Annotated Table of Contents
Economic Episodes in American History
How Can Economics Illuminate History?
A rich understanding of history requires careful
integration of concepts and ideas from economics.
Puzzling behavior from history becomes clear
when costs and choices are fully understood.
A few key economic concepts provide large gains
in historical understanding.
Why Did the British Colonies Succeed Economically—Without
Finding Gold and Silver?
In New World colonization, the British got a late start and found
no gold or silver. Yet Britain’s North American colonies succeeded
in becoming the largest and most prosperous economy on the planet.
Institutions help explain why.
- Primary Source: Pastime and Merry
- Then and Now: Is China the New Mercantilist State? .
Why Did John Harrower Sell Himself into Bondage?
John Harrower became an indentured servant to come to America.
Like thousands of others, he
gave up years of freedom and made large sacrifices. By the end
of their indentures, these former
servants were free people in a land of opportunity.
- Primary Source: Richard Lowther Signs an Indenture
- Then and Now: Are You Army Strong?
Why Did the American Colonists Fight When They Were Safe, Prosperous,
In 1776 the colonies of British North America had a high standard
of living. Politically they were the freest
people on the planet. Still, they found themselves drawn into war
against one of the mightiest military powers of the time.
- Primary Source: Losing Ground
- Then and Now: Party Like It’s 1773
How Did the U.S. Constitution Provide a Road Map to Economic Prosperity?
The founders of the newly independent United States had an opportunity
that is rare in history: to “reset” their government.
The U.S. Constitution, usually thought of as a political document,
is inherently an economic document as well. It provided a framework
for the world’s
most prosperous economy.
- Primary Source: Federalist No.15
- Then and Now: Comparing Two Constitutions
Turnpikes, Canals and Railroads: What Did We Do Before Interstate
As a far-flung nation, the United States has always faced transportation
challenges. Early in its history, meeting that challenge involved
roads through new territory, bold river journeys, creating new
canals, and establishing large new systems of railroad transportation.
- Primary Source: Clinton’s Folly Becomes Clinton’s Victory
- Then and Now: The Trains Roll On, With Warren Buffet at the Controls
Was Slavery a Market Institution?
Slavery was our national tragedy, both for the enslaved and for
the nation at large. Fully understanding slavery requires a close
look at the economics of the institution. Slavery involved markets
that operated in the absence of the most basic freedom: self-ownership.
- Primary Source: Technology and Slavery
- Then and Now: Some Consequences of Economic Freedom
The Civil War and Lee’s Dilemma:
Why Fight a War When the North’s Economy Was So Much Stronger?
The Union had overwhelming economic advantages over the Confederacy.
Yet, both choose to fight a war that resulted in the loss of more
than 600,000 lives. Economic thinking can help us understand why
the Civil War was fought when the outcome appeared certain.
- Primary Source: The Republican Platform of 1860
- Then and Now: The War in Iraq
How Did the Civil War Change the U.S. Economy?
Fighting the Civil War brought eventual emancipation to enslaved people.
It also brought huge opportunity costs to the North and the South.
Economic thinking can help to clarify the choice
of a wrenching war over other possibilities.
- Primary Source: The Debate on the Economic Future of African Americans
- Then and Now: The Economy of the New South
The Homestead Act of 1862: Was Free Land Really Free?
The Homestead Act of 1862 opened 270 million acres of publicly
owned western lands for settlement. Eventually, 10 percent of U.S.
land was given away under the Homestead Act. Economic analysis
reveals, however, that ‘free land’ came with its own costs.
- Primary Source: How the Railroads Promoted Land Sales
- Then and Now: Cash for Clunkers
Did the Comanche and Other American Indians Favor Communal
Institutions of ownership are important to any society, including
the Comanche Indians. Like other Plains Indians, they did not recognize
private ownership of land. Yet they did have property customs that
shaped their economic lives.
- Primary Source: Thomas Jefferson’s Confidential Letter to Congress
- Then and Now: Airports and Private Property Rights
Why Did Frank H. Mayer and His Fellow Hunters Kill Buffalo,
Almost to Extinction?
