The Market Revolution
Summary & Analysis
The Erie Canal
After decades of planning, the Erie Canal opened in 1825. As early as the 1790s, visionaries had recognized that the relatively level corridor between the Hudson River and the Lake Erie made a water route between New York City and the Great Lakes a possibility. But the governor of New York, De Witt Clinton, was not able to convince the state legislature to finance the project until 1817. Although ultimately costing the state $7 million, it was money well spent. Toll revenues in the first year alone generated a half a million dollars. And freight rates for interior transport fell dramatically; prior to the canal's completion, shippers paid $100 per ton to move cargo from Lake Erie to New York, but after 1825, they paid only $9 per ton.18 The effects on the region's economy were huge as the volume of goods produced and exchanged along the canal corridor grew exponentially.
The opening of the Erie Canal, thus, profoundly affected the size and structure of the regional market. But as these changes worked their way through the region's economic system, they did more than increase the flow of commerce. The market revolution triggered by the opening of the Erie Canal changed the way people worked and planned; it transformed individuals' lives, ambitions, and prospects.
Rochester, New York
Rochester, a town located in northwestern New York along the Erie Canal, is illustrative. Pre-canal Rochester served as a commercial hub for area farmers who brought their crops into town for milling and sale. The town also had a small manufacturing center. A handful of small shops catered to the needs of the farmers bringing their goods to Rochester for exchange. Shoemakers, cabinetmakers, and coopers made a good living filling this small local market. But as commerce expanded with the completion of the Erie Canal, so also did the market for manufactured goods. Shoes, cabinets, and barrels could also be shipped up and down the canal and, consequently, these industries exploded.
The growing opportunities within manufacturing attracted a new batch of entrepreneurs; men who may not have had experience in a particular trade, but knew how to organize production and access the capital needed to operate on a large scale. These "merchant-capitalists," with their more efficient and cost-effective scale of production, quickly drove many of the small craftsmen out of business, or probably, to be more precise, into the ranks of wage earners employed by merchant capitalists.
More than the master craftsmen and small shop owners were affected by the arrival of merchant capitalists, so too were the apprentices and journeymen working for the master craftsmen. In the past, a master craftsman may have employed a handful of people, and master and employee worked side by side and often lived in the master craftsman's home. Certainly the apprentices did. In fact, room and board were part of the arrangement along with the understanding that the master was responsible for the oversight of the young men placed in his charge. But when these master craftsmen were driven into the employment of merchant capitalists, the apprentices and journeymen were driven out of their former homes. They too may have found work with the larger manufacturers, but they now lived independently, in boarding houses or rented rooms.
Not only did workers now live independently of the men they worked for, they lived in different parts of towns. Residential maps from the period reveal that neighborhoods re-organized along lines of class and function. In pre-Erie Rochester, neighborhoods were relatively heterogeneous—men of different classes lived side by side in the same homes and in the same neighborhoods. Moreover, there was often little difference between residential and business districts. But as merchant capitalists reorganized the organization and scale of work, places of work and residence became separated and the neighborhoods housing workers grew more geographically distinct.
The results for Rochester's workers were mixed. These workers no longer benefitted from the familial atmosphere of the old arrangement, but they also enjoyed a new autonomy. One consequence that raised increasing local alarm was the new character of drinking.
Alcohol in Rochester
Alcohol did not flow into Rochester with the Erie Canal, but where and when people drank did change along with the town's economy. Within the old shop economy, alcohol was integrated, in our eyes somewhat surprisingly, within the structure of the workday. One of the apprentices was usually sent out in the morning, around 11 A.M., for a bucket of beer that the entire shop—apprentices, journeymen, and shop owner—would drink through the early afternoon. Productivity probably fell off a bit (or a lot), but shop morale was likely strengthened. As importantly, drinking was in this way contained within a controlled environment.
But in their new manufacturing operations, merchant capitalists abandoned this custom. They were guided by a different logic: the maximization of productivity. Manufacturing was a business, not a way of life; their workers were employees, not members of their extended families. Drinking, consequently, disappeared from the workplace. But it resurfaced in the now unsupervised leisure time of employees. In working-class neighborhoods the number of taverns and grog shops multiplied and liquor licenses were issued to groceries and taverns in unprecedented numbers.
Town leaders voiced increasing concern about the proliferation of taverns and the uncontrolled drinking among the town's workers. How workers felt about it all is unclear. But quite possibly, Rochester's new social conditions were a mixed bag for all parties. Workers and business owners all gained a certain degree of freedom. Workers had more control over where they lived and how they spent their leisure time, and employers rid themselves of former obligations to oversee the morality and behavior of their employees. But neither side enjoyed an unqualified gain for autonomy came at a price.
Workers soon discovered that their employers, preoccupied with productivity and profits, worried little about the security and occupational development of their employees. Their relationship was purely practical and pecuniary. The worker performed a task for a specified period of time and the employer paid him a certain amount of money for his labor. For some workers, this relationship was too impersonal and exploitive. They wrote nostalgically of the more collegial relationships they enjoyed with the small shop keeper and the more humane pace and sociable atmosphere of the shop. Others complained more about the loss of mobility within this new economy. An apprentice was less likely to work his way up the occupational ladder and own his own shop. A journeyman was less likely to muster the resources needed to compete with the merchant capitalist who was able to turn his superior resources into more efficient and cost-effective levels of production.
