The word economy means more than just money. The economy is made up of businesses and the people who work for them. It is also the goods that people make, trade, and buy. Production means making goods. Consumption means buying goods. The American economy of production and consumption is always changing.
Americans did not have to create a national economy from scratch in 1776. Colonial production, natural features like the Mississippi River, and native peoples' industries already existed. These systems made it easier for the country to continue producing and trading goods. The North American continent was part of a larger Atlantic economy. That meant Americans could buy luxury goods shipped across the ocean from South America, Europe, Africa, and Asia. Still, many people used products made at home or in their local area. As the country grew, this local American economy changed into the world-wide economy we know today.
Role of the Government
As part of the British empire, the English government decided where the American colonies could sell and buy goods. After the American Revolution, the founding-fathers asked a question which is still debated today: What is the role of the federal government in the American economy? In 1791, the First National Bank opened. Supporters of a national bank like Alexander Hamilton believed the bank would help keep the country’s economy stable.
Labor unions are groups of workers who use their numbers to create change and better conditions in their jobs. In the late 1800s and early 1900s Congress created national laws to regulate the workplace. These laws included workplace safety laws and the eight-hour workday. Before these laws, it was not uncommon to work ten or more hours a day in a crowded, unsafe factory. Before Congress passed child labor laws in 1938, some children went to work instead of school. Child labor laws made it illegal for young children to work, especially in dangerous jobs like mining. By the middle of the 1900s, all children were expected to go to school.
In the late 1920s and 1930s the American economy went through the Great Depression. The depression meant it was hard to find work, pay for goods, and create jobs. Public works projects were projects funded by the government for the American public to use. Public works were one solution to create jobs during the Great Depression. The Hoover Dam, built in the 1930s, is an example of this government economic program called the New Deal.
Questions about the role of government in the economy remained into the 2000s: How do we regulate employers while creating a foundation for business to thrive? How do we protect the environment while advancing technology and increasing consumption? And, finally, how do we protect the well-being of all workers?
Transportation & Technology
The economy in the 1700s was based in farming, local production, fur trading, and Atlantic jobs like ship building. In the 1800s Americans changed how they moved, who worked, and how they worked. In the mid-1800s the industrial revolution shifted jobs from the farm to the factory. During the industrial revolution, entrepreneurs invented machines to make production faster and cheaper. Factories opened along rivers and in cities. Many people moved from farms to cities to get jobs.
The goods made in these factories could be shipped farther away thanks to transportation improvements. Railroads provided construction jobs for workers and made it easier to ship materials, goods, and people over land. Steamboats and canals made shipping on water faster. In the 1830s, the Ohio & Erie Canal connected the East Coast with the Mississippi River and Gulf to Mexico. The canal created one, long trade route. Average Americans throughout the 1800s no longer had to produce all their clothes and everyday goods. More and more items could be bought pre-made and sold across the country.
By the 1900s and into the 2000s, Americans had more choices about where to shop and what to buy than ever before. The supermarket became a one-stop solution for consumers to buy many types of goods in one place. New materials like plastic combined with modern technology meant Americans could by all their goods instead of make them. Today, much of the American economy takes place over the internet. When you ride the bus to the grocery store, you can buy inexpensive items from all over the globe. This connected economic world is called globalization.
To understand these changes in the American economy, it is also important to understand the role of business owners and workers. These workers include enslaved, immigrant, indigenous, and indebted workers. From the smallest rancher to entrepreneurs like C.J. Walker, the stories of employers and laborers are a central part of American history.
Men, women, and children filled different roles in the American economy. In farm families, women and children worked alongside men in the fields. In the 1800s during the industrial revolution, working-class women and children took jobs in factories to help pay the bills. Alongside these jobs, women of all backgrounds sewed clothes, did laundry, prepared food, and raised children. These important tasks are not recognized in the formal economy of production and consumption, yet are very valuable. 1800s textile factories like the Lowell Mills show the different types of jobs men, women, and children filled. Men performed heavy labor and sometimes had the opportunity to become managers. Women and children ran large weaving looms and earned less money for their work.
Wealthier families organized their working lives differently. Men in these families worked in service industries as doctors, lawyers, clerks, or merchants. In these families, women and children did not have to work. This family structure started to change during World War II. Middle class women entered “men’s jobs” in factories and offices while men were away at war. Women fought for acceptance in male-dominated fields like management, science, engineering, and medicine. By the end of the 1900s, many households in all income levels relied on men and women’s salaries. Today women and men can be found in all types of jobs.
While many Americans in the 1700s and 1800s had the freedom to move and earn wages in factories, others did not. Slavery and servitude are two economic institutions upon which the American nation built its wealth. Farmers used enslaved Native Americans, Africans and African Americans as tools in a farming economy. Plantation sites show this economic system in which a landowner controlled the profits from crops produced by enslaved people. The northern textile mills relied on the inexpensive cotton produced by enslaved workers’ labor. Enslavement meant the loss of control of one's body, children, labor, and profits. Emancipation in 1865 did not guarantee economic equality for African Americans. Legal segregation excluded black Americans from universities, housing, and jobs into the 1960s. National Parks sites like Little Rock Central High School can help show how equal education is linked to economic advancement.
Immigrant, undocumented, and guest-worker labor has always been a part of the country's economy. In the 1860s Chinese and Irish immigrants built the Transcontinental Railroad. This railroad connected the two coasts by land. Other immigrants from across the world worked in industrial or manual labor jobs in the 1800s and 1900s. They came from countries like Poland, French Canada, and Italy and made the goods that were then shipped across the country. Immigrants continue to fill diverse roles in the American economy today. These include labor-intensive jobs in agriculture and factories. Some immigrants fill roles as doctors, engineers, and entrepreneurs. The Statue of Liberty reminds Americans that immigration has always been a part of the nation's economic story.
The types of jobs available to American residents changed by the end of the 1900s. The invention of the personal computer provided many jobs in software and technology. The people who work at your local grocery story are part of the economy known as the service industry. This means they work in a job that provides a service to help you and your family, as opposed to a manufacturing job that produces a product. Workers can be found in technology jobs, service jobs, and manufacturing jobs today.
The Growing American Economy
You may not think about it every time you buy groceries, but the long history of the American economy is filled with changes big and small. Visitors to National Parks can explore how the growth of our nation's economy played out from many points of view. They may also recognize how the economy developed in different parts of the country. In this sense, a Hawaiian fish pond that is hundreds of years old can tell us just as much about the nation's economic story as the Motor City. Together, these stories help us think about our roles as producers and consumers in the country today as we reflect on the American past.
Original article researched and written by Lauren Rever; editing by Mia Carey and Barbara Little.
Visit the National Park Service Telling All Americans' Stories portal to learn more about American heritage themes and histories.