American Economic History in 1790-1860 Report (Assessment)

October 14, 2020 by Essay Writer

Problems & Solutions: the US Economy 1790-1860

The industrial revolution had influenced the transportation infrastructure in the United States by 1790. The problem was twofold: undeveloped transportation system (roads, for example) and lack of transportation means. Canals systems and railways had solved the first problem mainly while the invention of the steam engine led to the overall solution of the second problem (Heilbroner and Singer 68). Trains and other means of transportation were the most significant factors that helped to develop the economy of the country from 1790-1860.

At the dawn of the banking system in the United States, the banking problems were essential. The first major problem was the utter politicizing of banks that became the instruments of political powers to pursue particular goals. Another problem was the absence of a single form of national currency. Each bank issued own banknotes providing them with their design (Heilbroner and Singer 67). The government-controlled the issue of coins only. The problems were solved as follows: several states adopted “free banking” laws to avoid politicizing and corruption, and the federal government regained control over the process of chartering banks, establishing a single form for currency.

Economic History Concept

Hamilton stood for the development of the American economy as the centralized and highly industrialized one while Jefferson was the proponent of the republic with strong decentralization and the agrarian sector of the economic development. The increasing pace of the industrial revolution had its benefits for the US economy as well as the focus on agriculture. The emerging cities, new workplaces, and the growth of the industrial potential of the US economy were the supportive arguments of industrialization in America.

However, the growing need for food in the developing economy and simpler methods of gaining the outcomes were rather strong arguments as well (Heilbroner and Singer 156). Douglas North with his “cotton thesis” stated that Britain’s demand for the US cotton was the “fuel” for the US economy in 1815-1840. History shows that his statement was not far from the truth. The choice of the agricultural doctrine would provide the country with better results in a short-term perspective while the focus on the development of the industrial infrastructure should have provided the US economy with a boost and stable growth in a long-term perspective.

Quantitative Analysis

To answer the questions regarding the extent to which the USA was industrialized in the early years of its development, it necessary to understand the situation of the economy up to that moment. The market of labor experienced boost due to the influx of immigrants and the emergence of the new cities that required a substantial workforce to develop. On the other hand, considering the agricultural nature of the early US economy, the undeveloped transportation infrastructure, and the issue in the banking sector, there were problems with the capital building, resources’ accessibility, and financing the large projects (Heilbroner and Singer 160). It can be said that up to the 1820s, the country was poorly industrialized.

Works Cited

Heilbroner, Robert L., and Alan Singer. The Economic Transformation of America, 1600 to the Present. 4th ed. Boston: Wadsworth Publishing, 1998. Print.

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