U.S. Economic Development and Industrialization 1783–1920

Economic Developments in the United States

The United States presents some unique features that attract attention from the moment we begin to study its economic past.

• It comprises an enormous area and was settled only gradually.
• It created a market within its own territory.
• From the first moment, a series of regions with very specific financial interests arose.
• The historic tradition was not heavy because virtually none existed: no traces of feudalism, and much of the territory was occupied by immigrants, mainly from Europe.

Post-Independence Growth and Infrastructure

The decades after independence (1783) were characterized by intense social and economic development, coupled with strong population growth. Geographic features stimulated the development of roads and the construction of canals. Construction of railways soon began; at many times in the nineteenth century, railroads were the best index of the U.S. economic situation.

Population and Immigration, 1865–1920

After the Civil War there was a significant increase in population: 50 million inhabitants in 1880 rose to 106 million in 1920. Growth was coupled with high immigration, which from various European countries supplied labor for diverse positions in industry and commerce.

Industrial Expansion and Key Sectors

Industry developed under the protection of a large internal market, and dangerous coalitions and concentrations of power began to emerge, against which government and public opinion fought. Significant progress occurred in the textile, chemical, electrical, and coal industries, and the oil industry also began to develop.

Agricultural Changes and Impact

Agriculture developed, especially with the introduction of new land use and increased production of wheat, corn, and cotton. Output increased greatly; however, the fate of many smallholders was often unfavorable.

Social Change and Labor Movements

As a result of progressive industrialization, new social groups and trends emerged. From the angle of union action, the Knights of Labor tried to organize, educate, and assimilate the working world, including recent immigrants. In contrast, the American Federation of Labor was more exclusive.

Large industries experimented with a series of measures to interest and involve workers in the conduct of business, aiming to draw them away from the union movement. However, other worker associations, such as the Industrial Workers of the World (often referred to as "the world's industrial workers"), also did important work.

Business Concentration and Regulation

From the business point of view, big industrialists emerged who founded dynasties of economic power. The government fought large industrial concentrations and monopolistic practices through a series of laws in the late nineteenth and early twentieth centuries.

Mass Production and Research Investment

The most outstanding feature of the American economy at the beginning of the twentieth century was its orientation toward mass production, which largely found its market in massive domestic consumption. U.S. industry also invested large sums in research.