7. The Maturity of American Industrial Society

Zurück zum Zitat Claudia D. Goldin and Frank D. Lewis, “The Economic Cost of the American Civil War: Estimates and Implications,” Journal of Economic History 35 (1975), pp. 299–326; Jeremy Atack and Peter Passell, A New Economic View of American History, 2nd ed. (New York, 1994), pp. 360–363. Claudia D. Goldin and Frank D. Lewis, “The Economic Cost of the American Civil War: Estimates and Implications,” Journal of Economic History 35 (1975), pp. 299–326; Jeremy Atack and Peter Passell, A New Economic View of American History, 2nd ed. (New York, 1994), pp. 360–363.

Zurück zum Zitat James McPherson, Battle Cry of Freedom: The Civil War Era (Oxford, 1988), pp. 442–450; Heather Cox Richardson, The Greatest Nation of the Earth: Republican Economic Policies during the Civil War (Cambridge, Mass., 1997), pp. 66–138. James McPherson, Battle Cry of Freedom: The Civil War Era (Oxford, 1988), pp. 442–450; Heather Cox Richardson, The Greatest Nation of the Earth: Republican Economic Policies during the Civil War (Cambridge, Mass., 1997), pp. 66–138.

Zurück zum Zitat McPherson, Battle Cry of Freedom, pp. 437–442. One scholar has even used the term “full-blown State socialism” to describe the Confederate government’s increasing economic intervention during the war; Jeffrey Rogers Hummel, “The Civil War and Reconstruction,” Price Fishback et al., Government and the American Economy: A New History (Chicago, 2007), p. 208. McPherson, Battle Cry of Freedom, pp. 437–442. One scholar has even used the term “full-blown State socialism” to describe the Confederate government’s increasing economic intervention during the war; Jeffrey Rogers Hummel, “The Civil War and Reconstruction,” Price Fishback et al., Government and the American Economy: A New History (Chicago, 2007), p. 208.

Zurück zum Zitat Charles A. Beard and Mary R. Beard, The Rise of American Civilization Vol. 2: The Industrial Era (New York, 1927); Louis M. Hacker, The Triumph of American Capitalism: The Development of Forces in American History to the End of the Nineteenth Century (New York, 1940). Charles A. Beard and Mary R. Beard, The Rise of American Civilization Vol. 2: The Industrial Era (New York, 1927); Louis M. Hacker, The Triumph of American Capitalism: The Development of Forces in American History to the End of the Nineteenth Century (New York, 1940).

Zurück zum Zitat Atack and Passell, A New Economic View, pp. 360–363. Atack and Passell, A New Economic View, pp. 360–363.

Zurück zum Zitat Robert E. Gallman, “Economic Growth and Structural Change in the Long Nineteenth Century,” Stanley E. Engerman and Robert E. Gallman (eds.), The Cambridge Economic History of the United States Vol. II: The Long Nineteenth Century (Cambridge, 2000), p. 7. Robert E. Gallman, “Economic Growth and Structural Change in the Long Nineteenth Century,” Stanley E. Engerman and Robert E. Gallman (eds.), The Cambridge Economic History of the United States Vol. II: The Long Nineteenth Century (Cambridge, 2000), p. 7.

Zurück zum Zitat Stuart Bruchey, Enterprise: The Dynamic Economy of a Free People (Cambridge, Mass., 1991), p. 256. Stuart Bruchey, Enterprise: The Dynamic Economy of a Free People (Cambridge, Mass., 1991), p. 256.

Zurück zum Zitat P. K. O’Brien, “The Pax Britannica and American Hegemony: Precedent, Antecedent or Just Another History?” O’Brien and Armand Clesse (eds.), Two Hegemonies: Britain 1846–1914 and the United States 1941–2001 (Aldershot, 2002), pp. 28–29; Richard Sylla, “Experimental Federalism: The Economics of American Government 1789–1914,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States, Vol II, pp. 532–533. Tariffs were still the most important protectionist measure. From 1866 to 1883, the United States maintained high tariff rates at an average of 45%. Subsequently, there was a growing demand to lower tariffs in order to raise living standards for farmers and workers. Tariffs were even reduced on occasion, but even after World War I, the United States retained its protectionist stance. For more on this point, see Paul Bairoch, Economics and World History (Chicago, 1993), p. 36; Robert J. Gordon, “Two Centuries of Economic Growth: Europe Chasing the American Frontier,” NBER Working Paper No. 10622 (August 2004), p. 21. P. K. O’Brien, “The Pax Britannica and American Hegemony: Precedent, Antecedent or Just Another History?” O’Brien and Armand Clesse (eds.), Two Hegemonies: Britain 1846–1914 and the United States 1941–2001 (Aldershot, 2002), pp. 28–29; Richard Sylla, “Experimental Federalism: The Economics of American Government 1789–1914,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States, Vol II, pp. 532–533. Tariffs were still the most important protectionist measure. From 1866 to 1883, the United States maintained high tariff rates at an average of 45%. Subsequently, there was a growing demand to lower tariffs in order to raise living standards for farmers and workers. Tariffs were even reduced on occasion, but even after World War I, the United States retained its protectionist stance. For more on this point, see Paul Bairoch, Economics and World History (Chicago, 1993), p. 36; Robert J. Gordon, “Two Centuries of Economic Growth: Europe Chasing the American Frontier,” NBER Working Paper No. 10622 (August 2004), p. 21.

Zurück zum Zitat Lipsey, “U.S. Foreign Trade and the Balance of Payments, 1800–1913,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. II, p. 725. Lipsey, “U.S. Foreign Trade and the Balance of Payments, 1800–1913,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. II, p. 725.