On the other side of the table, employers worried about the increasingly rowdy working-class neighborhoods and unchecked working-class pastimes. Their workers may have moved out of their homes and into their own neighborhoods, but they had not moved so far away that employers could ignore them altogether. The noise from the working-class neighborhoods drifted into the more sober parts of town, and the lingering results of a rowdy night stumbled into work the next day.
In this sense, Rochester's transformation reflected the broader changes introduced by the market revolution. Freed from traditional economies built upon local webs of obligation and exchange, Americans joined more extensive, far-flung, and opportunity-filled markets. But this very freedom could prove as unsettling as it was exciting. What would hold communities together when traditional sources of cohesion disappeared? What rules would govern economic behavior when the markets were populated by distant strangers rather than neighbors and friends? Who would supervise the young and unsettled if employers clocked out of this responsibility at five o'clock? And how healthy was a labor force made up of of permanent wage earners? How stable was a society filled with young men facing limited occupational opportunities?
Francis Cabot Lowell, Industrial Spy
In Massachusetts, industrialists confronted these questions as they set about introducing textile manufacturing to the region. They attempted to reconcile the new production methods with traditional social values in a particularly innovative way. Francis Cabot Lowell, the founder of the Boston Manufacturing Company, was known for his innovativeness as well as for his caginess. He built New England's first power loom using plans pirated from England's closely-guarded textile plants. British authorities were anxious to preserve their monopoly on the textile industry so much so that skilled workers from their plants were not allowed to emigrate and persons caught with models or drawings of British textile technology faced stiff penalties. But Lowell, playing the part of a casual tourist, visited a factory in Lancashire, England and closely studied its water-driven power looms. British authorities, suspicious of the wealthy American, searched his luggage for drawings. But with the details of the power loom committed to memory, Lowell returned to America and New England's textile industry was born.
Lowell followed this act of industrial espionage with a bit of financial creativity. Although unable to underwrite a factory on his own, he thought in more grandiose terms than the formation of a simple partnership. Instead, he formed a joint stock company by selling shares in the venture to several wealthy associates. In this fashion, Lowell raised the capital needed to construct a state of the art factory at Waltham that consolidated the transformation of raw materials to finished cloth on one site. And the joint-stock company he formed provided a model for industrial development for other aspiring entrepreneurs.
To complete his innovative approach to industrial production, Lowell proposed that young women, recruited from nearby farms, provide the bulk of the factory workforce. Lowell had been distressed by the labor conditions in English factories. Men, women, and young children worked in filthy factories for very low pay. The surrounding housing was overcrowded and inadequate; it all seemed a breeding ground for immorality and despair. But if American factories relied on young women rather than men, he calculated, if they were paid an adequate wage and provided with decent, well supervised housing, American industrialists could build a manufacturing sector that matched England's without replicating its disastrous social consequences.
At Waltham, Lowell therefore hired young women to fill the vast majority of the unskilled jobs. They lived in carefully-chaperoned dormitories, and were escorted to prayer meetings and church services through the week. Lowell had no trouble finding women to accept these terms. Many were anxious to leave the farm. Others wanted to escape overbearing parents and repressive small towns. But most were drawn primarily by the cash wage. There were few occupational alternatives for women and none, such as domestic service, that paid as well. At Waltham, the work was difficult and the days were long (the standard week was six twelve-hour days), but, at least in the beginning, workers could expect to save about half of what they earned; in a couple of years a woman could pay for a dowry or, after 1838, finance an education at the state's teacher college at Lexington.
By the 1840s, the Boston Manufacturing Company had expanded into neighboring towns. About 20 miles north of Waltham, the company turned a collection of sleepy villages into an industrial town (named Lowell) of more than 20,000 people and more than 30 mills. Francis Lowell was long since dead, but to many observers, the "Waltham" or "Lowell System" seemed the answer to the disorder threatened by the new manufacturing processes. By this point, however, many insiders had realized that it was not the panacea they had originally sought. Some young women found the work unpleasant and the living conditions repressive. Others complained that accumulating a dowry took longer than the two or three years they had anticipated. In the pages of The Lowell Offering, mill girls wrote nostalgically of country homes and childhood freedoms traded for the noise and tedium of factory life. When wages were reduced in 1834, employees formed the Factory Girls Association and led a walkout form the mill. The women struck again in 1836.
By 1850, few still clung to the belief that a paternal alternative to the sorts of purely-business labor arrangements, which had emerged in towns like Rochester, could be realized at Lowell. More labor conflicts had surfaced during the 1840s, and with the arrival of Irish immigrants fleeing the potato famine, the Boston Manufacturing Company had found an even more compliant source of labor. A handful of industrialists would continue to search for an alternative to the new market-based labor relations. George Pullman would introduce a modified version of Francis Lowell's vision outside Chicago in 1880, but this plan would also fail. There was simply no going back; within the manufacturing processes unleashed by the market revolution, recovering the paternal labor relations of the eighteenth century proved impossible.