Question

1)What do you think was more important for manufacturing growth in the United States in the early period: supply or demand factors, or a mix of both?

2)Should U.S. public policy aim to raise population growth (through either a higher birth rate or increased immigration) back to the high population growth rates seen earlier in U.S. history? Why or why not?

3)Do you think the Homestead Act was optimal as formulated? Or should it have been expanded or shrunk or never passed? Why or why not?

Answer 1

1. Demand and supply factors contributed to the growth of the manufacturing sector in the early period.

Industrialization was made possible by increases in productivity, capital investment and reinvestment, business expansion, and the rise of corporations.The economic growth was preceded by investment in material capital and by Chief Justice John Marshall's influence in securing private property and contract rights between 1801 and 1835.

Industrialization is defined by the movement from primarily agrarian labor toward urbanized, mass-producing industrial labor.This transformation corresponds with rising marginal productivity and rising real wages, albeit not consistently or equally.According to the 1790 U.S. Census, more than 90% of all American laborers worked in farming.The productivity-and corresponding real wages-of farm labor was very low.

Factory jobs tended to offer wage rates that were several times higher than farm rates.Workers eagerly moved from low-paying, hard labor in the sun to relatively high-paying, hard labor in industrial factories.

Farmers made up just 2.6% of the U.S. labor force in 1990. Corporations and Capital The U.S. industrial revolution primarily began through textile mills in New England. The three early mills were the Beverly Cotton Manufactory, the Slater Mill, and the Waltham Mill.

In 1813, the Boston Manufacturing Company became the first integrated U.S. corporate textile factory.

For the first time, investors could contribute to the development of new buildings, new machines, and new profits in manufacturing. Corporations became the dominant manufacturing business model by the mid-1840s.
Young unmarried women in New England were earning factory wages three times the rate of domestic maids.

Higher productivity translated to higher standards of living, a greater demand for other goods, and increased capital investment. Improved technology increased farm output as well, dropping farm product prices and allowing workers to move into other industries.

The Embargo Act of 1807 and the War of 1812

The United States passed the Embargo Act of 1807, preventing any trade with foreign nations, in the hopes to economically hurt France and Britain.This backfired as France and Britain's economy did not suffer but the U.S. economy did.It turned the U.S. economy inward, causing the nation to create and rely on its own goods, spurring the industrial revolution of the nation.

The War of 1812 with Britain resulted in an entire blockade of the U.S. eastern coastline, which brought all trade to a halt.After the war the country learned a lesson to reduce its reliance on foreign goods and begin manufacturing heavily itself, seeking economic independence.

John Marshall and Property Rights In market economies, private producers want to be able to keep the fruits of their labor.Several landmark Supreme Court cases in the early 19th century protected private property from government seizure.Chief Justice John Marshall issued opinions in Fletcher v. Peck and Trustees of Dartmouth College v. Woodward that established limits on government seizures and contractual arrangements.

Workers and businesses alike exhibited very high savings rates after 1870. Real interest rates declined, propelling a huge rise in loans.Farmers also saw rising land values and could mortgage their land to invest in capital goods.

2. The USA should try to increase the population rate to the higher levels.

On the whole, history — both global and American — refutes the Malthusian belief that more people means more misery. Add that all living members of the baby boom generation will have turned 65 by 2030 — and that 18 percent of the nation will be at least that age, according to Pew Research Center population projections — and demographic stagnation begins to seem uncomfortably realistic.

The good news is that, even at reduced rates of growth, the U.S. population, 328.2 million, is still expanding more rapidly than populations of peer nations such as Japan (whose population of 126 million is actually shrinking). The bad news, though, is that both sources of the U.S. edge in population dynamism — a relatively strong birthrate and immigration — are implicated in the Census Bureau’s report. Net international migration — permanent moves to the United States minus permanent departures — was 595,348 between 2018 and 2019. The Census Bureau and other experts have yet to identify a specific cause, but it’s certainly plausible to link the decline to the anti-immigration posture adopted by President Trump during that interval.

Meanwhile, the natural increase in the population between 2018 and 2019 — births minus deaths — was 956,674, the first reading under 1 million in “decades,” according to the Census Bureau. Of course, compared with those other countries, the United States has done little to provide paid family leave or subsidized child care — and could do more.Boosting immigration, by contrast, is relatively easy to accomplish.

3. The Homestead Act was not optimal as formulated. It could have been much better in legislation and execution.

The Homestead Act, enacted during the Civil War in 1862, provided that any adult citizen, or intended citizen, who had never borne arms against the U.S. government could claim 160 acres of surveyed government land. Title could also be acquired after only a 6-month residency and trivial improvements, provided the claimant paid the government $1.25 per acre. After the Civil War, Union soldiers could deduct the time they had served from the residency requirements.

Although this act was included in the Republican party platform of 1860, support for the idea began decades earlier. Even under the Articles of Confederation, before 1787, the distribution of government lands generated much interest and discussion.

The act, however, proved to be no panacea for poverty. In the end, most of those who purchased land under the act came from areas quite close to their new homesteads (Iowans moved to Nebraska, Minnesotans to South Dakota, and so on). Of some 500 million acres dispersed by the General Land Office between 1862 and 1904, only 80 million acres went to homesteaders. Indeed, small farmers acquired more land under the Homestead Act in the 20th century than in the 19th.