Nov 26, 2020 in History

The Great Transformation

During the first half of the 19th century, social and economic life in the U.S. experienced an unprecedented level of transformation. Some historians have also labeled this period as the Market Revolution. However, it is necessary to analyze the causes and effects of this process. It seems reasonable to determine whether this period may be considered as a real Industrial Revolution in America or not.

Between 1812 and 1850, advances in technology and population growth brought about changes in almost every aspect of everyday life in the U.S. These changes were permanent and swift, and for the majority of scientists and politicians, they were unexpected.

Important changes took place in the methods of production as electricity and steam became widely used, replacing water, muscle, and wind power in the majority of large-scale manufacturing companies. Fossil fuel based production methods (oil and coal) enabled significant economies of scale. It led to the situation that almost all of the new manufacturing companies were far larger than the enterprises that they replaced (Constitutional Design and Public Policy).

Towns and cities became far larger, and the farming sector became smaller. As a consequence, a smaller percentage of society was employed in agriculture whether indirectly through exchanging agricultural products or directly through farming.

A number of new industries emerged as innovations in management, chemistry, metallurgy, electricity, and other engineering fields took place. These innovations include telephones, telegraphs, rail transport, electric lights, photography, etc.

In this period, goods and people were able to reach more distant places in less time. Due to the spread of the telegraph throughout the country in the 1840s, information was able to travel anywhere in actually no time at all (Hamson).

Labor unions and industrial cartels emerged as factor owners. They aimed to use collective bargaining in order to enhance their personal influence on the gains from exchange. Wealth had been traditionally based on political connections, land ownership, and commerce. However, all these changes were not exclusively the result of engineering innovations.

Public policy in the U.S. tended to encourage rather than discourage industrial changes. In particular, international trade was widely encouraged through reductions in tariffs and other protectionist barriers (Constitutional Design and Public Policy).

There was important public education reform which helped to create a number of new publicly supported colleges and schools, and a higher quality of the labor force. A variety of laws regulating the structures that corporations were able to take were revised allowing more options with more diversified ownership to be provided with less risk to capitalists.

These pro-industrial policies were often lobbied for by some economic interest groups aiming to profit directly from the new set of rules. At the same time, the pro-industrial policies tended to encourage industrialization and make it more widespread, productive, specialized, and intense. In other words, industrialization demonstrated the benefits of many kinds of collective actions.

The development of formal organizations enabled to solve a free rider problem that would in the other scenario reduce the probability that any groups interests would be able to advance by public policy. Both ideological and economic interest groups often attempted to influence the way in which ordinary citizens thought about broad policy issues.

Even in events that seemed to be uniform and broad, political proposals are more likely to be implemented and influence policy when they were systematically provided by a formal union or organization.

That is why unions soon found that it is in their interests to lobby for a wide number of the new government policies regarding union organization and labor practices. The mutual business interests of companies owners could also explain the general pattern of industrial organizations in particular with respect to cooperative associations and trusts.

The population of the U.S. was around 5.3 million in the beginning of the 19th century. By the middle of the century, this number had increased dramatically to 23.2 million (Hamson). It was estimated that when Louisiana was purchased from France, this territory would be sufficient for more than hundred generations of American citizens. However, all this space was filled after two generations.

Due to the population explosion, a larger fraction of the population lived in cities; because of the transportation revolution, many services and goods were cheaper, and their market was more complex. The main cause of all these changes was the division of labor or specialization. As a result, mass production in factories became the dominant method.

In the international level, domestic economies of that time remained weakly integrated and limited while strong linkages existed between fast expanding sectors and the economies of foreign countries. At the same time, American industrial expansion was characterized not only by the double movement of market expansion and societal self-protection but also by a dualistic system of internal restriction and external expansion (Halperin).

It should be stressed that the innovations of the early 19th century were not universal throughout the country. For many years, printers, village blacksmiths, and shoemakers coexisted with millhands and factory workers. However, the main pattern laid down during these several decades eventually became the dominant way of life not only for the U.S. but for all industrial world (Hamson).

Thus, it seems that Industrial Revolution is not a very appropriate concept for this period. It was time of fast industrial development that may be properly called the Market Revolution. Nowadays, this historical period is of utmost importance in the light of current post-crisis economic instability.

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