The rise of corporations, heavy industry, mechanized farming and technological innovations transformed the American economy from an agrarian to an increasingly urban industrial society.
Before we begin this unit, watch the video. You will identify the life-changing innovations of the Industrial Revolution, including the factory system, the use of electricity, and the Bessemer steel process.
Content Elaborations
Industrialization in the United States in the late 19th and early 20th centuries was characterized by the rise of corporations and heavy industry, which transformed the American economy. Consequences of this transformation included:
A shift from a predominance of agricultural workers to a predominance of factory workers;
A shift from rural living to urban living, with more people living in crowded and unsanitary conditions;
New technologies made production more efficient as machines replaced human labor;
Increased agricultural production due to mechanized farming; and
The development of the mechanized assembly line and mass production, which led to the transition from skilled to unskilled labor.
Some of the technological innovations that transformed the American economy in the late 19th and early 20th centuries included the telephone, phonograph, incandescent light bulb, washing machine, skyscraper, automobile, and airplane.
Interactive Glossary
Interactive Glossary
Agrarian Economy
Industrialization
Corporation
Heavy Industry
Monopoly
Mechanized Farming
Urbanization
Assembly Line
Mass Production
Labor Union
Tenement
Technological Innovations
Select a term to see the definition
The Transformation of the American Economy: From Agrarian to Industrial
In the late 19th and early 20th centuries, the United States underwent a profound transformation that reshaped its economy, society, and way of life. This shift from an agrarian (farming-based) economy to an industrial one was driven by the rise of corporations, heavy industry, mechanized farming, and technological innovations. As factories sprang up, cities grew rapidly, and new technologies made production faster and more efficient, the American landscape changed forever. In this unit, you will analyze how these factors transformed the United States into an urban, industrial society, with a focus on the key changes and their lasting effects.
Many inventions transformed American society and had a global impact. These innovations not only revolutionized daily life but are still widely used today. Before we dive into how these inventions shaped the American economy, let’s see how much you already know!
For this activity, click on each innovation or invention that was developed during the late 19th and early 20th centuries. See how many you can identify!
The Agrarian Economy of the Early United States
Before industrialization, the U.S. economy was primarily agrarian. Most Americans lived in rural areas, working on small farms that produced food for their families and local communities. Agriculture was the backbone of the economy, and cities were small, with only a few factories. Farming required physical labor, and many tasks, from planting to harvesting, were done by hand or with the help of animals. Life was slow-paced, and people lived in tight-knit rural communities.
Farmers depended on the weather, seasonal patterns, and the quality of the land to determine their success. Farming was often difficult and unpredictable, and crop failures due to droughts, floods, or pests could leave families struggling to survive. Transportation was also a challenge. Without modern roads or railroads, getting goods to market was slow and expensive.
Now, let's dive into a video that will show how America transitioned from this agrarian way of life to a bustling industrial society, where factories, machines, and cities changed the face of the country forever.
However, all of this began to change in the mid-to-late 19th century as the Industrial Revolution, which had already transformed Europe, began to take hold in the United States.
The Rise of Corporations and Heavy Industry
One of the most significant changes during the Industrial Revolution was the rise of corporations and heavy industry. Corporations are large companies that can raise money by selling shares, or stocks, to investors. These businesses allowed for large-scale production and economic growth, as they could invest in new technologies, hire more workers, and expand their operations. Heavy industry—such as steel production, railroads, and coal mining—became the backbone of the American economy, replacing farming as the dominant source of wealth and jobs.
In this video, you will explain the emergence of “big business” in the U.S. by exploring the industrialization of the American economy in the late 1800s.
Key Corporations and Business Leaders
Several key business leaders, often referred to as industrialists, played a crucial role in shaping this new industrial economy.
