HISTORY OF FINANCE: Research Paper
“The people behind the American Industrial Revolution”
May 1st, 2012
Table of Contents
The People behind the American Industrial Revolution
* US Government
* Robber Barons
* The “masses”
“For the first time in history, the living standards of the masses of ordinary people have begun to undergo sustained growth … nothing remotely like this economic behavior has happened before”, these are the words of the Economic Nobel Prize, Robert Lucas Jr. concerning the Industrial Revolution in the 18th and 19th century. This period marks an important point in history as it has affected and improved the lives of the millions of people in Europe, Japan and North America. This period was not only marked by an increase in the quality of life but also a drastic population increase. Indeed as the birth rate increases and mortality rate decreases (thanks to the medical improvements), population boomed. In addition to a medical improvement, there is also the issue of immigration (in the US). There was a huge immigration to the US from Europe due to social problems. Furthermore, the American Dream was appealing to the eyes of most immigrants. This population boom is considered as a motor of the industrial revolution. The industrial revolution started off in Britain and then spread to different nations. It arrived at the US, helped its economy and society to rise and become one of the wealthiest and most powerful nations in the world. This paper will analyze the actions of the main actors that have contributed to the American economy during the Industrial Revolution. That is to say the US government, the Robber Barons and the common people.
The industrial revolution was marked by the creation of a new mean of transportation: Steam transportation. For a country as big as the US this new type of locomotion was considered as a “gold mine”. Indeed travelling from the east coast to the west coast would be a lot quicker. Therefore the US government wanted to help the development of this technology in order use it. Therefore the government decided to intervene in the train commerce because they knew that it would have a major importance. Consequently leaving the “Laissez-faire politic”. Therefore they gave different advantages to the train companies. Indeed they gave them land, charters, loans, “Eminent Domain” (any landowner is forced to sell their land if a train company needs it) and tax exemptions are sometimes given away. Due to the excesses of the new industrial age, the progressive movement and the progressive era emerged. Investigative journalism or “muckraking” started to address social issues that lead to a public reaction. Consequently the government started writing regulation laws. The Pure Food and Drug Act were created after the Upton Sinclair’s controversial novel “The Jungle” about a trust packing meat company in Chicago and Texas. Indeed this novel portrays the dreadful working conditions and how the company would sometimes sell bad meat to the public. In addition to the previous law, the Sherman Antitrust Act was passed on in 1890, which limits cartels and monopolies. Today, this law still forms as the basic for most antitrust litigation by the federal government. Consequently, the government is pro active in business and a regulatory system is installed.
In Europe, most of the companies were held by what we could consider as aristocrats unlike in the US. The industrial revolution created a new elite called Robber Barons. These people started from nothing and by taking advantage of the economic dynamic, they managed to create substantial wealth. They incarnate the American Dream. These types of industrialists or businessmen used questionable or even illegal practices in order to earn a lot of money. There weren’t any economic rules as...
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