The Market Revolution: Crash Course US History #12

The Market Revolution: Crash Course US History #12


Hi, I’m John Green, this is Crash Course US
History and today we return to one of my favorite
subjects: economics. Mr. Green, Mr. Green, I don’t wanna brag,
but economics is actually my best subject. Like, I got the bronze medal at the state
academic decathlon tournament…among C students. Yeah, I remember, Me from the Past. By the way, thanks for getting that picture
into our show. It just goes to show you: aptitude is not
destiny. Anyway, economics is about much more than,
like, supply and demand curves. Ultimately, it’s about the decisions people make and
how those decisions shape their lives and the world. So today we’re going to turn to one of the
least-studied but most interesting periods in
American history: the Market Revolution. There weren’t any fancy wars or politically charged debates, but this discussion shaped the way that most Americans actually live their lives and think about work on a daily basis. Like, if you or someone you know goes to work,
well, then you have the Market Revolution
to thank, or possibly to curse. [Theme Music] The Market Revolution, like the Industrial
Revolution, was more of a process than an event. It happened in the first half of the 19th century,
basically, the period before the Civil War. This was the so-called “Era of Good Feelings,”
because between 1812 and 1836, there was really
only one political party, making American politics,
you know, much less contentious. Also, more boring. The Market Revolution saw many Americans move
away from producing stuff largely for themselves on
independent farms – that Jeffersonian
ideal – and toward producing goods for sale to others,
often others who were very far away, with prices
set by competition with other producers. This was closer to Hamilton’s American dream. In the end, buddy, you didn’t get to be president,
but you did win. In many ways, this was the beginning of the
modern commercial industrial economy, not
just in the United States, but in the world. The first thing that enabled this massive
economic shift was new technology, specifically
in transportation and communication. Like, in the 18th century, it was very difficult
to bring goods to markets, and that meant
that markets were local and small. Most trade was over land, and transporting
goods 30 miles over land in the United States literally
cost as much as shipping them to England. So, to get something from Cincinnati to New
York, for instance, the most efficient way was to go down the
Mississippi River, through the Gulf of Mexico, around Florida, and then up the Atlantic coast,
which took three months, but that was still less time and less money
than more direct overland routes. But new transportation changed this. First came better roads, which were largely
financed by tolls. Even the federal government got in on the
act, building the so-called National Road, which reached all the way from the massive city
of Cumberland, Maryland, across our great nation to
the equally metropolitan Wheeling, West Virginia. Mr. Green! Mr – Mr. Green, Mr. Green! I know, Me from the Past, West Virginia did
not yet exist, argh, shut up! More important than roads were canals, which
made transport much cheaper and more efficient, and which wouldn’t have been possible without
the steam boat. Robert Fulton’s steam boat Clermont first
sailed from New York to Albany in 1807, demonstrating
the potential of steam-powered commerce. And by 1811, there were steam boats on the
Mississippi. The introduction of steam boats set off a
mania for canal building. Between 1800 and the depression of 1837,
which put a halt to most construction,
more than 3,000 miles of canals were built. And no state was more instrumental in the
canal boom than New York, which in 1825 completed the 363-mile-long Eerie
Canal, linking the Great Lakes with the Hudson River,
which made New York the nation’s premier port. Other cities like Buffalo, Rochester, and
Syracuse grew up along the canals. So much so that Nathaniel Hawthorne once said, “The canal is like fertilizer, causing cities
to spring up alongside it.” That’s such a good simile, Nathaniel Hawthorne. It’s almost like the United States didn’t
have any good writers until Mark Twain, but we need to read somebody from the early
19th century, so I guess it’s you. But from a long-term perspective, the most
important new transportation? Railroads. The first commercial railroad, the Baltimore & Ohio,
was begun in 1828 and by 1860, there were more than
30,000 miles of rails in the United States. And on the communication side, we got the
telegraph, so no longer would Andrew Jackson
fight battles two weeks after the end of a war. Telegraphs allowed merchants to know when
to expect their shipments and how much they
could expect to sell them for. And then, as now, more information meant more
robust markets. But perhaps the most important innovation
of the time was the factory. Now, when you think of factories, you might think of,
like, Chinese political prisoners making smartphones,
but early factories looked like this. More than just a technological development,
the factory was an organizational innovation. Like, factories gathered workers together in one
place and split up tasks among them, making
production much faster and also more efficient. The first factories relied on water power, which is the reason they were all east of the fall line – the geographic reason why there are so many waterfalls and rapids on the east coast. But after 1840, steam power was introduced,
so factories could be located in other places, especially near the large cities that were
