Why isn't the United States of America one Giant Australia (or New Zealand)? Why the u.s. didn’t stay a land of farmers & miners. How infrastructure, immigration, scale, and not-stupid tariffs...
I think there is lot to the Hamiltonian development strategy.
But I would not underestimate the sheer fertility of the US compared to Australia, at least relative to European agriculture and livestock raising methods.
There is nothing like a Midwest/Mississippi Basin in Australia and as a result the USA can and did support a vastly larger population. The role of the Mississippi (and the Erie Canal) in opening up the Midwest to agricultural and commercial development before the railroad should not be underestimated.
This allowed the US to develop a very sizeable internal demand for manufactured goods which, together with the Hamiltonian tariff policy, allowed manufacturing to flourish.
The US population had exceeded that of the UK already by 1860 (roughly 31 million). In 1860 Australia had only 1.17 M, comparable to the 13 colonies in 1740. Even today Australia only has 27 M or so, dwarfed by most of its trading partners (even the physically much smaller Japan has 124 M)
Australia did not become independent from the UK until 1900 and even after that remained within a privileged economic/strategic commonwealth trade bloc (unlike Argentina).
Thus, I would suggest that geography as well as trade policy had a lot to do with the exceptionalism of the US development path.
It would never have worked for Australia, South Africa, Canada or Argentina. Even today Australia has a negligible manufacturing sector.
So maybe we have to give some credit to Jefferson for the Louisiana purchase!
I agree with this. I think it's absurd to think of Hamilton's report as changing the course of history. Comparisons between the US and Argentina or Australia are ridiculous. Consider only the distances, using nautical miles (of course) from London to New York (3,000), Buenos Aires (7,700), and Melbourne (9,000). Consider that the U.S. had, in the northern states, several million bible-thumping, and bible-reading Protestants, while Argentina had the reactionary Spanish Catholic Church, and Australia had criminals. Consider that, when it comes to natural resources, the U.S. is the second most richly endowed country in the world (second to Russia), while Argentina and Australia have virtually nothing. In particular, the U.S. had massive coal and iron deposits, the sinews of the age of steam, comfortably located in the Appalachians. Robert C. Allen, in his excellent book on the British Industrial Revolution, argues that an industrial revolution can only occur in a country with low energy and high labor costs, along with a healthy population of skilled metal workers to create the machines. The U.S. had low energy and high labor costs, and ready access to the best technology available, from England and the Netherlands.
One could also consider the argument in Henry Adams’ history, that it was the Jefferson-Madison embargo that accidently cut the umbilical cord with Britain and forced the U.S. to create its own self-sufficient economy. Hamilton’s famed “Report” would have been a dead letter without these and a myriad of other factors. Mono-causal explanations of major historical events are the hobgoblins of little minds.
I wouldn't dismiss the Hamilton thesis the way you do. I think it is a question of both material conditions and policy. I would rank cultural differences you mention very low.
Also, Australia is richly endowed with mineral wealth - BHP and Rio Tinto are both Australian companies in origin and Australia had a gold rush not dissimilar to the California gold rush. Australia has done very well with wool, wheat, and mining (including coal). It is just that it has to have a manufacturing economy to export to, like Britain, Japan, or today China.
Both Australia and Argentina had world leading quality-of-life for their citizens around the turn of the 19th century. The divergence since then has been interesting.
Argentina does also have mineral resources, but it seems they have been relatively under-exploited. Also it is just physically smaller than the US or Australia. Argentina became wealthy on the temperate climate agricultural wealth of the pampas (Rio de la Plata basin), especially beef.
Interesting side-note on Hamilton. His text influenced Friedrich List's arguments for both German Customs Union (federal customs union) and infant industry tariff protection. These arguments seem to have been influential in Germany's rapid 19th Century industrialization. So Hamilton's ideas may have accounted for two of the most successful industrialization stories of the 19th century.
The downside of this story is that Germany envied the access of Britain and Germany to internal (US) or colonial (UK) sources of agricultural and mineral wealth. It wanted a colonial empire or failing that, Lebensraum in the east -- Ukraine and the Caucasus specifically. There is a reason why Germany has historical ties with Argentina.
Much of current events can be explained in part by the strategic significance of access to Ukraine's temperate zone agricultural wealth and mineral wealth in the Donets basin. Even Donald Trump wants in -- his attempts to annex Canada and Greenland for their mineral wealth not going very well.
