Dixon line, urban port cities and an underappreciated hinterland town (county seats) and small boroughs lay a foundation of urban middle colony policy systems in the coastal (east of the Appalachian fall line), and a series of provincial capitals and hinterland small “cities” in the east of the Hudson interior. The complexity of the colonial proto-class development will largely unfold in these urban locations.
Economic Diversification — To be sure this module will typically focus on economic efforts to diversify beyond agriculture. The reader, however, cannot forget agriculture’s primacy in Pennsylvania’s economic base. As we shall discover, Pennsylvania differs markedly from Virginia in terms of economic diversification. Self-sufficiency strategy, therefore is flexible on the extent to which economic diversification beyond the agricultural base is attempted. Pennsylvania from the get-go, however, anticipated, planned for, and set out to diversify its economic base.
Manufacturing and finance are sectors already transitioning from an English guild-dominated urban system, and from a rural handicrafts movement. Pennsylvania inherited, it seems, much of that legacy, and it affected its development into modern socio-economic classes
What will become apparent in the course of this module is the appearance, timing, composition, and configuration of migration and immigration into Pennsylvania. Since each colony will differentiate itself from its neighbors on the basis of this demographic and ethnic/religious variable. We will deal with immigration in particular in other modules, but reference to it will be made as needed.
Some sectors of the economy are central, if not natural, to the survival and development of our self-reliant colonial venture and offshoots, other sectors present at a reasonable risk-reward profile, natural opportunities for risk-takers to enter. Agglomerations and clusters are the building blocks of a diversified economic base; they emerge rather quickly, especially if capital is available. It is not uncommon that as an entrepreneurs achieves scale in size and wealth, that diversification among agglomerations-clusters will follow. Almost by definition this will affect our third dynamic, development of a class system reflective of the economic base.
In early economic history, economists used the term “agglomeration” to describe the aggregate of these individual actions/decisions that surrounded a particular sector or product. An agglomeration calls attention to a common reality that firms in such an industry/sector tend to collocate disproportionately in certain geographic areas. We will explore the reasons for such geographic co-location in the module.
We use the term cluster, as opposed to agglomeration, to include a diverse group of sectors that perform services or produce goods necessary for the creating the final output for sale to others/export. A cluster involves several sectors and business groupings across a variety of products/services each of which serve a function in the final end product of a cluster. The cluster concept potentially offers additional meaning and insight as to internal inter-sector dynamics and relationships.
The next module, we detail the “self-sufficiency strategy nexus” Self Sufficiency ED Strategy Nexus which I contend was imposed on all thirteen colonies established in the North American wilderness.
Ron W. Coan 