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A review by zelanator
The Market Revolution in America by John Lauritz Larson
3.0
John Lauritz Larson’s The Market Revolution in America offers a broad narrative and synthetic assessment of the Market Revolution and our current understanding of how it developed and continues to shape our world today. Two themes lie at the heart of Larson’s analysis: how Americans dealt with the increasing anonymity of the market and fluctuating social-class relations, and how Americans reconciled Republican “virtue” with individual self-interest. From this proceed two arguments that tie the work together. Larson first argues that Americans experienced “impersonal market forces [that] disabled the fabric of personal, familial, and cultural connections (9) and precipitated severe tensions between Northerners and Southerners, factory workers and managers, wage earners and shopkeepers, and the middle class and working class. Secondly, he contends that while Americans created the market through their adherence to Republican ideals of freedom and liberty, they unknowingly exchanged principles of the Declaration for the meager right to “free labor” and subsistence consumption—a treadmill that entrapped most Americans in the perpetual cycles of the market, unskilled labor, and dependence upon manufactured goods. It was only in hindsight that Americans perceived how the market affected social relations and constrained their liberty and freedom of choice. Reactions during the formative decades of the free market were largely mixed and negative sentiment briefly coalesced during the economic panics of 1819 and 1837.
Larson’s organization introduces the reader to his gradual declension narrative as the book’s four chapters detail the rise of the free market, its consequences for Americans, and the subsequent ideological scuffles during the later nineteenth century that set the stage for a Gilded Age based on social Darwinist beliefs. Two interludes—the Panic of 1819 and the Panic of 1837—come between the first, second, and third chapters. These brief passages analyze how Americans responded to the first economic crises of the free market and foreshadow an epilogue that takes the 2008 Financial Crisis and subsequent recession as its topic. Readers will get a sense for the various internal improvements, technological innovations, and legal measures necessary for the development of a free market in the United States, while simultaneously gleaning an idea of how the market affected Americans unequally throughout the period.
In the first chapter, Larson suggests that mercantilism during the colonial period primed the future United States for its foray into capitalism and the free market. For example, the legacy of mercantilism’s emphasis on the state directed economy caused Americans in the Early Republic to turn toward political science for an explanation of economic woes. During the Panic of 1819 Americans of different ideological persuasions clamored for the Federal government to alternatively solve their economic problems by shutting down the Second Bank of the United States, facilitating the movement toward yeoman farming and a “moral” economy, or establishing the internal infrastructure and legal mechanisms necessary to elaborate “interdependencies, specializations, and divisions of labor that made the capitalist system effective” (43). Again during the Panic of 1837 most Americans did not understand from whence economic downturn, unemployment, and inflation originated. Again they fell back on the tradition of political science to encourage the Federal government to either relax their regulation of the economy or implement new legislation to protect economic welfare. Either elected officials would exercise their “visible hand” (to borrow a term from Alfred Chandler’s magisterial book) to control the ill effects of the market, or completely step back and allow Adam Smith’s “invisible hand” to govern American fortunes (95-97). The latter eventually won out as politicians effectively convinced Americans that government intervention only served vested interests and always harmed the people.
While mercantilism, Adam Smith, and later Karl Marx provided frameworks for understanding how the market operated—and whether it was a natural phenomenon or subject to human control—the United States implemented several significant internal improvements between 1776 and 1861 that greatly facilitated the emergence of the market. Throughout the first two chapters, Larson details the construction of bridges, canals, locks and dams, the steam engine, locomotives and railways, roads and turnpikes, the nascent industrialism in textile mills, Eli Whitney’s cotton gin, and the innovation of interchangeable parts that collectively created and lubricated the early free market. Larson carefully reminds us that Americans did not foresee the market, nor were they consciously working toward that end. Instead, Americans pursued the happiness and liberty at the heart of the Declaration of Independence. Ironically, in the pursuit of these Republican ideas Americans eventually circumscribed their freedom, property rights, and socio-economic potential.
Larson uses chapters three and four to detail the largely negative consequences of the market revolution for most Americans and how pundits defended and critiqued the market during the later nineteenth century. The market effaced the available choices for women, African-Americans (free and enslaved), Native Americans, factory workers, artisans, farmers and entrepreneurs. Farmers serve as a useful example of the declension. Those whom Thomas Jefferson envisioned as the “perfect citizenry” of the Republic found themselves bound to the market by the mid-nineteenth century. While cash transactions for manufactured goods sold by third parties replaced the bartering system, mono-crop economies that sought maximum profits for minimal investment eclipsed subsistence agriculture. Both transitions placed farmers at the mercy of vagaries in the market and climate, and during economic winters yeoman became dependent on their wives and children for “putting out” homemade goods.
