During the colonial period, Americans were forced to rethink money. In response to the lack of gold or silver in North America, they invented new forms of money that depended on social agreement, rather than natural value. These new forms of money emphasized the infinite potential of labor rather than the finite stock of material goods. As a result, paper money upset the idea of “natural” class distinctions. Moreover, Americans adopted racial slavery, a system based on the idea of natural, intrinsic difference but also deeply embedded in market exchange and negotiation. This chapter focuses...

During the colonial period, Americans were forced to rethink money. In response to the lack of gold or silver in North America, they invented new forms of money that depended on social agreement, rather than natural value. These new forms of money emphasized the infinite potential of labor rather than the finite stock of material goods. As a result, paper money upset the idea of “natural” class distinctions. Moreover, Americans adopted racial slavery, a system based on the idea of natural, intrinsic difference but also deeply embedded in market exchange and negotiation. This chapter focuses on the colonial Atlantic economy and the special conditions that affected the English colonies in North America, examining how, in the origins of modern economics, the meaning of “specie” and “species” blurred. It compares paper money, which made value from nothing, with slavery, and argues that Americans resorted to racial slavery in part because there was no “natural” standard of value and character in commerce at the time.