EconAir

  PRECONDITIONS OF THE INDUSTRIAL REVOLUTION IN AMERICA   In the Beginning Before industrialization began in the 1820s, there was a set of political institutions and cultural values, mostly inherited from England, that encouraged profit-seeking individuals to start new companies.  They included fairly secure property rights, increasing legal limits on monopolies, an independent judiciary that enforced contracts, emphasis on individual rights rather than social obligations, patents, tolerance of markets, and less government regulation of markets than in the past.  Much of this was stated or implied in the Constitution; an activist Supreme Court under John Marshall extended these trends. The Constitution also helped to create a national market and reduce transaction costs by mandating a national currency and limiting states’ ability to make economic policy that favored their own residents.   What America did not inherit from England was important. U...

“The age is running mad after innovation.” Samuel Johnson In the Beginning Why study economic theory and analysis, read economic history, and make economic forecasts? The short answer is because of the Industrial Revolution and the attempt to understand its dynamics and structure. Economics is an attempt to understand the material world we live in, the environment created by the Industrial Revolution. THE BEGINNING OF THE INDUSTRIAL REVOLUTION The Industrial Revolution began in England in the late 1700s. It then spread to America  and western European countries. This post will summarize its origins in England and describe the early decades of the Industrial Revolution in America. The Industrial Revolution was a radical break in history. But in England, many of the preconditions were already in place, as can be seen by the history of the Wedgwood company. The revolutionary generation that first adopted steam engines saw t...