In the late 1800s, big business thrived in the United States, led by industrial giants such as Andrew Carnegie, J.P. Morgan, John D. Rockefeller, and Cornelius Vanderbilt. These men, often called "Captains of Industry," were instrumental in transforming the U.S. into a global industrial powerhouse. However, they were also labeled "Robber Barons" for their aggressive practices that eliminated competition, creating massive corporations that forced smaller businesses to close. In this interactive activity, you'll explore the lives of these industrial leaders and their role in America's rise as an industrial power.
Andrew Carnegie: Carnegie built a massive steel empire, known as Carnegie Steel, which supplied the materials needed for railroads, bridges, and skyscrapers. His use of new technologies, like the Bessemer process (which made steel production faster and cheaper), revolutionized the industry.
John D. Rockefeller: Rockefeller founded Standard Oil, which dominated the oil industry. He controlled nearly all aspects of oil production, refining, and distribution, creating a monopoly (when one company controls an entire industry). Rockefeller’s practices allowed him to reduce costs and increase profits, but his company also faced criticism for driving competitors out of business.
Cornelius Vanderbilt: Vanderbilt was a railroad tycoon who played a key role in expanding the nation’s rail network. Railroads became essential for transporting goods across the country, fueling the growth of industries like steel and coal mining.
These industrialists used their vast wealth to build enormous companies, and many of them became some of the richest people in American history. However, their success came at a cost. Many workers faced poor working conditions, low wages, and long hours, which eventually led to the rise of labor unions and worker protests.
The Role of Heavy Industry
Heavy industry refers to industries that produce large goods and materials, such as steel, machinery, and railroads. These industries were essential for building the infrastructure of modern America. Steel production, for example, allowed for the construction of skycrapers and bridges in cities, which created more space for businesses and people in urban areas. Railroads connected the country, making it easier to transport goods, raw materials, and people across long distances.
As heavy industry grew, so did the need for natural resources. Coal mining became a major industry, as coal was needed to power steam engines, trains, and factories. The demand for iron ore (used to make steel) also increased, leading to the development of large mining operations in states like Pennsylvania and Ohio.
Answer the following questions based on the content you've learned. Select the correct answer from the dropdown menu.
1. What is a key characteristic of corporations?
2. Who founded Standard Oil?
3. What industry did Cornelius Vanderbilt dominate?
4. What was the main use of coal during the Industrial Revolution?
Mechanized Farming and Its Impact on Agriculture
As industry boomed in cities, changes were also taking place in the countryside. The development of mechanized farming revolutionized agriculture, allowing farmers to produce more food with fewer workers. New machines, such as the mechanical reaper, the tractor, and the threshing machine, made it possible to plant and harvest crops much faster than before.
JOHN DEERE PLOW. - A mid-19th century American hand steel plow, by John Deere: contemporary wood engraving.
Key Technological Innovations in Farming
In this interactive activity, you'll explore key innovations in mechanized farming and other technologies that reshaped American life at the turn of the 19th century.
The Mechanical Reaper: Invented by Cyrus McCormick in 1831, the mechanical reaper was one of the first machines to automate the harvesting of crops. It allowed farmers to cut wheat and other grains much more quickly and efficiently than by hand, increasing crop yields.
The Steel Plow: Invented by John Deere in 1837, the steel plow made it easier to farm tough prairie soil. The old wooden and iron plows were not strong enough to break the hard soil of the Midwest, but the steel plow could cut through it, allowing farmers to cultivate more land.
The Tractor In the early 1900s, the invention of the gas-powered tractor replaced animal-drawn plows and other equipment. Tractors could pull heavier loads and perform tasks much faster, dramatically increasing productivity.
Consequences of Mechanized Farming
While mechanized farming increased agricultural production, it also led to some significant changes in the workforce and the economy. Fewer workers were needed to operate the machines, which meant that many farm laborers lost their jobs. As a result, many people left rural areas and moved to cities in search of factory work. This migration contributed to the growth of urban areas and the decline of the rural, agrarian economy.
At the same time, mechanized farming made the U.S. one of the world’s leading food producers. The country could produce more crops, such as wheat and corn, than ever before, which contributed to economic growth. However, the overproduction of crops eventually led to a decline in prices, making it harder for small farmers to compete with larger, more mechanized farms.
