Economics: economic systems, trade, and choices, early United States (grade 8) · lesson

Colonial trade and boycotts

💡 Britain ran colonial trade to help Britain, and colonists used their power as buyers to push back.

Under mercantilism, colonies were supposed to send raw materials to Britain and buy British goods. This made Britain richer.

The Navigation Acts said many colonial goods had to travel on British ships. That kept trade and its profits in British hands.

Colonists fought back with boycotts, refusing to buy British goods. Merchants lost sales and pushed Parliament to change course. Parliament repealed the Stamp Act in 1766.

🧠 Let's work it out

Ask who wins from a rule.
Only British ships may carry goods? Then British shipowners get all that business.
Colonists stop buying? Then British sellers lose money, and they press their government to change.

What do you think comes next?

mercantilism: a plan where colonies exist to make the home country richer
boycott: refusing to buy something as a protest

Paying for a new nation

💡 A government needs money and trust, and the young nation struggled at first to get both.

Under the Articles of Confederation, Congress could not collect taxes. It had little money, so it could not pay its war debts or its soldiers.

Under the Constitution, Alexander Hamilton wanted the national government to pay off the states' war debts. Paying debts would show the new nation could be trusted. Then people would lend it money in the future.

🧠 Let's work it out

Think about lending to a friend.
Would you lend again to someone who never paid you back? No.
Hamilton knew that.
Paying old debts builds trust, which makes borrowing possible later.

What do you think comes next?

debt: money that is owed
Articles of Confederation: the first US plan of government, before the Constitution

Cotton in the South, factories in the North

💡 New machines grew two different economies: cotton and slavery in the South, factories and cities in the North.

Eli Whitney's cotton gin (1793) cleaned seeds from cotton much faster. Growing cotton paid more, so planters grew more and used more enslaved labor. Slavery spread across the South.

The North had fast rivers to power mills and growing cities full of workers. Factories like the Lowell mills in Massachusetts made cloth from Southern cotton. Factories pulled people into cities and made goods cheaper. They ran on water power and later steam, not electricity.

A tariff is a tax on imported goods. It helped Northern factories by making foreign goods cost more. Southern planters, who bought many imported goods, disliked high tariffs.

🧠 Let's work it out

Follow the profit.
The gin made one step faster and cheaper.
Cheaper cleaning means more profit per acre.
More profit means planters want more land and more workers.
Planting and picking were still done by enslaved people, so slavery grew.

What do you think comes next?

cotton gin: a machine that pulls seeds out of cotton
textile: cloth
tariff: a tax on goods from other countries

War and its money costs

💡 Cutting off trade hurt the South in the war, and after it, many freed families were trapped by debt.

During the Civil War, the Union Navy blocked Southern ports. The South could not easily sell cotton overseas or buy the goods it needed.

After the war, many freed families became sharecroppers. They farmed a landowner's land and paid with part of the crop.

Sharecroppers often bought seed, tools, and food on credit at high prices. If the harvest was worth less than they owed, they fell deeper into debt each year.

🧠 Let's work it out

Trace the money through a year.
In spring, a family buys seed on credit at a high price.
In fall, they give part of the crop to the landowner.
If their share is worth less than the store bill, the rest carries over.
Next year starts in debt.

What do you think comes next?

blockade: using ships to stop goods going in or out of ports
sharecropper: a farmer who pays rent with part of the crop
credit: buying now and paying later, often with extra cost