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The Market Revolution - impact and significance

The Market Revolution dramatically reshaped American society in the early 1800s. Changes in labor, like the rise of factories, were among the most significant consequences. The Revolution encouraged international trade and investment, which brought both prosperity and instability. Additionally, it contributed to a religious revival as people grappled with their changing world. Some contend that the Market Revolution was even more influential than the American Revolution.

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Video transcript

- [Instructor] So why do we care about the Market Revolution? The Industrial Revolution and the Transportation and the Communication Revolutions of the early 19th century had a major impact on American society, both in the short term and in the long term. In this video, I want to talk about three major effects of the Market Revolution, and those were changes in labor, entry into a national and international market system and the Second Great Awakening. All right, so what effect did the Market Revolution have on labor? Well, we've already talked about this a little bit in the earlier videos, but here is a view of a textile factory floor. Now this is from a slightly later period, but I think it gives you a good sense of what it was like to work in a textile factory. With the Market Revolution really comes the emergence of factory labor in the United States. And there are a couple of ways that, that's important. One is that people start working for wages. It's a move away from subsistence farming and a barter economy, which also means that people aren't necessarily in charge of themselves anymore. And there's a lot that goes along with that, which means that people stop being their own bosses. Instead, they report to other bosses. And that can be problematic because it means that you have a lot less control over your daily life. So imagine that you're a farmer and you're really sick. Oh well, you know maybe you don't plant some seed that day and you do it the next day. Imagine that you work at a textile mill and you get really sick, you don't report to work and you get fired. So people are no longer able to set the pace of their own lives by and large. And with things like interchangeable parts, for example, fewer and fewer artisans, so masters of a craft, are making goods from start to finish. So it used to be perhaps you would be a master shoemaker, a master cobbler, and you would make every part of that shoe from tanning the leather to nailing in the sole. The system of interchangeable parts, which will later become even more codified as the assembly-line system, means that most people are only doing one part of a task. So instead of doing all of making a shoe and saying at the end of it, "I made this shoe, "I am a master maker of shoes," now your entire job might just be to hammer in one nail and then hand off the shoe to the next person. So there's never anything that you can point to and say, "I made that." So a lot of people say that this is a period when people stop being able to take pride in their own work or at least not as much pride. But what's even more important about this process of interchangeable parts, assembly-line labor, is that it leads to an overall, what they call, deskilling. So removing the skill from labor. And what's important about that is that if you've broken down a task into enough small parts that you've got people literally hammering in the same nail on a different shoe 12 hours a day, then you don't necessarily need highly trained artisans to do that. And what happens if you are not highly trained, we'll call this unskilled labor, and you decide you want to strike for higher pay? Well, your boss doesn't need to train anyone to hammer in that nail so you'll just get fired. So it makes the labor force in general a little bit more precarious because you don't need an exceptional skill to have a factory job, but you are easily replaced. All right, let's talk about entry into a market system. Now what do I mean by this? In this time period, the United States develops what's called a market economy. And that's different from what most people had been doing up until that point because people in the United States had mainly shipped raw materials over to Europe, England particularly, to be processed and made into finished goods. And this is similar to the system of mercantilism that you might be familiar with from the colonial era. Well, the war of 1812 and some of the conflict leading up to it, led the United States to embargo England, which was a manufacturing center. So people couldn't send their raw materials there. They responded by investing in their own factories. So the war of 1812 is actually a pretty important moment for the development of domestic industrialization at home. And so now, instead of this kind of import/export or barter economy, people are making deals with other investors all over the United States, all over the world. So this gives people an opportunity to invest and to speculate. And that means that as they're a part of an international market of investment speculation, they're prone to the kinds of booms and busts that characterize capitalism, right? Now we often think of the Great Depression as having been the first major American depression. But really, it was the largest and most recent up until that point, because after the war of 1812, the United States kinda goes through approximately a 20-year cycle of boom and bust. So boom is when things are getting better, things are looking up, the economy is going really well, and then a bubble of some kind bursts. And in 1819, they had the very first of these bubbles burst, it's called the Panic of 1819 in land speculation. And this is the first time that the United States had actually experienced any kind of economic depression. So imagine how frightening that would have been to them. One of the hardest things about market-based capitalism is that individuals don't really have control over the larger market. It's not one person that made the Great Depression happen. It was an overall loss in consumer confidence or perhaps overproduction, right? If too many people are supplying the same commodity, the price is dropping through the laws of supply and demand. So now, the laws of supply and demand and the pressures of an international market are really changing the nature of American commerce because they're enmeshed in that market. And that has all kinds of political and social ramifications for the United States. Understanding the volatility of belonging to an international market kind of helps explain why Andrew Jackson was so obsessed with the National Bank at this time period, right? Because it represents this confusing matrix of international supply and demand and people getting credit or not getting credit. And being part of this international market is something that's going to have a major effect on the American South, and particularly the enslaved population that lives in the American South because they're going to be supplying cotton to the world's textile mills. And those are textile mills in New England and textile mills in England. And as the world demands cotton for processing, the South is going to supply that cotton, which is picked by enslaved individuals. And one of the reasons that the Confederacy believes that it can succeed as an independent nation is because they're supplying cotton to England. And when England managed to find its own supply of cotton from Egypt and India, the economic chances of the Confederacy were sunk. And the last thing that I think is related to this Market Revolution is the Second Great Awakening. Now I don't wanna go into too much detail about this because of a whole separate series of videos about the Second Great Awakening, but this Second Great Awakening was kind of an explosion of religious fervor, which was happening at almost exactly the same time as the Market Revolution. And many American historians actually think that it's these confusing and confounding and anxious forces that lead a lot of people to take up religion. Because as the world is changing around them, as people now have to relate in different ways to their neighbors as bosses and employees rather than bartering partners, and as they're swept up in international markets that are outside their control, people look for new explanations and comfort in an increasingly confusing world. So that's one explanation for the Second Great Awakening. So I started out this series of videos by saying that some historians have argued that the Market Revolution was actually more revolutionary than the American Revolution. Now that's a difficult question to answer because we're talking about a revolution in politics as opposed to kind of a revolution of economics. But I will say that though the American Revolution dissolved the political bonds between the United States and Great Britain, its social and economic impact were relatively limited. Most people kind of ended up in the same place socially after the American Revolution as they were before it. But the Market Revolution changes an awful lot in American society in terms of how they participate internationally and how people organize their daily lives. So I think there is a strong argument to be made that this revolution of economics, technology, even religion, is considerably farther reaching than the American Revolution.