The American colonial economy was export-driven, although by far the largest share of output was consumed internally. English merchant-capitalists financed the settlement of American colonies, hoping that they would gain profits from their investments. Notwithstanding the English navigation laws, which attempted to ensure the profits of English capital by restricting American manufacturing and mandating the markets for exports of colonial crops, colonists sought self-sufficiency, not only growing most of their own food but making many of the crude tools they used in production. Colonial economic development should be seen as the result of both foreign commerce and dynamically growing local economies.
Joint stock companies, founded by English merchants and landlords, financed the initial conquest of New England and the Chesapeake colonies. Expecting profits from the riches of the New World, these investors wound up merely paying the colonists' bills. Ultimately, after several decades of experimentation, colonists discovered that agricultural goods (corn, wheat, tobacco, rice, indigo, naval stores) were in great demand in England and Europe.
By the mid-seventeenth century, trade under England's umbrella was mutually beneficial: the English navy protected colonial commerce, and colonists gained a guaranteed market in England and access to English and Scottish credit and manufactured goods; the English gained markets for manufactured goods, profits from the sale of colonial staples on the Continent, and interest payments on the credit they extended.
Although a majority of free and indentured white colonial migrants came from towns (where they had been artisans and wage laborers), the colonies were overwhelmingly agricultural. As many as four-fifths of all colonists, including their families, servants, and slaves, were farmers. Most of the rest provided such essential services for farm communities as shopkeeping, blacksmithing, or carpentry. Such behavior suggests that urban people sought the independence that farming entailed. At first, however, there was...