Zurück zum Zitat Fishlow, “Internal Transportation in the Nineteenth and Early Twentieth Centuries,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol II, pp. 583–584. It is instructive to compare American figures with British ones. In 1880, for example, the entire British railroad system was no more than around 25,000 kilometers in length; Alfred D. Chandler, Jr., Scale and Scope: The Dynamics of Industrial Capitalism, paperback ed. (Cambridge, Mass., 1994), p. 53. Fishlow, “Internal Transportation in the Nineteenth and Early Twentieth Centuries,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol II, pp. 583–584. It is instructive to compare American figures with British ones. In 1880, for example, the entire British railroad system was no more than around 25,000 kilometers in length; Alfred D. Chandler, Jr., Scale and Scope: The Dynamics of Industrial Capitalism, paperback ed. (Cambridge, Mass., 1994), p. 53.

Zurück zum Zitat For more on this point, see Stephen Broadberry and Kevin H. O’Rourke, The Cambridge Economic History of Modern Europe Vol. I: 1700–1870 (Cambridge, 2010), Chap. 7. For more on this point, see Stephen Broadberry and Kevin H. O’Rourke, The Cambridge Economic History of Modern Europe Vol. I: 1700–1870 (Cambridge, 2010), Chap. 7.

Zurück zum Zitat It is widely known that the federal government—which was dominated by the Republican Party after the war—provided direct and indirect support to railroad construction. As with the Union Pacific Railroad, which was built in the 1860s, the federal government supplied the land that was necessary for building the railroad network or helped with capital by trading government bonds for stock or having state and local governments purchase shares in railroad companies. Richardson, The Greatest Nation of the Earth, pp. 171–208; Jonathan Barron Baskin and Paul J. Miranti, Jr., A History of Corporate Finance (Cambridge, 1997), pp. 146–164. It is widely known that the federal government—which was dominated by the Republican Party after the war—provided direct and indirect support to railroad construction. As with the Union Pacific Railroad, which was built in the 1860s, the federal government supplied the land that was necessary for building the railroad network or helped with capital by trading government bonds for stock or having state and local governments purchase shares in railroad companies. Richardson, The Greatest Nation of the Earth, pp. 171–208; Jonathan Barron Baskin and Paul J. Miranti, Jr., A History of Corporate Finance (Cambridge, 1997), pp. 146–164.

Zurück zum Zitat Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977), Part 2; Bruchey, Enterprise, pp. 269–270. Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977), Part 2; Bruchey, Enterprise, pp. 269–270.

Zurück zum Zitat Lance E. Davis and Robert J. Cull, “International Capital Movements, Domestic Capital Markets, and American Economic Growth, 1820–1914,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. II, pp. 750–755. Lance E. Davis and Robert J. Cull, “International Capital Movements, Domestic Capital Markets, and American Economic Growth, 1820–1914,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. II, pp. 750–755.

Zurück zum Zitat Naomi R. Lamoreaux, “Entrepreneurship, Business Organization, and Economic Concentration,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. II, p. 419; Baskin and Miranti, Jr., A History of Corporate Finance, pp. 146–164. Naomi R. Lamoreaux, “Entrepreneurship, Business Organization, and Economic Concentration,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. II, p. 419; Baskin and Miranti, Jr., A History of Corporate Finance, pp. 146–164.

Zurück zum Zitat Chandler, Jr., Visible Hand, pp. 240, 289–290; William Leach, Land of Desire: Merchants, Power and the Rise of a New American Culture (New York, 1993), Part 1. Chandler, Jr., Visible Hand, pp. 240, 289–290; William Leach, Land of Desire: Merchants, Power and the Rise of a New American Culture (New York, 1993), Part 1.

Zurück zum Zitat Chandler, Jr., Visible Hand, p. 241; Chandler, Jr., Scale and Scope, p. 62. Chandler, Jr., Visible Hand, p. 241; Chandler, Jr., Scale and Scope, p. 62.

Zurück zum Zitat David A. Hounshell, From the American System to Mass Production, 1800–1932: The Development of Manufacturing Technology in the United States (Baltimore, 1984); Chandler, Jr., Visible Hand, pp. 240–283. David A. Hounshell, From the American System to Mass Production, 1800–1932: The Development of Manufacturing Technology in the United States (Baltimore, 1984); Chandler, Jr., Visible Hand, pp. 240–283.

Zurück zum Zitat Gavin Wright, “The Origins of American Industrial Success 1879–1940,” American Economic Review 80 (1990), pp. 651–668. Of course, natural resources in and of themselves do not fully explain the growth of the American manufacturing sector. The abundant supply of resources affected the specific way in which the American manufacturing sector developed, as we see in the development of the system of mass production. But we must not overlook the fact that the development and use of resources depended upon technological developments. In regard to the capital- and labor-intensive nature of the American manufacturing sector, see Table 1 on p. 656 of the same text. Gavin Wright, “The Origins of American Industrial Success 1879–1940,” American Economic Review 80 (1990), pp. 651–668. Of course, natural resources in and of themselves do not fully explain the growth of the American manufacturing sector. The abundant supply of resources affected the specific way in which the American manufacturing sector developed, as we see in the development of the system of mass production. But we must not overlook the fact that the development and use of resources depended upon technological developments. In regard to the capital- and labor-intensive nature of the American manufacturing sector, see Table 1 on p. 656 of the same text.

Zurück zum Zitat Youngsoo Bae, Miguk Yeoeronui Daeaneul Chajaseo [In Search of Alternatives to American Exceptionalism], (Ilchokak, 2011), pp. 109–113. Youngsoo Bae, Miguk Yeoeronui Daeaneul Chajaseo [In Search of Alternatives to American Exceptionalism], (Ilchokak, 2011), pp. 109–113.

Zurück zum Zitat Lamoreaux, “Entrepreneurship, Business Organization, and Economic Concentration,” pp. 423–424. Lamoreaux, “Entrepreneurship, Business Organization, and Economic Concentration,” pp. 423–424.

