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Just as the United States was becoming a nation, theorists started describing the free-market features that defined the modern economic system. Now, over two hundred years later, the system that was always central to American society is known as capitalism. Throughout the course of its existence, the United States has been characterized by the intertwining of its political and economic systems. To this day, capitalism and democracy interact in complex and mysterious ways. There have been volumes upon volumes written about the economic history of the United States, but here’s a brief summary that lays out the basics.
Triangular Trade and the Colonial Economy
As English colonies took shape on the eastern coast of North America, all sorts of trades and industries developed. A series of newly-formed ports sent ships far and wide, and intercontinental commerce became the norm. In a phenomenon now known as “triangular trade, the colonies sent raw materials to Europe and received enslaved people from Africa.
Industrialization and Slave Labor
In the early nineteenth century, the Industrial Revolution arrived in the northern United States. Factories and mills began producing incredible amounts of goods, all while giving birth to a proletariat of urban workers. In the South, slaves were forced to provide the backbone of the agrarian economy until their emancipation after the Civil War.
The Gilded Age
As Reconstruction failed and the South kept black Americans marginalized under the cruelties of Jim Crow, a class of mega-rich industrialists gained unprecedented wealth and power. This inequality spawned a new class consciousness among workers, many of whom were inspired by radical theories developing overseas.
The Rise of Unions and the New Deal
In an effort to combat rampant exploitation, workers around the country began to form unions. Collective bargaining forced concessions from the ownership class, and conditions for many workers gradually improved. After the collapse of the stock market caused the economic catastrophe now known as the Great Depression, a slew of “New Deal” legislation created a white middle class backed by the state. There are many historical novels about business from this era.
Neoliberalism and Free-Market Fundamentalism
After decades of vigorous state participation in the economy, a new generation of thinkers advised a drawback of government intervention. We’re still living in the wake of this free-market fundamentalism today.
The United States has seen its fortunes rise and fall along with its capitalist economic system. Whether you consider American capitalism an intolerable scourge or an eternal blessing, you can’t deny its central role in the country’s history.
Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on Twitter and Facebook: @RachelleWilber.
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