By "turn of the 19th century" I presume you mean "turn of the 20th century", since Australia had only a handful of settlers in 1800--the first 11 convicts arriving in 1788. The comfortable life--for whites only, of course--enjoyed by the privileged few circa 1900 in both countries was thoroughly exploitative of the unfortunate indigenous populations, similar to the "prosperous" white American south circa 1860. There is really no comparison between the U.S. and either "similar" countries, which were not similar at all. And I retain my skepticism of the effectiveness of Hamilton's piece of paper. After all, by 1800 Hamilton was dead and a 24-year reign of Virginia gentlemen/slaveholders was about to begin. None of the three, I'm sure, ever deliberately acted to "help" manufactures. Madison in particular was an aggressive physiocrat, insisting that manufacturing only created fripperies rather than necessities. Well, anyway, this what makes horse races. Thanks for taking the time to respond.
yes, 20th century - ie 1900. and indeed none of these settler colonies had pretty foundings and were disastrous for the native populations.
Re criminals and Australia -- the British sent their criminals to the US until the revolution. There is a reason they decided to fund a penal colony in Australia in 1788. There are admiralty records where they discuss where they are going to send the criminals given that the US is no longer an option.
I am going to surprise you, admit that you know more than I do about this, not suggest you missed something, and actually ask a question? I know. It had to happen in comments at some point.
Does this link up with this year's Nobelists at all? I know that political extraction and resource extraction NEED not go hand in hand. But I would love your take on this. I am dumb and receptive. Teach me, please.
Jefferson founded the first state university. Such schools were centers of innovation. New England, thanks to the Puritan ethic, invested in education. Another example is Hibbing Minnesota, home of my mother and Robert Zimmerman, where money from the Mesabi iron ore mining was used for education. The failure the1848 revolution caused many German engineers to come to the U.S. Allen Kamp
I'm not arguing with Brad's thesis: government intervention was important. But the states deserve some love, especially those outside the Confederacy.
The federal government played a limited role. Tariffs were indeed important throughout the nineteenth century. Land-grant schools, AFAIK, became important by the early 20th century, although the states did most of the heavy lifting. There was significant federal government involvement in railroads during the second half of the nineteenth century. And there were the Patent and Post Offices, I suppose.
But otherwise, all the 19th-century governmental economic development action I know of was at the state level: mass education, subsidies, regulation, infrastructure, etc. Until the New Deal, most state capacity was at the level of the states. The states that used this capacity well prospered. The ex-Confederacy? Meh.
The federal government pretty much abstained from immigration policy before 1920. Any of its "contributions" were negative. (E.g., China Exclusion Act.) Federal involvement in banking might also be a net negative, at least before the Federal Reserve Act. (Compare US financial crises to Canada.)
I think there is lot to the Hamiltonian development strategy.
But I would not underestimate the sheer fertility of the US compared to Australia, at least relative to European agriculture and livestock raising methods.
There is nothing like a Midwest/Mississippi Basin in Australia and as a result the USA can and did support a vastly larger population. The role of the Mississippi (and the Erie Canal) in opening up the Midwest to agricultural and commercial development before the railroad should not be underestimated.
This allowed the US to develop a very sizeable internal demand for manufactured goods which, together with the Hamiltonian tariff policy, allowed manufacturing to flourish.
The US population had exceeded that of the UK already by 1860 (roughly 31 million). In 1860 Australia had only 1.17 M, comparable to the 13 colonies in 1740. Even today Australia only has 27 M or so, dwarfed by most of its trading partners (even the physically much smaller Japan has 124 M)
Australia did not become independent from the UK until 1900 and even after that remained within a privileged economic/strategic commonwealth trade bloc (unlike Argentina).
Thus, I would suggest that geography as well as trade policy had a lot to do with the exceptionalism of the US development path.
It would never have worked for Australia, South Africa, Canada or Argentina. Even today Australia has a negligible manufacturing sector.
So maybe we have to give some credit to Jefferson for the Louisiana purchase!
I agree with this. I think it's absurd to think of Hamilton's report as changing the course of history. Comparisons between the US and Argentina or Australia are ridiculous. Consider only the distances, using nautical miles (of course) from London to New York (3,000), Buenos Aires (7,700), and Melbourne (9,000). Consider that the U.S. had, in the northern states, several million bible-thumping, and bible-reading Protestants, while Argentina had the reactionary Spanish Catholic Church, and Australia had criminals. Consider that, when it comes to natural resources, the U.S. is the second most richly endowed country in the world (second to Russia), while Argentina and Australia have virtually nothing. In particular, the U.S. had massive coal and iron deposits, the sinews of the age of steam, comfortably located in the Appalachians. Robert C. Allen, in his excellent book on the British Industrial Revolution, argues that an industrial revolution can only occur in a country with low energy and high labor costs, along with a healthy population of skilled metal workers to create the machines. The U.S. had low energy and high labor costs, and ready access to the best technology available, from England and the Netherlands.
One could also consider the argument in Henry Adams’ history, that it was the Jefferson-Madison embargo that accidently cut the umbilical cord with Britain and forced the U.S. to create its own self-sufficient economy. Hamilton’s famed “Report” would have been a dead letter without these and a myriad of other factors. Mono-causal explanations of major historical events are the hobgoblins of little minds.
