The U.S. Economic Development: The Significant Periods

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The U.S. Economic Development: The Significant Periods

Nowadays, America can boast one of the most developed economies in the world. The service sector is an important source of the countrys budget; the U.S. is also a world leader in many spheres of industry. However, the history of the U.S. success is complicated; the country went through periods of rapid industrial development and decrease, which were followed by both positive and negative outcomes. In this paper, certain examples will be discussed in detail to analyze the processes that took place in the country and how they influenced its overall performance.

The period of economic rise in the U.S. economy is usually associated with industrialization. Many researchers describe industrialization as the process of technological development and the positive changes in the organization of production and labor (Vigezzi, 2019). Such changes, both economic and social, led America from an agrarian to an industrial society. In the U.S., industrialization took place in the nineteenth century, before and after the Civil War.

The changes that happened to the U.S. economy in the past are mostly connected with its unstable economic situation. From the end of the Civil War to the beginning of the twentieth century, America suffered from economic inequality and devastation (Ward & Himes, 2019). The Gilded Age is an example of how economic and social growth was supposed to solve the emerged problems. The main feature of the Gilded Age was the rapid growth of cities and industries; building railroads also is a significant development of that period. The West of the country was based on farming and mining, while the South remained a devastated area. As for the countrys political and social changes, labor unions became very widespread (Ward & Himes, 2019). These communities were concerned with current social and economic issues, such as child labor and non-standardized working day.

At the same time, industrial growth led to certain negative consequences. The Gilded Age demonstrated a high level of class inequality, which was also connected with the influx of migrants to the country. According to Piketty, at the end of the nineteenth century, the richest Americans could own up to 50 % of the wealth (as cited in Ward & Himes, p. 120). The majority of workers savings were spent on basic needs; the class gap became apparent. As a result, during the 1880s and 1890s, there were numerous strikes among workers because of inappropriate living and working conditions. The unrest led to more efforts focused on managing the labor issue; for example, one of the measures was to boost domestic production, decrease imports, and regulate workers wages.

As it is possible to see, the results of industrialization turned out to be ambiguous. The period before the end of the nineteenth century was characterized by the rapid growth of the domestic industry and the overall wealth. At the same time, the rapid economic increase became a cause of multiple social problems like wage inequality, poor working conditions, rising rates of migration, and the concentration of wealth in certain regions. Therefore, certain measures were needed to cope with the economic crisis and to stabilize the political and social situations.

In the second half of the twentieth century, the American economy went through another important process opposite to industrialization. Deindustrialization is often described as the reduction of industrial activity of a country (Rycroft, 2017). It is believed that this process started in 1947 when the discussion of the current economic issues took place, and the goal to reach harmonious international economic relations was defined (Rycroft, 2017, p. 112). At that time, the American economy was based on its large-scale automobile industry and steel production. However, the increasing industrial success of other countries, like Japan, Russia, and Germany, led to a decrease in the American industry.

Deindustrialization in the U.S. is often associated with the decline in its automotive industry. The bright illustration of this process is the manufactory shrinking of Rust Belt, a region around the Great Lakes that was once a powerful and developed area. Rycroft (2017) draws an example of Detroit that was dragged into bankruptcy as industrial taxes and philanthropy disappeared (p. 113). According to the statistics, at the peak of its success in the 1960s, Detroit had about 290,000 jobs in the manufacturing sector, while by 2009, this number had decreased to 27,000 (Rycroft, 2017, p. 113). At the same time, the industrial decline was followed by the growing service sector, including transport, communication, healthcare, and other spheres. These positive changes, however, could not fully replace the negative outcomes, such as loss of jobs, significant federal spending, and growth of imports. However, it would be fair to say that despite the deindustrialization-related problems, the Rust Belt remains one of the most important industrial areas of the country.

In conclusion, the processes of industrialization and deindustrialization played a vital role in shaping the modern economy of America. Although the outcomes of industrialization are considered the basis of todays economy, the social turmoil of the 1880s and 1890s proved that all spheres of life need to be regulated equally. The industrial crisis of the Rust Belt caused a significant decrease in domestic production, and although many of the industries are no longer dominant in the world market, America has a developed service sector. In conclusion, such challenges demonstrate that economic growth is a complicated process that demands careful and integrated measures. The U.S. proved that careful and thoughtful economic measures lead to a balanced economy and the overall success of the country.

References

Rycroft, R.S. (2017). The American middle class: An economic encyclopedia of progress and poverty (Vols. 1-2). ABC-CLIO.
Vigezzi, M. (2019). World industrialization: Shared inventions, competitive innovations, and social dynamics. John Wiley & Sons.
Ward, K., & Himes, K. (2019). Growing apart: Religious reflection on the rise of economic inequality. MDPI.

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