sprouting up in what we now know as the Midwest. So the American system of manufacturing, which
centered on mass-production of interchangeable parts, grew up primarily in New England, but then it moved to the Midwest, where it spent its adolescence and its adulthood, and now its tottering decline into senility. So, all these new economic features – roads, canals, railroads, telegraphs, factories – they all required massive up-front capital investment. Like, you just can’t build a canal in stages
as it pays for itself. So, without more modern banking systems
and people willing to take risks, none of this
would have happened. Some of these investments were facilitated
by new business organizations, especially
the Limited Liability Corporation, which enabled investors to finance business
ventures without being personally responsible
for losses other than their own. In other words, corporations can fail without,
like, ruining their stockholders and directors. People don’t always like that, by the way,
but it’s been very good for economic growth
in the last 180 years or so. So having angered a bunch of people by talking about the important role that big businesses played in growing the American Economy in the 19th century, I will now anger the rest of you by talking
about the important role that the state played. In the 1830s, states began passing general incorporation laws, which made it easier to create corporations, and the Supreme Court upheld them and protected them from further interference in cases like Gibbons vs. Ogden, which struck down a monopoly that New York had granted to one steamboat company. And the Charles River Bridge case, which said that building a second bridge over the Charles River did not infringe upon the charter of the first bridge. In both those cases, the court was using its
power to encourage competition. And this brings up something really important about
the growth of American capitalism: government helped. The federal government built roads and canals
and its highest court protected businesses. And states issued bonds to build canals and
offered sweetheart deals to companies that
built railroads. And despite what we may believe about the
heroic risk-taking entrepreneurs building the
American economy through solitary efforts, without the government protecting their interests,
they wouldn’t have been able to do much. All right, let’s go to the Thought Bubble. The Market Revolution changed the landscape
of work, which, for most of the prior 200 years,
happened at home. Small-scale production of clothes and other goods had been done in the home, largely by women, and initially, this is how industrial production worked as well. Factory owners would produce some of the products,
like patterns for shoes, and then farm the finishing
out to people working in their houses. Eventually, they realized that it would be more efficient to gather the workers together in one place, although the older, “putting-out system” continued in some industries, especially in big cities. After the Market Revolution, more and more Americans
went to work instead of working from home. The Market Revolution also changed the way
we imagined work and leisure time. Like, on farms, the seasons and hours of daylight
regulated the time for work, but in factories,
work is regulated by the clock. Which, by the way, was one of the first products
to be manufactured using the American system
of manufacturing. Railroads and shipping timetables further
required the standardization of time. Factories also made it possible for more people
to do industrial work. At first, this meant women. The workers in the early textile mills at Lowell, Massachusetts, for instance, were primarily young, New England farm girls who worked for a few years in the mills before returning home to get married. Women were cheaper to employ, because it was
assumed that they would not be a family’s sole
breadwinner. At least, this was the excuse for not paying
them more at the time. I can’t remember what excuse we have now,
but I’m sure it’s a great one. Anyway, all of this meant that the nature
of work had changed. In colonial America, artisans worked for what they
called their “price,” which was linked to what they
produced. In a factory, however, workers were paid a
wage according to the number of hours they worked,
regardless of how much they produced. This may not sound like a big deal, but working for wages with one’s livelihood defined by a clock and the whims of an employer was a huge change, and it undermined the idea of freedom that
was supposedly the basis of America. Thomas Jefferson had worried that men working in factories, dependent upon their employers, were inherently un-free, and that this would make them unfit to be proper American citizens. And as it happens, many factory workers agreed
with him. Thanks, Thought Bubble. So, one reaction to the restrictions of the
wage worker was to engage in the great American
pastime of lighting out for the territories. With less and less farmland available in New England,
young men had been migrating west for decades. And, after the War of 1812, this flood of
migration continued and even grew. Between 1790 and 1840, 4.5 million people crossed
over the Appalachian Mountains, and six new states
were created between 1815 and 1821. Ohio’s population grew from 231,000 in 1810
to over 2 million by 1850. People even took up the motto ‘Malaria isn’t
going to catch itself!’ and moved to Florida
after we purchased it from Spain in 1819. Moving out West was a key aspect of American
freedom, and the first half of the 19th century
