Economic Nationalism and the American System Overview

Economic Nationalism

• Definition: Economic Nationalism refers to a set of economic policies designed to protect domestic industries from foreign competition through tariffs, trade barriers, and government intervention in the economy. It emphasizes the importance of a nation's sovereignty and the promotion of national interests in economic affairs.

• Key Features:

• Encourage Creativity & Inventiveness: Economic Nationalism prioritizes local innovation and the development of home-grown technologies, often supported by government grants and research funding.

• Establish a Transportation Infrastructure: Investments in transportation infrastructure, such as roads, bridges, ports, and railways, are crucial for facilitating commerce and connecting domestic markets efficiently.

• Foster a Pro-Business Atmosphere: Implementation of regulations that support businesses, providing a stable environment for growth, and incentivizing entrepreneurship through favorable policies.

Jefferson vs. Hamilton

• Jefferson’s Vision of America: Thomas Jefferson envisioned an agrarian society built upon farming and rural communities. He advocated for strong state rights and minimal central government intervention, believing that an informed citizenry would govern themselves effectively in such a decentralized framework.

• Hamilton’s Vision of America: Alexander Hamilton proposed a powerful central government that could effectively manage the economy. He pushed for an industrial economy and the establishment of a national bank to control currency, credit, and financial stability, arguing that a manufacturing base was essential for national wealth and independence.

The American System

• Components:

• Tariff of 1816: This tariff imposition on imported goods was aimed at protecting American industry from foreign competition, particularly after the War of 1812, promoting local manufacturing.

• Chartering of the Second Bank of the United States (BUS): The BUS provided federally controlled financial stability and facilitated credit availability, essential for economic growth and infrastructure projects.

• Internal Improvements: Federally funded projects aimed at developing vital infrastructure such as roads and canals to encourage interstate trade and mobility.

• National Road: This was the first major highway in the United States, established to connect Eastern states with the West, facilitating movement of goods and people.

• Henry Clay: Known as “The Great Compromiser,” Clay was instrumental in promoting the American System, advocating for legislative measures that supported economic development and national unity.

Regional Dynamics of Economic Nationalism

• West: The West benefited from internal improvements, receiving significant federal support for roads and canals, allowing for easier access to markets and resources.

• East: The Eastern states flourished as protective tariffs fostered industrial growth and encouraged the production of goods, stimulating the economy.

• South: In contrast, the South felt neglected; it lacked the same federal support and faced growing economic tensions with the industrializing North, exacerbating regional disparities.

Key Developments in Transportation

• First Turnpike (1790): The first segment of macadamized road connecting Lancaster, Pennsylvania, marked a significant advancement in transportation methods. By 1832, roughly 2,400 miles of roads linked major urban centers, aiding commerce and travel.

• Cumberland (National Road, 1811): This road project enhanced connectivity across states, representing federal efforts to create an interconnected national economy.

The Erie Canal System

• Construction: Initiated in 1817 and completed by 1825, the Erie Canal revolutionized transportation by linking the Hudson River to Lake Erie. This massive undertaking made it quicker and cheaper to transport goods, significantly boosting trade and settlement in the region.

The Railroad Revolution (1830s-1850s)

• First Railroad: The Baltimore & Ohio Railroad began operations with just 13 miles of track in 1830, setting the stage for rapid expansion across the nation.

• Expansion: By 1860, over 31,000 miles of railroads crisscrossed the country, transforming transportation and commerce.

• Labor: Railroads were predominantly constructed through the labor of immigrants and slaves, emphasizing the complex socio-economic dynamics of the period.

Innovation and Inventions in the Economy

• Yankee Ingenuity: The term encapsulates the spirit of American creativity during this era, illustrated by a rapid increase in patent registrations, growing from 41 in 1800 to 4,357 by 1860.

• Key Inventions:

• Eli Whitney’s Cotton Gin (1793): This invention mechanized the process of cotton processing, leading to a boom in cotton production and solidifying a critical component of the Southern economy.

• John Deere’s Steel Plow (1837): The steel plow made it possible to efficiently cultivate the tough prairie land, facilitating Westward expansion of agriculture.

• Cyrus McCormick’s Mechanical Reaper (1831): This machine dramatically increased agricultural productivity by allowing one worker to harvest much more grain than was previously possible.

• Samuel Morse’s Telegraph (1840): Introduced a new standard in long-distance communication, enhancing the speed and efficiency of business and information exchange.

Industrialization and the Lowell System

• Lowell/Waltham System: Initiated by Francis Cabot Lowell in 1814, this dual-purpose textile plant integrated the various production processes, providing an innovative model for factory organization.

• Impact on Labor: The system predominantly employed young women, known as Lowell Girls, who lived in company boarding houses, sparking discussions on women's labor rights and workplace conditions.

Economic Disparity and Class Structure

• Distribution of Wealth: Notable wealth concentrations emerged, with the top 10% possessing 45% of wealth during the American Revolution. By 1860, this disparity intensified further, as the top 1% controlled over 50% of Philadelphia's wealth, underscoring growing economic inequality.

• Regional Specializations:

• East: Focused on industrial manufacturing and innovation.

• South: Centered on cotton production, heavily reliant on the institution of slavery.

• West: Predominantly agricultural, supplying food and raw materials.

Immigration and its Impact

• National Origins (1820-1860): Major waves of immigrants came from Ireland (38.6%) and Germany (30.5%), contributing to workforce growth yet fostering social tensions, particularly with rising anti-Catholic sentiment directed against Irish immigrants.

The Rise of Nativism**

• Know-Nothing Party: Formed in the 1850s, this political group aimed to protect American jobs and labor against foreign competition. Its rise reflected the increasing nativist sentiments and a surge in anti-immigrant rhetoric during this period.

• Anti-Catholic Sentiment: Rooted in fears regarding the influence of Catholic immigrants, particularly in light of alleged church-state unions, contributing to social divisions.

• Lyman Beecher: A prominent critic of Catholicism, Beecher voiced concern over the potential political repercussions of Catholic influence in America.

Quotes**

• Beecher's Warning: Lyman Beecher warned that a union of church and state could provoke "overwhelming public indignation" and backlash.

• The Lowell Offering: This was one of the earliest publications advocating for factory operatives, providing a voice for laborers and highlighting their experiences and challenges.

Conclusion**

• The economic evolution in America, transitioning from Jefferson’s agrarian ideal to Hamilton's vision of an industrialized nation, set foundational elements for modern America. This transition highlighted the complex interplay of transportation growth, labor dynamics, technological innovations, and immigration, all of which played a critical role in shaping the economy during the 19th century.