The Political Economy of American Industrialization, 1877-1900 Book

Richard Bensel's The Political Economy of American Industrialization, 1877-1900 explores the relationship between political institutions and economic development. Pointing out that Chandler had tacitly assumed features of the American economy which were politically constructed, especially the existence of a unified national market which allowed integration and consolidation, Bensel traced the developments of the Gilded Age as the outcome of interrelated economic and political forces. Noting the relative rarity that democracy and rapid industrialization have gone hand in hand, Bensel identified three policies supportive of rapid industrialization which were politically contested in the last decades of the nineteenth century: the Gold Standard, the national market and the tariff complex. From an analysis of county level economic development data, voting patterns and political platforms, Bensel draws the conclusion that the Republican party was the crucial agent in mediating and reconciling political and economic demands in a way that facilitated the emergence of the United States as a leading industrial power. Essentially, political support for the party was generated by the tariff complex which protected key economic interests, funded benefits such as Union veteran's pensions, and facilitated the accumulation of capital by manufacturers at the expense of agrarian producers. Rooted in flexible Congressional coalitions, the tariff regime could be flexibly tweaked to accommodate changing political winds, buying support for the less popular legs of the development policy tripod - maintenance of the Gold Standard by the President, which simplified the investment of European capital and protection of an unregulated national interstate market by the Supreme Court.

These policies had victims. The exploitation of industrial worker was enforced by legal and military means during the waves of strikes, lockouts and work stoppages that gripped the North. In the West and the South agrarian interests were harmed by the tariff that made their inputs expensive and their products cheap, by the deflationary influence of the Gold Standard which made it harder to pay off northeastern creditors, by local manufactures which were undercut by more efficient northeastern competitors, and by the unfavorable terms on which they were forced to transport their crops to distant markets. While the dexterity of the Republican Party explains half of the maintenance of voter support for policies that resulted in gross wealth inequalities, the regional character of exploitation fills in missing puzzle pieces for Bensel. Support within the emerging industrial core of the northeast could be muted by the accruing local benefits and the fierce political loyalties ingrained during the Civil War. In the defeated South Bensel conceptualized the process of disfranchisement following the end of Reconstruction as the reinstatement of regional political autonomy by ex-Confederate nationalists, a process which both muted challenges to northeastern capital and made it difficult for the South to partner effectively against it. Only in the West, with the Populist Party and then Bryan's 1896 campaign, did a clear political challenge emerge, because class conflict and regional exploitation aligned in a politics that supported yeoman farmers against the northeastern financial and transportation interests which mediated their connection to the national economy. Bensel suggests that following Bryan's decisive defeat by William McKinley, the pattern of American industrialization was set.