* economies United States America economic sectors







United States Economy: Economic Sectors


Figure 1.--This is the Jonas family farm in 1903. The children are Ben, herman, henry, Lillian, Agnes, and Emma. Unfortnately we do not know where the farm was located. The date is interesting. It was at the turn of the century that America made the transition from a mostly rural to a nostly urban population. And it just before the internal conbustion engine and Henry Ford's Model T began to transform both urban and rural America. Put your cursor om the image for a close up.

The American economy is based on several different sectors. Initially agriculture like all other countries at the time was the principal sector. The agriculural system was varied, especially the difference between North and South. Cotton in America played a major role in finazncing the first stage of the industrial revolution. Througout mostv of the 19th century, agriculture was the backbone of the econmy, only by the late-19th century industry begin to replace agriculture as the heart of the economy. Even so, American agriculture played an important role in the 20th century. Fishing was an early industry and whaling developed in the late-18th century. When the Westward expansion reached the Great Plains, livestock became important. The handicradts of the northeast developed into industrial manufacturing beginning in the early-19th century America developed an important ship building and maritime industry made famous by the China clippers. British limits on American industry was one of the causes of the Revolution. A series of scientific discoveries and technical innovations resulted in the Industrial Revolution in both Europe and America. Many of the innivations came from America. Northern industry was a major factor in the Federal victory in the Civil War. Over the space of the 19th century, America shifted from an aficultural country to an industrial giant. At about the turn of the 20th century, the urban population began to dominate and America became the world's major industrial country. In the 20th century, Henry Ford's assembly line helped increase industrial effidencies that made possible and unparalled level of affluence, importantly including the workers. And the increasing economic power of america, especially american industry gave rise to an important financial sector which would come to rival and evntually excll the British finncial sustem, especially after World War I. And important minimg industries developed in many states. One of the most important was the coal mining industry. Mining was one of the most dangerous industrial jobs. Oil became a part of the mining complex. American began a major change in the world economy in the late-20th century as Space Race technology spawned personal computers, the internet, and what has come to be called the Information Technology of the Information Age.

Agriculture

The history of agriculture in what is now the United States began with the Native Americn peoples. While most were hunter gather peoples some were involved in agriculture to various degrees, especially the Eastern Woodland, Missipian, and Southwestern peoples. This was a relatively recent development. It occurred only after corn developed in Meso-America reached the peoples further north. Initially agriculture in colonial America like all other countries at the time was the principal sector. The first settlers in Jamesetown (1609) were not interested in farming. They hoping to find gold and silver judt like the Spanish. It soon became clear, however, that agriculture was needed if they were to survive. And it would be the basis of the economy just as it was in Europe. A decade later the Pilgrims founded Plymouth Colony (1620). Two different farm labor models followed. Free labor in the North nd slave lbor in the South. The first important cash crop was tobacco. Wheat became important because people wanted bread. It is corn, hiwever, that is the most productive crop. No other crop so efficently converts sun energy. Convering it into cash, however, was a problem. This was es[ecially the case after the Revolution when Americans moved beyond the Apalachins. One sollution was to covert it to more transportable corn whiskey. This led to the Whiskey Rebellion (1791). At about the same time Eli Whitney invnted the cotton gin (1793). This revolutionized agriculture in the south. In made cotton a valuable cash crop and meant that slavery instead of dieing out would become a emensly profitable American institution. Cotton would become the major American export commodity and essentilly finance the industrialization of the North. Througout most of the 19th century, agriculture was the backbone of the econmy, only by the late-19th century industry begin to replace agriculture as the heart of the economy. The settlement of the Mid-West cand Great Plains made America into a world bred basket comparable to Tsarist Russia. Unlike Russia, American farmers began to mchsnize even before the development of mechanical power. This process continued even furher with the development of the intenal combustion engine. As a result the United States would help feed the Allies during World War I initiate relief programs and prevent starvation first in Belgium and then the rest of Europe after the War. American farmers experienced trying times after the war because they had expanded so much during the War (1920s). They were doubly hit by the Depressionand the Dust Bowl (1930s). The Roosevelt's Adminitration's New Deal struggle to assist farmers by both restricting production and modenizing the sector. Farmers also played a key role in World War II, feeding the Allies and preventing starvation after the war. The American population steadily shifted to urban areas throughout the 20th century, but even with a smaller workforce farmers continued to increase production. And agriculture continues to be an important export commodity. The stady urbanization and economic devlopment especially of Asia means that the demand for agriculture products is steadily growing.

