The Market Revolution: Crash Course US History #12

Introduction to Economics and the Market Revolution

• Economics defined as the study of decisions made by people that shape lives and societies.

• Market Revolution:

  • One of the least-studied but significant periods in American history.

  • Transition from self-sufficient farming to goods produced for sale.

  • Changes have impacted everyday life and work culture in America.

The Market Revolution: An Overview

• Occurred in the first half of the 19th century, before the Civil War.

• Known as the Era of Good Feelings (1812-1836) due to limited political contention.

• Shift from Jefferson’s agrarian ideal to Hamilton’s commercial economy.

Key Features of the Market Revolution

Transportation Developments

• Prior to improvements, transporting goods was local and costly.

• Significant innovations included:

  • Better Roads: funded by tolls, including the National Road from Maryland to Wheeling, WV.

  • Canals: enabled cheaper and faster transport; 3,000 miles built by 1837.

    • Example: Erie Canal (1825), connecting Great Lakes to Hudson and solidifying New York's status.

  • Steamboats: Revolutionized transport; first steamboat Clermont launched in 1807.

  • Railroads: Began commercial operations in 1828; saw extensive growth with over 30,000 miles of rails by 1860.

  • Telegraph: Initiated instant communication for merchants, enhancing market efficiency.

Factory System: A New Economic Model

• Factories emerged as pivotal organizational units, enhancing production efficiency.

  • Initially relied on water power, later adapted to steam, permitting relocation to urban areas.

  • Birth of the American system of manufacturing focused on mass production and interchangeable parts.

Financial Innovations

• Major capital investment required for transportation and factory systems.

  • Emergence of modern banking systems allowed for investment risks to be spread.

  • Limited Liability Corporation established, protecting investors from personal losses.

Role of Government in Economic Growth

• State-level interventions included:

  • General Incorporation Laws: Simplified the process to create corporations.

  • Supreme Court cases (e.g., Gibbons vs. Ogden, Charles River Bridge case) supported competitive business environments.

• Federal government’s involvement in infrastructure building and legal frameworks fostered capitalist growth.

Shifts in the Nature of Work

• Prior to the Market Revolution, production largely took place at home.

• Transition toward factory work introduced regimented hours and wage-dependent livelihoods:

  • Regulation of work hours replaced seasonal or daylight-based labor schedules.

  • Young women largely filled early factory roles due to lower wages, reflecting societal norms.

• Shift from artisanal pricing linked to products to wage labor dependent on hours worked.

  • Thomas Jefferson's concern about factory work as inherently un-free, contributing to a perception of lost freedoms among workers.

Migration and Manifest Destiny

• After 1812, significant westward migration occurred due to farmland scarcity.

  • New states formed; example: Ohio's population surged from 231,000 in 1810 to over 2 million by 1850.

  • Concept of manifest destiny arose: belief in a divinely ordained right for Americans to expand across the continent.

• Immigration surged, particularly after the Irish Potato Famine (1845-1851), filling labor shortages in factories.

Intellectual Responses

• The Transcendentalists challenged the changing notions of freedom amidst the Market Revolution:

  • Advocated for individual self-reinvention contrary to the constraints of industrial life.

  • Key figures included Emerson, Thoreau, and Whitman. Emergence of literature reflecting the struggle between work and individual identity.

• The rise of Working Man's Parties in response to economic disparities and labor exploitation.

• Herman Melville's story, "Bartleby the Scrivener", critiques the meaning of work in a market economy, highlighting existential themes amid societal pressures.

Conclusion

• The Market Revolution fundamentally reshaped lives, labor, and the American ideal of freedom.

• Workers, particularly marginalized groups like women and slaves, faced diminished freedom despite the nation’s economic progress.

• The era influenced succeeding labor movements and ongoing discussions regarding economic systems and individual rights.