Verified Document

Early US History Markets Article Review

Market in Early Republic James Henretta is a history professor for the University of Maryland. In his article about the market in the early republic, Henretta (1998) outlines the structure of the market during that time period. He opens by pointing out that at the time there were two competing views of what the market should look like. One view, that of Hamilton and the Federalist party, was to "use the power of the state to assist monied men ... to pursue a capitalist path of domestic commercial development" (p.290). Such an approach would focus on building a strong banking industry to support the capitalists. The other approach, as advocated by Jefferson, Madison and the Democratic-Republican party, preferred a model that supported farmers, artisans and other small businesses. Incentives would be offered for these to produce for export markets, a "subsistence-plus" model that allowed people the means to survive while having opportunities to earn extra and grow their businesses from the ground up (p.290).

Each approach would differ in terms of how the market would be structured, and how the legal environment would support market activities. The author notes that the development of the market during the early republic was characterized by frequent conflict of these two ideals. The government owned most of the land, and was therefore heavily involved in land markets, making the issue of economic structure an inherently political one. The author supposes that political involvement in land distribution promoted the subsistence-plus market system, which in turn delayed the arrival of a price-based exchange system. Many Americans lived subsistence lifestyles, which in turn left only limited time and energy for other pursuits,...

The demise of the rural barter system and emergence of a cash economy took a long time, and many companies had to be creative with respect to finding cash, as capital markets were usually underdeveloped in rural areas in particular.
Another supporting point in Henretta's thesis is the idea that the money used for domestic commerce, which was fixed in amount, controlled by the state, inhibited the move to a cash economy. The first reason is that the government could print money without any reasonable basis -- thus, it could become inflationary. Henretta is perhaps using today's understanding of economics in his argument here. He juxtaposes this form of money with the use of gold -- a common argument today among certain circles -- to argue that such money was inflationary, but he is also imposing today's understanding of fiat currencies on what was not even a serious attempt at a fiat currency. The token money used for exchange in the early republic was correctly interpreted as risky by the capitalists of the time, not so much because it was fiat, but because there were no meaningful control mechanisms in place to prevent inflation. There was no central bank, and the government could without any effort at all disrupt the market for the token money, in ways that are impossible to do today. There were good reasons not to trust the value of token money.

A weak spot in the article is the author's inability to recognize inconsistencies in his own arguments. On page 293, he makes the point that government intervention in the form of the Relief Act was bad fiscal policy and brought about a…

Sources used in this document:
References

Henretta, J. (1998). The market in the early republic. Journal of the Early Republic. Vol. 18 (2) 289-304.
Cite this Document:
Copy Bibliography Citation

Related Documents

Fashion in the Early History, There Was
Words: 2247 Length: 6 Document Type: Essay

FASHION In the early history, there was no need of describing the existence of a market as the markets at that time were controlled by various social institutions and were governed by a set of non-economic norms and rules. The people, therefore, relied on the unproblematic existence of the markets. (Maddison )[footnoteRef:2] According to Marx, a commodity can be defined as, 'an object outside us, a thing that by its properties

History of the Early National
Words: 1208 Length: 4 Document Type: Term Paper

Aside from the practical considerations provided by the system which split the federal and local authorities, there was also the matter of the limitation of powers. In this sense, the central government was built in such a manner as to express the boundaries of the influence even the elected office representatives had on the particular issues concerning each state. Thus, the Congress and the House of Representatives were established and

Market Segmentation There Are a Variety of
Words: 516 Length: 2 Document Type: Essay

Market Segmentation There are a variety of ways to segment a market in order to identify a target market and perform many of the key marketing functions. Determining the basis of an effective segmentation is a multi-step and even multi-disciplinary process that can be incredibly complex. The five key forms of segmentation include: Geographic Demographic Behavioral Psychological Price Geographic segmentation is simply by region. This is especially important to brick and motor retail stores and businesses in

History of Wireless Tech. In
Words: 1094 Length: 4 Document Type: Term Paper

"They are adding 1 million new users a day." Impact on cultures One of the Chinese cultures that are affected by the wireless technology is the Cash Culture. Paying in cash has been a practice to most Chinese. Credit and debit cards are not in the trend of the Chinese culture. However, with the revolution of the wireless technology, cash would seem to be a little out of the way of

History and Development of Sound Technologies and Sound Design in...
Words: 11249 Length: 40 Document Type: Dissertation or Thesis complete

sound technologies and sound design in Film Sound in films Experiments in Early Age Developments Crucial innovations Commercialization of sound cinema: U.S., Europe, and Japan Sound Design Unified sound in film production Sound designers in Cinematography Sound Recording Technologies History of Sound Recording Technology Film sound technology Modern Digital Technology History of sound in films Developments Sound Design Sound Recording Technologies The film industry is a significant beneficiary of performing arts. The liberal arts combined with latest techniques and advancements experienced a number of stages. The

History of Native Americans How Did Native
Words: 1489 Length: 5 Document Type: Essay

History Of Native Americans How did Native responses to European activities affect the direction that colonies took? In 1585, Richard Hakluyt guaranteed that the economic potential of the North America is strong enough to provide the basis for the creation of a grand English commercial empire. He assured that the colonization by Englishmen would open profitable and productive new American markets. The next 178 years proved really beneficial for the Native Americans

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now