The Brief History of the US Economic - Case Study Example

US Economic History Background of the Civil War The following discusses the brief history of the US starting with the Civil War (Outline of US History). Warding off slavery was perhaps one of the most heart-warming and dramatic historical events of the United States. A country home to diverse culture, the United States was working hard to protect the rights of its citizens for freedom and choice. Adhering to idealism and principles, some leaders of the United States were fighting for government development and economic reform. One of them was remarkably Abraham Lincoln. In 1860, Abraham Lincoln was elected as president of the United States. During this time, there was a major economic classification between the north and the south according to the acceptance of industrialization. Manufacturing comprised the third of the nation’s income and 16 percent of the US population lived in urban areas. This means that the other remaining percent of the population lived in rural areas. Urbanization can be distinguished somewhere in the northeast part of the United States while areas in south remained rural. As far as its economic interest was concerned, the south was dependent on the north for capital and manufactured goods. For as long as the south controlled the federal government, its political power has strong power control over slavery. The Republican Party as headed by Abraham Lincoln represented the industrialized part of the north. Lincoln was very hesitant on slavery so then was very clear on economic policy. The US civil war began between the north and the south leaving the former victorious which also had eventually ended the slave-labor system. The absence of slave-labor system paralyzed the south’s economy. The northern industry on the other hand surged ahead too fast. There were growing number of industrialists and who were starting to influence and dominate the nation. This is to say that industrialization was starting to dominate the American life. This wide spreading of industrialization can be dated back to the late 18th century as the industrial revolution in Europe and which spread to the US. The US civil war opened up an opportunity for the US to embrace industrialization on a sudden and unanimous order. The Impact of Civil War to the US Economy Civil war was building up the foundation for the rapid economic development of a modern US industrial economy. The following were some indicators (History of the United States: Industrialization and Reform). 1. Discoveries The discovery of oil 2. Inventions Typewriter was developed Refrigeration rail road cars were used Invention of telephone Phonograph was invented Invention of electric light Invention of cars and airplanes at the dawn of 20th century 3. Development of industrial infrastructure Coal was found in abundance Opening of large iron mines Production of steel Mines for large copper Mines for silver Mines for leads Cement factories were built 4. Banking system development The national banking acts of 1863 and 1864 (Grossman) Later reforms 5. Distribution and communication system Railway system Years after the civil war but prior to World War I, the US economy had further grown into much more advancement and sophistication. The following were remarkable in the making of a powerful nation with a great and powerful economy. 1. Growth of mass consumerism and the availability of variety and quality goods for the average worker 2. High tariffs 3. Building of enterprises Growth of mass consumerism As the industry was growing, mass-production methods were developed. In 1913, Henry Ford was able to design a method which was able to give each worker a specialized task. Each customer was compensated well making them able to afford buying the product they made. This helped so much the industry to expand. In addition, the work’s efficiency and speed of production was able to increase because of the development and advancement through the use of machines and sophisticated technology. However, the growth of investments business even though they were able to provide employment, still exploitation were possible and other revolutionary form human exploitation was remarkable. High tariffs The good things about implementation of tariffs were of obtaining revenue or protection (McConnell & Brue 706). Protective tariffs for instance are designed to protect domestic producers from outside or foreign competition. The implementation of high tariffs made domestically produced goods cheaper by placing more taxes to imported goods. This contributed largely to the development of US economy. Building of enterprises Certainly, more business tycoons were able to grow and expand business giving more opportunity for higher employment rate. The bottom line was that more enterprises were created. In fact, the growing number of corruption expanded some of these businesses for they can do whatever they want. The Federal Government was trying to eliminate corporate abuse, trust bursting, reducing tariffs and reforming banking, protecting natural resources and more (VanGiezen & Schwenk). Elimination of corporate abuse alone is an indication of some inadequacy rapidly happening in the nation. In addition, corruption from the government was remarkable that simply Americans wanted badly to have focused on the people’s concerns (History of the United States: Industrialization and Reform). As a whole, Civil War was able to link the bonds between government and business (Streich). The downturn However, the trend seemed not to be always on the good side. Despite positive advancement of the US economy, the downturns were inevitable. Many Americans after Civil War and before World War I called for reduction of poverty, improvement of the living conditions of the poor and regulation of big business (History of the United States: Industrialization and Reform). The bottom line for this call was to make some changes in the US not only in its political, social but as well as in its economic system. World War I and its Impact to the US Economy Another interesting moment on the history of the US economy happened during 1914 to 1918. It was the World War I when the US was first in a recession. Soon after, the European purchases of goods for the war especially foods and munitions had significantly contributed to an upward spiral movement of the US economy (Rockoff). Soon after, the US continue to grow in its territory taking hold and making friends with the world were what it takes to become the world power. Source: http://www.nber.org/papers/w10580.pdf The results shown in Table I suggested that the US. Economy was constantly improving starting from 1848 to 1918. These are periods of American history were significant things happened for the benefit of its economy. It seems war had brought positive output to the US economy. These wars were prerequisite to the US’s long term economic expansion. Summary and conclusion in a nutshell The American period from 1861 to 1916 proved to be a significant transition of the US economic development. US Civil War also proved to be a significant contribution towards faster acceptance of industrialization among conservative states in America. On the other hand, the following World War I also proved to be a good opportunity for the US to make business out of it. This time the business went into a larger scale for it covers all those countries engaged in the World War I. This marks the beginning of the success of the coming world power. US Economic history is composed of both trials and errors. The US failed yet in the end its failures were stepping stones towards advancement to success. A clear point of view with the US’s economic success and growth lies on the fact that it always looks forward to advancement and never let the American dream fall. References “History of the United States: Industrialization and Reform”. TheUSAonline.com. 16 Sept. 2009 McConnell and Stanley L. Brue. Economics. 12th ed. New York: McGraw Hill, 1993. “Outline of US history”. America.gov . 16 Sept. 2009 Rockoff, Hugh “Until it’s over, over there: The US Economy in World War I” nber.org. 16 Sept. 2009 < http://www.nber.org/papers/w10580.pdf> Streich, Michael “Effects of the American Civil War.” Suite101.com. 14 Jan 2009. 16 Sept. 2009 VanGiezen and Albert E. Schwenk. “Compensation from before World War I through the Great Depression.” Bls.gov. 30 Jan. 2003. 16 Sept. 2009 < http://www.bls.gov/opub/cwc/cm20030124ar03p1.htm> Read More