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February 03, 2005

20050201 Econ 113 Lecture: The Pre Civil War United States--Growth of an Agrarian Civilization

National Population:

1790: 3.9M people, $1100
1840 17.1M people, $1800
1860 31.4M people, $2000

% urban:
5% 1790,
11% 1840,
20% 1860.

"Urban" means "2500 or more"...

City sizes: 1790: NY 33, PH 29, BO 18; 1840: NY 313, Balt 102, NO 102, PH 93; 1860 NY+Brooklyn 1081, PH 565, Balt 212.

Why this pattern? Transport: Erie Canal, C&O Canal, Mississippi-Missouri-Ohio river system. The coming of the railroad to keep NO from surpassing NY... New York Central RR, Pennsylvania RR...

SF in 1860: 15th among American cities with 57K people...

Conquest: Northwest territories, inland southeast and War of 1812, Louisiana Purchase, Florida, Texas, Mexican Cession, Oregon Territory, Alaska "Seward's Folly", Hawaii. Conquest keeps land abundant, hence keeps wages high.

Relatively fast increase in output per capita in the U.S. before 1860. A puzzle that growth was so fast. The puzzle set out for your inspection... Implication: an enormous increase in effective land and natural resources per worker from 1790 to 1860. Population grows. Accessible natural resources grow significantly faster... A handout on growth accounting, resources, and the pre-Civil War U.S.

Alexander Hamilton: Debt, Banks, and Manufactures.

U.S. Revolutionary War hyperinflation: $241 million continental dollars worth $1 million gold dollars by the end of the war.

Value of Revolutionary War debt tripled as debt assumption was discussed and debated.

Posted by DeLong at February 3, 2005 03:50 PM