Foundation for Teaching Economics

Tom W. Glaser, School for Advanced Studies
Dade County Public Schools, Miami-Dade Community College North
11380 N.W. 27^th Ave. Suite 1111
Miami, FL 33167

ABSTRACT

In order to better understand the issues behind the colonization of the New World, and to see why some colonies and empires failed while others flourished, the students analyzed the motivations and resources of the colonial powers. I introduced this unit during the second week of school.

I teach 46 11^th graders American history. They are some of the best juniors from the 13 high schools in the north half of Dade County. Most are honors students, some are advanced placement, a few are regular students, and all are dual enrolled at Miami-Dade Community College North Campus. They are exceptionally bright, with stanines of seven or better, but have generally not been challenged to their full potential in the standard high school setting. The results of the colonial era are counter-intuitive. The Spanish, who colonized the areas rich in gold, silver, and precious stones, went bankrupt, while the English, who had only dead plants and animal parts to work with, thrived and conquered. This did not seem logical to my students, so they had two weeks to research the anomaly, with my guidance and assistance, and to prepare a statement as if they were going to make it to either the king of Spain or England. Evaluation was based upon their knowledge of the facts, the logical argument of their position, and how convincing their letter was.

RATIONALE

This exercise came from the idea of economic mysteries, economic issues that are counter-intuitive but logical once the true agendas behind the question are winnowed out. Too often students accept uncritically whatever they hear on the six o’clock news, for they seldom read past the sports page or the comics in the newspaper. Students were answering the basic question in class without substantiation from outside sources. This exercise was an attempt to teach them how they must defend their own right to know by exercising their right to research.

Moreover, I wanted the students to see the forces of the market in action in determining supply and demand. They were to think critically and rigorously to prepare their arguments. This meant that they had to do research beyond their textbooks. To this end, they had to do research in various libraries in the area and, in so doing, developed search strategies and formed hypotheses.

GOALS AND OBJECTIVES

During the study of the colonial era in America and Florida in particular, the students came to wonder at the failure of the Spanish, rich in gold, silver, and precious stones, as they became a second rate economic power, while England, with few mineral resources, had to rely instead on agricultural resources, becoming the most powerful empire the world as seen. This result did not seem reasonable at first glance, so it became obvious to the class that they would have to do some digging to find an answer.

The students were to examine several different and often competing economic considerations. What gives gold and silver value? Did the use of slavery enter into consideration, or was it even a matter of labor? Did the mode of settlement, by families or by government employees, make a difference? Were transportation and shipping costs major considerations? Did the costs of war and government eat up the profits? Was the British free enterprise system of independent businessmen superior to the Spanish systems of haciendas, encomiendas, and royal grants?

This also included a market analysis of the goods under consideration. Which of these were limited resources and which were renewable resources? Moreover, which of these were durable goods and which were expendable goods? Did the answer lie in the production end of the question or in the consumer? How did the government allocate market shares, or did they recognize the wisdom of classical laissez faire economics? How did Spain go broke on specie and gems while Great Britain got rich on dead plants and animal parts?

PROCEDURES

The class was asked to define the basic issues involved in the economic success or failure of a colony. With my guidance and assistance, they were to come to their own decision about the answer or answers to the mystery. They were encouraged to use their imagination in their letters and to make them as accurate and in the spirit of the period as possible. As usual, some got more into the spirit of the task then others, but all were required to base their responses on solid research rather than their own speculations.

During the intervening time, I consulted with many individuals and helped students work together, so that whatever one found he or she shared with others. While not influencing them towards one position or another, I guided them to sources of which they had been unaware.

CONTENT

We discussed the mercantile system, as defined by Adam Smith. Even though this was anachronistic, Smith wrote in An Inquiry into the Nature and Causes of the Wealth of Nations about a system whose failure he was observing in 1776. The seeds of that destruction were sown in the colonial period, and yet those seeds had flourished more than had the Spanish endeavors. The attached "The New World Mystery" sheet was then distributed to give them some clues as well as some red herrings. They began to eliminate the issues that were not germane, and began to link the historical events that had led to the situation in the Americas.

The obvious beginnings of the exploration and exploitation of the New World was with Christopher Columbus, but what had made Columbus possible? The students knew that 1492 was not only the year of his voyage but was also the year that Granada fell to the Spanish and the Moors were finally driven from Spain. But how did the end of this war relate to Columbus?

As they began their research, they found that wars cost money, and that governments seldom can afford to fight on a pay-as-you-go basis. They are forced to borrow money at interest to pay for the war, but they can usually defer payment until after they win the war. The victory at Granada meant that payments were coming due, Ferdinand and Isabella had to find sources of funds quickly, and Columbus seemed to offer a newer, quicker route to the spice trade of the Orient. Their desperation for money convinced them to finance the expedition. We did not go into possibly cynical economic reasons for the Spanish Inquisition, which Tomas de Torquemada also started that year.

