A revolutionary recession: did a sour economy set off the American war for independence?

• Author: Arango, Tim
• Position: NATIONAL

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When Benjamin Franklin returned to America in 1762 after almost five years in London, he was shocked at the housing prices. "The expense of living is greatly advanced 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 burst, as all real estate bubbles do, bringing on a credit Chinch and a deep recession that was the economic backdrop to the American Revolution.

The parallels between the current economy and the one Franklin experienced have historians reassessing how much of a role economics, as opposed to ideas, played in the Revolution.

"I think there's reason to doubt the Revolution would have happened as it did if it weren't for these economic conditions," says Ronald W. Michener, an economics professor at the University of Virginia.

Michener's views are a radical departure from the popular notion that the Revolution was primarily a product of grand ideas about self-government, the kind embodied in the poetic prose of Thomas Jefferson in the Declaration of Independence.

Big, unexpected things always happen during times of economic stress: A year ago, who would have predicted a Republican administration would spend billions of dollars to bail out entire industries?

Economic conditions have certainly played a central role in other revolutions throughout history. The political unrest that set off the French Revolution in 1789 was heightened by high unemployment and soaring food prices. World War I bankrupted Russia and set the stage for the Communist Revolution: After the collapse of the czarist regime in 1917, Vladimir Lenin and the Bolsheviks (later called Communists) ultimately took power with promises of "bread, peace, and land" to war-weary peasants and factory workers.

As with most downturns, America's colonial recession was preceded by an economic boom. During the height of the French and Indian War, which lasted from 1754 until 1763, money flooded into the Colonies, especially New York, where the British Army was headquartered. All that cash sloshing around resulted in lavish displays of wealth-notably by British officers.

COLONIAL FORECLOSURES

Housing prices soared during the war. But when credit tightened afterward, those who could not pay their debts lost their land. John Morton, the sheriff of Chester County, Pennsylvania, and a signer of the Declaration of Independence...