Capitalist ethic is deeply ingrained in America.
No pre-capitalist history such as feudalism and socialism, in
contrast to Europe. Navigation Acts of the 1600s define the
mercantile economic role of the American colonies to England, mainly
for the benefit of England.
100 years of relative neglect.
Results in illegal trade by colonies, which becomes to norm.
Reasons for neglect include problems of enforcement. English
government upheavals, English involvement in European wars mainly
with France, problems with English governors managing the colonies.
Merchant capitalism in the North.
English win the French & Indian War of 1756-63. The
Colonies benefit. The English now enforce economic laws to help it
cover its war debt, and is met by resistance by the Northern
merchants who had been trading freely.
Slave capitalism in the South.
feudal aspects but mainly concerned with markets and profit,
although entwined with a number of ideological issues as well
Considerable poverty in much of the South for poor whites.
The North and South in early 18th century.
North begins manufacturing, including mills run by water power. The
South avoids manufacturing, depends on tobacco until invention of
the cotton gin makes cotton very profitable, boosting slavery.
Thomas Jefferson mistrusts cities and views America’s future as
agricultural with small farms. Alexander Hamilton’s vision is
urbanized with a manufacturing type economy. This is beginning of
the 2-party system.
American economy after Independence.
Hamilton is George Washington’s Secretary of Treasury whose policies
help create the new American economy, establishes the value of
credit and debt, and boosts the role of the federal government.
Taxes and tariffs to encourage American industry. Jefferson opposes
The age of canals in early 19th century.
importance of the Erie Canal. It opens the Midwest to the Northeast
markets away from the South. NYC becomes the commercial hub of the
country The Erie Canal is not an example of laissez faire,
requiring substantial government help. .
The coming of the railroads starting in 1820s.
Concept is brought over from England. Construction is expensive,
must overcome many natural obstacles, requires the help of
government, not laissez-faire. A major impetus to the American
President Jackson’s banking policies in 1832.
He kills conservative U.S. 2nd Bank in Philadelphia,
encouraging the loose credit “pet” banks in NY and western wildcat
banks. Substantial short term result: business panic and
ultimately economic depression in 1837. Substantial long-tern
result: helps start of new business which become huge industries
in the post-Civil War era.
President Jackson’s tariff policies.
Favored by the North with growth of manufacturing. High tariffs
undercut South’s economic relationship with England. Becomes more
and more a sectional issue between North and South. Role of states’
rights to ignore federal law when deemed harmful to a state, and
Jackson’s harsh response to its use.
Republican Party emerges in 1854.
A Northern party, not a national party. Diverse component
interests. Opposition to slavery by Northern capitalists is
economic more than moral. Northern homestead farmers want West to
be open to them, opposes expansion of slavery to West, not for moral
reasons. Unionists want to keep the country together.
Abraham Lincoln elected president 1860.
The South secedes as the Confederate States of America based on the
institution of slavery, and the Civil War begins. Debate about
whether the Civil War was inevitable.
The Civil War.
North’s advantages include railroad network, banks to finance the
war, ample shipping. South is hurt by its dependence on slave labor
when blacks flee as war progresses. North’s victory in Civil War
is a turning point in American history, represented symbolically by
War Era. Significant growth of industrialization. During
Reconstruction period, land is confiscated from plantation owners
and divided among former slaves and poor whites to become small
independent farmers. Effects of moral, economic and political
concern for the defeated South to be subservient to the North.
End of Reconstruction.
Election of 1876 and the Compromise of 1877 and the removal of
federal troops from the South. Motivation is for troops to be
available to break strikes in the North or subdue the Indians in the
West. Ku Klux Klan terrorize small independent white and black
farmers, driving them off their farms, and who become sharecroppers,
guaranteeing a life of poverty.
The North’s great push forward for industrialization.
Emergence of Robber Barons, the Gilded Age, great corruption.
Generalizations about new industrialists: originally lower middle
class, do not invent machinery or processes but understand the
markets and apply English inventions and processes. Generally
amoral, not operating under moral values, and above the law.