Americas Economic History Khaled Albana Professor Cruze

Americas Economic Historykhaled Albanaiprofessor Cruzem

America is the only strong and has one of the highest standards of living in the world. In the times of Soviet Union and Eastern Europe when the most practiced version was communism but as Karl Max said this has been thrown into the pit of history. In the years of 1990s the American economy had generated more than 22million new jobs. But the number of Americans who were working in the early 2010 was less than there were 10 years earlier. To put together the awful and the best: America has got the largest economy in the world, and one of the world’s highest standards of living, though the American economy has not been doing well most of the citizens have got descent jobs with descent wages.

The American Economy in the 19th Century America has always had a large agricultural sector that is quite productive. Unlike Europe 200 years ago America had lots of idle fertile land. The lands were given away by the federal government 160 acre plots to any individual who was willing to clear the land and farm it. Land being available in America was the most influential factor in the economic development in the 19th century. The availability of idle land it did not only encourage more immigrants to get into the country to the shores, it also strengthened the rise of early marriage and extended families, because each child was an additional source of labor to cultivate the lands and manage the animals.

More so the availability of these idle lands in comparison to the available labor did boost rapid developments in technology. Though all locations of the United States were primarily agricultural as a result of the civil war, New England, the Middle States they had already put up iron, steel, textile and apparel companies were seen as a major industrial development which was to last till the great depression. But the South whose economy was based on cash crops cottons, tobacco, and rice still continued with the cultivation of these crops till the 20th century. Though this section of America went on with the agricultural practices, remained the poorest regions in America this effects remained till the rise of Sun Belt in the 1960s.

Agriculture did not do well from the end of the civil war up to the close of the century. The most basic cash crops were corn, wheat, and cotton grew faster compared to the population at that time. This was due to the technological upgrades that had been made at that time. Out of the writing the Americas constitution in the 1787, America’s economy witnessed a tremendous growth. The constitution gave America a kind of economic boost putting forward rules of both businesses and money by congress.

The market of United States was opened as also. The already free borders paved way for an internal flow of goods and ideas with restrictions. One of the unusual things was the tax regime on the whiskey put forward in 1791 to assist in the clearing of national debt created and rooted as a result of the revolutionary war. In the year 1789 the republic elected its first president. At this time goods for trade were in plenty, but industries were few.

With the departure of British investments American entrepreneurship received free reign. Economic regional character progressed with shipyards in New England, crops and furs in the middle colonies, the plantations economy of the old south. With the arrival of Samuel Slater, a textile apprentice of a British mill who had taken skills to United States, American manufacturing received a boost. As a result, a single man saw America up on the textile manufacturing of the British after a period of one year effortlessly building the plan from just an idea. It was specifically the boost from the America first president, George Washington, wish, having been sworn into office.

Washington had one main objective; to encourage upcoming American industry in a period when ninety percent-90% of the citizens would be employed in agricultural sector, most of whom everything they needed they produced from their own lands. The first miller of cotton production began in 1790, but the industry took long to take hold as the labor- intensive processing progresses of cotton maintained high costs. There was a talk on the kind of country America should be. Each leader had his own policies which he saw would apply in making United States a strong country more so in the Agriculture sector. The two most events that took place in the twentieth century in America and the effects were evident were; Great depression and World War II (Tassava & Christopher).

While the major causes of the Great Depression are so not clear and too many to outline them, they had disastrous effects on the economy. At its highest point the level of unemployment was almost 25 percent of the workforce as most of the banks were not performing well and what followed was loss of hundreds of millions deposits. The increasingly stocks speculation swept out millions of investors and impaired confidence among the businesses managers and consumers. The Great Depression was as a result of: The fickle fed- Twenty two years ago, the shock of 1907 provided something of the same kind, as shock selling sent the New York Stock Exchange (NYSE) crawling downwards and resulted to a bank run to boot.

No available federal reserve’s to put cash into the market. In 1929, however, the fed took a different path by lowering the supply of money in the economy by almost a third, thus impairing the hopes of the economy getting back on its feet. The banks who were suffering from liquidity difficulties had no option but to go under. Raising the money supply and keeping interest rates down during the roaring twenties, the Fed brought the rapid expansion and what followed was a collapse. Presidential flaws- President Roosevelt got into office by a negative character. It was clear that the previous president, Herbert Hoover, had tried doing everything possible to curb the recession. One of this president’s policies was that the workers’ wages should be brought down due to the economic struggle United States was experiencing. He reasoned that for companies to go on with production the prices were to remain high. The consumers with money were to pay more to keep prices up. Ironically, the public was the most affected and lacked the needed resources to pay more on the products (Bernstein &William).

Though Roosevelt promised to bring change during his time in office, he followed Hoover’s footsteps but to some extent it never worked out. America suffered one to three years of low wages and unemployment before recovery came along after prices going down, with previous depression cycles. New deal- The new deal made set unrealistic objectives to keep track on public works, full employment, and healthy wages through price, wage, and even controls on production. Basically the new deal was made basing its argument on Keynesian economics, especially on the idea that the state works can improve the economy. The projects were ideal, but presence of many cases of mismanagement, political interference and general mis- use that dogs’ government- managed projects.

One of the most dangerous results of the New deal was the impairment of excess crops to justify the artificially high prices, besides the desire of food at a cheaper price (Gordon & Steel). Agencies born as a result of the New deal broke up other markets (black markets) to sell goods at a cheaper price. Factory workers were forced to stop their working and generally impaired production that was necessary for recovery. The level of unemployment went up because companies could not keep up with large payrolls at the government set rates. However there was concentration of wealth in the hands of the few rich individuals and this led to a limit in the economic growth.

The rich intention was to save money that would have been put into the economy if it had been distributed in the hands of the middle and lower classes. This played part in America experiencing a depression. The Great depression was as a result of a combination of factors- a reticent fed, protectionist tariffs and Keynesian, a centered plan by the government. It could have been made short or even avoided completely by changing any of these. Many government interventionists’ supporters pointed out that the depression in 1929 could not have taken place since it was the first time the citizens and the investors lost quite large investments.

References

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