Economic History of the US - Napa Valley College 120/Econ120_sp12_… · Economic History of the US Revolution to Civil War, 1776-1860 Lecture #4 Peter Allen Econ 120. US in 1819.

Economic History of the US

Revolution to Civil War, 1776-1860Lecture #4

Peter AllenEcon 120

US in 1819

First organization of labor

After 1815

Rapid industrialization and urbanization

Esp. NE and Mid-Atlantic

%

1790 1860 change, pa

Estimated GDP ($ mm) 180 11,800 6.2%

(% manufacturing) 1% 17%

Population (million) 4 31.4 3.0%

GDP per capita ($) 45 376 3.1%

Labor Force Distribution (thousand/%)

Total Ag. Manuf. Mining Trans.

1810 2,330 83.7% 0.0% 0.5% 2.6%

1820 3,135 78.8% 0.0% 0.4% 1.6%

1830 4,200 70.6% 0.0% 0.5% 1.7%

1840 5,660 63.1% 8.8% 0.6% 2.0%

1850 8,250 54.8% 14.5% 1.2% 1.9%

1860 11,110 52.9% 13.8% 1.6% 2.0%

% change, pa 3.2%

Figure 11.1 Labor Force Additions from Migration, 1800–1860

Yearly Immigration (thousand)

Total England Ireland Germany Other

1845-50 233 34 107 66 26

1851-55 350 47 139 129 35

1856-60 160 38 44 61 27

Growth of Factories and Factory Employees

NE, 1820-50 (average per annum)

Firm # Workers per Firm

Shoes 5.4% 1.9%

Cotton textiles 14.8% 3.5%

Flour mills 14.4% -1.0%

Glass 7.8% 0.4%

Hats and caps 11.4% 2.4%

Iron mills 10.8% 0.7%

Liquor 4.6% 2.1%

Paper -3.3% 1.5%

Tanning 11.4% 0.3%

Wool textiles 8.6% 2.8%

Early Industrial Relations

Industrial organization

Larger and larger production

units

Rudimentary mechanization

Division of labor

Specialization, repetition of

tasks…

High proportion of women

and children

Productivity in textiles, 4.5%

pa, 1835-60

12-hour day

½ hour for meals

6-day, 72-hour work week

Sunday off

Concentration of Wealth

% of all capital assets held by

Richest 1% Richest 10%

1776 13 48

1860 29 73

Early Union Movement

Growing # of urban workers in close

proximity

Efforts to organize began immediately

New phenomenon…economic

fluctuation

Employment uncertainty and insecurity

Labor scarcity, relatively high wages…

…vs. crude labor standards

Early Union Movement

Before 1860, union members never

exceeded 1% of the labor force

Contrast with England

Craft unions, most successful

Largely excluded factory workers, farm

workers, domestic servants

English Common Law: unions viewed as a

“criminal conspiracy” until 1840

Real Wages, Adult Males

in Manufacturing

Avg. Growth

1820 1832 1850 1860 per annum

New England 101 131-154 149-188 164-197 1.3-1.7

Mid Atlantic 100 122-143 159-202 157-188 1.2-1.6

Total 101 128-150 155-197 159-191 1.2-1.6

Avg. Wage (pa) $267 $292 $341 $360

PV (2008) 4,061 6,220 8,720 8,530

Productivity growth in textile mills averaged 4.5% p.a., 1836-60

Deflation, 1820-mid-1830s and again in early 1840s

Little to no real wage increase in 1850s (1854/1857 recessions)

Wage Differential England v. the US, 1820-21 (English Wage = 100)

Figure 11.2 Market for Manufacturing Workers

Figure 11.3 Market for Manufacturing Workers by Skill

Southern Migration

Economy of 5 southern states hurt most by:

Independence, loss of export market in England

Esp. tobacco, indigo, rice

Jefferson’s effort to stay out of Napoleonic Wars

Plantation system revived by…

Cotton…beginning after 1794

Better land and climate conditions as wealthy

planters moved westward into…Alabama,

Mississippi, Louisiana, W. Texas

Cotton gin, patented March 1794

Eli Whitney

Huge increase in productivity…

One worker…

55 lbs./day

Instead of

1 lb.

5,400%

Southern Migration

Western plantations – Cotton…

…became central to southern agriculture…

Exported to Europe, also NE textile manufacturing

By 1860… Cotton was ½ of all US merchandise exports

10X larger than second largest export, wheat

cotton goods/fabric was #1 manufactured export

Map 8.4 Shifts in Cotton Cultivation

Entrenchment of Slavery

Cotton revived southern states’ economic model

Very large-scale plantations…

…with free labor

“economies of scale”

Huge profits and wealth build-up, but…

…prevented industrialization, modernization, development, change

Little immigration from Europe

Table 13.4 Economies of Scale in Southern Agriculture (Index of Free Southern Farms)

Table 13.8 Per Capita Income pre-Civil War (1860 Prices)

Table 13.3 Southern Population by Race, 1800-1860 (in mm)

Figure 13.2 Distribution of Slaves in the Western Hemisphere, 1825

Table 13.2 Slave Emancipation in the North for Free-Born

Decent to Civil War

Morality of slavery gradually came to dominate politics

Most citizens wanted to contain

Fight was over extension to territories

Northwest Ordinance (1787) banned slavery there

Western migrations kept issue alive

Southern states wanted to maintain equal voting power in Senate

Table 13.2 Slave Emancipation in the North for the Free-Born

Map 13.1 Missouri Compromise of 1820

Missouri Compromise, 1820

No Way to Compromise

1820-50: states admitted in pairs

1850: 15 slave and 15 free states

36 x 30’

Mexican Cession, 1848

Compromise of 1850

California, free

New Mexico/Utah territories, slave-holding permitted

Kansas-Nebraska Act, 1954 and popular sovereignty

Map 13.2 New Settlements