The Market Revolution
The Market Revolution Introduction
In A Nutshell
The "market revolution" is a term used by historians to describe the expansion of the marketplace that occurred in early nineteenth-century America, prompted mainly by the construction of new roads and canals to connect distant communities together for the first time. Inspired by the success of the Erie Canal, states poured millions into transportation networks that spurred economic growth.
But the market revolution refers also to a new approach adopted by farmers and manufacturers to their work. With distant but lucrative markets now accessible, they now produced "for the market," rather than for personal consumption, and they engaged in elaborate calculations designed to maximize their profits in these markets.
The market revolution brought greater opportunities to some farmers, craftsmen, and entrepreneurs. But since the greatest success was realized by those who understood how to "work the market"—how to secure capital, arrange transportation, advertise and distribute goods—the market revolution diminished the economic fortunes of others. Small craftsmen were driven out of business by "merchant capitalists," and skilled workers and small shop owners were reduced to wage earners with little hope for occupational mobility.
Even among those who succeeded under the new conditions, the rapid and sweeping changes that occurred in American labor relations and gender roles caused a great deal of anxiety. This anxiety inspired a wave of experimentation in areas as diverse as labor organization, health, and religion.
Why Should I Care?
Have you ever been ripped off on eBay? Have you ever misrepresented an item on Craigslist? The internet has turned our homes into global marketplaces. Millions of buyers and sellers are just a mouse click away. But can you trust them? Can you trust yourself?
What if you could only buy goods from your friends, your family, the people in your neighborhood? What if you could only sell goods to people that you knew? Would you find this sort of marketplace limiting or reassuring? Would you be willing to exchange a better deal for the confidence that comes with doing business with someone you know and trust?
Until the early nineteenth century, most Americans participated in markets that were local and familiar. They did business with people they knew and every exchange was embedded within a larger web of relationships—for instance, your buyer belonged to your church or your seller's daughter was married to your cousin. The basic rule governing these local markets was simple: be fair. If you ripped somebody off, it would be talked about by your neighbors for the rest of your life.
But during the market revolution, new roads and canals allowed people to exchange goods in distant markets with complete strangers. It wasn't exactly eBay, but for people accustomed to markets that were familiar and local, it was just about the same—both exciting and unnerving. While many embraced the new opportunities provided by the new market conditions, others sought refuge from the chaos in new religions. While some abandoned their old markets and old ways and began to think like businessmen, others tried to slow the forces of change.
Had you been alive in 1820, how would you have responded? Would you have become an entrepreneur or a Shaker?