"Market revolution" is a fitting label for the economic transformation that occurred in America during the first half of the nineteenth century. It acknowledges that radical changes occurred and that the key to these changes lay within the character and size of the market.
But the term is also useful for what it acknowledges by omission. The American economy was not transformed by an "industrial revolution" during these years. The most dramatic changes in American industrial growth were still a half century in the future. Nor would the term "technological revolution" really fit. While important new technologies were introduced in a few industries, most of the period's economic growth was not linked to new machinery. Most manufacturers continued to use old tools and methods, and farmers would not really benefit from new technologies until roughly 1850.
But while the emphasis placed on the term "market" is appropriate, it is equally important that we recognize the full meaning of the term.
For starters, the term refers to the dramatic expansion of the market through the construction of roads and canals. Thousands of miles of roads and canals, most funded by private developers and state governments, enabled manufacturers, craftsmen, and farmers to affordably transport goods to distant, and often more lucrative, markets.
But the term refers to more than just an expanded arena of exchange; "market" also refers to a new mind-set adopted by producers in planning and distributing their goods. The term acknowledges the fact that increasing numbers of people produced for the "market," rather than for personal consumption, and made decisions about what to produce, what to charge, and where to sell on the basis of "the market."
It was this new mindset that was most "revolutionary." Formerly, most Americans participated in local markets. Often labeled "traditional" or "pre-capitalist," these markets were integrated within a broader web of relationships and obligations tying community members together. Neighbors exchanged goods with neighbors, transactions were governed by local standards, and vigilant communities watched and passed judgment on the behavior of their members.
But with distant and more lucrative markets now accessible, more and more people broke free from these traditional patterns of exchange and entered into a new set of calculations. What crop or product offered the greatest profit? Where was the best price available? Would higher prices in a distant city offset transportation costs?
These sorts of "market calculations" typified the new mindset inspired by the market revolution. But the term suggests even more than this. Freedom from traditional economic relationships also meant freedom from traditional approaches to one's livelihood. Producers that had formerly aimed just at providing reasonable comfort for themselves and their families now thought in terms of maximizing their yields. Farmers that had formerly planted a variety of crops in order to attain self-sufficiency now focused their efforts on generating surpluses that could maximize their cash returns. Craftsmen that had formerly operated small shops thought about hiring more employees in order to increase sales. In short, profit-seeking became more central to the calculations of producers and, consequently, gained legitimacy as the purpose of economic behavior.
The market revolution, therefore, changed more than just where people sold their goods; it transformed the approach and the goals people applied to their work. It turned craftsmen and farmers into businessmen, and it altered the relationships between sellers and buyers, employers and employees. And since the changes were so sweeping, tensions were inevitable. Distant markets meant unknown trade partners. Could they be trusted? Larger operations meant more impersonal relations between employers and employees. Was this good for society? Larger operations also meant that opportunities for mobility diminished among workers with fewer skills and less capital. How would these people find satisfaction in their work when consigned to the ranks of permanent wage laborers?
In short, while the market revolution provided new opportunities and increased freedom, it also generated a great deal of concern. Traditional markets had been limiting, but they helped anchor communities and contributed to social stability. Could this new, extended market serve a similar role? Or would it only undermine the social order? Who would oversee this new marketplace? What rules would govern it? More broadly, what would hold American society together if the nation was transformed into a collection of profit-seeking individuals?