became the age of “manifest destiny”: the idea that it was a God-given right of Americans
to spread out over the North American continent. The term was coined by a New York journalist, John L. O’Sullivan, who wrote that the people living out West – i.e, the Native Americans – must succumb to quote, “our manifest destiny to overspread and to possess the
whole of the continent which providence has given us
for the development of the great experiment in liberty.” Stan, he actually wrote “overspread”! One thing I love about providence is that
it has like a 100% rate of giveth-ing unto
us and taketh-ing away from them. One of the results of this migration was that
it was really difficult for factory owners to find
men who could work in their factories. First, they looked to Yankee women to fill
the factories, but increasingly, those jobs
were filled by immigrants. Fortunately, the US had lots of immigrants, like the more than one million Irish people that came here fleeing poverty, especially after the potato famine of 1845 to 1851. Lastly, let’s turn to the intellectual responses
to the Market Revolution. Oh, it’s time for the Mystery Document? The rules here are simple. If I fail to guess the author of the Mystery
Document, I get shocked with the shock pen. And yes, this is a real shock pen! Lots of people are commenting, saying I am
faking the shocks. I am not faking the shocks! I am in the business of teaching you history,
not in the business of faking pain! All right, let’s do this thing. “They do not yet see, and thousands of young
men as hopeful now crowding to the barriers
of the career, do not yet see, that if the single man plant himself indomitably
on his instincts, and there abide, the huge
world will come round to him. Patience – patience; – with the shades of
all the good and great for company; and for solace the perspectives of your own
infinite life; and for work, the study and the communication
of principles, the making those instincts
prevalent, the conversion of the world. Is it not the chief disgrace in the world,
not to be a unit; – not to be reckoned one character; – not to yield that peculiar fruit which each
man was created to bear, but to be – ” Oh, god, Stan, I can’t bear it anymore. It’s Emerson. [dinging noise] It’s definitely
Emerson. It is unreadably Emerson. Indeed, the most linguistically convoluted of the
Transcendentalists, which is really saying something. Anyway, I don’t get punished, but I did kind
of get half punished, because I had to read that. The Transcendentalists – like Margaret Fuller, Henry
David Thoreau, Walt Whitman – were trying to
redefine freedom in a changing world. Work was increasingly regimented. Factory workers were as interchangeable as
the parts that they made. But the Transcendentalists argued that freedom
resided in an individual’s power to remake
oneself, and maybe even the world. But there would be a reaction to this in American
literature as it became clear that escaping drudgery to
reinvent yourself was no easy task for wage workers. So, the early 19th century saw a series of booms
and busts, sometimes called business cycles. And with those business cycles came a growing
disparity in wealth. To protect their interests, workers began forming political organizations called Working Man’s Parties, that eventually morphed into unions, calling for higher wages and better working conditions. And we’ll have more to say about that in coming weeks, but for now, it’s important to remember that as America grew more prosperous, many people – women and especially slaves, but also
free, wage-working men – recognized that the Market Revolution left them with much less freedom than they might have enjoyed 50 or 100 years earlier. My favorite commentary on the Market Revolution
actually comes from the author Herman Melville
in his short story “Bartleby the Scrivener.” Melville worked at the customs house in New
York, so he knew all about world markets first-hand. In “Bartleby,” he tells the story of a young
clerk who works for a lawyer in New York City. Now, when you’re a farmer, your work has an
intrinsic meaning. When you work, you have food, and when you
don’t work, you don’t. But when you’re a copyist like Bartleby, it’s difficult
to find meaning in what you do every day. You know that anyone else could do it, and
you suspect that if your work doesn’t get done,
it won’t actually matter very much. And in light of this, Bartleby just stops
working, saying, “I prefer not” when asked,
well, pretty much anything. Seeing his boss and society’s reaction to
someone who simply doesn’t buy into the market
economy is comic, and then ultimately tragic. And it tells us a lot about the Market Revolution
beyond the famous people and inventions and
heroic individualism. Now, most people read “Bartleby” as an existentialist
narrative, and it definitely is that, but, for me, the story’s subtitle proves that it’s also about the market economy. The full title of the story is, “Bartleby
the Scrivener: A Story of Wall Street.” I’ll see you next week. Crash Course is produced and directed by Stan
Muller. The script supervisor is Meredith Danko. Our associate producer is Danica Johnson. The show is written by my high school history
teacher Raoul Meyer and myself. And our graphics team is Thought Cafe. If you have questions about today’s video,
please ask them in comments, where they’ll
be answered by our team of historians. Also, suggest Libertage captions. Thanks for watching Crash Course World History. If you enjoy Crash Course, make sure you’re
subscribed, and as they say in my hometown,
don’t forget to be awesome. Just kidding, thanks for watching Crash Course
US History! DFTBA!

