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Discover_our_World_Yellow / Lesson 4: Colonial Economies

 

 

Colonial Economies


Colonial Economies


  • An Economy has to do with how a group of people makes money

  • In the days when the colonists were coming to America, they needed to find ways to survive

  • Eventually, the colonists set up economic or money making systems to survive


The colonies each had natural resources


  • Each colony had it's own natural resources that could be turned into money

  • Natural Resources are the basic geographical items that naturally are associated with a particular area:

  • Examples of natural resources: land, thick forests, harbors, seafood, soil, plants, crops, animals, oil, etc.

  • Each colony had some or all of the above natural resources-and these items could be collected and sold to other countries to make money


The colonies could trade


  • The colonies could collect the natural resources in the Americas and trade them for items in England

  • The natural resources that are collected to be traded in their natural states are called raw materials

  • The items that came from England were manufactured goods because they took raw materials and made items like furniture or clothes in the factories from or out of the raw materials

  • Through trade; the colonies could get furniture and clothes and England could get more trees, and etc. to make more furniture to sell or trade


Colonial Economy


  • The colonies began to export raw materials

  • The colonies began to import manufactured goods

  • To export means to ship out of the country

  • To import means to ship into the country


Colonial Industries


  • Colonial Industries began to develop as a result of the abundance of natural resources in the colonies

  • Abundance means-a lot of

  • An industry is all the businesses that make one kind of product or provide one kind of service
    The industries that thrived in the colonies were: shipbuilding, fishing, farming, and iron making


The farming Industry


  • The farming business, is also called agriculture

  • In the 1700s many colonists became farmers and they sold the food and crops they grew for money

  • The farming colonists fed their families with crops, but all the extra crops went to the market---or the place where they sold the food and crops

  • The farmers raised animals and grew crops

  • The animals were eventually killed to export meat to the West Indies

  • The two places that the Middle Colonies exported their goods to were 1. Europe 2. West Indies


Farming


  • The reason that West Indies wanted meat was because they used almost all of their land to grow sugar and they did not have the animals for the meat

  • The popular crops that the farmers grew were tobacco, indigo, and grains

  • In Virginia, the main export crop was tobacco

  • The second largest cash crop of the Southern colonies was indigo (a plant used to make blue dye)-and a woman named Eliza Lucas Pinckney caused it to be popular by increasing the production process of it


The fishing Industry


  • The fishing industry was popular in the colonies because all of the colonies were on the oceans and there were also many streams and rivers

  • At that time, the rivers and streams were unpolluted so the fish thrived and there was an abundance of fish

  • Fish were easy to catch and sell to England and other countries in EuropeFish were easy to catch and sell to England and other countries in Europe


Supply & Demand


  • Supply is the amount of goods available at a given price at any time

  • Demand is how many consumers (people who buy things) desire the goods that are in supply and will buy them

  • Example---In the colonies, there were a lot of fish----in countries such as Poland there is no oceans or huge rivers so they do not have a lot of fish----if the people in Poland want fish then that means there is a demand for fish and because the colonies have fish that means there is a supply of fish---so the colonies can sell or trade fish with countries where there is a high demand for fish


Supply & Demand


  • Supply and Demand rules apply not just to fish, but to all of the economic colonial industries

  • Example #2: If the people in England do not have the land to grow tobacco but they like tobacco and they want it then there is a demand for tobacco in England and because the colonies have the land to grow tobacco then the colonies have a supply of tobacco

  • It is important when trading items to have the places with the supply trade with the places who have the demand---so you make more money


The Shipbuilding Industry


  • In the New England colonies, it was important to have fishing ships and merchant ships so the demand for ships was high

  • There was also a lot of trees which meant that there was enough lumber available to make ships

  • So the Colonies had a supply and a demand for shipbuilding

  • The English wanted the colonists to only build or make or sell items only to them

  • The colonists began to make ships for other colonies which led to the free enterprise system


The Free Enterprise System


  • A Free Enterprise System: This is an economic system in which people can start any business that they want to and they decide what products to make, what prices to set and how much they want to produce---this system leads to competition which lowers prices because of choice and it provides motivation to work for money

  • Because the colonists could decide who they wanted to sell their ships to, they could make money from other countries besides England such as France or Spain or ETC. and England did not like the idea of the colonies building ships for other colonies or other countries because they could become independent from England


The Iron Making Industry


  • There were many iron-ore deposits in the colonies

  • The colonists needed lots of tools and kitchen items, etc. so the iron making industry became popular

  • Some colonists began making iron products and they were known as blacksmiths

  • The items made out of iron were axes, kettles, nails, etc.


Colonial Economies


  • Colonists could not afford to import all goods and services from England and the distance between England and the colonists made it impossible to get goods quickly----so the colonists started other colonial industries such as brickmaking, glassmaking, papermaking and ropemaking


Colonial Economies


  • By the middle of the 1700s, the colonists began to support themselves as their colonial economies grew

  • Overtime, the colonists became unhappy with the laws that England set on trade because the laws took away their money and caused the colonists to go in debt and so colonists traded with other countries and soon they became independent from England