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 self-

sufficiency 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– ex> telecommunication changes today (not same

scale!)– affected countryside and urban area both

• 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.– 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– middle class associated and related with each

other– continuity and stability

• Working class linked by work and afterwork experiences– increasingly see themselves as distinct group

• highly volatile and changing– 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!