They eventually realized what Columbus never did, that they had not found the fabulous wealth of the East Indies, but rather that Spain had found a new land, the West Indies, as they were called. Instead of the silk and spices they had expected to obtain, they found entirely new resources to exploit, those being mainly the Indians (also misnamed) and the mineral resources. They entered into agricultural enterprises, such as Pima cotton and sugar, only belatedly. As long as they could get as much gold, silver, emeralds, amethysts, lapis lazuli, and other valuables from the ground, and cheap labor from the Indians, why bother with more mundane and less profitable resources?

The English came later, hoping to emulate the Spanish bonanza. Instead, they found only fertile ground and strange plants, people, and habits. They wasted much time and effort trying to find an easy way to get rich, but the mineral wealth eluded them. In order to survive, they had to make more productive use of their time. So the English went about doing what they knew best, farming the land. They also knew they had to find a market for their goods where they could compete.

They found this cash crop in one of the Indian habits, smoking tobacco. This "sot weed" was reputed to have medicinal effects on the smoker, it grew abundantly with careful cultivation and husbandry, and it was available as a free resource. The colonists did not know that it was addictive, but under the brilliant marketing of Sir Walter Raleigh, it became more than an economic necessity. It became a fashionable fad, and therefore far more profitable.

Similarly, the English found rich fishing grounds just off shore and in the rivers and lakes. Also in those lakes, rivers, and forests, they found beavers, foxes, deer, mink, and Sea Islands cotton. They harvested the flesh to cure and ship back to England to feed the hungry masses and sent back the pelts and raw cotton to adorn the backs and heads of their countrymen. From dead plants and animal parts, the English made their fortune.

This is not as contradictory as it may at first appear, and the students sorted it out rather quickly. Gold, silver, and precious stones get their value from their scarcity. The labor that is put into them is of little consideration for the purchasers, particularly at that time when there were no industrial applications for these items. They were bought solely for decoration, for conspicuous consumption, to display wealth and power. Accordingly, as Spain brought back more of this mineral wealth, it ironically was worth less as the Spanish glutted the market. The more they brought back, the more they had to bring back to keep pace with the inflationary spiral they had created. Furthermore, as gold, silver, and gems are durable goods, they did not need to be replaced as they were not consumed. To make matters worse, mineral resources are not renewable resources. Once they are gone, there is no way to replace them, which necessitates constant new resource searches. This was the origin of the conquistadors’ eternal search for El Dorado and Cibola, the legendary Cities of Gold.

The English, however, had hit on a profitable combination of factors of production. The faddish nature of the tobacco craze insured conspicuous consumption, as did the Spanish gold, but in smoking the tobacco became an expendable good. It could not be reused once burned, and so tobacco was sold for its weight in silver. The British colonists could literally grow money, for in the colonies, tobacco was readily accepted as commodity currency, as were the various pelts.

The pelts, meat, fish, and cotton the English colonists exported also had the virtue of being expendable goods, as clothing and hats must be replaced as they wear out. Changes in fashion also help to reduce the usable life of clothing, and the courts of Europe helped to accelerate those trends. And yet the best part was that all of these profitable products were renewable resources, as the crops grew and were harvested every season, and the animals reproduced without encouragement, thereby replenishing the inventory.

It became clear to the students that the English had come to American for the long term, and intended to make the capital and labor investment necessary to prosper. Spain, to the contrary, had tried to make a quick killing on the market, but the only things killed were many Indians and the Spanish economy. The concept of viewing economic activities with an eye to the future was strongly reinforced on the students.

BIBLIOGRAPHY

Barker, Ernest. The Character of England. New York: Clarendon Press, 1963.

Boorstein, Daniel J. The American Colonial Experience. New York: Random House, 1985.

Bourne, Edward Gaylord. Spain in America. New York: Barnes, 1962.

Chapin, Bradley. Early America. New York: Free Press, 1968.

Clapham, Sir John. A Concise Economic History of Britain From the Earliest Times to 1750. New York: AMS Press, 1978.

De Madariaga, Salvador. The Fall of the Spanish American Empire. New York: Collier Books, 1963.

The Rise of the Spanish American Empire. New York: Free Press, 1947.

Elliot, J.H. The Old World and the New, 1492-1650. Cambridge: Cambridge University Press, 1969.

Floud, Roderick and Donald McCloskey, eds. The Economic History of Britain Since 1700. Cambridge: Cambridge University Press, 1981.

