Insight: Changing Households and New Markets (Chapter 4)

            When a population grows, when a nation grows, there are bound to be changes in the market and its goods. Rather than trading, exchanging goods, people now used cash and credit to obtain their resources – this is called the Market Revolution; introducing entrepreneurs, banks, and knowledge on buying.

            Samuel Slater was one of the creators and definers of what an entrepreneur was to be. He took advantage of the potential of a young, growing nation – the United States was producing more and more cotton to meet the needs of the growing population, and he brought English information on cotton mills and textile factories to create a fortune. For an entrepreneur is one who takes on business risks for the sake of profit, and this individual flourishes in capitalism – which is manufacturing controlled by private corporations and by individuals competing for profit.

            The household economy had ruled previously, in which people’s business was simply based on keeping their households running, it was very individualistic. They didn’t care for wealth, just living comfortably and on their own produce. Work was not a commodity, something to be bought and sold. As time passed, families produced fewer things they needed and instead bought them from stores or other people - this lead to centralizing manufacturing, which increased production.

            The Market Revolution also brought by the importance of banks, for these provided the credit and cash necessary for entrepreneurs to buy land or invest. They first appeared during the 1780’s, and by the 1830’s hundreds of them were placed. They were often started by groups of private investors, who unknowingly fueled the development of American economy. They allowed the loans to buy millions of acres of federal land in the West and other money-making schemes. They caused economic booms, but also, due to their way of acting together, severe depressions.

            Thanks to the Market Revolution: middle-class Americans were cluttered with purchased items, banks consolidated themselves as some of the most powerful and important institutions in society, work became a commodity, and work was centralized. All which, together, allowed for the American economy to flourish and expand.

Samuel Slater: one of the very first entrepreneurs.