Zurück zum Zitat Chandler, Jr., Scale and Scope, Part 2; Louis Galambos, “The U.S. Corporate Economy in the Twentieth Century,” Stanley E. Engerman and Robert E. Gallman (eds.), The Cambridge Economic History of the United States Vol. III: Twentieth Century (Cambridge, 2000), pp. 927–959. Chandler, Jr., Scale and Scope, Part 2; Louis Galambos, “The U.S. Corporate Economy in the Twentieth Century,” Stanley E. Engerman and Robert E. Gallman (eds.), The Cambridge Economic History of the United States Vol. III: Twentieth Century (Cambridge, 2000), pp. 927–959.

Zurück zum Zitat Chandler, Jr., Scale and Scope, pp. 14–31. Chandler, Jr., Scale and Scope, pp. 14–31.

Zurück zum Zitat Richard R. Nelson and Gavin Wright, “The Rise and Fall of American Technological Leadership,” Journal of Economic Literature 30 (1992), pp. 1931–1964; Thomas P. Hughes, American Genesis: A Century of Invention and Technological Enthusiasm, 1870–1970, 2nd ed. (Chicago, 2004). Richard R. Nelson and Gavin Wright, “The Rise and Fall of American Technological Leadership,” Journal of Economic Literature 30 (1992), pp. 1931–1964; Thomas P. Hughes, American Genesis: A Century of Invention and Technological Enthusiasm, 1870–1970, 2nd ed. (Chicago, 2004).

Zurück zum Zitat The new liberalism that appeared in Britain at the end of the nineteenth century should not be confused with the similarly named neoliberalism that has come into fashion more recently. Just as with the progressive movement in the United States, the new liberalism emphasized the failure of the market and the need for aggressive intervention from the state to prevent capital from monopolizing, to protect the rights of workers, and to expand social welfare. The new liberalism that appeared in Britain at the end of the nineteenth century should not be confused with the similarly named neoliberalism that has come into fashion more recently. Just as with the progressive movement in the United States, the new liberalism emphasized the failure of the market and the need for aggressive intervention from the state to prevent capital from monopolizing, to protect the rights of workers, and to expand social welfare.

Zurück zum Zitat Price Fishback, “The Progressive Era,” Fishback et al., Government and the American Economy, pp. 288–322. Price Fishback, “The Progressive Era,” Fishback et al., Government and the American Economy, pp. 288–322.

Zurück zum Zitat Mark Guglielmo and Werner Troesken, “The Gilded Age,” Fishback et al., Government and the American Economy, pp. 267–273; Fishback, “The Progressive Era,” pp. 309–310; Thomas K. McCraw, Prophets of Regulation (Cambridge, Mass., 1984), pp. 78–79 and passim. Mark Guglielmo and Werner Troesken, “The Gilded Age,” Fishback et al., Government and the American Economy, pp. 267–273; Fishback, “The Progressive Era,” pp. 309–310; Thomas K. McCraw, Prophets of Regulation (Cambridge, Mass., 1984), pp. 78–79 and passim.

Zurück zum Zitat For the “end of the frontier,” see Jackson Lears, Rebirth of a Nation: The Making of Modern America, 1877–1920 (New York, 2009), pp. 40–41. For the “end of the frontier,” see Jackson Lears, Rebirth of a Nation: The Making of Modern America, 1877–1920 (New York, 2009), pp. 40–41.

Zurück zum Zitat Michael Adas, Dominance by Design: Technological Imperatives and America’s Civilizing Mission (Cambridge, Mass., 2006), pp. 129–182. Michael Adas, Dominance by Design: Technological Imperatives and America’s Civilizing Mission (Cambridge, Mass., 2006), pp. 129–182.

Zurück zum Zitat Lears, Rebirth of a Nation, pp. 279–291 (for Roosevelt’s aggressive foreign policy) and pp. 324–325 (for Wilson and American policy on Central and South America); Kris James Mitchener and Marc D. Weidenmier, “Empire, Public Goods, and the Roosevelt Corollary,” NBER Working Paper No. 10729 (September 2004). According to the second paper, Roosevelt’s announcement led to a major jump in the values of government bonds from Central and South American countries (74% after one year and 91% after two years), an increase in exports, and a decrease in regional conflict. The authors contend that this supports the hegemonic stability theory that was long ago espoused by Charles Kindleberger. Lears, Rebirth of a Nation, pp. 279–291 (for Roosevelt’s aggressive foreign policy) and pp. 324–325 (for Wilson and American policy on Central and South America); Kris James Mitchener and Marc D. Weidenmier, “Empire, Public Goods, and the Roosevelt Corollary,” NBER Working Paper No. 10729 (September 2004). According to the second paper, Roosevelt’s announcement led to a major jump in the values of government bonds from Central and South American countries (74% after one year and 91% after two years), an increase in exports, and a decrease in regional conflict. The authors contend that this supports the hegemonic stability theory that was long ago espoused by Charles Kindleberger.

