Colonial America

The first permanent British settlement in what became the United States was established in 1607, nearly 170 years prior to the American declaration of independence. This chapter examines the economic development of the British North American colonies that became the United States. As it describes, abundant natural resources contributed to the remarkable growth in the size of the colonial economy and allowed the free white colonial population to enjoy a standard of living among the highest in the world at that time. While living standards were comparatively high, there was not much improvement over time. Scarce labor and capital, the corollary of abundant resources, also played an important role in shaping colonial institutions, encouraging reliance on indentured and enslaved labor and influencing the development of representative governmental institutions. The colonial period ended with the American declaration of independence in 1776. For most of the colonial era, the colonists had happily accepted their relationship to Britain. Changes in British policies following the end of the Seven Years War in 1763, however, created tensions between Britain and the colonies that ultimately led to the colonies to declare their independence.