What were the effects of the market revolution?

The market revolution had a tremendous impact on many regions in the U.S., most notably the South and Northeast. The market revolution is a term used by historians to describe the expansion of the marketplace that occurred between 1815 and 1830, prompted mainly by major transportation improvements and various unique inventions to connect distant communities together for the first time. The South developed and thrived mainly from the cotton gin and the expansion of slavery. The Northeast flourished and bloomed from the factory system, interchangeable parts, transportation improvements, and women in the work force. The market revolution impact on the South and Northeast brought about widespread economic growth yet affected the regions differently, the South shifted from subsistence farming to commercial farming and the Northeast grew in mechanization and industrialization. The South had focused on providing subsistence…show more content…
New England emerged as the leading manufacturing center as a result of the abundant waterpower the region held for driving new machinery and seaports for shipping goods. The decline of maritime and industry made capital available for manufacturing and the decrease of farming in the region brought ready labor supply. As the factory system expanded, it encouraged the growth of financial businesses such as banking and insurance. Transportation including roads and canals such as Pennsylvania 's Lancaster Turnpike and the Erie Canal stimulated economic growth. Another factor that impacted the region was Eli Whitney 's brilliant mechanical invention of interchangeable parts that became the basis for mass production methods in the new rising factories that were sprouting and

Following the War of 1812, the country looked to expand into the western territories in order to take advantage of the economic opportunities there as new markets opened up. In order to get manufactured goods to these new markets, a massive system of canals and roads were constructed.

The Erie Canal was completed in 1825 and connected the port city of New York with the mid-west cities like Detroit, Chicago, and Cleveland.

The Erie Canal was completed in 1825 and was an engineering marvel. The canal ran 363 miles and connected the port city of New York with the mid-west agricultural centers via a system of canals running to the Great Lakes. Mid-west cities like Detroit, Chicago, and Cleveland thrived as they became booming trade centers as mid-western agricultural products were shipped through the Great Lakes and along the canal to New York and eventually Europe.

By midcentury, railroads were one of the fastest growing industries in the country.

By midcentury, railroads were one of the fastest growing industries in the country. As businessmen and corporations saw their profits and demand for products worldwide increasing, railroad construction took on an ever increasing pace.

As the Midwest and Northeast regions became linked by rail, both areas prospered economically.  Trade of wheat, corn, and grain along with hogs and cattle were commonly loaded onto trains and shipped East for domestic consumption or to shipped to Europe. Railroad companies became one of the largest employers in the country and investment profits from growing demand helped fuel investments in other industries such as coal, lumber, and oil.

As the countries industries became mechanized, a greater demand for factory labor spread throughout the economic system. Previously urged to engage in apprenticeships, young workers were now being encouraged to join the labor force by moving to urban centers and take a wage job.

Previously urged to engage in apprenticeships, young workers were now being encouraged to join the labor force by moving to urban centers and take a wage job.

The decline of the apprenticeship system and loss of labor in rural areas forced farmers themselves to shift from traditional subsistence (self-reliance) farming and bartering of goods, to a more commercialized (for profit) single crop approach. John Deere’s improvements to the steel plow and Cyrus McCormick’s reaper allowed for farmers to grow and harvest mass quantities of crops that was needed to satisfy the increasing domestic and global demand for agricultural products.

The bustling port of New Orleans with bales of cotton waiting to be shipped. The volume of cotton indicates its economic importance throughout the century, and how it would become a lucrative raw material for the northern economy to develop into products to sell back to the south and overseas in their new textile mills.

The most useful definition of marketization as it pertains to the Young American Republic is the exposure of industries to market forces. In economic terms, this simply means Adam Smith’s “Invisible Hand”, or market forces exerting the pressures of supply and demand and forcing a market for a given good or service to equilibrium, or the efficient allocation of resources. As governments release their grip over industry, change comes expeditiously. In the infancy of the Republic, it is clear that there were strong testaments towards protectionism or other forms of government control over infant industries and the developing American economy as a whole. However, as the Jeffersonian era begins, it is clear that marketization was connecting areas of the young nation that had been at most marginally economically connected before. Integral in creating and aiding in the development of national markets for essential goods and services was the phenomenon known as the Transportation Revolution. The advent of railroads, steamboats, steam engines, and industrial machinery meant that Americans and their businesses now had access to a national market, in addition to actually having the means of transportation to execute legitimate national trade.