Zurück zum Zitat Lears, Rebirth of a Nation, pp. 325–326, 334–335, 337–338 (the Zimmermann Telegram); David Kennedy, Over Here: The First World War and the American Society (Oxford, 1980), pp. 5, 10. It is frequently said that the United States’ entry into World War I was precipitated by the torpedoing of the RMS Lusitania, a British passenger liner, by a German submarine in May 1915, causing the death of a large number of Americans on board. But a more direct cause of the American decision was the Zimmermann Telegram in February 1917, which increased the American government’s suspicions about Germany. In the telegram, which was allegedly sent to the Mexican government by German Foreign Secretary Arthur Zimmermann, Germany promised to force the United States to return the states of Texas, Arizona, and New Mexico to Mexico, provided that Mexico joined the war and Germany was victorious. While the authenticity of the telegram was doubtful since the American government had received it by way of a British intelligence agency, it played a major role in shifting American public opinion in favor of the war. Lears, Rebirth of a Nation, pp. 325–326, 334–335, 337–338 (the Zimmermann Telegram); David Kennedy, Over Here: The First World War and the American Society (Oxford, 1980), pp. 5, 10. It is frequently said that the United States’ entry into World War I was precipitated by the torpedoing of the RMS Lusitania, a British passenger liner, by a German submarine in May 1915, causing the death of a large number of Americans on board. But a more direct cause of the American decision was the Zimmermann Telegram in February 1917, which increased the American government’s suspicions about Germany. In the telegram, which was allegedly sent to the Mexican government by German Foreign Secretary Arthur Zimmermann, Germany promised to force the United States to return the states of Texas, Arizona, and New Mexico to Mexico, provided that Mexico joined the war and Germany was victorious. While the authenticity of the telegram was doubtful since the American government had received it by way of a British intelligence agency, it played a major role in shifting American public opinion in favor of the war.

Zurück zum Zitat Hugh Rockoff, “Until It’s Over, Over There: The U.S. Economy in World War I,” Stephen Broadberry and Mark Harrison (eds.), The Economics of World War I (Cambridge, 2005), p. 334 Table 10.8; Michael Edelstein, “War and the American Economy in the Twentieth Century,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. III, p. 330, p. 342, Table 6.1 (estimated at 32.1 billion dollars). Hugh Rockoff, “Until It’s Over, Over There: The U.S. Economy in World War I,” Stephen Broadberry and Mark Harrison (eds.), The Economics of World War I (Cambridge, 2005), p. 334 Table 10.8; Michael Edelstein, “War and the American Economy in the Twentieth Century,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. III, p. 330, p. 342, Table 6.1 (estimated at 32.1 billion dollars).

Zurück zum Zitat Rockoff, “Until It’s Over, Over There,” pp. 316, 321, 322–327; Kennedy, Over Here, p. 105 (the campaign to promote sales of liberty bonds). Rockoff, “Until It’s Over, Over There,” pp. 316, 321, 322–327; Kennedy, Over Here, p. 105 (the campaign to promote sales of liberty bonds).

Zurück zum Zitat Rockoff, “Until It’s Over, Over There,” pp. 327–332; Kennedy, Over Here, pp. 126–136. Rockoff, “Until It’s Over, Over There,” pp. 327–332; Kennedy, Over Here, pp. 126–136.

Zurück zum Zitat Stephen Broadberry and Mark Harrison, “The Economics of World War I: An Overview,” Broadberry and Harrison (eds.), The Economics of World War I, p. 27 Table 1.9. It is worth remembering that Britain is estimated to have lost about 15% of its national wealth and that France and Germany are estimated to have both lost 55% of theirs during the war. See Table 1.10 on p. 28 of the same text. Stephen Broadberry and Mark Harrison, “The Economics of World War I: An Overview,” Broadberry and Harrison (eds.), The Economics of World War I, p. 27 Table 1.9. It is worth remembering that Britain is estimated to have lost about 15% of its national wealth and that France and Germany are estimated to have both lost 55% of theirs during the war. See Table 1.10 on p. 28 of the same text.

Zurück zum Zitat Real GNP (converted into 1982 dollars) increased from about 400 billion dollars to 496 billion dollars during the same period. For these two figures, see Nathan S. Balke and Robert J. Gordon, “The Estimation of Prewar GNP: Methodology and New Evidence,” NBER Working Paper No. 2574 (August 1988), p. 85, Table 10. According to another estimate that examines changes in real GDP between 1914 and 1918, the United States’ real GDP, assumed to be 100 in 1913, grew to 113.2 by 1918. See Broadberry and Harrison, “The Economics of World War I,” p. 12, Table 1.4. Real GNP (converted into 1982 dollars) increased from about 400 billion dollars to 496 billion dollars during the same period. For these two figures, see Nathan S. Balke and Robert J. Gordon, “The Estimation of Prewar GNP: Methodology and New Evidence,” NBER Working Paper No. 2574 (August 1988), p. 85, Table 10. According to another estimate that examines changes in real GDP between 1914 and 1918, the United States’ real GDP, assumed to be 100 in 1913, grew to 113.2 by 1918. See Broadberry and Harrison, “The Economics of World War I,” p. 12, Table 1.4.

Zurück zum Zitat Rockoff, “Until It’s Over, Over There,” p. 335 Table 10.9. American foreign investment increased from 5 billion dollars in 1914 to 9.7 billion dollars in 1919, while foreign investment in the United States decreased from 7.2 billion dollars to 3.3 billion dollars during the same period. Even after the war, overseas capital investment by Americans continued for some time, and more than 1 billion dollars was exported every year between 1924 and 1928. Barry Eichengreen, “U.S. Foreign Financial Relations in the Twentieth Century,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. III, pp. 475–479. American government debt had been 3.7 billion dollars before the war, but by the end of the war the American government had loaned a similar amount of money to other countries. Kennedy, Over Here, p. 338. Rockoff, “Until It’s Over, Over There,” p. 335 Table 10.9. American foreign investment increased from 5 billion dollars in 1914 to 9.7 billion dollars in 1919, while foreign investment in the United States decreased from 7.2 billion dollars to 3.3 billion dollars during the same period. Even after the war, overseas capital investment by Americans continued for some time, and more than 1 billion dollars was exported every year between 1924 and 1928. Barry Eichengreen, “U.S. Foreign Financial Relations in the Twentieth Century,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. III, pp. 475–479. American government debt had been 3.7 billion dollars before the war, but by the end of the war the American government had loaned a similar amount of money to other countries. Kennedy, Over Here, p. 338.

