When and how did the American economy acquire its capitalist character? Scholars writing in what I call the Merrill/Clark/Henretta tradition have been united in their conviction that farmers, on the one hand, and merchants and manufacturers, on the other, stood on opposite sides of a critical dividing line in early American society, and that the mentalité of farmers, as opposed to that of merchants and manufacturers, was pre- or even anti-capitalist. These scholars supported their position by presenting evidence that seemed to indicate that farmers' economic behavior did not fit conventional notions of capitalist exchange-that the transactions that farmers entered in their account books were not mediated by money, that the credits that rural producers granted each other did not circulate as means of exchange, that farmers typically did not charge each other interest on debts, that they engaged in a wide variety of cooperative activities, that they made decisions that put family and community before profit, and that their goal was to achieve a competence not to accumulate capital. These scholars, however, neglected to test whether the behavior of merchants and manufacturers was in fact different from that of farmers along the dimensions they singled out for consideration. Hence in the first half of the paper I show that abundant evidence is readily available to indicate that farmers had more in common with merchants and manufacturers in the late eighteenth and early nineteenth centuries than scholars in this tradition would like to admit. It does not necessarily follow, however, that farmers, like merchants and manufacturers, were capitalist. We are only forced into such a position, I argue, if we restrict our theoretical toolbox to the traditional versions of neoclassical theory employed by scholars on both sides of this debate. In the second half of the essay I show that more recent theoretical developments in economics can help us move beyond such simple dichotomies and, when combined with the insights of historians influenced by cultural anthropology, can help us develop more complex understandings of the economic cultures of these groups. I then return at the end of the paper to the various definitions of capitalism available in the literature and find that they yield strikingly different conclusions about the extent and nature of the economic transformation that the agricultural sector experienced by 1850. The problem is that, in some ways, the worlds of farmers and merchants and manufacturers became more broadly similar during the first half of the nineteenth century, but in other ways the experiences of members of these groups increasingly diverged. In the end, therefore, I conclude that capitalism is not a very useful concept for understanding the transformations of this period, though it by no means follows that we must also give up on notions of mentalité.