Speculation Nation

Michael Blaakman’s Speculation Nation: Land Mania in the Revolutionary American Republic is a detailed account of the role land speculation played in the early history of the United States. Its scope is relatively narrow. The story opens with the Proclamation Line of 1763 and closes with the speculative collapse of the 1790s, and Blaakman makes little effort to connect his research to modern concerns. The exception is a few paragraphs at the end that try, though I do not believe they succeed, to draw a line between Revolutionary-era land mania and present-day anxieties about housing prices. What the book offers instead is an abundance of detail and primary sources that make it an excellent accompaniment to other scholarly accounts of the founding era. Readers looking for a sweeping argument with contemporary payoff will be disappointed; readers who want to understand the economic and political environment of early America in granular detail will find a great deal of value.

The organizing tension of the book is between vision and reality. Lawmakers in the wake of the Revolutionary War imagined a settler republic supported by a broad population of yeomen farmers, for whom land was the material basis of independence. Blaakman repeatedly contrasts that settler republican vision with the reality on the ground: the vast tracts claimed by the new state governments were purchased by a concentrated set of well-connected elites.

The logic that drove them was simple. Americans had gained access to enormous quantities of western land; its very abundance made it cheap; and its price would rise as the population grew and migrants surged westward. Buy cheap, wait for settlement, sell dear. The simplicity of the logic, however, belied the wide-ranging political consequences of acting on it.

Blaakman is frequently too hard on the state governments and the speculators they enabled. The governments of the new republic carried heavy war debts and possessed limited means of raising revenue. They wanted simultaneously to realize the ideal of settler republicanism and to generate income from the sale of public land, and when those goals came into conflict, they understandably chose revenue. They lacked the robust bureaucracies that might have allowed them to restrain speculation, and they desperately needed the money: land sales accounted for roughly 15 percent of Pennsylvania’s revenue in 1791 and 1792 and nearly half of it by 1793 (p. 200). Faced with that fiscal arithmetic, governments that sold to speculators were not simply betraying their stated ideals; they were responding to constraints that Blaakman acknowledges but does not always weigh as heavily as he might.

Land sales also carried costs that complicated their fiscal appeal. Much of the land sold lay on a frontier where the selling government had not actually established control and could not readily provide defense. Selling frontier land therefore created future obligations: a government that profited from a sale also acquired a commitment to protect the settlers who would eventually occupy it. The revenue arrived immediately; the military and administrative liabilities accrued later. This mismatch between present income and deferred obligation is one of the more economically interesting threads running through the book, even if Blaakman tends to frame it as political hypocrisy rather than as a problem of public finance.

The weakness of the governments selling the land is also reflected in the difficulty they had in enforcing property rights over the lands they were selling. Squatters were a perennial nuisance to speculators and governments alike. Rather than wait to purchase a surveyed tract, they simply moved west and settled whatever land suited them, and it was not unusual for a buyer to discover a squatter already established on land he had lawfully purchased. Here Blaakman’s account dovetails with Colin Woodard’s argument in American Nations (Penguin, 2012) that America has never behaved as a single unified country but as a federation of distinct regional cultures. The settlers of Greater Appalachia, who were often the first movers in westward migration, retained the clannishness of their Scots-Irish forebears and showed little reluctance to use violence in defense of their claims.

The competition for settlers gave the logic of land policy a dimension beyond immediate revenue. Settlers secured a state’s frontier and expanded its taxable economic base, so colonies and later states competed for them by offering attractive terms and low taxes. Georgia went so far as to grant much of its land for free, because, as Blaakman puts it, to “make its territorial aspirations a reality, what the state needed more than anything was settlers—a growing population that could furnish more bodies to man militias and pay taxes” (p. 93). Population, in this framing, was not merely a market for land. It was the very thing that gave both the land and the state that claimed it their value.

One shortcoming of the book’s narrow scope is that it barely engages America’s colonial history. As a result, questions of land distribution, settlement, and speculation can appear to arise in response to British policy after the French and Indian War, when in fact they had been live issues since the beginning of England’s colonization of North America. The Proclamation Line of 1763 makes a tidy starting point, but it was a waypoint in a much longer story, and beginning there lends the speculative mania of the Revolutionary era an air of novelty that a longer view would temper.

Headrights, alienable land grants tied to the importation of settlers, had long been used to encourage migration to the colonies, reflecting an early and persistent recognition that North America suffered from an abundance of good land and a shortage of people to work and defend it. They were consistently used by the land-abundant southern and mid-Atlantic colonies, and were first used in Virginia in 1618. Land policy had played a role in incentivizing migration from America’s colonial origins. The period of land mania after the Revolutionary War was a curious episode in the long history of land distribution, land speculation, and westward migration, and is best understood as such.

Although most of the book concerns speculation on the western frontier, some of its earlier chapters examine speculation in loyalist land confiscated during the Revolution, and here Blaakman opens a line of inquiry he does not himself pursue. The American seizure and resale of loyalist property bears a striking resemblance to the dissolution of the monasteries after the English Reformation, as noted by Desiree Desierto, Mark Koyama, and Marcus Shera (​​“Rents and Reformation”), and the confiscation of church lands during the French Revolution, as noted by Louis Rouanet and Ronan Tallec (“Long Live the Republic: The Political Consequences of Revolutionary Land Redistribution,”). Each is an instance of societal restructuring secured through the transfer of land. The mechanism is the same in all three cases: property taken from a newly disfavored group, whether loyalists, Catholics, or the Church, is sold to a newly favored one, and in the process the purchasers acquire a powerful stake in the success of the revolution or reform that dispossessed the original owners. The buyers can profit only if the new order endures; should it fail and the old regime return, the confiscated property would in all likelihood revert to its former owners. Selling the seized property of a revolution’s enemies thus manufactures a constituency with every incentive to see the revolution through. It is a genuinely interesting argument, and a small disappointment that Blaakman gestures at the material without developing its logic.

A related insight that the book does develop concerns federalism itself. Speculators, Blaakman argues, learned to play revenue-hungry governments against one another, “twist[ing] federalism into a basis for market competition that promised to serve private interests” (p. 253). They tailored their sales pitches to the particular statutes of the states in which they had invested and worked their connections across the many sovereignties of the federal system, prodding officials to match the favorable terms offered by competing governments. The result was a kind of regulatory competition, in which the fragmentation of authority that was meant to check power instead became an instrument for private gain. Blaakman seems to assume that competition between states only began after America formed as a nation, but I (“Competitive Colonies: Interjurisdictional Competition and American Colonial Taxation”) show there is reason to believe that the American colonies had been tailoring their policies to attract migrants throughout the colonial period. Even during the founding period, the states had a long history of competitive governance.

Speculation Nation is a thoroughly researched and richly documented account of a narrow but important episode in the economic history of the early republic. Its reluctance to engage either the colonial period that preceded its story or the modern concerns that might have given it broader resonance limits its appeal largely to readers already interested in the founding era. But for those readers it is a valuable book, generous with sources and detail and full of threads that reward patience and invite a good deal more development than Blaakman himself provides: the fiscal logic of land sales, the credible commitment created by confiscation, and the turning of federalism into a marketplace.