Zurück zum Zitat For the chaos after the war, see Charles S. Maier, Recasting Bourgeois Europe: Stabilization in France, Germany and Italy in the Decade after World War I (Princeton, 1975). For the chaos after the war, see Charles S. Maier, Recasting Bourgeois Europe: Stabilization in France, Germany and Italy in the Decade after World War I (Princeton, 1975).

Zurück zum Zitat Hughes and Cain, American Economic History, 6th ed., pp. 441, 443–444. According to these scholars, real wages rose by 17% between 1922 and 1929, and real income increased by about 60% between 1921 and 1929. As a consequence, the consumption of durable and semi-durable consumer goods increased from 12.5% of GNP in 1919 to 20% in 1929. It is also worth remembering that expenditures on durable producer goods and the construction sector also increased, from 5.5% and 6.3% in 1919 to 7.5% and 11.2% in 1929, respectively; Bruchey, Enterprise, p. 403, Table 37. Hughes and Cain, American Economic History, 6th ed., pp. 441, 443–444. According to these scholars, real wages rose by 17% between 1922 and 1929, and real income increased by about 60% between 1921 and 1929. As a consequence, the consumption of durable and semi-durable consumer goods increased from 12.5% of GNP in 1919 to 20% in 1929. It is also worth remembering that expenditures on durable producer goods and the construction sector also increased, from 5.5% and 6.3% in 1919 to 7.5% and 11.2% in 1929, respectively; Bruchey, Enterprise, p. 403, Table 37.

Zurück zum Zitat Of particular importance were the United States’ abundant deposits of petroleum and iron ore. When the development of the automobile industry took off in the early 1910s (more specifically in 1913), the United States was producing 65% of the world’s crude oil and 35% of its iron ore. Wright, “Origins of American Industrial Success,” p. 661. Of particular importance were the United States’ abundant deposits of petroleum and iron ore. When the development of the automobile industry took off in the early 1910s (more specifically in 1913), the United States was producing 65% of the world’s crude oil and 35% of its iron ore. Wright, “Origins of American Industrial Success,” p. 661.

Zurück zum Zitat Hounshell, From the American System to Mass Production, pp. 217–261; Thomas K. McCraw and Richard S. Tedlow, “Henry Ford, Alfred Sloan, and the Three Phases of Marketing,” McCraw (ed.), Creating Modern Capitalism: How Entrepreneurs, Companies, and Countries Triumphed in Three Industrial Revolutions (Cambridge, Mass, 1995), pp. 266–300. Hounshell, From the American System to Mass Production, pp. 217–261; Thomas K. McCraw and Richard S. Tedlow, “Henry Ford, Alfred Sloan, and the Three Phases of Marketing,” McCraw (ed.), Creating Modern Capitalism: How Entrepreneurs, Companies, and Countries Triumphed in Three Industrial Revolutions (Cambridge, Mass, 1995), pp. 266–300.

Zurück zum Zitat McCraw and Tedlow, “Henry Ford, Alfred Sloan, and the Three Phases of Marketing,” pp. 285–288. McCraw and Tedlow, “Henry Ford, Alfred Sloan, and the Three Phases of Marketing,” pp. 285–288.

Zurück zum Zitat Gordon, “Two Centuries of Economic Growth,” p. 24. Gordon, “Two Centuries of Economic Growth,” p. 24.

Zurück zum Zitat The United States reinforced its protectionist stance after World War I. During Wilson’s presidency, the United States reduced its average tariff rate from 19.3% to 9.1% with the Underwood-Simmons Act of 1913, but the Harding administration raised tariffs to 14% in 1922. American industrial sectors that had led the way in exports such as the finance sector, mining, petroleum, machinery, electricity, automobiles, rubber, and chemicals supported the Wilson administration’s policies and called for the United States to reduce tariffs, to aid Europe’s postwar reconstruction, and in particular to write off war reparations and wartime debt. But the agriculture sector and industrial sectors that had been traditionally labor-intensive were strongly in support of protectionism. Tariffs were raised again by the Smoot-Hawley Act immediately after the beginning of the Great Depression, and by 1932 the average tariff rate was 19.59%. For conflicting opinions inside the economic establishment and for the dispute between the Republican and Democratic Parties in the debate over raising tariffs and other aspects of economic policy during the interwar period, see Jeff Frieden, “Sectoral Conflict and Foreign Economic Policy, 1914–1940,” International Organization 42 (1988), pp. 59–90; Barry Eichengreen, “The Political Economy of the Smoot-Hawley Tariff,” NBER Working Paper No. 2001 (August, 1986), pp. 16–17; Colleen M. Callahan, Judith A. McDonald, and Anthony Patrick O’Brien, “Who Voted for Smoot-Hawley?” Journal of Economic History 54 (1994), pp. 683–684. The United States reinforced its protectionist stance after World War I. During Wilson’s presidency, the United States reduced its average tariff rate from 19.3% to 9.1% with the Underwood-Simmons Act of 1913, but the Harding administration raised tariffs to 14% in 1922. American industrial sectors that had led the way in exports such as the finance sector, mining, petroleum, machinery, electricity, automobiles, rubber, and chemicals supported the Wilson administration’s policies and called for the United States to reduce tariffs, to aid Europe’s postwar reconstruction, and in particular to write off war reparations and wartime debt. But the agriculture sector and industrial sectors that had been traditionally labor-intensive were strongly in support of protectionism. Tariffs were raised again by the Smoot-Hawley Act immediately after the beginning of the Great Depression, and by 1932 the average tariff rate was 19.59%. For conflicting opinions inside the economic establishment and for the dispute between the Republican and Democratic Parties in the debate over raising tariffs and other aspects of economic policy during the interwar period, see Jeff Frieden, “Sectoral Conflict and Foreign Economic Policy, 1914–1940,” International Organization 42 (1988), pp. 59–90; Barry Eichengreen, “The Political Economy of the Smoot-Hawley Tariff,” NBER Working Paper No. 2001 (August, 1986), pp. 16–17; Colleen M. Callahan, Judith A. McDonald, and Anthony Patrick O’Brien, “Who Voted for Smoot-Hawley?” Journal of Economic History 54 (1994), pp. 683–684.

