Economist Robert Gordon’s “special century” from 1870 to 1970 looms large in American economic history. As he argued in his 2016 book The Rise and Fall of American Growth, electricity lit homes and reorganized factories, plumbing tamed disease, cars collapsed distance, and antibiotics extended lives. And as worker productivity surged, so did American living standards. By contrast, the post-1970 digital era, dazzling as it is, hasn’t transformed everyday existence with the same breadth—unless, perhaps, artificial intelligence delivers on its loftiest promises. Gordon calls the earlier burst a once-in-human-history convergence of general purpose technologies.
Yet America’s special century did not emerge ex nihilo. The pro-growth groundwork was laid in the less glamorous decades between 1790 and 1870. In a new NBER paper, “The Industrial Revolution in the United States: 1790-1870,” Iowa State University economist Joshua Rosenbloom shows how the young republic, still thinly populated and largely agricultural, managed to build the industrial scaffolding for later acceleration.
“The Industrial Revolution in the United States: 1790-1870”
On paper, the odds were poor. The United States had abundant land and raw materials but was short on labor and financial capital. Even Adam Smith advised Americans to stick with farming. But industry took root because British technology was reshaped to fit local conditions, among other factors, including:
- Oliver Evans and others pioneered compact, high-pressure steam engines—less fuel-efficient than Britain’s Watt machines but cheaper to build in a capital-scarce economy, and perfect for powering steamboats and locomotives.
- President Thomas Jefferson’s 1807 embargo and the War of 1812 blocked imports, giving domestic mills space to experiment.
- Francis Lowell’s Boston Manufacturing Company combined spinning, weaving, and finishing under one roof, reducing reliance on scarce skilled labor.
- Federal arms contracts helped gunmakers develop interchangeable parts and precision tooling, innovations that later spread into sewing machines, bicycles, and cars.
Equally important was an innovation culture, according to Rosenbloom. Patents grew almost five times as fast as the population between the years 1790 and 1850. Ordinary mechanics drove a culture of tinkering and incremental improvement (what economic historian Joel Mokyr has called the “Industrial Enlightenment”). Productivity growth in manufacturing improved, propelled by learning-by-doing (as in textile mills that discovered new efficiencies) and organizational refinements (from subdividing tasks so less-skilled workers could master them quickly, to using gauges and fixtures that standardized parts and made machines work more precisely).
By 1870, the United States already had a national transport network, a machine tool sector, and a broad base of citizen inventors. The special century was ready for launch. One lesson for today’s policymakers in a very different economy (one that is a capital-rich technological leader rather than a capital-poor follower)? Don’t cling to some preset, top-down blueprint of what the American economy should look like. Instead, build the capacity to adjust to local conditions by having lots of smart workers and entrepreneurs with the freedom to innovate.
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