Before the 19 th century, America only had a promising economy that was highly reliant on international trade. However, by the turn of the 20 th century, America was already a global economic powerhouse. Multiple transformations and development contributed to the rapid economic growth witnessed in 19 th century America. The transition from the subsistence-oriented to commercially oriented outlooks as well as the promotion of New Nationalism led to the development of the robust national market economy that was hugely independent of international trade.
In the 1800s, American saw the transition from a subsistence-oriented to commercially oriented outlook. The practice of independent American farmers producing everything they need was replaced by a commercial system, where people specialized in producing specific products and trading them with what they did not produce 1 . Also, with the master-apprentice system of production, human skills were central in the production process. However, the commercial system advocated for trade between people, which promoted specialized production using mechanized systems 2 . The adoption of commercial outlooks increased growth through the increased revenue from commercial production.
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The introduction of the new nationalism policies promoted the development of a national market economy that could grow independent of international trades. The new nationalism incorporated a set of economic policies that aimed to facilitate regional growth and bind the nation tightly together 3 . New nationalism led to the introduction of the Second Bank of the United States in 1816, which increased the access to capital for business 4 . Also, the economic policies introduced tariffs on imported goods, which raised the price of competing foreign goods and thus gave domestically produced goods a market advantage 5 . The new nationalism policies led to the development of a national market economy that was varied enough to sustain itself even in periods of war.
The American embraced materialism. Unlike in the previous years, when intellectual achievement was highly respected, American society became more preoccupied with material goods 6 . People developed a love for money, which led to an increase in the volume of trade. Also, American society considered the acquisition of money to be the pathway to respect and recognition 7 . The mentality developed by the new generation facilitated an increase in trade which resulted in economic growth.
To create a conducive business environment, the Supreme Court, under the guidance of John Marshall, promoted Enterprise 8 . The Court, through a series of rulings, protected the new forms of businesses that were central to the growing market economy. The pro-business stances, including the decision to uphold the constitutionality of the Second Bank of the United States and the redefinition of contract, promoted a favorable business environment for private entities and corporation, which in turn, resulted in economic growth.
Social transformations such as migration and urbanization also contributed to the development of the United States economy. In the 19 th century, the level of production in the rural farms was going down. Therefore, people became more open to migration from rural areas to the urban setting 9 . With the industrial revolution, factories in the urban areas provided people with employment opportunity 10 . Aside from availing cheap labor for the factories, the growing urban population provided a market for the produced goods. People became open to the idea of moving West, where there were larger parcels of land. People’s willingness to move out of the state they were born in led to the effective utilization of American resources, access to cheap labor, and growth of the national market.
In conclusion, the United States’ transformation from a promising economy to a global powerhouse was as a result of ideological changes during the 19 th century. The American embraced commercialization, materialism, as well as other social ideologies such as urbanization and migration. The philosophical and ideological changes promoted easy access to labor, increased volume of trade, and the eventual growth of the national economy.
Bibliography
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Ely Jr, James W. "Property Rights and the Supreme Court in the Gilded Age." J. Sup. Ct. Hist. 38, (2013): 330.
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1 James, Davidson West. US: a Narrative History . McGraw-Hill Higher Education, 2014.
2 Ibid., 172
3 Joyce Appleby, Alan Brinkley, Albert S. Broussard, James M. McPherson, Donald A. Ritchie, Jay McTighe, Dinah Zike, Douglas Fisher, and Nancy Frey. Discovering Our Past: A History of the United States Early Years . McGraw-Hill Education, 2018.
4 James, Davidson West. US: a Narrative History . McGraw-Hill Higher Education, 2014.
5 Mehdi, Shafaeddin. How did developed countries industrialize? The History of Trade and Industrial Policy: The cases of Great Britain and the USA . No. 139. United Nations Conference on Trade and Development, 1998.
6 Ibid., 184
7 Peter, Lindert H., and Jeffrey G. Williamson. "American Incomes before and after the Revolution." The Journal of Economic History 73, no. 3 (2013): 725-765.
8 James, Ely Jr W. "Property Rights and the Supreme Court in the Gilded Age." J. Sup. Ct. Hist. 38 (2013): 330.
9 Leah, Boustan Platt, Devin Michelle Bunten, and Owen Hearey. Urbanization in the United States, 1800-2000 . No. w19041. National Bureau of Economic Research, 2013.
10 Peter, Lindert H., and Jeffrey G. Williamson. "American Incomes before and after the Revolution." The Journal of Economic History 73, no. 3 (2013): 725-765.