Fuentes, Carlos. The Buried Mirror: Reflections on Spain and the New World. New York: Houghton Mifflin, 1992.

Gibson, Charles. Spain in America. New York: Harper and Row, 1966.

Hanke, Lewis. The Spanish Struggle for Justice in the Conquest of America. New York: Little Brown, 1965.

Haring, Lewis. The Spanish Empire in America. New York: Harcourt, Brace and World, 1963.

Hohenburg, Paul. A Primer on the Economic History of Europe. New York: Random House, 1968.

Lowery, Woodbury. The Spanish Settlements. New York: Russell and Russell, 1959.

MacLachar, Colin M. Spain’s Empire in the New World. Berkely: University of California Press, 1988.

Moore, David R. A History of Latin America. New York: Prentice Hall, 1946.

Moses, Bernard. The Establishment of Spanish Rule in America. New York: Cooper Square, 1965.

Muldoon, James. The Americas in the Spanish World Order. Philadelphia: University of Philadelphia Press, 1994.

Notestein, Wallace. The English People on the Eve of Colonization. New York: Harper and Row, 1954.

Nowel, Charles E. The Great Discoveries. New York: Cornell University Press, 1954.

Parry, J.H. The Age of Reconnaissance. New York: World Publishing, 1963.

Viereck, Philip. The New Land. New York: The John Day Company, 1967.

Vives, James Vicns and Jorge Nadal Oller. An Economic History of Spain. Trans. Frances M. Lopez-Morillas. New Jersey: Princeton University Press, 1969.

EVALUATION

The students’ letters were judged primarily on content, with special focus on their comprehension of the issues involved and how convincing their explanations were. As this was their first research paper in this advanced program, and for many their first exposure to the requirements of MLA, form was not weighed as heavily as it has been since. Their use of sources was of concern, however, as most of the students had never used a college library before and were unfamiliar with the resources available to them. As a result of this experience in research, the students were quite attentive when we had our official library orientation the week after the papers were turned in.

SUMMARY

My students came to the project with little academic background in research and/or history. They also came with different academic preparation based on the lower expectations of their home high schools. The academic rigor and intensity this program demands shocked many of them with this project so early in the year, but their later work, as compared with other students at similar times during the academic year, shows marked superiority. The early shock seems to have gotten them to settle into their productive study patterns sooner than otherwise.

THE NEW WORLD MYSTERY

Situation: Spain was the European nation which discovered the New World. As such, It was able to explore the area first and stake its claim on lands before the rest of Europe was able to respond. They gained territories rich in gold, silver, and precious stones, which were exploited and the wealth sent back to fill the coffers of the Spanish monarchs. Even though they were the targets of pirates and the victims of weather and reefs, most of the fabulous Plate Fleet shipments made it intact to Spain.

To the contrary, England was a relative late-comer to the New World and established colonies in areas with few or no precious gems or metals. What they did send back to their mother country was dead animal parts and dead leaves. How then did England grow and get rich on dead animal parts and leaves while Spain declined and went broke with gold, silver, gems, and jewels?

Directions: Read the following clues. Decide which clues are important based on the Handy Dandy Guide and which are not. Then decide which clues are important to answering both questions (Why did England thrive? Why did Spain wither?) and a third question: How do the two reasons relate to each other? Explain your conclusions in a paper 3 to 5 pages long, consistent with your clues, and attach a bibliography of any sources you used to write your paper.

Clues:

Gold and silver are considered to have universal value.
Both English and Spanish colonies used slave labor.
English colonies were settled by families.
Spanish slavery was far more cruel than English.
Food is a never-ending necessity.
The conquest of the New World was made possible by the defeat of the Moors in Granada.
Gold was cheaper to bring from the New World than China.
Gems, Jewels, gold, and silver have value because of their scarcity.
The potential of Africa for precious stones and metals was still unknown.
Gold has always been sought after and coveted.
Spanish colonies were settled by soldiers, priests, and bureaucrats.
Spain held sway over the oceans until the Battle of the Armada.
Tobacco can not be reused.
Wars are expensive and are often financed by borrowing.
Gold had quite a limited usefulness.
English colonies were often begun as profit-making enterprises by independent businessmen.
Most of the cost of a low-value good can be in shipping.
Clothing wears out with use.
Spain imported approximately 95% of all black slaves ever shipped from West Africa.
Precious metals and stones tend to be dense and small, concentrating much value in an easily transported form.
As an island, England has long been concerned about sea-power.
Spanish colonies belonged to the Crown.
Scarce minerals and metals get some value from the labor put into their finding and processing.
Gold does not tarnish.
English colonies used both slaves and indentured servants.

New World Mystery

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