The Atlantic Economy of the seventeenth and eighteenth century was an organized commercial system of diverse peoples and regions that exchanged, produced, and consumed a variety of goods and services across the Atlantic Ocean. Many economic historians believe that the lifeblood of this system was the development of staples: a resource-intensive commodity produced primarily for export. An exchange system developed between the colonial staple producers and a metropolis that provided manufactured goods, additional labor, and capital. The growth and/or development of the colony were dependent on the spread effects or linkages of the staples trade. The production function fundamentally influenced this connection. Farm crops, generally developed a diverse export sector which fueled local production. As the colony diversified it would become free of metropolitan dominance. Plantation crops, on the other hand, often produced few domestic links and would remain dependent on the metropolis for various goods and services. This economic phenomenon, unique to the Atlantic world, could not have been possible without ports.
If staples were the lifeblood of the Atlantic economy, than ports were the heart that facilitated its economic pulse. Like other urban centers, ports were areas of political, social, and economic concentration. The port, however, has a special connection to a major body of water. This link often created greater opportunities to participate in larger maritime markets than most land locked towns or cities. As staple production was established in the Americas, ports became necessary points of exchange for Atlantic trade. Peggy K. Liss and Franklin W. Knight indicated that, “[b]y 1650, when the patterns of the European empires in America were already solidly established, ports…gained in significance as the Atlantic world developed a complex trading system with its various geographic sectors built around maritime commerce.” Ports became an irreplaceable segment of the Atlantic system, and helped create this interconnected world based on the staples trade.
The importance of ports to Europeans seems rather obvious—after all they were a maritime people. Ships were the primary mode of transportation, and needed places where they could refuel provisions, make repairs, and conduct trade. Ports supplied these in-demand services, but not every port would provide all the necessities. Jacob Price distinguishes between five different types of ports based on their mercantile activity. At the lowest point of the spectrum were shipping points and processing centers where goods were loaded and unloaded while receiving little to no manufacturing in transit. Next came the shipping centers where vessels could be constructed, repaired, and/or supplied with basic provisions—including sailors. Following shipping centers were limited/general marts that focused on the purchase and sale of goods. Then there were communication centers that excelled at continual contact with all areas with which they traded. Finally there were the financial centers. These ports were at the top of the economic spectrum with the ability to buy and sell bills of exchange, raise capital, obtain credit, and provide insurance.
The basis for a ports role in the Atlantic economy had a direct relation to the characteristic of the staples being traded. All ports in the Americas imported European and Asian goods, the majority of which were manufactured. The legislation and exportation of commodities, however, varied amongst colonies. Price illustrated this conundrum by distinguishing between bilateral and multilateral trades. Bilateral trade was—as the name implies—between two regions. A colonies staple would have been directly traded with only one metropolis, and usually the later dominated entrepreneurial and management actions. The tobacco plantations of the Chesapeake regions, and Spanish sugar plantations in the Caribbean are good examples. For these trades, capital, credit, insurance, manufactured goods, and labor were more legal, attainable, and affordable in Europe than in the Americas. Ports would rarely be regarded as communication or financial centers in a bilateral trade. The concentration of commercial measures would prevent further colonial development outside of basic shipping centers and general marts.
Multilateral trades, conversely, involved multiple markets with the colonies controlling entrepreneur and marketing activities. This readily applied to the northern British colonies production of basic provisions like fish, wheat, and flour. The staples were delivered to the Caribbean and southern Europe in exchange for products like sugar, wine, and rum. Multilateral trades also involved illegal activities by independent entrepreneurs through contraband, privateering, and costal trade. This was specifically apparent in Buenos Aires’ illegal trade of exported silver for imported African slaves and European luxuries. Merchants relatively close to these markets would best handle financial centers involved in complex networks, amongst diverse cultures, with multiple bills of exchange. This increased responsibility of colonial ports created a greater demand on local markets, which fueled the development of various industries. Ports in this financially viable situation would rise up to become key communication and financial centers in the Atlantic economy.
Price’s theories about the economic development of the Americas largely coincided with the staples approach. Both denoted that the main cause of expansion was trade relations between a colony and its metropolis. They also indicated that colonies were dependent on the export sector of the economy for future growth and development. Price, however, focuses more on the influences of entrepreneurial decision makers. He indicated that the ports where financial centers existed were able to operate a large, complex, maritime network. This commerce produced an independent colony ready for industrialization by the end of the eighteenth century. If ports were simplistic, lacked the necessary economic tools for development, or were hindered by legislation than they would remain dependent on the metropolis for goods and services. The staples theory lends more credibility to the actual linkages created by the staple itself. Farm crops with strong domestic spread effects developed, while plantation crops with weak links merely grew. Despite the minor differences between these theories they both illustrated the importance of ports to the Atlantic economy. As nods of European expansion they provided the necessary functions of trade between the staple producer and metropolis. The question of what came first, or which was more important is irrelevant. Both ports and staples were interdependent powerhouses within the Atlantic economy.
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