100 thoughts on “The Market Revolution: Crash Course US History #12

  1. The transcendalists must have found some pretty interesting plants while isolating themselves in nature.

  2. The US Department of Labor and dozens of economists have concluded that the current wage gap is due to separate choices and not discrimination. For someone that claims to love economics so much…you really need to learn some damn economics

  3. Nice channel.

    Now to correct a common fact error: LLCs are not corporations. They are limited liability COMPANIES. Corporations did indeed lay the groundwork for the Industrial Revolution, for better or worse.

  4. All that talk about the War of 1812, and not a single mention that slavery was virtually abolished in Canada before 1812. The British had abolished the slave trade in 1807; no slave ships brought slaves to Canada, from Africa nor from anywhere else, ever; and, most of the slaves brought into Canada were owned by American Loyalists, (those on the British side during the American Revolution), and brought their "property" to Canada. The "Act Against Slavery" of 1793, in Upper Canada, prohibited bringing any new slave into the colony and gave every child born to a slave their freedom when they were 25-years-old. Do you really think that American slave-owners in the South were so upset by British ships taking back their sailors, (employed on American ships), that they wanted to start a war? Or, might their reasoning be that, in that British colony called Canada, slavery was being abolished and any trade in slaves was being made a criminal offense.

  5. One thing I like about you Mr. Greene, is that you do not let your political beliefs dictate what you are teaching. A lot of the time, historians and teachers let there political beliefs interfere with fact. I can see you are somewhat of a democratic liberal, but you do not let that interfere with your teachings. I highly respect you for that.

  6. Kind of liked your videos until you injected your political ideology into it. Going to skip them now that I know you are bent to the left.

  7. Ohio got over 2 million in 1860, not 1850, I dont know why it matters, but my confidence in this video has dropped.

  8. am i the only one who came here to get their homework done and not have to read a bunch of websites on this stuff lol

  9. Alexander Hamilton has a sex scandal, he lost all chances of becoming president. Bill Clinton and Trump have sex scandals, continued to be president

  10. On the subject of aptitude and destiny, one is free to diverge from the standards set by the aptitude and embrace their destiny in anyway they please.

  11. me listening to the Mystery Document: oh my god this is amazing likes video I can't believe I like a video made by this communist cretin
    John Green after reading the Mystery Document: waaahhhh I hate the Mystery Document
    me:dislikes video

  12. Hey buddy, yea I’m talking to you not John. It’s getting late and you should probably get some rest. Go to sleep now and wake up earlier to study. You’ll do great on your quiz tomorrow if you get some shut-eye I promise.

  13. I used to disdainfullly sniff that I would never be like the people in the comments who watch crash course a night before the exam – never say never kids.

  14. OMGOSH THIS STUFF REALLY HELPS!!!! Mid term Review and Exam for American history…im not a big fan of history buts its cool at the same time! Thank you CrashCourse! 😀

  15. I'm a chinese political prisoner but they imprisoned me here in the diabolical prison commonly known as the United States of America. Send Help.

  16. Evaluate the extent to which the market revolution marked a turning point in women's lives in the United States. In the development of your argument, explain what changed and what stayed the same for women as a result of the market revolution in the period 1800-1850.

  17. The wage gap doesn’t exist in the manner that the media and politicians want you to believe it exists. Women aren’t being paid less than their male counter parts, they are choosing to work in industries that pay less overall due to time investment in the work itself and what those industries have the ability to pay. Feminists don’t want to accept that many women today choose industries that pay less not because they don’t want to make a lot of money but because they allow for more a more flexible work/child rearing balance.

  18. Am I the only APUSH student not watching for exams? This is literally homework over 10 weeks. Gotta watch all the CC vids.

  19. Can someone tell me the story behind "Chinese political prisoners making smartphones"? I don't get it😂

  20. these ads are so mean! “hey kids, are you ready to fail the ap US history exam and disappointment everyone in you entire life?”

  21. 7:40 You mean they were employed in favor of men because they were cheaper to hire? I wonder why employers need to be cajoled into hiring them now, if they aren't being paid the same for the same work. It's almost like this isn't true. Huh.

  22. How is the Market Revolution not a direct result of European Mercantalism and the Agricultural Revolution, and in particular the British Industrial Revolution??

  23. Many people see the founding of the US in religious liberty, but in reality our country is an experiment in industrial capitalism. The experiment was hugely successful, but still has not conveyed its benefits on the whole society.

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