1) What economic problems were resolved by the replacement of the Articles of Confederation with the Constitution? Describe these problems in the context of the so-called "American System" and in the context of the present-day world economy. Is there a relevance to NAFTA or to globalization? In a larger sense, discuss the relationship between the extant and breadth of the trading area and the relative extent of economic activity.
2) What is the relationship between the developing technology in transportation and communication and the ratification of the Constitution? Where in present-day society is there a parallel?
3) Describe the rising triangular relationship between farmer, merchant, and manufacturer. Who held the long range advantage and why?
4) What were the unusual advantages rooted in American customs and practices?the policies of incorporation, the judicial system, the work ethic?that have led to the successful American industrialization? Are there any disadvantages to these practices and customs, for example, in American labor policies or to American consumers?
5) What facets of technological development compare with modern technological evolution? Which are different?
6) How did the recruitment of labor at this time compare with modern efforts to solve labor problems?
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OTA 105878/Xenia Jones
American Industrial Revolution Q&A
1. One of the main issues with the Confederacy is that funding & taxation is not centralized. Enactment of the American Constitution established the Federal Reserve/Bank, centralized taxation and equalized taxation and share in all national expenses. Prior to this, contributions to financing the war effort, for example was always under debate with the burden between states unequal. Hence, payments to soldiers were always delayed, funding for war machinery was always short as it had to be deliberated not only between members of the confederacy but within state assemblies too. This did not help in securing loans and financial aid from financiers oversees as to provide credit to such a system does not encourage positive recoup not only of investment but also of making profit. Being that such centralization of financing allowed for a more robust financial state, the ability to pay war loans, issue bonds against Federal capacity and the centralization of a mercantile-style federal economic institution protected not only the cavans of government but also allowed for centralization and standardization of financing credit systems across the US. Lending institution got credit from bigger institutions backed by the federal financing system and in turn the rates they gave to individual borrowers were cheaper, fairer, better regulated than under the confederacy causing the entrepreneurial spirit in Colonial America to boom. The American System had its origins under the ideas of Alexander Hamilton whose plan it was to create a central government and a centralized system of taxation as well as defense.
i. The term first appeared in 1832 as proposed by Henry Clay. Essentially its elements include high tariffs for industry protection and revenue generation for the government to finance and support its activities, maintenance of high prices for public land for federal revenue, maintenance of the federal bank for currency stabilization and to regulate risk of local and state banks, and finally, creation and maintenance of a nationwide infrastructure for transport and trade financed by tariff and land revenue. The 1994 North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico, neighbour nations of North America, lifted restrictions and put in place measures to enhance economic trade between said nations, creating the biggest Free Trade Zone in the world. By doing so, 444 or so million people and a trade production capacity of over $17 trillion of goods and services commenced, in an essence combining the Purchasing Power Parity GDP of its member-countries. Since then, the economic and trade activity between the NAFTA nations dynamically increased. In a way, we can say that NAFTA is similar to the Confederacy in that they are only trading partners. While they have rules of trade with each other, they can still have separate bilateral agreements with each other and with other nations. There is no centralized currency in the trading block as well as no centralized political and administrative power. There is an administrative office that overlooks the NAFTA trade bloc system but each nation, it can be argued do not have the same responsibility as each other in maintaining roads, policing, infrastructure and security for revenues generated from it are not shared and always in the end, the treaty is only enforced to maximize the gains of each and 'protect' their own interests. They are a trade bloc but not one political entity. NAFTA is important in globalization in that aside from the economic dynamism it fuels in the territory it also enhances the image of the trade bloc as one single entity to investors from other nations making trading in it very attractive via the NAFTA system but of course, government and security standards are not the same in all 3 nations and this is the negative aspect. But, culturally and socially, the increased trade between said nations enhances global social dynamics due to cross-cultural exchange.
2. US Historian Dr. Bailyn at the time of then Pres. Clinton in a White House lecture shared that in the days of the Founding Fathers and the early US government, transportation and communication was limited by distance, infrastructure, available technology and available ...
The solution is an extensive 2,715-word Q&A type essay whereby the questions regarding American Business history indicated in the original problem are answered and discussed, providing social and historical background on the men and events that shaped certain chapters of that period. References are listed for further research. a word version of the solution is attached for easy download and printing.