TIM ARANGO | nytimes.com | November 30, 2008
When Benjamin Franklin returned to America in 1762, after almost five years in London, he was shocked at the housing prices.
“The expence of living is greatly advanc’d in my absence,” he commented. “Rent of old houses, and value of lands … are trebled in the past six years.”
Franklin, it seems, had come home to a real estate bubble. It eventually popped — bringing on a credit crunch and deep recession that was the macroeconomic backdrop to the American Revolution.
The parallels between the current economy and the one Franklin saw highlight a debate among historians: how big a role did economics, as opposed to ideas, play in fomenting revolution?
“I think there’s reason to doubt the Revolution would have happened as it did if it weren’t for these economic conditions,” said Ronald W. Michener, an economics professor at the University of Virginia, in a radical departure from today’s popular notion that the Revolution was a product primarily of grand ideas about self-government.
Gordon S. Wood, a professor at Brown University and perhaps the pre-eminent living historian on the subject, counters: “There was a great deal of instability, but that is hardly an explanation for the Revolution. I don’t think you can make a strong argument for an economic interpretation of the Revolution.”
Professor Michener and his collaborator, Robert W. Wright, a financial historian at New York University, plan to do just that. The tandem worked for several years on a manuscript arguing that the American Revolution was a direct result of the economic malaise that followed the French and Indian War. Continue reading ‘The Housing-Bubble and the American Revolution’