The Transportation Revolution and the
Formation of a National Market

 

Opinions and Evidence - The effects of the steamboat, which were critical to the early settlement of the West, were transfused through a competitive market. Additionally, the steamboat set in motion a transportation revolution that linked the western regions to the eastern seaboard and facilitated the creation of a national market.

Outline

1. Opinions do not equate to understanding, theory and evidence give value to opinions

2. The transport revolution
   1. The falling costs of transport, 1800-1900

   2. Population change in the west

   3. Formation of a national market

   4. Regional specialization, politics, and regional ties

3. The routes of commerce, 1810-1860
   1. Railroads v. steamboats

4. Sources of productivity advance in steamboating Steamboat rates and productivity gains
   1. Technological change vs. other productivity sources

   2. Impact on old technologies

Connections to Economics

Rules of the Game - What was the status of transportation in the United States during the period 1810-1860?

Trade-offs - Why were the rivers the dominant form of transportation in the early 19th century? How would the transportation market have been different had Fulton succeeded in gaining a monopoly in Mississippi River steamboating? What was the impact of the steamboat on other forms of river transportation?

Incentives - How did competitive steamboat traffic impact old transportation technologies? steamboat technology? transportation productivity? What was the impact of the steamboat on western development, and on national markets, politics, and ante-bellum regional alignments?

The Economic Way of Thinking - The failure of attempts to monopolize the steamboat trade allowed the development of competitive, cost-efficient shipping between western settlements and eastern cities, which facilitated regional specialization and the creation of a national market of interdependent buyers and sellers.

Economic Concepts that support the historical analysis:

• supply and demand
• specialization
• trade creates wealth
• economic profit
• competition
• interdependence
• monopoly
• market clearing price
• productivity
• public goods