Conclusion: An Industrializing Economy

Conclusion: An Industrializing Economy

The early nineteenth century in the United States saw the rapid rise in industry, which had profound economic and social effects.

Learning Objectives

Summarize the effects industrialization had on American society and markets

Key Takeaways

Key Points

  • By the 1830s, the United States had developed a thriving industrial and commercial sector in the Northeast. The Industrial Revolution and Market Revolution, combined with advances in transportation, transformed the economic and social landscape.
  • The production of goods, and their prices, were unregulated by the government, and commercial centers, to which job seekers flocked, mushroomed.
  • As American economic life shifted rapidly and modes of production changed, new class divisions emerged and solidified, resulting in previously unknown economic and social inequalities.
  • By the 1830s, many urban centers had become home to widespread poverty, crime, and disease. Advances in industrialization and the market revolution came at a human price.
  • Many workers began to question the basic fairness of the new industrial order, and the early origins of the labor movement can be seen in worker strikes and organized protests of this era.
  • The expansion of the American economy also made it prone to the boom-and-bust cycle, characterized by the economic downturns in 1819 and 1837.

Key Terms

  • Wage labor: The socioeconomic relationship between a worker and an employer, in which the worker sells his or her labor under a formal or informal employment contract.
  • boom-and-bust cycle: A business pattern in which the expansions are rapid and the contractions are steep and severe.

Summary: The Market Revolution

By the 1830s, the United States had developed a thriving industrial and commercial sector in the Northeast. Farmers embraced regional and distant markets as the primary destination for their products. Artisans witnessed the methodical division of the labor process in factories. Wage labor became an increasingly common experience. Inventors produced new wonders that transformed American life. These industrial and market revolutions, combined with advances in transportation, transformed the economic and social landscape. Americans could now quickly produce larger amounts of goods for a nationwide, and sometimes an international, market and rely less on foreign imports than in colonial times. Those who invested their money wisely in land, business ventures, or technological improvements reaped vast profits.

By the 1840s, the U.S. economy bore little resemblance to the import-and-export economy of colonial days. It was now a market economy and the production of goods, and their prices, were unregulated by the government. Commercial centers, to which job seekers flocked, mushroomed. New York City’s population skyrocketed. In 1790, it was 33,000; by 1820, it had reached 200,000; and by 1825, it had swelled to 270,000. New opportunities for wealth appeared to be available to anyone.

A transportation infrastructure rapidly took shape in the 1800s as American investors and the government began building roads, turnpikes, canals, and railroads. The time required to travel shrank vastly, and people marveled at their ability to conquer great distances, enhancing their sense of the steady advance of progress. The transportation revolution also made it possible to ship agricultural and manufactured goods throughout the country and enabled rural people to travel to towns and cities for employment opportunities.

The Human Cost

As American economic life shifted rapidly and modes of production changed, new class divisions emerged and solidified, resulting in previously unknown economic and social inequalities. American day laborers and low-wage workers lived a precarious existence that the economic benefits of the new economy largely bypassed. An influx of immigrant workers swelled and diversified an already crowded urban population. By the 1830s, many urban centers had become home to widespread poverty, crime, and disease. Advances in industrialization and the Market Revolution came at a human price.

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Five Points by George Catlin: Five Points (1827), by George Catlin, depicts the infamous Five Points neighborhood of New York City, so called because it was centered at the intersection of five streets. Five Points was home to a mix of recent immigrants, freed slaves, and other members of the working class. This image of the Five Points district captures the turbulence of the time.

Industrialization led to radical changes in American life. New industrial towns, including Waltham, Lowell, and countless others, dotted the landscape of the Northeast. The mills provided many young women an opportunity to experience a new and liberating life, and many workers relished their new freedom. At the same time, workers were subjected to harsh and dangerous working conditions and required to work long hours for very little pay and no job security. Many workers began to question the basic fairness of the new industrial order, and the early origins of the labor movement can be seen in worker strikes and organized protests of this era. The world of work had been fundamentally reorganized.

The profound economic changes sweeping the United States led to equally important social and cultural transformations. The formation of distinct classes, especially in the rapidly industrializing North, was one of the most striking developments. The unequal distribution of newly created wealth spurred new divisions along class lines.

The expansion of the American economy also made it prone to the boom-and-bust cycle, in which runaway land speculation led to economic downturns during which wage workers lost their employment and investors lost their assets. This happened for the first time in the United States in 1819 and again in 1837, when waves of enthusiastic speculation gave way to drops in prices.