I wouldn't dismiss the Hamilton thesis the way you do. I think it is a question of both material conditions and policy. I would rank cultural differences you mention very low.
Also, Australia is richly endowed with mineral wealth - BHP and Rio Tinto are both Australian companies in origin and Australia had a gold rush not dissimilar to the California gold rush. Australia has done very well with wool, wheat, and mining (including coal). It is just that it has to have a manufacturing economy to export to, like Britain, Japan, or today China.
Both Australia and Argentina had world leading quality-of-life for their citizens around the turn of the 19th century. The divergence since then has been interesting.
Argentina does also have mineral resources, but it seems they have been relatively under-exploited. Also it is just physically smaller than the US or Australia. Argentina became wealthy on the temperate climate agricultural wealth of the pampas (Rio de la Plata basin), especially beef.
Interesting side-note on Hamilton. His text influenced Friedrich List's arguments for both German Customs Union (federal customs union) and infant industry tariff protection. These arguments seem to have been influential in Germany's rapid 19th Century industrialization. So Hamilton's ideas may have accounted for two of the most successful industrialization stories of the 19th century.
The downside of this story is that Germany envied the access of Britain and Germany to internal (US) or colonial (UK) sources of agricultural and mineral wealth. It wanted a colonial empire or failing that, Lebensraum in the east -- Ukraine and the Caucasus specifically. There is a reason why Germany has historical ties with Argentina.
Much of current events can be explained in part by the strategic significance of access to Ukraine's temperate zone agricultural wealth and mineral wealth in the Donets basin. Even Donald Trump wants in -- his attempts to annex Canada and Greenland for their mineral wealth not going very well.
By "turn of the 19th century" I presume you mean "turn of the 20th century", since Australia had only a handful of settlers in 1800--the first 11 convicts arriving in 1788. The comfortable life--for whites only, of course--enjoyed by the privileged few circa 1900 in both countries was thoroughly exploitative of the unfortunate indigenous populations, similar to the "prosperous" white American south circa 1860. There is really no comparison between the U.S. and either "similar" countries, which were not similar at all. And I retain my skepticism of the effectiveness of Hamilton's piece of paper. After all, by 1800 Hamilton was dead and a 24-year reign of Virginia gentlemen/slaveholders was about to begin. None of the three, I'm sure, ever deliberately acted to "help" manufactures. Madison in particular was an aggressive physiocrat, insisting that manufacturing only created fripperies rather than necessities. Well, anyway, this what makes horse races. Thanks for taking the time to respond.
yes, 20th century - ie 1900. and indeed none of these settler colonies had pretty foundings and were disastrous for the native populations.
Re criminals and Australia -- the British sent their criminals to the US until the revolution. There is a reason they decided to fund a penal colony in Australia in 1788. There are admiralty records where they discuss where they are going to send the criminals given that the US is no longer an option.
Interesting read. I'd like an analysis of where we'd be if we kept the taxation levels as they were prior to Reagan.
I am going to surprise you, admit that you know more than I do about this, not suggest you missed something, and actually ask a question? I know. It had to happen in comments at some point.
Does this link up with this year's Nobelists at all? I know that political extraction and resource extraction NEED not go hand in hand. But I would love your take on this. I am dumb and receptive. Teach me, please.
Jefferson founded the first state university. Such schools were centers of innovation. New England, thanks to the Puritan ethic, invested in education. Another example is Hibbing Minnesota, home of my mother and Robert Zimmerman, where money from the Mesabi iron ore mining was used for education. The failure the1848 revolution caused many German engineers to come to the U.S. Allen Kamp
What would the Giant Australia looked like.
The peabrain thinks like a giant collective farm per the USSR example.
Driven growth from the Civil War, WW 1 as well as WW 2. Government spending for these wars should get more emphasis.
I'm not arguing with Brad's thesis: government intervention was important. But the states deserve some love, especially those outside the Confederacy.
The federal government played a limited role. Tariffs were indeed important throughout the nineteenth century. Land-grant schools, AFAIK, became important by the early 20th century, although the states did most of the heavy lifting. There was significant federal government involvement in railroads during the second half of the nineteenth century. And there were the Patent and Post Offices, I suppose.
But otherwise, all the 19th-century governmental economic development action I know of was at the state level: mass education, subsidies, regulation, infrastructure, etc. Until the New Deal, most state capacity was at the level of the states. The states that used this capacity well prospered. The ex-Confederacy? Meh.
The federal government pretty much abstained from immigration policy before 1920. Any of its "contributions" were negative. (E.g., China Exclusion Act.) Federal involvement in banking might also be a net negative, at least before the Federal Reserve Act. (Compare US financial crises to Canada.)
Brad, this is a very interesting lecture. What it does not emphasize is the Keynes Ian demand side. The U.S. as you know had huge demand-