The Economic Growth of the United States: 1790-1860

by Douglass C. North

"All readers will profit by the virtuosity with which the author has carried out his pioneering attempt to erect the structure of economic hisotry on the basis of a theory of development." ―Carter Goodrich, American Historical Review "On the eve of the Civil War the United States had already achieved rapid and sustained economic expansion. We had filled out our territorial boundaries, and the frontier was already encroaching upon the parched lands in the lee of the Rocky Mountains and moving east of the Sierra Nevadas. We were an industrial nation second only to Britain in manufacturing. Our expansion had been matched by an acceleration of economic well-being. The obstacles to American economic growth had been removed before the Civil War took place. That war was a costly and bitter interruption."

Integrating economic theory, history, and statistics in this provocative study, Professor North develops a fresh interpretation of the sources and determining factors of United States growth from the founding of the nation to the Civil War.

From 1970 to 1814 economic development is seen primarily as a result of external influences. From 1815 to 1860 the westward movement and the transformation to an industrial economy provided accelerating influences on the nation's growing prosperity. Professor North concludes that the export trade, particularly in cotton, was of prime importance as a stimulant to the economy. And he emphasizes the cornerstone of growth was the spread of a market economy, which attracted "an increasing percentage of resources into production for the market and out of pioneer self-sufficiency."

Genres: Economics, History, American History

322 pages, Paperback

First published January 1, 1966

About the author

Douglass Cecil North (November 5, 1920 – November 23, 2015) was an American economist known for his work in economic history. He was the co-recipient (with Robert William Fogel) of the 1993 Nobel Memorial Prize in Economic Sciences. In the words of the Nobel Committee, North and Fogel "renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change."

Reviews

[Roger · Rating 5 out of 5]

Boom

[Michael · Rating 3 out of 5]

North uses graphs based upon economic statistics to demonstrate the cyclical nature of American economic growth in the years after the Napoleonic Wars ended and before the American Civil War. During this period the US was at peace and not affected by any external military conflict. The result of this was increasing economic interdependence between the three regions of the country, Each of which developed according to a dynamic linked to the sale of government land in the south and the west.

It is the sale of government (read native) land that fuelled the expansion of the cotton industry in the south. This in turn allowed the West and the Northeast t develop in the first period of expansion immediately following the establishment of peace at the conclusion of the second English war. During this period, the South relied upon staples from the West and manufactures from the Northeast to expand its cotton manufactures.

During the second boom period in the 1830s (when yet another great land grab had made Indian land available for sale), the South once again expanded cotton agriculture. The expansion of the Southern economy fed the development of Western and Northern economies which then expanded their infrastructure in leaps and bounds to meet Southern needs. The dependency of the South on agriculture was not broken during either of these two boom periods, because cotton agriculture worked so well as an engine of economic development.

The resurgence in the economy in the late 1850s did not affect the South as had the previous two booms. By that time the West and the Northeast had developed sufficient infrastructure, to a large extent fuelled previously by King Cotton, to carry out their own trade in manufactures with overseas markets. The Northeast and the West invested in not only railroads and canals, but also education. None of this was the case in the "Cotton South." The basis for large scale manufacture was already laid in the Northeast and the West before 1860.

[Brian · Rating 5 out of 5]

Douglas North delivers another classic in the economic history of the United States. Focusing on the years following the formation of the country to the firing on Fort Sumter he catalogues and categorizes the way the United States grows. From looking at balance of payments, price indexes, population and organization structure he follows the development of the North, South and West. He spends time looking at specie circulation and the effects of the Gold Rush. This book also delves into the various Panics that hit the Untied States causing economic imbalance during this era. The technological growth of the United States in both transportation (paddlewheel, steamship, canal, railroad) and industrial advancements (clothing, metal production, farming) are all covered and shown how they shaped the course of the economy. The land increases from the Louisiana purchase, Florida expansion, annexation of Texas, treaty to acquire Oregon, Mexican American war and finally the Gadsden purchase are all explored. Overall an excellent look at the subject and one of the most thorough analysis on the early economic history of the United States.

[Yong Kwon · Rating 5 out of 5]

Great survey of antebellum American history that gives more depth than later books like "Land of Promise." In addition to underscoring the heavy dependence on commodity exports, North further hints at how fragile the American economy was prior to the Civil War. The internal market was insufficiently developed during this period in spite of the growing returns from trade, industrial capacity, and population. Why? This is beyond the scope of North's survey but it sets up Gavin Wright's exploration of harms done to economic development by slavery and John Larson's examination of political discord that hamstrung the country's development of transportation infrastructure. North's book is old. But it is a launchpad for a proper understanding of American economic history.

[Oliver Bateman · Rating 4 out of 5]

A bit dated but still an excellent introduction to the subject. Economic Growth was one of the North's first books, written a few years after he'd finished his graduate studies at Berkeley and joined the staff of Washington University in St. Louis. The prose is tedious but pellucid, the graphs are easy to follow, and North's periodizations and regional breakdowns are the stuff of one or two lectures in a US history survey course.