North America occupies a central place in the book’s explanation of how colonial institutions, rather than geographic advantages alone, shaped the uneven spread of prosperity. The region first entered English imperial ambitions as a less desirable destination than the densely populated, mineral-rich parts of the Americas already claimed by other powers. Its later development was marked by struggles over labor and land, and by institutions that gave many settlers incentives to work, invest, and innovate—though those arrangements existed alongside the dispossession of Indigenous peoples.

A late and less desirable colonial frontier

When English colonization began, England was still recovering from the Wars of the Roses and had not been positioned to join the early Spanish conquest of the Americas. The Spanish Armada’s defeat in 1588 signaled growing English power at sea, but by then the most attractive colonial territories—those with large Indigenous populations to exploit and gold and silver mines—were already occupied. English settlers turned to North America as the territory that remained available, not because it offered the richest prospects.

The contrast in expected returns was striking. Arthur Young’s later comparison of colonial staple production reported an estimated value of £8 12s. 1d. per head in the West Indies, £5 10s. in the southern continental colonies, 9s. 6½d. in the central colonies, and only 2s. 6d. in the northern settlements. His figures captured the low export value attributed to northern colonies and the disadvantage of their latitude within the imperial economy.

The first English attempt to establish a North American colony at Roanoke, in what is now North Carolina, failed between 1585 and 1587. In 1606, three vessels—the Susan Constant, Godspeed, and Discovery—sailed under Christopher Newport. Backed by the Virginia Company, the expedition entered Chesapeake Bay and sailed up the James River. On May 14, 1607, the settlers founded Jamestown, named for James I.

Coercion, resistance, and a change in colonial institutions

The Virginia Company initially sought to organize the colony through direct control. It owned the land, housed men in barracks, issued company-determined rations, and assigned work gangs overseen by company agents. The regime approached martial law, with execution treated as an early punishment. Its rules threatened death for settlers who ran away, even as the harsh labor system made escape to live with local people—or setting out beyond the company’s reach—an attractive possibility.

The company’s coercive power was limited. It could not reliably compel English settlers to work hard for subsistence rations, and the sparsely populated landscape made it difficult to reproduce the labor arrangements that had enabled Spanish extraction in Mexico and Peru. Outside a few pockets, the population density of what became the United States was estimated at no more than three-quarters of a person per square mile. In central Mexico and Andean Peru, it reached as high as 400 people per square mile—more than 500 times greater. The different demographic conditions made the Spanish model impracticable in Virginia.

The failure of the initial system prompted a change beginning in 1618. The Virginia Company introduced the headright system, granting each male settler 50 acres, plus 50 more for each family member and each servant the family brought to Virginia. Settlers received houses and were freed from their contracts. In 1619, a General Assembly was established, giving all adult men a say in the colony’s laws and institutions. The shift from compulsion toward incentives was a response to the company’s inability to command labor, and the book identifies the assembly as the beginning of democracy in the United States.

The company took twelve years to learn that the institutions that had worked for Spain in Mexico and Central and South America could not simply be transplanted north. The wider lesson—that an economically viable colony needed institutions giving settlers incentives to invest and work—remained contested throughout the rest of the seventeenth century.

Land access, dispossession, and divergent frontiers

In the nineteenth century, expanding international trade and transportation, including steamships and railways, made the open spaces of the Americas increasingly valuable. These frontiers were only nominally open: Indigenous peoples already inhabited them and were often dispossessed. Competition for frontier land became a defining process of the Americas, but institutional differences shaped who acquired it.

In the United States, a sequence of legislation from the Land Ordinance of 1785 to the Homestead Act of 1862 opened substantial access to frontier land. Indigenous peoples were sidelined, but the resulting frontier was comparatively egalitarian and economically dynamic. Across much of Latin America, political institutions instead directed frontier lands to people with wealth, influence, and useful connections, further strengthening those who already held power. The difference was not simply the presence of land, but the rules determining who could claim it.

The book’s comparison also resists treating North America’s later prosperity as a consequence of inherent geographic superiority. Before European colonization, Peru and Mexico were more prosperous than the regions that later became the United States and Canada. North America’s subsequent growth depended in part on its adoption of Industrial Revolution technologies: education expanded, and railways spread across the Great Plains, in contrast with the slower and more imperfect adoption described for South America. In the book’s account, geography alone cannot explain that reversal; the institutional conditions that enabled technology to spread mattered decisively.

Innovation and the institutions of growth

The region’s later economic trajectory is connected to institutions that widened participation in innovation. In the United States, patent holders came from varied social backgrounds rather than only from wealthy or elite families. Between 1820 and 1845, only 19 percent of patentees had professional parents or came from recognizable major landowning families, while 40 percent had only primary schooling or less. Many used patents to establish firms. This broader access to invention and commercialization contributed to the country’s emergence as an unusually innovative economy.

A patent alone did not guarantee that its holder could profit from an idea: starting a business required capital. The rapid expansion of banking and financial intermediation helped bridge that gap. The United States had 338 banks, with total assets of $160 million, in 1818; by 1914 it had 27,864 banks and $27.3 billion in assets. Competition among financial institutions made capital available at relatively low interest rates, helping potential inventors finance businesses rather than relying solely on selling their patents.

These institutions formed part of a broader explanation for the region’s divergence from poorer societies. North America’s prosperity is presented not as an automatic gift of latitude, resources, or continental orientation, but as the outcome of political and economic arrangements that affected landholding, work, education, finance, and the adoption of new technology. Its history also carries a contradiction: institutions that widened opportunity for many settlers developed alongside Indigenous dispossession, while the colonial expansion that helped fuel growth in Europe imposed or reinforced extractive systems elsewhere.