Marketization and the development of the early economy lead to another very important development: driving the development of the middle class. The combination of marketization processes with the burgeoning technological development of the late Eighteenth and early Nineteenth centuries meant more economic opportunity for Americans that were not at high levels of businesses or government, and with the number of state chartered banks rising from 206 in 1820 to 702 in 1840, a much broader investment structure existed that could foster economic growth. However, President Jackson’s famous bank wars meant the abolition of The Second Bank of the United States in favor of these state chartered operations. The result was often inflation, counterfeit currencies, and bank runs, characterized in this era as “panics”. Nevertheless, spearheaded by the older and established artisan classes, skilled laborers began to work their way into a new middle class, culminating in the general removal of property rights as a prerequisite to vote across the Jacksonian Era, most famously in the New York Constitution of 1821. 

This interconnection of the nation through markets allowed by transportation and technological improvements meant something broader for Americans. They now peered into the political, economic, and social systems of their neighbors, as what happened in the cotton south could veritably and negatively effect the industry in the northern states, and vice versa. Massive government stimulus programs like the Eerie Canal and private developments like factories, steamboat engines, and railroad systems meant a public citizenry that could now afford to do much more traveling than before, exposing them to the wonders, or the horrors of their fellow states. 

2.  Atack, Jeremy; Passell, Peter (1994). A New Economic View of American History. New York: W.W. Norton and Co. p. 469. ISBN 978-0-393-96315-1.

4. Chandler Jr., Alfred D. (1993). The Visible Hand: The Management Revolution in American Business. Belknap Press of Harvard University Press. ISBN 978-0-674-94052-9.

7. "Elms and Magnolias: The 18th century". Manuscripts and Archives, Yale University Library. August 16, 1996. Retrieved

March 19, 2008. (Markets)

11. Taylor, George Rogers (1969). The Transportation Revolution, 1815–1860. ISBN 978-0-87332-101-3.

14. “The Market Revolution.” THE AMERICAN YAWP, www.americanyawp.com/text/08-the-market-revolution/.

15. “The United States from 1816 to 1850.” Encyclopædia Britannica, Encyclopædia Britannica, Inc., 2019,

In the early years of the nineteenth century, Americans’ endless commercial ambition—what one Baltimore paper in 1815 called an “almost universal ambition to get forward”—remade the nation.1 Between the Revolution and the Civil War, an old subsistence world died and a new more-commercial nation was born. Americans integrated the technologies of the Industrial Revolution into a new commercial economy. Steam power, the technology that moved steamboats and railroads, fueled the rise of American industry by powering mills and sparking new national transportation networks. A “market revolution” was busy remaking the nation.

The revolution reverberated across the country. More and more farmers grew crops for profit, not self-sufficiency. Vast factories and cities arose in the North. Enormous fortunes materialized. A new middle class ballooned. And as more men and women worked in the cash economy, they were freed from the bound dependence of servitude. But there were costs to this revolution. As northern textile factories boomed, the demand for southern cotton swelled and the institution of American slavery accelerated. Northern subsistence farmers became laborers bound to the whims of markets and bosses. The market revolution sparked not only explosive economic growth and new personal wealth but also devastating depressions—“panics”—and a growing lower class of property-less workers. Many Americans labored for low wages and became trapped in endless cycles of poverty. Some workers—often immigrant women—worked thirteen hours a day, six days a week. Others labored in slavery. Massive northern textile mills turned southern cotton into cheap cloth. And although northern states washed their hands of slavery, their factories fueled the demand for slave-grown southern cotton that ensured the profitability and continued existence of the American slave system. And so, as the economy advanced, the market revolution wrenched the United States in new directions as it became a nation of free labor and slavery, of wealth and inequality, and of endless promise and untold perils. Read the rest of Chapter 8 from the American Yawp.