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In assessing the US's emergence as a major exporter of both primary produce and manufactures, it is of course essential to examine the general internal development of the US economy in the nineteenth century. In this context, the discussion here will focus on agriculture, industry, on technological development, and on the more general social and economic structures that these developments were embedded within and which they also conditioned. In discussing these internal developments, some analysis of the US's place in the changing world economy will also be provided.
By 1900, the US's share of world export trade in primary products - crude foodstuffs and raw materials - was nearly 19% of the total, and its share of manufacturing exports was 7.4%. [1] Although these figures are small in comparison with the north-west European and British shares, they are indicative of the US's role as a burgeoning participant in a growing international economy. Additionally, they foreshadow the US economy's transformation from being primarily an exporter of primary produce to being an export economy based mainly on manufactures. On this point, raw materials as a share of US exports fell from 62% in 1850 to only 25% in 1900, while manufactures grew from 22% of the total in 1850 to 35% in 1900. [2] It will be argued here that both the shift from agricultural to manufactured exports, and the US's emergence as a major exporter, were closely related to the modes of development and differentiation of the domestic US economy.
The first aspect of the US's domestic economic development to consider here is agriculture. Leaving aside any speculative notions of a `frontier mentality', it is obvious that the territorial expansion of the US brought vast acreage into agriculture: in the hundred years to 1912, the US land area unfolded from .5 billion acres to 1.9 billion. Almost half of this land was tied up in farms by 1912, with a significant shrinkage of `public domain' land swelling the productive area, a process encouraged by government intervention such as the Homestead Act of 1862. [3] Not only the quantity of land was significant, but also its quality. The opening up of land west of the Mississippi brought into cultivation "new land...more fertile than the old." [4] This quality contributed to the developing efficiency and competitiveness of US agricultural production: "The abundance and accessibility of land plus the fact that much of it was fertile meant that output per man in American agriculture was high." [5]
However, the very abundance of land brought practical challenges in a nation where labour was a relatively scarce resource. The shortage of labour in the US, combined with the large areas available for cultivation, dictated that if agriculture was to maximise its profitability, capital- and machinery-intensive methods would need to be adopted. This was especially important since the US population was increasing significantly throughout the nineteenth century (ten-fold between 1820 and 1914). [6] This domestic market obviously had to be supplied with food. Broadly speaking, the latter part of the nineteenth century saw the adoption of chemical, biological, and mechanical techniques within a system of `scientific' farming - again a system that was in part government-sponsored. [7] These technical improvements meant that agricultural output increases shifted from being the result of greater acreage under cultivation to being based on productivity increases. Particularly significant here is the development of mechanised agricultural techniques which allowed for larger farms and brought economies of scale, contributing to the low prices of US agricultural products which in turn contributed to US competitiveness in world markets. Another element here is the expansion of demand overseas. The growth of European industrial economies and their populations fuelled US exports; by 1901, a third of US wheat and flour was sold abroad, [8] and cotton - admittedly not at the forefront of technical developments - was in the mid-century the "major commercial crop" [9], providing in 1850 63% of the value of all US exports. [10] Thus, US agricultural exports were predicated on the availability of resources - land and crops - and on the adoption of techniques to maximise efficiency and productivity. Finally, the surpluses created required foreign markets willing and able to absorb them.
The second aspect of US export growth to discuss is that of the manufacturing sphere. Here it is possible to find parallels with the agricultural sector: resources, methods, and markets.
In resource terms, the US was `blessed' with an "abundance of non-reproducible natural resources." [11] Again, it is not just the quantities that are significant, but their composition and quality: the US was rich in the materials which were important to the rapidly-expanding industrial economies of the nineteenth century, economies that were developing new methods of production which called for specialised materials. Hence the US gained a comparative advantage - initially as an exporter of raw materials, later as a manufacturer - from its reserves of the materials required for the industrial mode of production: oil, copper, coal, zinc, iron ore, lead. [12]
The processing of these raw materials within the US was influenced, like agriculture, by the availability of labour. The relative scarcity of labour again suggested the adoption of production processes and technologies which maximised productivity, processes and practices which came to be labelled as a recognisable `US system of manufactures'. The US system relied on the principles of mass-production and mechanisation, and on the extensive utilisation of interchangeable parts. These technical and systemic improvements were important factors in the lowering of unit costs which made US manufactures increasingly competitive in world markets, especially in comparison to European economies with their relatively high levels of labour-intensiveness and their limited supplies of raw materials.
