1776

I am not completely satisfied with my statement in the previous post.  However, I do want to add one particular, and to me, very important point.

On July 4th, 1776, the American colonies declared their independence of Great Britain.  The Declaration of Independence, written chiefly by Thomas Jefferson, explained the reasons:  

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — 

Earlier that same year, Thomas Paine had published his revolutionary pamphlet, Common Sense, another (less temperate) but also important political document.

However, over in Scotland, in March of 1776, the moral philosopher Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations.  This is often considered to be the founding document of the modern field of economics, and has certainly been influential in urging a a "free market" guided chiefly by an "invisible hand," not by governmental intervention throughout the intervening decades and centuries.

The important point, though, is that these two developments were occurring simultaneously--new political thought and new economic thought.  But the former was occurring in America, while the latter was European.  And it appeared at the dawn of the Industrial Revolution, which began considerably earlier in the "old world" than in the new.

So, at least to my way of thinking, Americans took the lead in developing important, new, and basically successful political doctrines and institutions.  New and important economic doctrines were chiefly devised elsewhere.

To some degree, this is a matter of emphasis. The idea of "political economy" has a significant history, too, and political events often have economic causes.  An important early document was Alexander Hamilton's Report on Manufactures (1791) which, however, encouraged governmental subsidies for new industries, and not a "free market" system.   It definitely did not claim the existence of an "invisible hand" in markets.  I suppose the current tea-party crowd would term it "socialistic."

Anyhow, economic thought and practice was largely a European, and not a distinctively American, development.  Our genius, or at the very least our main contribution, is in the latter area.  There isn't much that can be pointed to as a significant American thought or policy in economics (other than Hamilton's Report) for many decades after our nation's Founding.  And our government, not Adam Smith's thoughtful but limiting ideas, became a very important force in helping the U.S. develop into the extremely wealthy and powerful nation it ultimately proved to be.