Market Revolution (Issue)
MARKET REVOLUTION (ISSUE)
The market revolution was simply the transition from subsistence economy or barter economy to using money to buy and sell things. This, in turn, transformed the way that people looked at things: from useful objects into commodities with prices attached to them. Except in the case of slavery, among the things that now wore price tags was human labor. The populations of the countryside now included a growing stratum of agricultural laborers who, like their urban counterparts, worked for wages. To the extent that the market revolution penetrated the countryside, however, with cash crops like tobacco and cotton, those who did not own land could often rent it. Those tenant farmers might rent the land by paying the landowner in money or in shares of the crop. But even though the process of production involved various combinations of cash, barter, and sharecropping, the whole system rested on the fact that the crop was eventually sold on the market. Otherwise there would have been no reason to grow crops beyond what was needed to subsist. The market revolution absolutely revolutionized the lives that it touched. The changes that it wrought even extended to the religious sensibilities expressed by the people whose lives were disrupted by the market revolution.
At the beginning of the nineteenth century the United States was still primarily an agrarian nation. Agriculture dominated the lives of people whether they were large planters or small farmers. Most small farmers practiced subsistence farming, making whatever was needed for themselves and their families. Because the shipment of produce was costly and time-consuming, only farmers near ports grew cash crops. The market revolution grew out of this primitive economic regime. Prior to the market revolution, the transportation revolution established the trade corridors that gradually corroded the culture of subsistence farming.
The roads, canals, rivers, and, eventually, the railroad tracks that made up the transportation revolution spurred the market revolution. Self-sufficient farmers became involved in the market little by little: selling eggs, growing cash crops for sale, and relying on industries for the goods—like clothing or the fabric to make clothing—that were formerly produced at home. More people became involved in non-agricultural businesses, which helped to diversify the U.S. economy. By 1860 almost 40 percent of U.S. citizens no longer relied directly on farming for their living. With economic expansion and improvement in transportation the population began to move westward, opening up the interior of the continent. By 1850 almost half of the U.S. population lived outside of the original thirteen states.
The cities grew rapidly. In 1820 only 12 cities had populations over 5,000. By 1850 there were 150. By 1860 over 20 percent of the U.S. population lived in urban centers (towns over 2,500 people), which was up from nine percent in 1820. The Northeast was the most urbanized area in the nation with one-third of its population living in cities. In the South cotton fed a strong, rural agricultural economy. Only one-tenth of the South's population lived in urban areas.
Although some economists see a period of laissez faire economics during the market revolution, the federal government nonetheless remained a potent force in the economy. Nowhere was this more clearly seen than in banking. The federal government established the First and Second Banks of the United States as central banks with effective power to regulate commercial banks chartered and licensed by state governments. The existence of a "national" or "central" bank brought relative regularity to the circulation of currency and the funding of enterprise. It also, however, provoked anxiety and skepticism on the part of ordinary citizens as well as politicians like Andrew Jackson, who distrusted concentrations of economic or political power.
Echoing the anxiety of many Americans regarding the financial and speculative aspect of the market revolution was the fear and despair of the slave population of the South in the face of the demand on their labor to feed the cotton-based industrial revolution in England and the textile producing mill towns of the Northeastern United States. The exploitation of slave labor was based on cotton, rice, and tobacco as cash crops. This required the market revolution and the conversion of subsistence agriculture into cash-crop agriculture.
The market revolution also transformed the culture and the religious life of the United States in the period between the Revolution and the Civil War. What had been a rural, traditional society was now undergoing profound change. The market revolution sped up change. It brought uncertainty and anxiety and it evoked the thinly repressed insecurity of evangelical Protestantism. The question: "What must I do to be saved?" now reverberated in a great many questions of everyday life. People were moving. Jobs were being lost. Slave families were being broken up as the men were being shipped off to new and more fertile plantations along the Mississippi River. Trades were being "degraded" as various forms of capitalist enterprise found cheaper ways to produce the goods that the artisan class had formerly made. Women who had made the candles or the homespun clothes that the family had worn now bought those items in the crossroad store. They were losing their roles and the feeling of equality with men that the shoulder-to-shoulder labor of the subsistence homestead had afforded.
This pervasive and multi-faceted insecurity on the part of displaced populations who were undergoing the trauma of separation from traditional society expressed itself in the religious rhetoric of the age. The camp-meetings of the Second Great Awakening—with the itinerant preachers and the amateurs preaching from tree stumps and the emotional outpouring of sinners all looking for a second chance—served to heal some of the wounds of a population going through the market revolution.
See also: Bank War, Laissez Faire, Slavery, Subsistence Agriculture
Bruchey, Stuart. Enterprise: The Dynamic Economy of a Free People. Cambridge, MA: Harvard University Press, 1990.
North, Douglas. The Economic Growth of the United States, 1790–1860. Englewood Cliffs, NJ: Prentice-Hall, 1961.
Taylor, George Rogers. The Transportation Revolution, 1815–1860. New York: Holt, Rinehart, and Winston, 1951.