6/11/12 - america steals from britain

In today's excerpt - in the earliest days of United States history, we tried hard to steal British technology, and the British tried just as hard to stop us. With a combination of innovation and resourcefulness, intellectual property theft, protective tariffs to help our industries compete against the British, British loans to finance our development, and our rapid population growth -- nineteenth century U.S. industry surpassed Britain's:

"Hindering the transfer of technology from Britain to America was another British mercantilist technique. In 1719, Britain banned the emigration of skilled workers in industries including steel, iron, brass, watchmaking, and wool. The law punished suborning, or recruitment, of skilled workers for employment abroad with fines or imprisonment. Skilled immigrants who did not return to Britain within six months of being warned by a British official faced the confiscation of their goods and property and the withdrawal of their citizenship. Britain followed its ban on the emigration of skilled workers with a ban on the export of wool and silk technology in 1750. In 1781 and 1785, the act was enlarged into a comprehensive ban on machinery of all kinds. The ban on skilled emigrants was repealed only in 1825, while the ban on technology exports lasted until 1842. ...

"[In drafting the Report on Manufactures, a key blueprint for America's industrial development, Secretary of Treasury Alexander] Hamilton supported [his assistant Tench] Coxe's proposals for encouraging skilled immigra­tion, proposing that the federal government fund a board that would im­port both foreign workers and foreign technology. In 1787, in his capacity as secretary of the Pennsylvania Society for the Encouragement of Manu­factures and the Useful Arts, Coxe had provided support for a British emigrant, Andrew Mitchell, to return to Britain and pirate textile tech­nology, a scheme that failed when Mitchell was discovered and forced to flee to Copenhagen. Thomas Digges smuggled nearly two dozen British textile workers to the United States, including some hired by Hamilton. ...

"In addition to recommending policies to encourage manufacturing and the immigration of skilled labor, Hamilton sought to promote Amer­ican industrialization directly. When he failed to persuade Congress to support the SUM, he and allies obtained a charter for the company from the state of New Jersey and founded the city of Paterson. ... Following initial failures, Paterson became one of the most important centers of American manufacturing until the second half of the twentieth century.

"The British government was alarmed by the Report on Manufactures and SUM. George Hammond, the British minister in Philadelphia, urged the British government 'To prevent the emigration and exportation of machines necessary to the different branches of manufactures.' British agents in the newly independent United States worked to stymie Ameri­can manufacturing development. In 1787, Phineas Bond, the British con­sul in Philadelphia, bought four carding and spinning machines that had been smuggled into the United States and sent them back to Britain. Bond kept his superiors in London informed about American theft of British technology and called for enforcement of laws 'against seducing manufacturers and conveying away implements of manufacturing.' ...

"Hamilton was accused by many contemporaries and later historians of being an Anglophile. In fact, his complete program, if it had been carried out, would have used revenues from the federal tariff on British-American trade in order to subsidize American industries capable of catching up and competing with British industries. In the nineteenth century, US in­dustrialization was accelerated by the protective tariffs that Coxe rather than Hamilton favored. But the result was similar. While tariffs kept out British manufactured imports, private British investors in American rail­roads and factories played a major role in financing the development of the American industrial base that eventually surpassed Britain's own."


Michael Lind


Land of Promise: An Economic History of the United States


HarperCollins Publishing


Copyright 2012 by Michael Lind


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