Communications and Publishing


Energy

Energy was not a driver for the European settlement of the New World, but with the Industrial Revolytion this began to change. The Indutrial Revolution created a huge and increasing demand for energy. And vital for industrialization was coal. Amnerica had vast coal resources. Coal dominated the 19th century. American coal mining grew rapidly in the early 1800s, doubling or tripling every decade. It was centered in Pennsylvania and West Virginia. This began to change after the turn-of-the 20th century. Oil proved to be a much more effective fuel for navies and marime transport in general. With the invention of the internal combustion engine ICE), a vast consumer demand was unleashed. And the United States also had major oil fields, the first to be developed. The first American well was drilled in Pennsylvania (1859). At the time, oil was used to produce lubricants and kersoene for lighting. The develomentof the ICE changed that, along with diesel and jet engines. American oil played an important role in World War Imand even more so in World War II. Along with oil came another hydrocarbon-natural gas. Again America has huge reserves. America's coal consumption is rapidly neing replace with NG which is more clean buring. American oil production peaked (1970s). Innovative new technoligies like fracking and horizontal drilling has massibely incrased oil and NG production. Environmental groups are attempting to prevent drilling and pipeline construction. With the invention of electrical power, hydro-power and geo-thermal became important. And inrecent years other renewable technologies have been develoed, inclusing nuclear,solar, wind, and tidal power.

Financial Sector

And the increasing economic power of America, especially American industry gave rise to an important financial sector which would come to rival and evntually excll the British finncial sustem, especially after World War I. Until World War I, American had been a debtor country. This changad with the war as European countries (especially Britain and France) had to borrow money and sell assetts to finance the war.

Fishing and Whaling

Fishing was an early industry in America and whaling began to develop as a major industry in the late-18th century. Fishing has been referred to as America's first industry. In fact, European fishermen came to America, to fish cod on the Grand Banks before Columbus' voyages when there no European settlement any where in the Americas. At the time America's existence except for the fishermen was basically unknown. The American fishing industry began during earliest colonial times in New England, still based primarily on cod. New England has, for over 400 years, been identified both economically and culturally with groundfishing, first on cod and than other groundfish as well. A mixture of groundfish, bottom-dwelling species) like cod, haddock, redfish and flounders were the groundfish resource. Great fleets of sail vessels sailed from Gloucester and Boston to what is the eastern-most reaches of North America -- the Grand Banks off Newfoundland. The catch of cod was salted so it could be preserved and sold. There were fleets of 400 schooners in each of these ports, and a multitude of shore-side businesses developed to support the fishing industry. This came in include including salt mining and a boat building industry. The industry at first based on fishing vessels soon built merchant vessels. As a result, at the time of he Revolution, America already had one of the world's largest merchant fleets. No other country than Bitain had a significantly larger merchant fleet. Shipyards on the Essex River north of Boston became some of the busiest and best known in the world. The New England shipyards had the advantage of the still largely untouched North American forrests. Ice harvesting in fresh-water ponds became important with the coming of the railroads. Another fishery also developed from New England--the whaling industry, but because whales unlike groundfish were mobile, the whaling industry developed a worldwide reach--into the Pacific. Anothther important fisgery was the Cheaspeake Bay anf the railroads enabled oyster and crabs to be delivered throughout the country. But overharvesting have vadverely affected the resource. Steam power replacung sailmha placed huge pressure on resources. Important fisherie developed in ghe Gulf of Mexixo. Today the country's most important fishery is based in Alaska. And new technologies called aquaculture (fish farming) have been developed to supplement declining wild fisheries.

Forestry

Forests have been important since the dawn of humanity. In fact, humanoids developed when apes responding to environmental changes descebded from trees on to the African savana. Stone Age humans developed many ues for wood, not the least firewood. Evidence for other use is more limited because unlike stone tools, wood is perishable. With the rise of civilization, wood became an important trade good. This was in part because three early civilaztiobs developed in arid river valleys without forrests (Tigris-Eupgrates, Nile, and Indus). Forrests were immensily important in Europe. The pre-industrial age has been called The Wooden Age. [Sombart] Wood was the basic resource for energy, construction, and housing. Europe's maritime expansion create another major demand for timber. Western Europe began to deplete the forrests that once dominated the Continent. This was especiall true of the English which had to cut down much of the ancient oak forests to build ships and supply building materials. Nelson's HMS Victory required 6,000 oak trees to build. A normal shipm-of-the-line wold require 3,000-4,000 trees. The British had to import timber from the Baltic area and Russia. It was one of the drivers for colonization. The forests of North America developed for eons evolved according to nature�s rhythms. This began to change with the arrival Siberia groups who mbecame proto-Native mericans (about 10,000 BC). Native Americans began significant manipulation. The English colonists encountered the Eastern Woodlands with copios native forests. As the frontier moved westward, forrests werev cut down and converted to farming. Today the American fprestry is concentrated in the Pacific Northwest and Alaska. The 'timber famine' that Theodore Roosevelt and Gifford Pinchot so stridently forecast in the early twentieth century never occurred. He shows that logged lands have come back, either through natural processes or human effort, unless converted to agricultural or urban use. Also, many species of wildlife-once diminished-are again abundant, forested watersheds are better protected, and the number of forest acres that burn each year has been dramatically reduced. [MacCleery] The new forests are different from the native forests which existed with the arrival of Europeans. , And while some wildlife species thrive under the new conditions, others do not. Appreciation of the forest as an ecosystem increase. A major debate exists between enviromental groups opposed to cutting and industry groups as well as forestry management groups which maintain that resistance to cutting is afact in the deadly California forrest fires.

