Saturday, November 29, 2008

Was the American Revolution the Product of a Boom-Bust Cycle?

Ronald W. Michener and Robert W. Wright say yes. According to this article, these authors have "worked for several years on a manuscript arguing that the American Revolution was a direct result of the economic malaise that followed the French and Indian War." So how exactly does their story unfold? From the article:
For the colonists, as for us, first came the boom. During the height of the French and Indian War, which lasted from 1754 until 1763, money flooded into the colonies, especially New York, where the British Army was headquartered. At the same time, the New York Legislature issued large numbers of bills of credit.

All that cash sloshing around resulted in lavish displays of wealth — notably by British officers, whose opulent living was emulated by the locals, especially in New York.

Housing prices soared during the war. But when credit tightened afterward — thanks in no small part to a prohibition on the issuance of paper money by the colonies under the Currency Act of 1764 — real estate owners who could not pay their debts lost their land.


At the core of the Wright-Michener argument is that this confluence of nasty economic circumstances was what produced the anger that found expression in rebellion against the Stamp Act and other British taxes. In other words, the core economic culprit was a boom-bust cycle; convinced that their future was no longer in their hands, the colonists could summon the ghost of John Locke, setting the stage for the arguments of Tom Paine and the Declaration.
I wonder if Niall Ferguson included this story in his new book.


  1. I doubt Niall did as he tends to ignore me. btw, the Times got it wrong. My name is Robert E. Wright, not Robert W. For a more detailed discussion of the issue, see the document called "The Great Trio and the Imperial Crisis in the Middle Colonies" at

  2. Robert:

    Thanks for commenting and the link. It would be unfortunate if Ferguson ignored your work since it fits the motif of his new book.