Larson’s book makes for a great supplement in undergraduate and graduate classrooms. His accessible writing style and sweeping narrative introduces students to complex economic changes and his epilogue connects the contemporary free market liberalism to similar patterns during Jackson’s presidency. Some may question Larson’s ominous assessment of capitalist labor and his rosy portrait of pre-industrial cooperation between farmers, apprentices, and entrepreneurs. For example, his narrative doesn’t explain why Franklin Roosevelt’s initiatives during the New Deal sustained working class politics through the 1970s. Nor does his assessment of peaceful pre-industrial class relations square with the sometimes violent clashes that occurred over economic issues during the 1780s. Still, Larson offers intriguing ideas about ideological continuities between 1825 and 1900.
Larson’s organization introduces the reader to his gradual declension narrative as the book’s four chapters detail the rise of the free market, its consequences for Americans, and the subsequent ideological scuffles during the later nineteenth century that set the stage for a Gilded Age based on social Darwinist beliefs. Two interludes—the Panic of 1819 and the Panic of 1837—come between the first, second, and third chapters. These brief passages analyze how Americans responded to the first economic crises of the free market and foreshadow an epilogue that takes the 2008 Financial Crisis and subsequent recession as its topic. Readers will get a sense for the various internal improvements, technological innovations, and legal measures necessary for the development of a free market in the United States, while simultaneously gleaning an idea of how the market affected Americans unequally throughout the period.
In the first chapter, Larson suggests that mercantilism during the colonial period primed the future United States for its foray into capitalism and the free market. For example, the legacy of mercantilism’s emphasis on the state directed economy caused Americans in the Early Republic to turn toward political science for an explanation of economic woes. During the Panic of 1819 Americans of different ideological persuasions clamored for the Federal government to alternatively solve their economic problems by shutting down the Second Bank of the United States, facilitating the movement toward yeoman farming and a “moral” economy, or establishing the internal infrastructure and legal mechanisms necessary to elaborate “interdependencies, specializations, and divisions of labor that made the capitalist system effective” (43). Again during the Panic of 1837 most Americans did not understand from whence economic downturn, unemployment, and inflation originated. Again they fell back on the tradition of political science to encourage the Federal government to either relax their regulation of the economy or implement new legislation to protect economic welfare. Either elected officials would exercise their “visible hand” (to borrow a term from Alfred Chandler’s magisterial book) to control the ill effects of the market, or completely step back and allow Adam Smith’s “invisible hand” to govern American fortunes (95-97). The latter eventually won out as politicians effectively convinced Americans that government intervention only served vested interests and always harmed the people.
While mercantilism, Adam Smith, and later Karl Marx provided frameworks for understanding how the market operated—and whether it was a natural phenomenon or subject to human control—the United States implemented several significant internal improvements between 1776 and 1861 that greatly facilitated the emergence of the market. Throughout the first two chapters, Larson details the construction of bridges, canals, locks and dams, the steam engine, locomotives and railways, roads and turnpikes, the nascent industrialism in textile mills, Eli Whitney’s cotton gin, and the innovation of interchangeable parts that collectively created and lubricated the early free market. Larson carefully reminds us that Americans did not foresee the market, nor were they consciously working toward that end. Instead, Americans pursued the happiness and liberty at the heart of the Declaration of Independence. Ironically, in the pursuit of these Republican ideas Americans eventually circumscribed their freedom, property rights, and socio-economic potential.
Larson uses chapters three and four to detail the largely negative consequences of the market revolution for most Americans and how pundits defended and critiqued the market during the later nineteenth century. The market effaced the available choices for women, African-Americans (free and enslaved), Native Americans, factory workers, artisans, farmers and entrepreneurs. Farmers serve as a useful example of the declension. Those whom Thomas Jefferson envisioned as the “perfect citizenry” of the Republic found themselves bound to the market by the mid-nineteenth century. While cash transactions for manufactured goods sold by third parties replaced the bartering system, mono-crop economies that sought maximum profits for minimal investment eclipsed subsistence agriculture. Both transitions placed farmers at the mercy of vagaries in the market and climate, and during economic winters yeoman became dependent on their wives and children for “putting out” homemade goods.
Larson’s book makes for a great supplement in undergraduate and graduate classrooms. His accessible writing style and sweeping narrative introduces students to complex economic changes and his epilogue connects the contemporary free market liberalism to similar patterns during Jackson’s presidency. Some may question Larson’s ominous assessment of capitalist labor and his rosy portrait of pre-industrial cooperation between farmers, apprentices, and entrepreneurs. For example, his narrative doesn’t explain why Franklin Roosevelt’s initiatives during the New Deal sustained working class politics through the 1970s. Nor does his assessment of peaceful pre-industrial class relations square with the sometimes violent clashes that occurred over economic issues during the 1780s. Still, Larson offers intriguing ideas about ideological continuities between 1825 and 1900.