In the 19th century, buffalo on the Great Plains were hunted nearly
extinction. Hunters such as Frank H. Mayer were seeking profit
Economic reasoning explains why buffalo populations were hit so
hard and why
they have made a striking comeback.
- Primary Source: Protesting the Slaughter of a “Noble and Harmless Animal”
- Then and Now: Ocean Resources and Property Rights
Did Railroads Cause the Economy of the Late 1800s to Grow?
Railroads grew rapidly after the Civil War and the U.S. economy
also thrived. Railroads captured
the national imagination. As prominent as railroads were, however,
economic analysis warns against overestimating their importance.
- Primary Source: “Crazy Judah’s” Railroad Plan
- Then and Now: The Quest for Growth
Hard Currency: Sound Money or Cross of Gold?
Having the right quantity of money in circulation is vital to an
economy’s success. In the late 1800s, some advocated big injections
of money based on silver. The alternative was reliance on gold,
considered so harsh that William Jennings Bryan called the policy
a “cross of gold.”
- Primary Source: The “Cross of Gold” Speech
- Then and Now: Could a Little Inflation Be Good for the Economy?
Were the Robber Barons Robbers or Barons?
Leaders of industrialization such as Rockefeller and Vanderbilt
are often portrayed as ruthless monopolists— robber barons,
to use a familiar term. Closely analyzed, the robber barons’ effects
are a good deal more complex and surprisingly favorable to consumer
- Primary Source: How Did Standard Oil Succeed? Two Perspectives
- Then and Now: Is Walmart a Monopoly?
Why Did the 19th-Century Monopolies Disappear?
The late 19th century saw the development of large business consolidations
industries such as oil, whiskey, and steel. Only one of these—Standard
was broken up by antitrust actions. The fate of the others helps
dynamics of a competitive market economy.
- Primary Source: “Fighting Bob” and the Railroads
- Then and Now: Is Microsoft a Monopoly?
How Did Financial Panics Lead to the Establishment of an Independent
To rich and poor alike, the financial panics of the 1800s were
life-changing. Even those with minimal ties to the financial system
could be ruined. The Federal Reserve System was a natural reaction
to the banking practices of the time.
- Primary Source: Report on the Panic of 1907
- Then and Now: The Modern Equivalent of 1800s Financial Panics
Who Was the Titanic Baby and Where Was He Going?
When the steamship Titanic sank on April 15, 1912, many passengers
in the lower part of the ship didn’t make it out alive. One
who did survive was the “Titanic baby,” 10-month-old
Frank Aks. His family’s story, one among millions, illustrates
the economics of immigration.
- Primary Source: Was There Discrimination by Age,
Gender, and Class When the Titanic Sank?
- Then and Now: The Changing Face of Immigration
What Made the Roaring Twenties Roar, Economically: Real Growth
or a Stock Market Bubble?
Looking back, the heights of the economy in the 1920s were clearly
Yet that period of growth also was based in part on strength in
the real economy.
New technology and institutions were part of the era that included
different music, new fashions and the motor car.
- Primary Source: Stock Experts Everywhere
- Then and Now: “Let ‘em Fail” vs. “Too Big to Fail”
Why Did a Mild Recession in 1929 Become the Great Depression of the
No recent downturn has been anything like the Great Depression
in the degree of hardship. It began as a mild recession in 1929.
Economic analysis shows how circumstances and policy mistakes combined
to make it the most severe economic downturn in our history.
- Primary Source: Bank Runs
- Then and Now: “Let ‘em Fail” vs. “Too Big to Fail”
Was the New Deal Good for the U.S. Economy?
President Franklin D. Roosevelt’s New Deal substantially reshaped
the operation of the American economy. Economic analysis shows
how the change in institutions had effects on the market economy,
on the environment facing employers and on the length of downturns.
- Primary Source: A Cartoonist Looks at the AAA
- Then and Now: Two Famous Economists Debate the 2009 Stimulus Plan
The Economics of Union Membership?
