Evolution of the American Economy: Growth, Welfare, and Decision Making

This book is for college students of economics and history who want to learn the important facts about the economy, and the complex factors of economic change. It combines an analytic narrative of economic growth with an evaluation of economic welfare. It covers subjects often omitted, such as the distribution of wealth and income. It treats the main phases, trends, and turning points. The first four chapters cover 1492 to 1790, from Colonialism to national independence. The next six chapters cover 1790 to 1860: the agricultural era and emerging industrialism. The next six chapters cover 1860 to 1914: the transformation of the American economy. The last six chapters cover 1914 to 1979: the super-industrial economy. The English colonies attracted people who wanted to acquire material goods, a "selective migration". [Was this different from the Spanish colonies?] Colonies produced staples for export, and imported manufactured goods. The enclosure movements in England confiscated common property to benefit the aristocracy (p.30). Forcing people off the land created immigrants for the colonies. Religious minorities also sought a refuge in America. The Continental Congress created paper currency to pay for the war; this inevitably created severe inflation and dramatic price rises. Revaluing the currency downwards didn't work. Robert Morris was put in control of finances, but failed to secure taxing power for the national government. Instead of higher taxes, higher inflation paid for the war. America's productive strength overcame the monetary problems (p.87). Some merchants gained wealth from war supplies and its commerce. American continued to trade with Great Britain, but also increased or opened other markets in Europe. The post-war depression resulted in forming a strong national government to eliminate the conflicts and problems from separate but equal states (p.96). The power to tax is the basis for any government (p.97). America increased in size and population from 1790 to 1860 (p.103). Immigrants, human capital, created a fast-growing labor force. Chapter 5 tells of improvements in transportation: canals, steamboats, and railroads. [No mention here of their spread of cholera.] The lands west of the Appalachians were more productive than the older lands. Improvements in transportation changed agriculture from subsistence to market production. Gains in efficiency resulted from new inventions, and more workers outside of agriculture. The primary source of Federal revenue was the tariff on imports. This protectionism paid for the national debt, and increased the rate of capital formation (p.176). Industrialized production reduced the real cost of producing goods so the rising level of material welfare exceeded previous levels. Imported technology often had to be modified for local conditions. Cotton cloth manufacturing was the first modern industry (p.188). Page 195 explains the importance of interchangeable parts, as pioneered by Eli Whitn