Sunday, September 30, 2012

The New Business

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The latter part of the nineteenth century was a time of unprecedented economic growth in the United States. The advances made during, and the effects of, the industrial revolution of the late eighteenth century put the US on a course for increased productivity and economic growth in the late nineteenth century.

The nation now stretched across the North American continent from the Atlantic to the pacific coasts. Connected by railroad lines, transportation between the cities and far off areas of the nation now took days rather than weeks and months. The industrialized northeast was able to quickly and efficiently receive the resources it needed to manufacture goods and transport them for sale elsewhere. The west was also able to take advantage of the new transcontinental railroad as the abundant resources of the nation now could be transported from coast to coast and all places in-between quickly and cheaply, increasing productivity and reducing prices. From different areas came cattle, fruits, vegetables, lumber, steel, coal, cotton, oil and much more. Abundance indeed.

As productivity grew due to increased industry, American cities began to grow larger. Railroads once again provided a quick and inexpensive means of transportation for the ever-increasing number of people from all over the nation to take advantage of the ever-growing job market in the cities. American farm families flocked to the cities to work as well as millions of European immigrants.

Between the 1870’s and 1880’s, eight million European immigrants came to the United States. The unlimited immigration policy at this time served to increase the size of the population and labor force. Immigrants provided cheap labor usually in factories and mines. The huge increase in the population raised production, and as the number of workers increased so did the number of consumers to purchase goods and services.

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Technological progress was crucial to economic growth. The Bessemer process transformed the steel industry and enabled it to produce faster and in much larger quantities than had ever been produced. The United States became the worlds leading steel producer. New farming methods and equipment, enabled farmers to grow crops larger and more successfully than before. New plows, seed drills, cultivators, mowers, threshers, reapers, harvesters and binding machines came into use, as did combines. These advances in farming made extremely large farms possible, consolidating the industry in some ways and displacing some smaller farmers who flocked to the cities for work. Enormous advances in science-based industries such as chemicals, electrical power, and electrical machinery changed the means of production. These changes prompted further innovations, which led to further economic growth. New inventions such as the sewing machine, typewriter, calculating machine, and cash register transformed industries. Some, like the telephone, electric light and power, and the phonograph created new industries and changed the quality of life.

New business practices were also an important element in economic growth during this period. Companies better organized work for efficiency and higher production. Large firms coordinated production and marketing across many business units. Leading industrialists such as Carnegie and Rockefeller operated huge conglomerates that held relative monopolies in steel and oil production. These corporations revolutionized the way big business operated, employing many thousands and controlling their respective industries.

Abundant resources, quick inexpensive transportation, cheap labor, technological advances and new business practices fueled the economic growth of the late nineteenth century that made the American economy the largest and most productive on the globe.

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