The Market Comes to America
1790-1840s
Introduction
• Today we are going to examine
the emergence of the national
market economy in the United
States. This event had a
profound impact on American
society from politics to economics
to culture to how people
interacted with each other.
• We will also consider the
conditions and events that
stimulated the growth of the
market and demonstrate how it
transformed both rural life and
the relations between employers
and workers thus creating a
significant working class in
America.
Introduction
• The market revolution:
– tied people together in a
different way
– Led to an exchange of goods
with cash as a medium
– saw move from subsistence
to commercial farming
– saw move from face to face
relations to more impersonal,
distant transactions
– saw the introduction of more
complex technology
– movement of people further
west and into the cities.
Introduction
• Here’s how one man
described the US in this
period:
– “It is all money and
business, business and
money which make the
man now-a-days.
Success is everything,
and it makes every little
difference how, or what
means he uses to obtain
it.”
The Market Revolution Defined
•
•
A truly national system of markets
began to grow following the War of
1812, when the United States
entered a period of unprecedented
economic expansion.
As it grew, the economy became
varied enough to sustain and even
accelerate its growth.
– Before the war it had been tied largely
to international trade. The US
exported staples like cotton, wheat,
tobacco and timber.
•
When other nations that brought
these commodities stopped doing
so, the domestic economy suffered.
That happened during the European
wars of the 1790s and again after
1803.
The Market Revolution Defined
• The market economy:
• a process in which Americans
increasingly tied themselves to
one another through the
mechanism of the “free market”
• they sold cotton or wheat and
bought manufactured cloth or
brass one-day clocks, etc.
• borrowed money to buy houses
or farms, but also to speculate
and profit
• Greater reliance on cash and
paper money instead of bartering
for goods and services
Causes of the Market Revolution
• Demographic
Expansion
– high population growth
in first half of 1800s
– fertility high and IMR
low
– in 1830s see arrival 1/2m
immigrants
• Geographic Expansion
– US size increased greatly as #
of states grew and the
western settlement
– growth of RR by 1840s
– new territory gained
– opportunity and land
encouraged western
migration
• Population and territorial
expansion facilitated growth
of market economy—the
most important event of
first half of 19th.
Causes of the Market Revolution
•
War of 1812
– The war of 1812 marked the turning
point in the creation and expansion of a
domestic market.
– The embargo of the war stimulated the
growth of manufacturing, particularly in
textiles.
– In 1808, the US had 8000 spindles
spinning cotton thread, by the war’s
end the number had jumped to around
130,000;
– What caused the war?
•
•
impressment
seizure of American ships
–
between 1803-1807, Britizn seized over
500 American ships; France over 300.
– After the war: “protective” tariffs
•
•
passed in 1816
set an average duyy of 20 percent on
imported woolen and cotton cloth, iron
and sugar
Causes of the Market Revolution
• To expand market and create a
true national market economy,
the US had to overcome
transportation problems.
– lousy roads meant could travel only
25-30 mi. day
– only along rivers and oceans trade
viable
– by 1820s see building of Erie Canal
some 364mi from Albany to Buffalo
• lowered costs from 19 cents/mi to 3
cents/mi
• increased development around
canal since market economically
viable to farmers
• steamboats and RRs would follow
in next 2-3 decades
Market Economy and Rural life
•
•
•
•
•
While some farmers had interacted with the
market economy during the colonial period,
especially in PA and some places of NY, in NE
market-oriented farming was not that
pervasive.
From 1790s to 1860 farmers in NE would
jump or at times be dragged into the
market.
family farming sector in NE, mid Atl. and
hinterlands of south
family farming was most important and
significant
household labor had gender division of labor
with both essential to overall operation
–
–
men did heavy field work
women dairy, garden, food and clothing
Market Economy and Rural Life
• Many farmers attempted selfsufficiency as possible
• Some farmers did produce for the
market, especially those who
lived closer to towns
• Specialization more prevalent
around lg. urban centers
• those further from town involved
in local exchange and bartering
– customary exchange/ little cash
– labor exchange
• marketed surplus since family
most important
• Cash was necessary to provide
inheritance for children so they
could buy additional land
Market Economy and Rural Life
•
The entrance of farmers into the market
economy was complex. What was the goal?
•
•
simply profit and making money?
or perhaps to maintain certain traditional
ideas and relations
–
•
like buying land for children v. buying for
making more money
The market was not seen by all as alluring
and attractive. Many saw it as frightening,
dangerous, and uncertain.
–
–
–
–
entering market meant loss of control over
life
at mercy of distant events and influences like
prices
put family at risk by placing all eggs in one
basket
could do well but also could get debt and lose
farm
Market Economy and Rural Life
• Impact:
– growing inequality in the
countryside.
• land and prop. not evenly distributed
even in farming areas
• wealthiest 10% owned 40% of
wealth and 1/3 no land
• changed relations with neighbors
– since competing with each other in
the market and see use of
neighbors labor without reciprocity
but as wage labor
– outwork also part of achieving this
goal and helped bring capitalist
transformation to the region
The Emergence of a working class
•
The market reshaped the way people lived,
worked, related to each other and thought
about things
–
–
•
The impact was felt in the city as well and
changed the way employers and employees
interacted with each other and how they felt
about the other.
–
–
–
–
–
•
ex> telecommunication changes today (not
same scale!)
affected countryside and urban area both
master craftsmen owned tools & accumulated
resources to own shop
hired journeymen and apprentices
lived and worked together generally under
one roof
household was family and extension of work
sold goods to local customers and custom
made often
change in this by 19th c. esp. in seaports and
interior cities as market econ. expanded
Emergence of the Working-Class
• --now master craftsmen
buys raw material and uses
his help to become more
market oriented (more a
merchant)
– div. of labor in work process
• spreads out from shop to
other areas like outwork
and then finished in shop
• shift from custom work to
larger pop. thus increased
standardization
Implications
• fewer journeymen and
apprentice s live with master
craftsman
• workplace and dwelling inc.
separated
• in cities see changes in spatial
organization of the city
– commercial and residential
were the same before
– after, see increasing
commercial distribution and
stratification of residence by
class
Importance
•
Emergence of 2 different social worlds in
19th century
–
–
•
Working class linked by work and afterwork
experiences
–
•
increasingly see themselves as distinct group
highly volatile and changing
–
•
middle class associated and related with each
other
continuity and stability
transiency high
This new middle class became concerned
about working class and how they differed
from themselves and a threat of order and
stability.
–
–
–
became increasingly absorbed with idea of
character as we will see next time
became increasingly absorbed with order,
prosperity and progress
became early reformers!