Folk singers have written hundreds of tunes protesting working
conditions and extolling the virtues of membership in labor unions,
and yet unions have struggled to maintain membership. The incentives
to join unions, coupled with the changing legal environment, explain
- Primary Source: Folk Songs Helped Organize Labor Unions
- Then and Now: The Rise of Public Sector Unions
Did Rosie the Riveter Win the Battle for Working Women?
World War II changed the workforce. There was a huge increase in
the participation of women, symbolized by wartime posters of Rosie
the Riveter. Rosie was part of a wave reflecting changes in the
relative attractiveness of work inside and outside the home.
- Primary Source: Rosie the Riveter Magazine Cover
- Then and Now: Rosie and Oprah
Why Did the U.S. Economy Grow after World War II?
At the end of World War II there were credible worries that the
economy would sink back into depression. Instead, there was a period
of unprecedented prosperity, widely spread across the population.
It was an economic success story that many would hope to repeat.
- Primary Source: The Way You Live at Levittown
- Then and Now: The Boomers Grow Up
Who Desegregated Major League Baseball: Adam Smith or Jackie
For years, the owners of major league baseball clubs refused to
hire African-American players. Things changed on April 15, 1947,
when Branch Rickey signed Jackie Robinson to play for Brooklyn.
Economic analysis shows how new incentives promoted social change.
- Primary Source: Branch Rickey Speaks Out
- Then and Now: The Gender Gap
How Did the Marshall Plan Become a Model for Foreign Aid Programs?
After World War II, the United States was the only economy left
on its feet. It provided assistance to European economies that
became a model for foreign aid programs to come later. Understanding
foreign aid requires a close analysis of incentives and outcomes.
- Primary Source: The Marshall Plan as a Bike Lesson
- Then and Now: A “Marshall Plan” for Africa?
What Were the Origins of the African-American Middle Class?
George E. Johnson, Sr. left the South of his childhood and became
a pioneer African-American business owner in Chicago. His story
illustrates how internal migration and increased human capital
both preceded and strengthened the civil rights movement.
- Primary Source: A President Takes Notice of the
Great Migration and Its Importance
- Then and Now: Continuing Musical Influences from a Migration Long Past
Why Did Communism Collapse?
Ulrike Reichenbach and Conny Holzbrecher were born identical twins
in Germany, but Ulrike was raised in prosperous West Germany while
Conny grew up under communism in East Germany. Their story illustrates
the dramatic effects of economic institutions on people’s lives.
- Primary Source: The Trabant, and the Fall of the Wall
- Then and Now: East and West Germany Today
How Did the Economic Influence Presidential Elections in the
Stagnant Seventies ?
When economic times are bad, the Misery Index measures how bad
they are. It is calculated as the sum of the unemployment rate
and the inflation rate. Presidential candidate Jimmy Carter campaigned
on the Misery Index, but later as President found the index used
- Primary Source: President Carter Addresses the Energy Crisis of 1979
- Then and Now: The Economy and the Mid-Term Elections of 2010
Is the Information Revolution as Big as the Industrial Revolution ?
Computers had been in use for decades as the twenty-first century
approached, yet the information revolution did not occur until
computers started talking to each other over the Internet. Proponents
hail a new equivalent of the Industrial Revolution but skeptics
- Primary Source: A Prediction That Was Not So Stupid
- Then and Now: Speculative Bubbles, “This Time
Is Different,” and a 2009 Breakup
Is Free Trade Out of Date?
Since the end of World War II, the United States has championed
increasing international trade. Critics are many, and they have
become more vocal in recent years. Economic analysis of recent
history illuminates the key tradeoffs.
- Primary Source: Tariffs between the United States and Europe
- Then and Now: A Trade War with Mexico?
Is the Growth of the Federal Government Good for the Economy?
The Founders had in mind a limited role for the federal government
in the economy. However, life in 2010
is much different from what it was in 1789. An examination of entitlement
spending on Social Security and
Medicare suggest tough choices in the near future.
- Primary Source: Three Presidents Comment
on the Economic Role of Government
- Then and Now: What Should We Do Now?
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