Lesson 4: Understanding the Colonial Economy in a Global Context

The students discuss a mystery regarding economic growth in the American colonies, making inferences from statistics about trade and population in their effort to explain why the colonies prospered. The lesson includes an application exercise in which students use the concepts of specialization and trade to analyze choices arising in contemporary cases. It concludes with an activity that links the concepts of specialization and trade to colonial economic growth. Between 1585 and 1763, trade for furs, lumber, fabrics, cotton, shipping services, tobacco, whales and other products linked colonial America to people living in other parts of the globe. The colonists and their trading partners benefited from this trade. The colonists generated wealth by exporting products they could produce from available resources; in turn, they imported products not readily available to them from local sources. Production and consumption possibilities expanded, generating wealth at an unprecedented rate.

Concepts:

Exports, Gains from trade, Globalization, Imports, International trade, Specialization
National Content Standards in Economics:
  • Standard #5: Trade
  • Standard #6: Specialization
  • Standard #10: Institutions