The Political Economy of Early Modern England and her Colonies

Caleb Petitt

Advisor: Donald J Boudreaux, PhD, Department of Economics

Committee Members: Daniel Klein, Peter Boettke

Buchanan Hall, #D180
March 31, 2025, 02:00 PM to 05:00 PM

Abstract:

This dissertation examines three topics in the political economy of England and her colonies in the Early Modern Period. Specifically, I investigate the history of thought regarding the Navigation Acts, interjurisdictional competition and provincial taxation in England’s North American colonies, and the effect of the Molasses Act on British North American colonial molasses prices.

The first chapter challenges the widespread belief that Adam Smith supported certain parts of the Navigation Acts. Some parts of the Navigation Acts, what I call the colonial trade part, were clearly criticized by Smith. However, Smith offered apparent support for other parts, what I call the European trade part. Examining the totality of his comments on the Navigation Acts sheds new light on Smith’s apparent support of the European trade part of the Navigation Acts. Smith never actually said that the Navigation Acts were effective at accomplishing their stated aim, and argued against their efficacy in several places throughout the Wealth of Nations. Instead of taking Smith’s supposed support on the European trade part of the Navigation Acts at face value, I propose that seeing Smith’s comments as not being genuine makes better sense of the totality of his work.

The second chapter explores how interjurisdictional competition put downward pressure on taxes in colonial America throughout the colonial period. Specifically, colonial lawmakers had an incentive to increase the population of their colonies to bolster their defensive capabilities, increase economic productivity, and to increase the profitability of land speculation. I show that the convergence of population growth in the colonies over time indicates the presence of active interjurisdictional competition. Colonial lawmakers gave selective incentives to migrants, advertised for their colony, and kept taxes low to encourage population growth in their particular colony. 

The third chapter investigates the effect that the Molasses Act had on colonial American molasses markets. The Molasses Act was a prohibitive tariff to keep foreign molasses out of the British North American colonies. It is often viewed as a failure because smuggling activity largely circumvented the licit channels of trade it was supposed to regulate. However, the primary method used to circumvent the molasses tariff was with a bribe. I treat the bribes paid by the North American merchants as an import tariff and analyze the economic effects of the bribe. I show that approximately half of the burden of the bribe fell on British North American molasses consumers.