The market revolution describes the transition from an economy focused largely on agrarian products to one based on capital. This transition, in the United States, was largely confined to cities in the North, while cities in the South tended to maintain their agrarian focus. This influenced differences in the beliefs of slave holders and abolitionists. Abolitionists saw the industries in their cities grow, requiring an increase in labor to ensure profitability. The smaller concentration of slaves in these areas led to the use of paid laborers, which helped drive economic gains, as these individuals expanded commerce by spending the money they earned. Abolitionists gained more support in Northern cities because slavery posed a threat to laborers by offering a cheaper alternative that could cause significant unemployment. Even emancipated slaves in the North were seen as a threat by laborers because these emancipated slaves would work for lower wages.
Cities in the South maintained their reliance on cash crops, denying the necessary support for the rapid growth of industry and the transition to a capitalist economy. In order to maintain profitability, the largest plantations required the continued acceptance of slavery in order to ensure that farms were worked at next to no cost. Initially, this split may not have posed a significant problem, as the raw materials grown in the South could be processed in the North before being sold in the South or Europe. The lower transaction costs of shipping between the North and South, as opposed to overseas, should have lowered the sale prices of many goods and benefited both. However, slavery continued to be a sticking point because the enumeration of slaves gave slave-holding states more power in Congress.
Attempts to increase tariffs on the export of raw materials to incentivize the sale of these materials to the North lowered the profits of some Southern plantations, exacerbating issues that were opened by the market revolution. Southern states also complained about the Federal government's move to increase the prevalence of railroad lines. These issues continued to play out in Congress, where the goals of free states's and slave states's legislatures were often sought in acrimonious and sometimes violent ways.
Westward expansion played a dual role in exacerbating these issues. As new territory was bounded into states, there was a question of whether these states would be free or slave states. This was important economically: capital enterprises in free states would have difficulty competing with a proliferation of slave states because of the ability of industry in slave states to use slaves to depress wages. The proliferation of free states, by contrast, would limit the amount of growth that could be generated in slave states and could subject slave states to being relatively impoverished compared to their neighbors. This could threaten the slaveholders who held substantial power by incentivizing the lower classes in slave states to push for more protection and higher wages to enjoy a quality of life equal to their free-state neighbors.
A second issue of westward expansion was a political issue within Congress and the state legislatures. The growth in slave states would provide sufficient representatives to allow slaveholders to control the House of Representatives almost in perpetuity while ensuring that the interests of slaveholders would also need to be addressed in the Senate. A growth in free states could have broken the political power of slave states. The initial way to manage this issue was the Missouri Compromise, which would allow a slave state or free state to enter the Union only when an additional state of the opposite designation was allowed to enter. This was struck down by the Supreme Court.
The next attempt at diffusing the situation was the Kansas-Nebraska Act, which allowed the people within the territory to determine whether they would enter the Union as a free or slave state. This led to a significant amount of violence in the Kansas border area as abolitionists (including John Brown) and slave state supporters crossed the Kansas border to attack opponents. These divisions ultimately split the Democratic party, which ran two candidates against Lincoln. When Lincoln won (because the Democratic candidates split the vote by garnering support in only the South or only the North), it led to secession, which ultimately led to the Civil War.
The Market Revolution demonstrated that the two regions of the United States, North and South, were moving in opposite directions. The North, having more internal improvements and population, focused on producing goods such as textiles and other manufactured goods. The Northeast soon became one of the world's sources for cloth. The South, a land of farmland, focused on the production of cash crops, mainly cotton. Due to a shortage of laborers that plagued the South from the beginning, this cotton was largely worked by slaves. Much of this cotton went to Northern and British textile mills. When some began to question the morality of slavery, Southern plantation owners pointed out that their cotton production helped to power the American and the world economy. The South became dependent on Northern goods and imports as it had few factories. Southerners became hostile to any attempt to raise tariffs, while Northern manufacturers appreciated any protectionist tariff that would make their products more competitive in the marketplace.
Westward expansion helped to drive the nation apart as well. When Missouri wanted to come in as a slave state, the Senate worried that it would create an imbalance between free and slave states. This could potentially lead to more legislation that would help slaveowners. In the Missouri Compromise, all land south of the Missouri border would be slaveholding and all land north of the line (except for Missouri) would be free. Maine was taken into the Union as a free state to reset the balance between free and slave. This was the Compromise of 1820. Many abolitionists said that the Mexican War of 1846–48 was an unlawful land grab by Southern slaveholders, and the new territory acquired in this war became a serious issue between Northern and Southern congressmen, who were then feeling even more pressure from their constituents as slavery was becoming more vilified and more profitable. This would end in the Compromise of 1850. Westward expansion only served to make the problem the nation faced at its birth worse—should the nation allow slavery? This would ultimately end in the Civil War.
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