Zurück zum Zitat Requoted from O’Brien, “The Pax Britannica and American Hegemony,” p. 51. For the speculative boom, see Gordon, An Empire of Wealth, p. 402; Dong-hyu Yang, 20 Segi Gyeongjesa: Daegonghwangeseo Segyehwakkaji [Economic History of the Twentieth Century: From the Great Depression to Globalization] (Ilchogak, 2006), p. 20. Requoted from O’Brien, “The Pax Britannica and American Hegemony,” p. 51. For the speculative boom, see Gordon, An Empire of Wealth, p. 402; Dong-hyu Yang, 20 Segi Gyeongjesa: Daegonghwangeseo Segyehwakkaji [Economic History of the Twentieth Century: From the Great Depression to Globalization] (Ilchogak, 2006), p. 20.

Zurück zum Zitat Assuming that the value of stocks in July 1926 was 100, the index rose to 216 in September 1929. The index began to fall on “Black Tuesday” (October 29, 1929) and by July 1932 had dropped to 34. Assuming that the value of stocks in July 1926 was 100, the index rose to 216 in September 1929. The index began to fall on “Black Tuesday” (October 29, 1929) and by July 1932 had dropped to 34.

Zurück zum Zitat Jonathan Hughes and Louis P. Cain, American Economic History, 6th ed. (New York, 2003), p. 460; Charles H. Feinstein, Peter Temin, and Gianni Toniolo, Daegonghwang Jeonhu Segye Gyeongje [The World Economy Between the World Wars], trans. Dong-hyu Yang, Bok-yeong Park, and Yeong-wan Kim (Dong-suh-Munhak-sa, 2008), p. 195, Table 7.2. Jonathan Hughes and Louis P. Cain, American Economic History, 6th ed. (New York, 2003), p. 460; Charles H. Feinstein, Peter Temin, and Gianni Toniolo, Daegonghwang Jeonhu Segye Gyeongje [The World Economy Between the World Wars], trans. Dong-hyu Yang, Bok-yeong Park, and Yeong-wan Kim (Dong-suh-Munhak-sa, 2008), p. 195, Table 7.2.

Zurück zum Zitat According to Dong-hyu Yang, this was a very unreasonable decision. The biggest problem facing the global economy at the time was not rising prices but falling prices. If expectation persisted that prices would continue to fall, people would keep postponing consumption and companies to keep postponing investment. The only way to overcome this was reversing people’s psychological reluctance to spend and invest by moving away from the gold standard to reduce the value of currency and by greatly expanding the currency supply at the same time in order to raise prices. Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 28–42. According to Dong-hyu Yang, this was a very unreasonable decision. The biggest problem facing the global economy at the time was not rising prices but falling prices. If expectation persisted that prices would continue to fall, people would keep postponing consumption and companies to keep postponing investment. The only way to overcome this was reversing people’s psychological reluctance to spend and invest by moving away from the gold standard to reduce the value of currency and by greatly expanding the currency supply at the same time in order to raise prices. Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 28–42.

Zurück zum Zitat Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 43–45, 60–63, 125–161. Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 43–45, 60–63, 125–161.

Zurück zum Zitat For the unemployment and industrial production indicators, see Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 19, 21. For the unemployment and industrial production indicators, see Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 19, 21.

Zurück zum Zitat J. R. Vernon, “World War II Fiscal Policies and the End of the Great Depression,” Journal of Economic History 54 (1994), pp. 850–868. J. R. Vernon, “World War II Fiscal Policies and the End of the Great Depression,” Journal of Economic History 54 (1994), pp. 850–868.

Zurück zum Zitat Hugh Rockoff, “The United States: From Ploughshares to Swords,” Mark Harrison (ed.), The Economics of World War II: Six Great Powers in International Comparison (Cambridge, 2000), pp. 81–121. When the per capita consumption of actual residents is estimated, the reduction in consumption in 1942 vanishes, and consumption steadily increases until reaching its highest point ever in 1943. When people at the time said that “Americans never had it so good,” they were not exaggerating. For more on this point, see Table 3.5 in the same text. Hugh Rockoff, “The United States: From Ploughshares to Swords,” Mark Harrison (ed.), The Economics of World War II: Six Great Powers in International Comparison (Cambridge, 2000), pp. 81–121. When the per capita consumption of actual residents is estimated, the reduction in consumption in 1942 vanishes, and consumption steadily increases until reaching its highest point ever in 1943. When people at the time said that “Americans never had it so good,” they were not exaggerating. For more on this point, see Table 3.5 in the same text.

Zurück zum Zitat Gordon, An Empire of Wealth, p. 453; Fred Aftalion, A History of the International Chemical Industry (Philadelphia, 1991), pp. 208–209. Gordon, An Empire of Wealth, p. 453; Fred Aftalion, A History of the International Chemical Industry (Philadelphia, 1991), pp. 208–209.

Zurück zum Zitat Robert M. Collins, More: The Politics of Economic Growth in Postwar America (New York, 2000), pp. 11–12. Robert M. Collins, More: The Politics of Economic Growth in Postwar America (New York, 2000), pp. 11–12.

Zurück zum Zitat David Mowery and Nathan Rosenberg, “Twentieth-Century Technological Change,” Stanley E. Engerman and Robert E. Gallman (eds.), The Cambridge Economic History of the United States Vol. III, p. 819. David Mowery and Nathan Rosenberg, “Twentieth-Century Technological Change,” Stanley E. Engerman and Robert E. Gallman (eds.), The Cambridge Economic History of the United States Vol. III, p. 819.