More speculatively, there is also a cultural element here, with the US characterised as a free-enterprise zone where an ethos of innovation and improvement were embedded in a culture where the `ideological drive' to get rich was a powerful and widely respectable one, and where the paucity of restraints on capital accumulation meant that new methods and innovation found ready backers. This `social' element, combined with the US's richness in natural resources, high levels of technical development, and the stimuli of the expanding domestic market, contributed to the emergence of the US's strength in production which created the competitiveness of its manufactured exports, a competitiveness measurable in terms of cost, quality, serviceability and standardisation.
In addition to these specific developments in agriculture and manufacturing, it is also useful to consider the wider contexts of US economic development, contexts which - arguably - conditioned the creation of an economy which was able to maximise the benefits conferred on it by `natural' comparative advantage. Alfred Chandler has written that
[w]hat most strikingly differentiated the United States from Great Britain and Germany in the late nineteenth century were the geographical size and very rapid growth of its domestic market. [13]
For the present writer, this highlights the criticality of the specificities of the developing domestic market in shaping productive processes and systems of distribution and consumption. The continental United States was, for much of the nineteenth century, a thinly-populated and highly dispersed nation. The extent of the land area and the accompanying demography dictated the path of what might be seen as a US economic sonderweg different from the other industrial economies.
It is a truism that each country's economic development is unique, but the significance of the circumstances and direction of US economic development lies in the creation of an economy that was supremely well-placed to exploit the prevailing global economic circumstances at that particular period in the developing world economy. The apparatus of US agricultural and manufacturing production was built on the principle of maximising profit (obviously). In the US techniques were necessarily capital-intensive rather than labour-intensive. The processes of innovation and mass-production, coupled to a growing and widely-distributed mass-market, led to significant developments in technologies - railroad transport, storage and packaging, for example - and in the systems by which economic enterprises were operated. The size and geographical distribution of the US market led to the creation of the "integrated, multi-unit enterprise," [14] which in turn stimulated the development of `professional' and `scientific' management. [15] It could be argued that the specificities of the US market created a system of economic development where the threefold thrust of innovative manufacturing, marketing and management positioned the US so that it could emerge - after 1900 - as the dominant industrial world power.
Thus it is in placing the US's internal economic development in the context of the changing world economy - where, throughout the nineteenth century, a liberalisation of trade, labour mobility, and international investment took place - that we can perhaps find the explanation for the emergence of the US as a major exporter.
In conclusion, I reiterate the last point above: the `colonisation' of the vast continental US throughout the nineteenth century and its growing population meant that novel solutions had to be found to the problems of production in what was still - despite the expanding population - an economy short of labour. Many of the answers to these problems centred on raising productivity through technical innovation, maximising output and output per worker. The combination of rich resources, the growing domestic market, high productivity, economies of scale, and growing and increasingly accessible world markets, created opportunities for the US to compete highly effectively with `rival' industrial economies. By 1900 the shift in favour of the US as a major exporter of manufactures and primary products was well-established, but it can be noted that subsequent US primacy was not to be permanent: like Britain, which had enjoyed the fruits of pre-eminence as the `first industrial nation' in a specific economic epoch, the US was also to be only a temporary beneficiary. However, at the turn of the nineteenth century, the particular circumstances of US economic development were meshing fruitfully with the development of the world economy.
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Atack, Jeremy
and
Passell, Peter A New Economic View of American History W. W Norton, 1994
Chandler, Alfred Scale and Scope: The Dynamics of Industrial Capitalism Harvard U.P., 1994
Habakkuk, H. J. American and British Technology in the nineteenth Century CUP, 1967
Hurt, R. Douglas American Agriculture: A Brief History Iowa State U.P., 1994
Kenwood, A. G.
and
Lougheed, A. L. The Growth of the International Economy 1820 - 1990 Routledge, 1992
Temin, Peter Causal Factors in American Economic Growth in the Nineteenth Century
MacMillan, 1975
Walton, Gary M.
and
Rockoff, Hugh History of the American Economy Harcourt Brace, 1994
[1] These figures include the Canadian contribution, and are derived from Kenwood and Lougheed, p. 86
[2] Figures derived from Walton and Rockoff, p. 463
[3] Figures in Temin, p. 22
[4] ibid., p. 64
[5] Habakkuk, p. 13
[6] Atack and Passell, Ch. 1, passim
[7] See Walton and Rockoff, Ch. 15, passim
[8] ibid., p. 334
[9] Hurt, p. 120
[10] ibid., p. 121
[11] Walton and Rockoff, p. 463
[12] ibid.
[13] Chandler, p. 51
[14] ibid.
[15] ibid., Conclusion, passim