Term
| Why was transportation more expensive in the north? |
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Definition
Northern goods, like wheat and corn, were heavy relative to their value
Transportation by land was 30 times more expensive than transportation by water
There were long distances; New York to Chicago was about 6 weeks |
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| Four Internal Transportation Improvements |
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Definition
| Turnpikes, Canals, Steamboats, Railroads |
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Toll Roads
Not too important or successful
Tolls allowed for better roads, but people still used free roads
Fell off the map by 1820 |
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Allowed easy transportation upstream (Mississippi)
Upstream real transportation costs fell 90% |
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Erie Canal: Successful. Linked Lake Erie (Buffalo) to Hudson (NYC)
Other canals were built following this success but were not too successful |
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Definition
Growth in an industry leads to growth in the industries that supply it.
Ex. Growth in clothing leads to growth in cotton |
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Definition
Growth in an industry leads to growth in an industry that it supplies.
Ex. Cotton industry expands, making cotton cheaper and more widely available, which allows the clothing industry to expand |
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Definition
Walt W. Rostow
The Stages of Economic Growth
Rostow exaggerated the importance of the railroad, and claimed that railroads had "sharply increasing returns on capital" |
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Robert Fogel
Determined that there was not much backwards linkage related to railroads
Iron peaked at 6%
Canals were still very cost effective and frequently used
Concluded that the railroad was not a primary source of demand for any of its input industries
Calculated that the social savings of the rise of the railroad was around 4% of national income; positive but not revolutionary |
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Definition
| Numerical evaluation of the historical implications of a new technology on economic growth. |
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| NW focused on land-intensive products like wheat, and NE focused on labor-intensive products like dairying and orchard crops |
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| Worked as a form of credit between nations so that trade could occur without having to exchange money |
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| Grown mostly in the west, land intensive, easy to store, low value to weight |
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| More labor intensive than wheat. Western farms switched to corn and hog production as populations filled in and land prices rose. |
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Definition
| Wheat had only about a three day window in which it could be harvested. This meant that the amount of wheat that a farm could grow was limited by the amount of labor there was to harvest the wheat. |
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Complicated machinery that came out in the 1830's
Increased labor productivity in regards to harvesting
Eased the harvest labor constraint
Boom of sales in the 1850's |
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Tried to relate the early failure of reaper sales to small farm sizes in the north
His theory does not explain the sudden boom
An alternate theory is that reapers needed to be higher quality (more durable) before finding commercial success |
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Definition
| Released a report that claimed that the south was more efficient than the north because the south used 6% less labor and made 3% more money |
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Argued that the difference in price relative to labor input was not due to productivity, but instead due to the fact that the north did not have access to cotton, which was the most profitable commodity
Argued that slaves led to cotton |
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The idea that small farms in the south grew a larger proportion of corn than large farms because they didn't have as much access to the world market and because it was safer to be self-sufficient
Wright used this idea to argue against the claim that cotton was an economy of scale |
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| Stated that slavery would have died out due to internal economic contradictions (lower tobacco and indigo prices) |
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| Stated that tendencies to overproduce cotton and scarcity of good land would have led to strangulation of slavery |
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Concluded that slavery was not profitable and would not compete with industrialization
Arguments were flawed, as he did not properly calculate slaves as their owner's capital |
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Definition
| used the capital asset price return model to show that slaves were profitable |
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Tried to calculate whether another generation of slavery would have lasted without the Civil War
Calculated opportunity costs of the mother birthing and raising the child, and rearing costs when the child was too young to work |
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Definition
| Organization of slaves in a brutal way such that each slave was specialized so they were used in the most efficient manner |
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Term
| Rosenburg and Technological Convergence |
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Definition
| Technological Convergence was the idea that the technologies used in different production processes became similar or identical. For example, locomotive builders coming out of the tesxtile industry |
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Term
| American System of Manufacturing |
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Definition
| a technique of production based on standardization, interchangeable parts, and division of labor |
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