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Delaware, the first state to ratify the Constitution, the second smallest state in area, sixth smallest in population, is a small corner of America, with some considerable claims on the national attention. The mouth of the Delaware River was explored by Henry Hudson, and the Dutch and Swedes built settlements on the west bank in the 1630s. But the three counties of Delaware owe their separate existence to the politics of the proprietors of William Penn's colony of Pennsylvania, and to Delawareans' own speed in ratifying the Constitution which made it literally the ''First State.''

Through most of its history, Delaware has been unusually affluent. It had the nation's highest income levels during the early 20th century and high incomes in the prosperous 1990s. It houses, in beautiful cobblestone mansions in its chateau country, many members of the most numerous wealthy family in America, the du Ponts. Delaware's ethnic and racial mixture is much like that along the rest of the East Coast and not that much different than the nation's, though with fewer than average Hispanics and Asians; there is a mixture here of suburbs, old immigrant neighborhoods, urban black neighborhoods, attractive beach towns and farmlands. Sussex County in southern Delaware is a world of its own, one of the centers of the nation's chicken industry, producing 800 million pounds of chicken a year (it also processes 96,000 tons of the chicken dung euphemistically called "broiler litter"). If not all parts of the nation can follow Delaware's exact path to continued prosperity, perhaps they can get an idea of the direction to travel.

The central focus of Delaware's economy for two centuries was the business started when Eleuthere Irenee du Pont, the practical, business-minded son of a dreamy, idealistic French immigrant, built a gunpowder mill on the banks of Brandywine Creek in 1802. This was the first enterprise of the family du Pont, and it expanded to become one of America's great munitions and chemical companies. It grew especially rapidly during World War I, generating so much capital that the company bought a huge block of stock in General Motors in the 1920s and controlled GM for thirty years while it was America's largest corporation. DuPont capital also financed what was arguably the world's finest research and development program. In the years during and after World War II, DuPont prospered by bringing to the consumer and industrial market new synthetics and plastics like rayon, nylon, cellophane, polyethylene, lucite and teflon: ''Better Living Through Chemistry.'' Delaware continues to be a high-tech state today, although DuPont has shifted its focus from plastics to biotechnology; the state boasts that it ranks number one in scientists and engineers with Ph.D.s per capita and highest in patents per capita.

Delaware has used its ability to pass laws to set national economic policy. In the late 19th century, it passed pioneering liberal laws of incorporation, giving more flexibility and power to managers and owners. A large share of the nation's big companies are incorporated in Delaware--their legal births take place in a federal-style building near the Capitol in Dover--which means that much of the nation's corporate law, especially on mergers and acquisitions and unfriendly takeovers, is made in Delaware's Chancery Court. In 1981 Governor Pete du Pont pushed through a law abolishing Delaware's usury laws and lowering its bank franchise tax. Inflation was high, and banks were looking for a state with no limit on interest to locate their credit card operations. South Dakota abolished its usury law in 1980, but didn't have a labor force large enough to support many banks; Delaware did. Today 7 of the 10 biggest credit card companies do business in Delaware; they employ 32,000 people, more than any other industry and issue 60% of the nation's credit cards. Charles Cawley, head of MBNA, the largest credit card issuer, has emerged as Delaware's leading civic and business leader, overshadowing every du Pont.

Some critics charge that Delaware lives off out-of-staters. "The organizing principle of Delaware government is to subsidize its people at the rest of the country's expense," wrote the New Republic's Jonathan Chait, irritated at the $2 toll and traffic jams at the tollbooths on the Delaware Turnpike. "It is a rapacious parasite state with a long history of disloyalty and avarice." State government gets 3% of its operating budget from the tolls and 20% from corporate fees and franchise taxes. He might have added that slot machines at Delaware race tracks, legalized in 1996, produce $189 million for the state, most of it from out-of-staters, another 8% of revenues. But these taxes have allowed Delaware to levy no sales tax and, first under du Pont and then under Republican Mike Castle and Democrat Thomas Carper, to lower its income tax several times. Delaware boosters can argue that its state policies have enabled America's industrial economy to grow robustly and have provided easy credit to millions of Americans and have led the nation in a virtuous cycle of lowering taxes. Certainly Delaware has done well: Its economy grew robustly in the 1980s, paused only a little in the recessions of 1990-91 and 2001; its population grew more in the 1990s than any other Northeastern or Midwestern state.

Delaware is on both sides of the Mason and Dixon line; it has immigrant communities in Wilmington and southern-accented farmers in Kent and Sussex Counties (plus Latino migrants working in chicken plants); its suburbs range from very affluent to not-so-affluent in New Castle County. Well-preserved 18th century buildings line the streets of New Castle, the state capital in 1776-77, while mansions gaze out over rolling countryside in the chateau country in Centreville, north of Wilmington. Newark has grown from a country crossroads to a small city as the University of Delaware has expanded; new housing has sprung up along U.S. 40 west of Wilmington while country towns seem little changed from the 1950s. Delaware's considerable variety has produced a robust two-party politics in which tiny Delaware has often voted very much like the nation as a whole. But in the 1990s Delaware, like so many of America's largest metro areas, trended toward the Democrats, and now Democrats hold both the governorship and both Senate seats, while popular former Republican Governor Mike Castle has held onto the state's single seat in the U.S. House. In 2000 Al Gore carried the state 55%-42%, five-term Republican Senator William Roth was defeated by Democratic Governor Tom Carper by a wider than expected 56%-44%, and Democrat Ruth Ann Minner was elected governor by 59%-40%.

But these were not bitter contests. Thanks to Delaware's small size there is still an intimacy to politics here. Most of Delaware is reached (though politically ignored) by Philadelphia TV, so personal campaigning is still important. The candidates for governor in 2000 made the rounds of 33 scheduled joint appearances, starting at the Jewish Community Center in Talleyville. Roth campaigned, as always, with his trademark St. Bernards. The day after the election is ''Return Day,'' when winning and losing candidates--opponents ride in the same car--come back to the Sussex County seat of Georgetown to receive the bipartisan cheers of the voters and, literally, bury a hatchet.