Growth in the Postbellum Economy: A Reconsideration of American Progress

Arguably one of the most unreconciled phases of American history, the postbellum period left many Americans uneasy about Reconstruction, expanding urbanization and industrialization, and harsh postwar human and material realities. Some entrepreneurs built great wealth through emerging innovation and technology, while others faced relentless economic uncertainty. Common interpretations of this period often emphasize themes of excessive exploitation and inequality. This blog seeks to deliver an alternative perspective, one focused on highlighting actual positive economic growth and progress.

To build this essay’s case, we explore Northern and Southern postbellum production growth from 1865-1900. From there, we then discuss postbellum growth and its relationship with human progress. By “progress”, we refer to how Americans lived better lives. For the most part, postbellum economic growth and industrialization enhanced the American experience.

Much has been made of the divergent postwar economic paths of the North and South. In general, the North experienced constant economic growth through a multitude of rapidly developing industries such as chemicals, metals, coal, textiles, and transportation, among many others. Case in point: Northen industrial production grew 6.02 percent annually from 1840-1900; 6.62 from 1840-1860; 5.16 from 1865-1877; and 3.56 during the Civil War, the only notable downswing.[1] These figures suggest Northern industrialization remained in full flight before, during, and after the war.

Naturally, rising industrialization produced extraordinary urbanization. To put this shift into perspective, in 1810, urban dwellers in incorporated areas represented about 12% of the U.S. population; yet by 1910, the number swelled to 45%.[2] At the same time, Northeastern regions nearly doubled the national average, as nearly three out of every four inhabitants lived in urban quarters.[3] And according to population density (per square mile) statistics, the Northeast held markedly higher figures than the national average. All regions of the country held similar figures until 1850; yet, by 1910, the Northeast region accommodated roughly 400 residents per square mile, a figure no less than 10 times greater than everywhere else in the country.[4]     

In contrast, the postbellum South remained largely agricultural, driven by labor-intensive industries. That said, the South and North experienced similar industrial growth patterns for much of the nineteenth century, with one exception: the Civil War period. While the North faced a modest dip during the war compared to the antebellum period (3.56), the South encountered precipitous decline (-11.69).[5] A glance into capital and non-capital-intensive growth rates reveal even grimmer economic realities in the South compared to the North. For example, while the North did confront minor negative capital-intensive growth (-1.09), the South confronted a stunning -16.09 decline. Even Southern non-capital intensive industries experienced negative growth (-6.98), whereas the North actually produced an 8.83 percent rise.[6]

These figures illustrate a destabilized Southern economy. Indeed, Southern capital-intensive production surged during the postbellum period; however, one can reason this was somewhat a product of a severely depressed existing economy. From 1862-1898, Northern industrial production far exceeded that of the South. Not until 1900 did the South surpass Northern production.[7] That the South exceeded the North by then was remarkable. However, one must remember that Southern and Northern output remained even from 1840 to the start of the war. And while production remained similar on both sides until 1861, Northern industrialization and urbanization developed rather quickly throughout the nineteenth century. On the other hand, the South did not invest heavily into capital intensive industries until the end of Reconstruction, at which point, capital intensive growth ascended by a factor of 15 by 1900, whereas non-capital grew only by a factor of 4.[8]  

Let us now grapple with the idea of progress. To advance a deeper understanding of the period, one must consider how and the extent to which Americans lived better lives, especially during the latter half of the century. In the case of life expectancy at birth, for instance, subjects born in 1850 averaged 38.3 years.[9] By 1900, life expectancy increased by 20%.[10] To put these gains into perspective, if today’s average Americans gained 20%, they would be centurions. From 1850-1930, moreover, illiteracy rates dropped significantly across most age groups.[11] And by 1930, little to no differences remained between the rates of men and women aged 21 and over (5.2 vs 5.4). However, a brief glance into regional figures suggests most postbellum illiteracy improvement occurred in the South and West. For instance, when comparing Northern, Southern, and West figures from 1860-1900, Northern illiteracy dropped .5%, whereas Southern illiteracy fell 17%, and the West dropped nearly 10%. School enrollment gaps also drastically narrowed between Whites and other races from 1850-1900. In 1850, for example, Whites held 53% enrollment rates compared to 2% for Blacks and other races.[12] By 1900, the gap closed from 53% to 30%.[13] Overall, substantive progress occurred, especially in the case of non-White populations.  

The postbellum period remains uniquely fundamental to American history. Americans aimed to reconcile the gruesome human and material realities of the war, while negotiating emerging industrialization, mechanization, and capitalism. Much has been written on the Gilded Age, and the so-called “robber barons” such as Andrew Carnegie, Cornellius Vanderbilt, and John D. Rockefeller. Contemporary academics appear increasingly hostile to this era, its most notable industrialists, and their contributions. Indeed, harsh work conditions and poverty existed, and great fortunes were lost; however, the data strongly confirms the presence of extensive human progress across the board. Ultimately, Americans lived markedly better lives than previous generations, a point often taken for granted or overlooked in current discussions.


[1] Joseph H. Davis and Marc D. Weidenmier, “The Macroeconomic Impact of the American Civil War,” Federal Reserve Bank of Atlanta, 34, https://www.atlantafed.org/-/media/documents/news/conferences/2022/05/23/monetary-and-financial-history-workshop/davis-weidenmier.pdf. Accessed 5 September 2024.

[2] Leah Platt Boustan, Devin Bunten, and Owen Hearey, “NBER Working Paper Series: Urbanization in the United States 1800-2000,” National Bureau of Economic Research, (May 2013): 34.

[3] Ibid.

[4] Ibid., 36.

[5] Davis and Weidenmier, 34.

[6] Ibid., 35.

[7] Ibid., 36.  

[8] Ibid., 40.

[9] Richard H. Steckel, “A History of the Standard of Living in the United States,” Economic History Association, https://eh.net/encyclopedia/a-history-of-the-standard-of-living-in-the-united-states/. Accessed 8 September 2024.

[10] Ibid.

[11] Campbell Gibson, American Demographic History Chartbook: 1790-2000, Democratic Chartbook, 2010, 82, https://demographicchartbook.com/wp-content/uploads/2015/11/Gibson-DemographicChartbook.pdf.

[12] Thomas A. Snyder, 120 Years of American Education, 6.

[13] Ibid.


Bibliography

Boustan, Leah, P., Devin Bunten, and Owen Hearey. “NBER Working Paper Series: Urbanization in the United States 1800-2000,” National Bureau of Economic Research, (May 2013).

Davis, Joseph H. and Marc D. Weidenmier. “The Macroeconomic Impact of the American Civil War,” Federal Reserve Bank of Atlanta, https://www.atlantafed.org/-/media/documents/news/conferences/2022/05/23/monetary-and-financial-history-workshop/davis-weidenmier.pdf.

Gibson, Campbell. “American Demographic History Chartbook: 1790-2000, Democratic Chartbook,” 2010, https://demographicchartbook.com/wp-content/uploads/2015/11/Gibson-DemographicChartbook.pdf.

National Center for Education Statistics, 129 Years of American Education: A Statistical Portrait, by Thomas A Snyder. NCES 93442. 1993. https://nces.ed.gov/pubs93/93442.pdf.

Steckel, Richard. “A History of the Standard of Living in the United States,” Economic History Association, https://eh.net/encyclopedia/a-history-of-the-standard-of-living-in-the-united-states/.

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