Industry

The handicrafts of the northeast developed into industrial manufacturing beginning in the early-19th century. British limits on American industry was one of the causes of the Revolution. The Industrial Revolution began in America with the textile industry just as it did in Britain. This process occurred mostly in the North. The motivation for industrialization is to reduce the costs of production. And one of the major costs were labor. With slave labor it became less important to industrialize. The same process was at play in Russia with serfdom or in China with a peasantry forced to labor for minimal wages. A series of scientific discoveries and technical innovations fuled the Industrial Revolution in both Europe and America. Many of the innovations came from America which into the 20th century did not have the same advancced research institutes and universiities that existed in Europe. Here America benefitted from a fine public education system. And the absence of an entenchd class system meant that America was more fully utiling the energies and talents of its people than other countries. Northern industry was the major factor in the Federal victory in the Civil War. Over the space of the 19th century, America shifted from an agricultural country to an industrial giant. As in Europe, textile production was the first major industry. The railroads were a major development leading the country's heavy industrial dvelopment. Railroads required steel and vast quantities were needed to run rail lines across the country. Cornelius Vanderbelt helped launch the rairoad industry and John P. Morgan helped rationalize it. Andrew Carnegie played a key role in the developmnt of the American steel industry. By the end of the century, American industry surpassed the European powers. At about the turn of the 20th century, the urban population began to dominate and America became the world's major industrial country. In the 20th century, Henry Ford's assembly line helped increase industrial effidencies that made possible and unparalled level of affluence, importantly including the workers. Ford's assembly line also enable the production of low cost cars that the average person could afford. This mean production in vast numbers exceeding not only major European countries, but all of Europe. The automobile became a key factor in America's 20th century industrial expansion. By the time of the Depression, Will Rogers quipped, "America was the first country to go to the poor house in the autmobile." And unlike Europe, America had the petroleum resources to power the vast fleet of cars. Here John D. Rockelfeller played a key role in the devlopmnt of the petroleum industry. It would be American capitalist industry that would not only help defeat the Axis powers in World War II, but the Soviet Union in the Cold War, ironically a state based on an ideolgy claiming to create a workers' paradise. Economic growth was a key factor in the Cold War. The Soviets for a time posted impressive numbers in industrial expnsion, but what they did not achieve was efficent production and the ability to innovate. Although winning the Cold War, the United States allowed its heavy industrial base to decline creating the Rust Belt. Amother irony is that labor unions, major corporations and the political estblishment, including he labor friendly Democratic Party, cooperated in this process.

Information Technology

American began a major change in the world economy in the late-20th century as Space Race technology spawned personal computers, the internet, and what has come to be called the Information Technology of the Information Age.

Mining

One of the greatest drivers of European colonization in the Americas was the search for gold and silver. Unlike South and Cental America (Mexico), there was little gold found in North America. The Europeans looked but found little. It was there, but unfortunately for the eraly settlers was located all the way west across the continent in California. There were nany other minerals found, but not ilarge deposits taht bwould have made mining a profitable undertaking. And labir shortages was another problem. As was British imperial regulations which discouraged manufacturing, reserving for the mother country. The British aditude that the colonies esosted only for the benefit of the mother coubtry would evebtually lead to the Revolution. These problems did not immediately surface as the English Civil War, Crommwell's Commonwealth, and the struggle between Parliament and the Stuarts meant that the English Goverment gave little attentiin to he colonies. This did not change until after the French and Indian War (1763). Of corese were many other minerals to be mined, but major deposits were located west of the Apalachins. Important mining operations did not begin until after the Revolition when manufacturing began to develop, creating demand for metals. The first major mining operation was for coal in Pennsylcania (1830s). Iron ore also began at this time. Lead mining began in Missouri (1835). Coppermining began around Lake supeior (1842). The most famous mineral find and resulting boom occurred in California-- Ggold was found at Sutter's Mill in California (1849). Not only did it provde much neded specie, but it drew large numbers of people to the new state. Goal and iron were vital for industrialiation. And as America began to industrialie a demand was created for more amd more metals. Important mining industries developed in many states. One of the most important was the coal mining industry. Which fueled the development of the steel and heavy indudtry. Mining was one of the most dangerous industrial jobs. Major minining industries included copper, iron, gold, silver, and zinc as well as smaler operaions for other metals. There was also mining operations for clay, granite, marble, potash, quartz, salt, soda ash, and sulpher. As road bulkding became impotant (20th century), we see miming for crushed rock/gravel and sand. Oil drilling and petro-chenicals became a part of the American mining complex (mid-19th century). At the time, there was only a limited market for oil, but this changed as kerosene began to become an inportat fuel and then with the perfection of the internal combustion engine. America and Russia were the only industrial countries with oil resources. This would have a major impact on the 20th century.

