pre 1920s USA

Question 1

what were the foundations for future growth in 1789?

Answer 1

there was good political and economic institutions. a representative government created political stability. individual liberty and property rights protected the white male population. legal institutions were established
intellectual property rights were protected.
these measures encouraged entreneurship

Question 2

what economic policies were established in 1789?

Answer 2

they established a national government with revenue raising powers
established a single currency union( met the criteria for optimal currency area)
free trade between states
the usa became protectionist under the influence of alexander hamilton (infant industry arguement)

Question 3

what was the reason for the high percentage of slaves in the USA compared to the rest of america?

Answer 3

there was a relatively low mortality and a high birth rate of slaves in the USA compared to the rest of the americas

Question 4

what was the accepted wisdom about the economics of slavery before conrad and mayer?

Answer 4

The South entered into an unnecessary and catastrophic 4 year war to defend a system which was inefficient, unprofitable, and about to collapse

Question 5

what was conrad and mayers alternative view to the economics of slavery?

Answer 5

1. Slavery was profitable to the slave owners
2. There was an incentive to expand slave territory to the west
3. Therefore, without the civil war slavery would have persisted

Question 6

what was fogel and engermans assessment of slave agriculture in 1860?

Answer 6

Slave agriculture was “efficient” (i.e. had high labour productivity)The system was profitable to slave owners. Slavery was NOT about to implode as a system.

Question 7

who had the advantage in the US civil war , the union or the confederates?

Answer 7

the union had a massive advantage in terms of GDP , Finance, industrial production, armaments production, transportation infrastructure, food production. however the confederates had more talented generals originally

Question 8

what were the benefits of the civil war?

Answer 8

slavery ended by the civil war, north entered a period of intense growth with rise of american system of manufactures

Question 9

what were the costs of the american civil war?

Answer 9

the southern economy went into a long period of decline, it was a very costly way to end slavery and lead to a loss of physical and human capital

Question 10

what were the demand side conditions that led to search for new technologies in a specific direction?

Answer 10

1. rapid growth of demand - rapid population growth and migration increase. also encouraged by abundant supply of land
2. improvements in rail and river canal transportation linked markets
3. low food prices - allowed workers to spend greater proportion of income on other goods
4. egalitarian social structure - created a large market
5. consumer tastes - USA consumers happy with standardised products

Question 11

what were the supply side factors of growth in the US?

Answer 11

1. Abundance of natural resources
2. Adoption of capital-intensive & resource intensive technologies
3. Large scale production, economies of scale - large internal singlemarket
4. Use of specialised machinery with inter-changeable parts
5. Single currency - the USA satisfies Mundell’s (1961) conditions for anoptimal currency area
6. child labour

Question 12

what are the other important factors for growth of US?

Answer 12

1. early and exceptional commitment to mass education
2. well developed political and judicial insitutions designed to protect individual freedom
3. non predatory and accountable democratic government - favourable enviroment for entreprenuers
4. protectionist trade policies