An Agricultural Economy, 1607–1790

The economy of Virginia's Indian peoples was a mixture of agriculture, hunting, and fishing. With the arrival of English settlers, Virginia developed a colonial economy highly dependent on the sale of wheat, corn, and especially tobacco in British markets. Manpower, animal power, and running water were the sources of energy. Wagons were the most common form of transportation. Because of poor roads, trade with England was often far easier than long-distance internal trade.

White indentured servants, and later African slaves, were brought to Virginia to work the tobacco fields. Servants outnumbered slaves 5 to 1 in 1668, but by 1700 the ratio was reversed. In the seventeenth century, farm families worked the land alongside their servants and slaves. When their indenture contracts were up, servants might become small landowners or else tenants or farm laborers. Slaves were bound to labor for life. Reflecting the importance of agriculture, only one Virginian in fifty lived in a town. Craftsmen such as blacksmiths and cobblers served the needs of local farmers, but as one Frenchman observed, "From England, Virginians take every article of Convenience or ornament which they use, their own manufactures not being worth mentioning." This assessment was not quite true. On most farms, men, women, and children made goods such as clothing and candles in the household. Families grew much of their own food, trading away the surplus for coffee, tea, liquor, sugar, and manufactures they could not make themselves.

A Commercial Economy, 1790–1865

A million people left Virginia between the American Revolution and the Civil War because much of the land was worn out and prospects farther west and south seemed better. Most people remained farmers, but commerce became a dynamic element of the economy and the key to a recovery that began in the 1830s. Steam power, the new energy source, powered the railroads that opened up new markets for Virginia products.

Commerce remains local when transportation costs are high, but a combination of private capital and state investment built an extensive network of turnpikes, plank roads, canals, and railroads that knitted Virginia together as never before. Lower transportation costs meant goods could be brought economically to the state, which made them more affordable in stores. The apprentice system declined, the factory system arrived, fewer people were self-employed, and more people became employees of others.

Slave owners could often make more money leasing slaves to factories than working them in the fields. White workers resented competition from slave labor, and foreign immigrants were discouraged from settling in Virginia because slaves depressed wage rates.

An Industrial Economy, 1865–1945

After the Civil War, most Virginians still lived on farms, but northern capital, local entrepreneurs, cheap labor, and abundant natural resources allowed Virginians to participate in the industrial revolution. Because industry usually grows up in cities, many Virginians relocated to urban areas to take advantage of new employment opportunities. Steam power transformed the milling, lumbering, textile, and printing industries. Steam-powered railroads were the most important form of transport, and after 1900 electricity revolutionized economic life.

An extensive railroad network integrated Virginia into a national market. Railroads transformed the hamlet of Big Lick into the city of Roanoke, which became a center for manufacturing railroad equipment, and they transported southwestern Virginia coal to the booming ports of Norfolk and Newport News. Electricity allowed factories to operate in shifts around-the-clock, and in the 1900s, consumer demand created new industries around household appliances, radios, and automobiles.

Many African Americans became sharecroppers or tenant farmers eking out a living on small farms, casual laborers, or domestic servants, but they moved to cities in large numbers after 1920. Prevailing prejudices limited opportunities for both African Americans and women. Before industrialization, most office workers were men, but during the 1900s women came to dominate occupations like secretaries, typists, and telephone operators. Many of these jobs were regarded as dead-ends, suitable only for single women, who were expected to leave the workforce when they married.

A Service Economy, 1945–Present

Mechanized agriculture and industry freed workers to enter the service sector after World War II. Consumer spending became the mainstay of the economy and required numerous workers in stores, hotels, restaurants, tourist attractions, and innumerable small businesses. Nuclear power became a major energy source, producing nearly half of Virginia's electricity. Cars and trucks replaced railroads as the most important means of transportation, and air travel was transformed from an expensive luxury to a common convenience.

Defense work centered at the Pentagon spawned a host of high-tech firms in Northern Virginia and gave birth to a large industry making computer chips, cell phones, and data storage and delivery devices. As new industries were created, some older ones declined—tobacco because of health concerns, and textiles because of cheaper wages overseas. But, overall, there was a shift away from manufacturing. Service workers now outnumber those in manufacturing 3,372,000 to 296,400.

Government employment expanded at all levels and now numbers nearly 700,000. Health care and private education employ another 316,000 Virginians. Banking, insurance, and financial services corporations employ almost 200,000.