Week 4: Growth of an economic superpower: Nineteenth Century USA Flashcards
(27 cards)
What is geography fundamental for?
-Agriculture (pre 1700)
-Industry
-Disease Climate
Can geography be overcome?
yes, irrigation , draining swamps etc.
Does the implementation of the rail system explain industrial growth in the U.S?
-No, timing explains U.K industrial growth but not U.S
What bigger implications does the transport revolution bring?
-transport for stuff, people and ideas
-In Britain reduces freight costs by 95% 1700-1800
What does Fogel mention about Railroads and American Econ growth?
-Overall aggregate impact of railroads on the economy was small, used what if railroads did not exist and we used canals low diff
-‘Market Access’- cost of trade between places, reducing this ,some places grew
What did improvements in transportation led to in America?
-Globalization
-1850-1914 60% of Europeans left the continent to go to U.S
-Labour was attracted to U.S because of high wages
Population growth and industrialization link U.S?
-no link
-U.S could have stayed agricultural even with influx of people/labour
What was the reason for industrialization in the U.S?
-America had great raw material availability
But people are expensive
[Recall Allen’s theory of the British IR!]
-American manufacturing was therefore raw material and
energy intensive
- America also invented many iconic technologies
What technology did America invent?
- Interchangeable Parts
- The Assembly Line
- Modern Management
Explain interchangeable parts?
-Eli Whitney for interchangeable parts in firearms greater specialization and efficiency
- as easier assembly , repair and less skill needed
Example of Interchangeable parts
-Singer Sewing Machine
Explain the Assembly line?
-Assembly line became dominant after Ford’s innovation
-Production shifted to a structured process where teams divided labor into specific segments to improve efficiency
Example of Assembly line
-Henry Ford’s Highland Park Factory
What did assembly line production lead to?
-fundamentally deskilling, therefore lowering wages
-increased productivity, lower prices and mass consumption
What makes the US economy dominant in the 20th century?
-modern management (large firms, economies of scale, and professional management)
What is modern management?
-shift to large hierarchal firms (economies of scale, lower costs per unit)
-rise of professional managers, mass distribution and advertising
What does Alfred D Chandler describe the innovation in the U.S?
-‘Managerial and production revolution’
How does path dependency link to big cities?
-Institutions are long-lived
Infrastructure is long-lived
Cities are SELF REINFORCING
What places did not have path dependency and agglomeration economies in the 20th century?
-Argentina, Chile and Uruguay
-weak institutions, poor economic policies, failure to diversify industries meant that Argentina could not create a self-reinforcing cycle
What are Marshallian economies?
-Marshallian economies - economies of scale
-when an industry gets bigger in a region costs go down due to clustering
-due to specialist suppliers
Examples of Agglomeration Economies?
Marshallian economies
-Jacobs’ externalities
Example of Marshallian economies?
-London and NY financial centres
What are Jacobs externalities?
- Costs in each and every industry are lower, if there is more
industry in that region
-due to knowledge spill overs , trained workers, local supply of general business support
Examples of Jacobs externalities?
-any big city with a diverse economic base
