United States Economic History: The Industrial Revolution

Figure 1.--

The Industrial Revolution is arguably the most important development in human history since the development of agriculture (about 10,000 BC). The Industrial Revolution began first in Britain (mid-19th century). It slowly spread to North America and continental Europe. The British origins was a great advantage to the United States. It meant that among the immigrants to America were Britons with a wide range of technical skills. Along with them, the American commitment to free market capitalism and the rule of law created the stable conditioins for foreign investments. The British were especilly active. The British-based legal system facilitated economic development and guaranteed contracts. And the free market outlook of most Amnericans prevented Government interference which had impeded economic development in many European countries. While the British legal tradition was vital for America, the Revolution was also necessary for America's own industrial revolution. This was Britain saw America as an adjunct for the British economy. America's role to provide agricultural products and raw materials and to serve as a market for British manufactuers. Laws restructured the development of American manufacturing. This was only possible after America achieved its independenc. American policies toward public schools also resulted in a well-educated population. These factors combined with abundant natural resources created favorable conditions for the spread of the industral revolution to the United States. This set the fondation for the United States emergence as the most technologically advanced country in the world. Especially important was the availability of cheap energy. Intially this meant seemingly inexhustable forrests and rivers, but as the industrial revolution developed emense coalfields and then oil fuel America's indudtrial expansion. Even before the Revolution (1776-83) America had constructed a substantial merchant fleet, but inland commerce was at first dependant on rivers. This changed with the contruction of first canals and than railroads. Foreign, especially, British capital played a central role in financing the early railroads. It is difficult to date the beginning of the American industrial revolution, but the 1790s is when several developments came together. The new Federal Constitution created the conditions favorale for trade and commerce. Sammuel Slater, a textile factory manager arrived in America and opened a cotton spinning factory in Rhode Island (1790). He introduced both the machinery and an efficent factiry system which became known as the Rhode Island System. Shortly after, Eli Witney's invention of the cotton gin (1793) layed the foundation for cotton production in the south which would provide the raw matetial for New England textile mills. Francis Cabot Lowell was one of many who adopted Slater's Rhode Island System and improved upon it. The Napoleonic Wars in Europe promoted industrial development in America. Presudent Jefferson issued embargoes. The British Royal Navy made it difficult for merchant vessels to reach French-held continental Europe. This greatly increased the demand for American produced industrial goods. The War of 1812 virtually ended trade for several years and much of the American merchnt navy was seized or destroyed by the British. This was a great boon to domestic manufactuers who began opening factories in the northeast. The same did not occur in the South. We are not sure just why. Fortunes could be made exploiting slave labor and few planters took an interest in opening factories. America fought the Mexican War before industrialization had made a huge advance. This was not the case in the Civil War where industrilization largely explins the Federal victory. After the war Americaa began building an industrial powerhouse which would not only make Americans the most prosperous people on earthm but prfijundly affect the history of the 20th century.


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Created: 2:37 AM 12/4/2014
Last updated: 8:55 AM 5/21/2015