Zurück zum Zitat For the role of the federal government in R&D investment after the war, see Mowery and Rosenberg, “Twentieth-Century Technological Change,” pp. 820–823. For the role of the federal government in R&D investment after the war, see Mowery and Rosenberg, “Twentieth-Century Technological Change,” pp. 820–823.

Zurück zum Zitat Alfred D. Chandler, Jr., Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industries, paperback edition (Cambridge, Mass., 2006), pp. 27–29 (RCA), 83–84 (computers); Mowery and Rosenberg, “Twentieth-Century Technological Change,” p. 886. Alfred D. Chandler, Jr., Inventing the Electronic Century: The Epic Story of the Consumer Electronics and Computer Industries, paperback edition (Cambridge, Mass., 2006), pp. 27–29 (RCA), 83–84 (computers); Mowery and Rosenberg, “Twentieth-Century Technological Change,” p. 886.

Zurück zum Zitat Chandler, Jr., Inventing the Electronic Century, pp. 83–84. Chandler, Jr., Inventing the Electronic Century, pp. 83–84.

Zurück zum Zitat Mowery and Rosenberg, “Twentieth-Century Technological Change,” pp. 856–857. Mowery and Rosenberg, “Twentieth-Century Technological Change,” pp. 856–857.

Zurück zum Zitat Aftalion, A History of the International Chemical Industry, pp. 209–212. Aftalion, A History of the International Chemical Industry, pp. 209–212.

Zurück zum Zitat Ruth Schwartz Cowan, A Social History of American Technology (New York, 1997), pp. 256–258; Mowery and Rosenberg, “Twentieth-Century Technological Change,” p. 842 (for the development of the jet engine). Ruth Schwartz Cowan, A Social History of American Technology (New York, 1997), pp. 256–258; Mowery and Rosenberg, “Twentieth-Century Technological Change,” p. 842 (for the development of the jet engine).

Zurück zum Zitat Gordon, “Two Centuries of Economic Growth.” There was a severe gap between the productive capacity of the United States and of Europe. While American industrial production just before the end of the war was 50% higher than before the war, the industrial production of the defeated countries of Germany and Japan had fallen to 20% of prewar industrial production. Philip Armstrong, Andrew Glyn, and John Harrison, Capitalism since 1945 (Oxford, 1991), p. 23. Gordon, “Two Centuries of Economic Growth.” There was a severe gap between the productive capacity of the United States and of Europe. While American industrial production just before the end of the war was 50% higher than before the war, the industrial production of the defeated countries of Germany and Japan had fallen to 20% of prewar industrial production. Philip Armstrong, Andrew Glyn, and John Harrison, Capitalism since 1945 (Oxford, 1991), p. 23.

Zurück zum Zitat Feinstein, Temin, and Toniolo, Daegonghwang Jeonhu Segye Gyeongje [The World Economy Between the World Wars], p. 278. Feinstein, Temin, and Toniolo, Daegonghwang Jeonhu Segye Gyeongje [The World Economy Between the World Wars], p. 278.

Zurück zum Zitat Eichengreen, Globalizing Capital, p. 99. For the Bretton Woods agreement, start reading at p. 93 in the same book and Kim Gi-su, Gukje Tonghwa Geumyung Chejewa Segye Gyeongje Paegwon [The International Monetary and Financial System and Global Economic Hegemony] (Sallim, 2011), Chap. 3. Eichengreen, Globalizing Capital, p. 99. For the Bretton Woods agreement, start reading at p. 93 in the same book and Kim Gi-su, Gukje Tonghwa Geumyung Chejewa Segye Gyeongje Paegwon [The International Monetary and Financial System and Global Economic Hegemony] (Sallim, 2011), Chap. 3.

Zurück zum Zitat For the origins of the Council on Foreign Relations and the postwar plan, see Youngsoo Bae, Miguk Yeoeronui Daeaneul Chajaseo [In Search of Alternatives to American Exceptionalism], pp. 431–432; Laurence H. Shoup and William Minter, Imperial Brain Trust: The Council on Foreign Relations and United States Foreign Policy (New York, 1977), see especially Chaps. 1 and 4. For the origins of the Council on Foreign Relations and the postwar plan, see Youngsoo Bae, Miguk Yeoeronui Daeaneul Chajaseo [In Search of Alternatives to American Exceptionalism], pp. 431–432; Laurence H. Shoup and William Minter, Imperial Brain Trust: The Council on Foreign Relations and United States Foreign Policy (New York, 1977), see especially Chaps. 1 and 4.

Zurück zum Zitat Jeffry A. Frieden, Global Capitalism: Its Fall and Rise in the Twentieth Century (New York, 2006), pp. 255–257; Tony Judt, Postwar: A History of Europe since 1945 (New York, 2006), pp. 107–108. Jeffry A. Frieden, Global Capitalism: Its Fall and Rise in the Twentieth Century (New York, 2006), pp. 255–257; Tony Judt, Postwar: A History of Europe since 1945 (New York, 2006), pp. 107–108.

Zurück zum Zitat Frieden, Global Capitalism, p. 258. Frieden, Global Capitalism, p. 258.

Zurück zum Zitat Frieden, Global Capitalism, p. 270; Armstrong, Glyn, and Harrison, Capitalism since 1945, pp. 30–31. Frieden, Global Capitalism, p. 270; Armstrong, Glyn, and Harrison, Capitalism since 1945, pp. 30–31.

Zurück zum Zitat Frieden, Global Capitalism, p. 265. Frieden, Global Capitalism, p. 265.

