Question

Why was there so little regulation of industry in the United States before the late nineteenth century?

Answer 1

The Industrial Revolution marked a period of development in the latter half of the 18th century that transformed largely rural, agrarian societies in Europe and America into industrialized, urban ones. Goods that had once been painstakingly crafted by hand started to be produced in mass quantities by machines in factories, thanks to the introduction of new machines and techniques in textiles, iron making and other industries.Fueled by the game-changing use of steam power, the Industrial Revolution began in Britain and spread to the rest of the world, including the United States, by the 1830s and ‘40s. Modern historians often refer to this period as the First Industrial Revolution, to set it apart from a second period of industrialization that took place from the late 19th to early 20th centuries and saw rapid advances in the steel, electric and automobile industries.An early landmark moment in the Industrial Revolution came near the end of the eighteenth century, when Samuel Slater brought new manufacturing technologies from Britain to the United States and founded the first U.S. cotton mill in Beverly, Massachusetts. Slater’s Mill in Pawtucket, Rhode Island, like many of the mills and factories that sprang up in the next few decades, was powered by water, which confined industrial development to the northeast at first. The concentration of industry in the Northeast also facilitated the development of transportation systems such as railroads and canals, which encouraged commerce and trade. The technological innovation that would come to mark the United States in the nineteenth century began to show itself with Robert Fulton’s establishment of steamboat service on the Hudson River, Samuel F. B. Morse’s invention of the telegraph, and Elias Howe’s invention of the sewing machine, all before the Civil War. Following the Civil War, industrialization in the United States increased at a breakneck pace. This period, encompassing most of the second half of the nineteenth century, has been called the Second Industrial Revolution or the American Industrial Revolution. Over the first half of the century, the country expanded greatly, and the new territory was rich in natural resources. Completing the first transcontinental railroad in 1869 was a major milestone, making it easier to transport people, raw materials, and products. The United States also had vast human resources: between 1860 and 1900, fourteen million immigrants came to the country, providing workers for an array of industries.The beginning of the 19^th century was dominated by “classical economists,” a group not actually referred to by this name until Karl Marx. One unifying part of their theories was the labor theory of value, contrasting to value deriving from a general equilibrium of supply and demand. These economists had seen the first economic and social transformation brought by the Industrial Revolution: rural depopulation, precariousness, poverty, and apparition of a working class. They wondered about the population growth because the demographic transition had begun in Great Britain at that time. They also asked many fundamental questions about the source of value, the causes of economic growth, and the role of money in the economy. They supported a free-market economy. They argued that it was a natural system based upon freedom and property. However, these economists were divided and did not make up a unified group of thought.A notable current within classical economics was the under-consumption theory, as advanced by the Birmingham School and Malthus in the early 19^th century. The theory argued for government action to mitigate unemployment and economic downturns. It was an intellectual predecessor of what later became Keynesian economics in the 1930’s.Just as the term “mercantilism” had been coined and popularized by its critics like Adam Smith, so was the term “capitalism” or Kapitalismus used by its dissidents, primarily Karl Marx. Karl Marx (1818–1883) was, and in many ways still remains, the pre-eminent socialist economist. His combination of political theory represented in the Communist Manifesto and the dialectic theory of history inspired by Friedrich Hegel provided a revolutionary critique of capitalism as he saw it in the 19^th century. The socialist movement that he joined had emerged in response to the conditions of people in the new industrial era and the classical economics which accompanied it. He wrote his magnum opus Das Kapital at the British Museum’s library.Without a comparative analysis across countries or regions, it is impossible to test which factors were necessary or sufficient conditions to cause industrialization. Such studies are not always definitive, however, because labor, capital, and other resources can flow across regions and countries. The analytical strategy adopted here is of a detailed case study of one country, the United States, with a primary focus on measuring the increasing share of immigrants and their descendents in the mobilization of labor during the American industrial revolution from 1880 to 1920. The counterfactual, namely whether the domestic labor supply would have been sufficient for rapid industrial development in the absence of immigration, cannot be directly observed. Our strategy, which draws on theory and prior research in addition to empirical analysis, cannot fully adjudicate between competing explanations. Our conclusion about the centrality of immigrant labor is based on the fact that recent immigrants and their descendents were not just the majority of industrial workers, but the overwhelming majority of workers in the emerging manufacturing sector in early 20^th century America.