Insights

In the 18th and 19th centuries, the unprecedented economic transformation known as the 'European miracle' significantly impacted both Europe and its extension, America. This phenomenon, which began around 1800, marked the first time in history that per capita economic growth was consistently achieved over a long period. Historian Ralph Raico notes that this 'miracle' extended to America, which vastly benefited from its European heritage while amplifying the advantages of decentralization, lower taxation, and expansive freedoms. The American economy expanded dramatically, surpassing prior growth rates and fundamentally altering the quality of life for many, including increased heights and wealth accumulation among its citizens. The unique circumstances in America, including its distance from colonial powers and the lack of a central governing body, allowed for the development of independent institutions that promoted secure property rights and encouraged economic prosperity. This environment of decentralization allowed colonies to thrive economically and culturally, leading to a notable distinction from rigid European systems. Farmers and traders in the American colonies were free from excessive regulations, fostering an unregulated marketplace that deviated from the restrictive norms of their European counterparts, thereby enhancing overall productivity and wealth creation. According to researchers Jeremy Atack and Peter Passell, the scale of growth in the American economy by the time of the Revolution was remarkable, highlighting that it had become at least ten times larger than in 1690 and a hundred times larger than in the early 1630s. As Deirdre McCloskey points out, the changed conditions in the New World led to improved living standards among the American populace, including better diets and reduced instances of starvation that had plagued most of human history. Overall, the economic advancements that began with the European miracle laid the groundwork for America's eventual prominence in the global economy. By synthesizing and intensifying the foundational elements of this miracle, the American colonies not only inherited but innovated upon the framework that had driven Europe's extraordinary growth, setting the stage for the economic power that America has become today.