Categories: Entrepreneurialism, Commerce, Economic History, Revolutionary Era, Politics, Business

Place: Philadelphia

Time Period: 1750-1791

Thomas Doerflinger seeks to answer the overarching question of why the United States from the late-18th century onwards achieved superior economic performance. His answer: entrepreneurialism. Doerflinger argues that the origins of the foundational entrepreneurial spirit that spurred Americans can best be seen in the merchant class of Philadelphia between 1750-1791. Doerflinger argues that a "fabric of adversity" in which a volatile commercial landscape and high degrees of risk catalyzed the kind of innovative, risk-taking that helped drive forward commercial development.

Doerflinger describes Philadelphia merchants as an extremely incoherent, diverse (religiously, ethnically, wealth-wise) group with little to no social or political identity - far from a "merchant elite". Instead, it was marked by very low barriers to entry and a high rate of turnover, making for a volatile landscape of both failure and success. The group becomes more and more sophisticated over the course of the century, becoming more specialized in both dry goods (importing manufactures from Britain) and provisioning (exporting goods from the colonies) while also specializing geographically. Unlike Max Weber's ascetic Protestant capitalists, Doerflinger's guys are risk-taking, speculative, and innovative who used widely available commercial credit to tackle a risk-filled economic landscape. 

Doerflinger goes on to describe a SHIFT in the merchant community. Leading up to the Revolution, they were largely apolitical and "reluctant revolutionaries" that were wary of breaking off from Britain. Towards the end of the war and immediately afterwards in the 1780s, the merchant community coalesced into a coherent political interest group as part of the Federalist ascent, lobbying for more centralized federal government. The war itself was enormously disruptive (Doerflinger argues against it bringing about prosperity), but this disruption also opened up new opportunities and spurred on commercial innovation during and after - in banking, securities speculation, trade with China, and, eventually, reckless land speculation in the early 1790s. Doerflinger ends by contrasting the experience of Northern merchants with Southern planters, arguing that the initial success of the Southern planters and their reliance on land actually stunted their entrepreneurial drive, whereas in the North merchants had to face a "fabric of adversity" that led them into commerce and finance, which had many more opportunities for growth than stagnant agriculture and land-owning.

- "Fabric of adversity" - challenges of late 18th century economy bred entrepreneurial drive in the North and led to Industrial Revolution

- entrepreneurialism

- "Reluctant revolutionaries": Shift from incoherent political apathy to a coherent political identity (moving towards Federalism)

- Sectional differences between north and south