The Market Revolution Introduction

In A Nutshell

America's economic transformation story really got started in the first half of the 19th century. 

After all and first off, big cities are much more likely to thrive if there's a way to get to them. And better transportation meant easier movement of people and goods, improved trade, and solidification of the North's role as the commercial center of the nation.

Since we were still centuries away from hoverboards, transportation looked more like feet and horses, so you can imagine the novelty of paved roads and canals.

Historians called this era of establishing better connectedness the "market revolution." Basically, it included the expansion of the marketplace that occurred in early 19th-century America, prompted mainly by the construction of these new roads and canals to connect distant communities together for the first time. 

Turnpikes, the oldest version of the paved toll road, made transportation much easier, and people were willing to pay the tolls that corporations charged for the maintenance of these roads. On top of roads, the Erie Canal—we promise it wasn't as sinister as it sounds—was an engineering marvel that had a dramatic effect on the growth of the economy. 

It also made canal building crazy popular.

Turnpikes, canals, and last but not least, railroads linked the North to the rest of the country and, uh, paved the way for a nation-wide transportation, communication, and economic makeover. 

In fact, the market revolution also refers 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.

On the flip side, the market revolution meant merchants needed to be more savvy about "working the market"—how to secure capital, arrange transportation, advertise and distribute goods—so 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.

Hey, can't win 'em all, right?

 

Why Should I Care?

Have you ever been ripped off on eBay? Or misrepresented an item on Craigslist? 

The internet has turned our homes into global marketplaces, so millions of buyers and sellers are just a click away. But can we always trust them, or even trust ourselves?

What if you could only sell goods to people that you knew? Would that ruin your chances of selling fake handbags? Would you find this sort of marketplace limiting or reassuring?

Until the early-19th 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 a long while.

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. 

It's tough to tell how we'd respond since there are many buffers—anonymity, delivery trucks, and huge corporations that don't have your number memorized (or do they?)—but if you'd been kickin' it in 1820, would you become an entrepreneur or would you become a Shaker?