Zurück zum Zitat The United States was not worried, of course, that Communism would immediately sweep over Western Europe. Rather, the United States was concerned that socialism would grow in influence unless the economic conditions in Western Europe improved and that this would lead to increasing demand for socialization of the means of production and increased control by labor, all measures that conflicted with the free international economic order that the United States envisioned. Therefore, the objective of the aid provided through the Marshall Plan was not “to be the combatting of communism as such but to the restoration of the economic health and vigor of the European society,” as George Kennan said (requoted from Armstrong, Glyn, and Harrison, Capitalism since 1945, p. 72); Judt, Postwar, pp. 88–90. The United States was not worried, of course, that Communism would immediately sweep over Western Europe. Rather, the United States was concerned that socialism would grow in influence unless the economic conditions in Western Europe improved and that this would lead to increasing demand for socialization of the means of production and increased control by labor, all measures that conflicted with the free international economic order that the United States envisioned. Therefore, the objective of the aid provided through the Marshall Plan was not “to be the combatting of communism as such but to the restoration of the economic health and vigor of the European society,” as George Kennan said (requoted from Armstrong, Glyn, and Harrison, Capitalism since 1945, p. 72); Judt, Postwar, pp. 88–90.

Zurück zum Zitat While Britain and France received the greatest portion of the 12 billion dollars of Marshall aid, this aid had an even greater effect on beneficiary countries with smaller economies. For example, the amount of aid that Austria received during the first year of the Marshall Plan was equivalent to 14% of Austria’s national income. Judt, Postwar, pp. 90–91; Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 173–174, 261. While Britain and France received the greatest portion of the 12 billion dollars of Marshall aid, this aid had an even greater effect on beneficiary countries with smaller economies. For example, the amount of aid that Austria received during the first year of the Marshall Plan was equivalent to 14% of Austria’s national income. Judt, Postwar, pp. 90–91; Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 173–174, 261.

Zurück zum Zitat Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 174–175. Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 174–175.

Zurück zum Zitat Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 185–186; for the “politics of productivity,” see Charles S. Maier, Among Empires: American Ascendancy and Its Predecessors (Cambridge, Mass., 2006), pp. 191–237. Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 185–186; for the “politics of productivity,” see Charles S. Maier, Among Empires: American Ascendancy and Its Predecessors (Cambridge, Mass., 2006), pp. 191–237.

Zurück zum Zitat Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 176–177. Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 176–177.

Zurück zum Zitat Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 202–212; Armstrong, Glyn, and Harrison, Capitalism since 1945, p. 3; Judt, Postwar, p. 86. Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 202–212; Armstrong, Glyn, and Harrison, Capitalism since 1945, p. 3; Judt, Postwar, p. 86.

Zurück zum Zitat Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 191–198; Eichengreen, Globalizing Capital, pp. 106–107. Dong-hyu Yang, 20 Segi Gyeongjesa [Economic History of the Twentieth Century], pp. 191–198; Eichengreen, Globalizing Capital, pp. 106–107.

Zurück zum Zitat Findlay and O’Rourke, Power and Plenty: Trade, War, and the World Economy in the Second Millennium, Chap. 7. Findlay and O’Rourke, Power and Plenty: Trade, War, and the World Economy in the Second Millennium, Chap. 7.

Zurück zum Zitat Armstrong, Glyn, and Harrison, Capitalism since 1945, p. 151; Moses Abramovitz, “Catching Up, Forging Ahead, and Falling Behind,” Journal of Economic History 46 (1996), p. 391, Table 1. Armstrong, Glyn, and Harrison, Capitalism since 1945, p. 151; Moses Abramovitz, “Catching Up, Forging Ahead, and Falling Behind,” Journal of Economic History 46 (1996), p. 391, Table 1.

Zurück zum Zitat This remark by Allen W. Dulles, director of the CIA, is requoted from Judt, Postwar, p. 94. This remark by Allen W. Dulles, director of the CIA, is requoted from Judt, Postwar, p. 94.

Zurück zum Zitat Peter H. Lindert, “Twentieth-Century Foreign Trade and Trade Policy,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. III, pp. 444–455; Judith Stein, Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (New Haven, 2010), pp. 5–8. Peter H. Lindert, “Twentieth-Century Foreign Trade and Trade Policy,” Engerman and Gallman (eds.), The Cambridge Economic History of the United States Vol. III, pp. 444–455; Judith Stein, Pivotal Decade: How the United States Traded Factories for Finance in the Seventies (New Haven, 2010), pp. 5–8.

Zurück zum Zitat Armstrong, Glyn, and Harrison, Capitalism since 1945, p. 154. Armstrong, Glyn, and Harrison, Capitalism since 1945, p. 154.

Zurück zum Zitat Collins, More, pp. 40–41; Stein, Pivotal Decade, pp. 1–2. Collins, More, pp. 40–41; Stein, Pivotal Decade, pp. 1–2.

Zurück zum Zitat Armstrong, Glyn, and Harrison, Capitalism since 1945, pp. 177 (Table 11.5), 151 (Table 10.1). After the Kennedy Round (1962–1967), the average rate of tariffs fell to 8.7%; after the Tokyo Round (1973–1979), this rate dropped even further to 4.7%. Armstrong, Glyn, and Harrison, Capitalism since 1945, pp. 177 (Table 11.5), 151 (Table 10.1). After the Kennedy Round (1962–1967), the average rate of tariffs fell to 8.7%; after the Tokyo Round (1973–1979), this rate dropped even further to 4.7%.

Zurück zum Zitat This can be conceptualized as the “phoenix factor.” For more on this point, see Tai-Yoo Kim et al., “War, Peace and Economic Growth: The Phoenix Factor Reexamined,” mimeograph. This can be conceptualized as the “phoenix factor.” For more on this point, see Tai-Yoo Kim et al., “War, Peace and Economic Growth: The Phoenix Factor Reexamined,” mimeograph.