Economic History of the United States

By Chester W. Wright | Go to book overview

CHARTER VI
MANUFACTURING INDUSTRIES IN THE COLONIES

Introduction. Under the term "manufacturing," though no sharp line of division can be drawn, we include those industries engaged in turning the crude products of the extractive industries into more highly finished products regardless of whether this was carried on in the household, in the shop of the craftsman, or in a plant or factory. As was stated in connection with the chapter on the extractive industries, it should be borne in mind that the conditions of life in the colonies were such that few individuals devoted their energies exclusively to one line of economic activity; this applies to manufacturing as well as to other activities. A great deal of manufacturing was carried on by the individual along with various other lines of work, chiefly the extractive industries; ill the towns and cities, largely, people made it the sole means of earning a livelihood. In consequence there was no such large specialized group engaged in manufacturing as we are familiar with today.

In order to explain the causes for the establishment and growth of manufacturing industries in the colonies it is necessary, as in the case of any economic activity, to understand (1) the underlying economic conditions, which are by far the most important factors in determining the course of development and (2) what may be called the more artificial conditions, such as legislation or other social action, designed to stimulate or retard growth. These two groups of factors will be taken up in the order named.

Underlying Economic Conditions Determining the Growth of Manufactures. In manufacturing as in any other line of industry, the relative importance of the four agents of production--natural resources, labor, capital, and business management--combined 'with an abundant and cheap supply of these agents, especially those that are most important in producing the particular commodity, is the first of the underlying economic conditions to determine the growth of the industry. A second condition is made up of all those factors that determine the extent and character of the market available from the place where the industry is located. These conditions are the first things that a businessman would study in determining the location of a manufacturing industry.

The economic availability or supply of natural resources for a manufacturing industry, unlike the extractive industries, does not always

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