Ranching and Livestock

When the Westward expansion reached the Great Plains, livestock became important.

Transport

Commerce in colonia America was largely conducted by sea, primarily with Britain. Commerce between colonies was more limited and also largely conducted by sea. There were roads out into the country from towns and the few small cities. There were no developed roads conndcting mjorcities. All imprtant cities had seaports, even Philadelphia. America developed an important ship building and maritime industry. This began as an offshoot of fishing vessel construction in New England. Trade with England and illegal trade with other countries was vital to the colonies so merchannt vessel construction became important. These early vessels were rough hewn, but sturdy. And unlike English shippyard there was a ready supply of timber available. Wood construction reached the epitome of sail boat design with the China clippers. Transport became a major issue as Americans after the Independence began moving west in substantial mumbrtrs. This involved crossing the Appalchins. Crossing the Appaclins was one thing. Shipping produce back across the Appalachins on a virtually northeastern cities was another matter. The shipping cost more than the value of the product. One option was to convert corn to whiskey, meaning rrducing the volume. This led to the Whiskey Rebellion (1794). What most farmers were fotved to do was to load their produce on rafts and glot down the Ohio and Mississippi Rivers to New Orleans where it could be shipped by sea. A yiung Abraham Limcokln was one individual who made the trip. The raft would be sold for timber and the men involved had to walk baxk north on foot. This is why New Orleans became the largest America city and why the British tried ton seize it (1815). British colorol would be like a cork in the American economic bottle. The Erie Canal provided an easier route west as well as delivering Western produce to New York City (1821). The steam engine wouod solve the American transport problem. The pronlem of the homeward journey was solved by the paddlewheel steamboats. First was the Paddlewheel steamboats played a major in transport before the railroads on the Mississippi and its tributaries (1810s-60s). Steambots used existing waterways, The railroads required building subsatatial infrastructure. Building began (1830s). Steam power and industrialiazation led to iron and then steel vesels. The turning point in America was the iconic battle between the USS Monitor and CSS Virginia (Merrimack) in the James River (1862). The Monitor has been called 'the little vessel that aved the nation. The more advanced northern transport system was an important factor in the Civil War. Steam power, iron construction, and the screw propeller came together at the same time to revolutionize ship building and maritime transportThe same steam shios that carried Amertucan priductioin to Wurope brought vEuropean immigrants to Aneriuca in huge numbers. Land transport was vital for economic development. The final major step in rail infrasructure was the Inter-Continental Railroad (1869). There were cord roads in the earkly-19th century, but signiicant land transport did not develop until the construction of the rail roads. Actual roads were only marhinally imoroved even by the turn-of-the 20th century. . While the railroad connedcted the country. There were no roads that connected the coountry. This began to change when Henry Ford invented the Model-T. Americans adopted the automobile with a passion began buying Model-Ts and other cars in large numbers. Americans had cars, but they did not have msnt decent highways. None other than a young officer named Dwight Eisenhower went on acoast-to-coast U.S. Army convoy which highlighted the inadequate American road system (1919). Wiil Rogers would quip that "America is the only countytry to go to the poor house in an automoble". The automobilev industry would play a major role in the American Arsenal of Democracy that helped save Western Civilization. All those car owners began demanding improved highways. Four decades later that same Dwight Eisenhower after viewing the German Autobahns at the end of World War II would launch the American Interstate Highway System (1950s). American xompanies began offering passenger air service. (1920s). It was at first only for the wealthy, but this new industry laid the foundation for the American air forces that would also help save Western Civivization. After World War II, air travel became thanks to the magic of capitalism became a mode of travel that all could enjoy.

Sources

MacCleery, Douglas W. American Forests: A History of Resiliency and Recovery (2012, originally published in 1992).

Sombart, Werner. Sombart was a influential German economist and sociolgist. In his later years he turned toward nationlism and eventually NAZIism. He was distinctly ant-Semetic, but a cultural anti-Semyism, not the NAZI biological version.








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Created: 2:50 AM 8/15/2017
Last updated: 3:07 PM 10/29/2020