Plowing with a steam tractor in South Dakota, n.d. In 1877, James Oliver of Indiana (1823-1908) invented a stronger smooth-surfaced plow blade, made of chilled iron, strong enough to turn over the thick prairie soils.
Mechanized Farming: Interactive Questions
5. What was a negative consequence of the overproduction of crops due to mechanized farming?
6. Who invented the mechanical reaper, which automated the harvesting of crops?
7. What was the primary function of the steel plow invented by John Deere?
8. How did the invention of the tractor affect farming in the early 1900s?
9. What was one of the major consequences of mechanized farming on the workforce?
The Shift from Agrarian to Urban Living
As more people moved from rural areas to cities in search of work, the U.S. experienced a major demographic shift. In the early 1800s, most Americans lived in rural areas, working on farms or in small towns. By the early 1900s, however, the majority of Americans lived in urban areas, working in factories and other industrial jobs. This shift from an agrarian society to an urban one had far-reaching consequences for the American economy and way of life.
In this video, you will analyze causes of urbanization by learning how it is connected to industrialization, new technology, and transportation networks.
Urbanization and the Growth of Cities
As factories opened, cities grew rapidly. New York City, Chicago, Detroit, and other industrial hubs expanded as workers flooded in from the countryside and from overseas. This process is known as urbanization, the movement of people from rural areas to cities.
Urbanization brought new opportunities, but it also created challenges. Many cities became overcrowded, with people living in cramped and often unsanitary conditions. Tenement buildings, which housed multiple families in small apartments, were common in industrial cities. These buildings were often poorly constructed and lacked proper ventilation and sanitation, leading to the spread of diseases like cholera and tuberculosis.
The rapid growth of cities also created a demand for improved infrastructure. New technologies, like the invention of electric streetcars and the construction of subways, made it easier for people to commute to work. Skyscrapers, made possible by the use of steel in construction, allowed cities to expand vertically, creating more space for businesses and apartments in urban centers.
Consequences of Urbanization
While urbanization provided economic opportunities for many people, it also contributed to social problems. The influx of workers into cities created a labor surplus, which allowed factory owners to keep wages low and working conditions poor. Many workers toiled for long hours in dangerous factories, with little to no safety regulations in place.
More than a million children worked in American factories in the late 1800s and early 1900s. Photograph by Lewis Hine.
National Child Labor Committee collection/Library of Congress, Washington, D.C. (LC-DIG-nclc-01555)
In response to these conditions, workers began to form labor unions to demand better pay, shorter hours, and safer working environments. Strikes and protests became common in cities, as workers fought for their rights. One of the most famous strikes was the Homestead Strike of 1892, in which steelworkers in Pennsylvania protested against wage cuts at Andrew Carnegie’s steel plant. The strike ended in violence, with several workers killed in clashes with private security forces hired by the company.
These boys worked in a North Carolina cotton mill in 1908. The man standing next to them oversaw their work. Photograph by Lewis Hine.
National Child Labor Committee Photographs taken by Lewis Hine/National Archives, Washington, D.C.
The Shift from Agrarian to Urban Living: Interactive Questions
10. What term describes the movement of people from rural areas to cities?
11. Which cities were major industrial hubs that grew rapidly due to urbanization?
12. What were common living conditions in tenement buildings during urbanization?
13. What innovations helped cities expand vertically and improve transportation?
14. What were the social problems created by urbanization?
Technological Innovations and Their Impact on the Economy
The late 19th and early 20th centuries were marked by a wave of technological innovations that transformed not only the economy but also everyday life. These inventions made factory production more efficient, improved transportation and communication, and changed the way people lived and worked.
During the late 19th and early 20th centuries, new technologies and innovations emerged that transformed both the United States and the world. A breakthrough in steel production enabled the construction of skyscrapers, while advancements in electricity and communication revolutionized daily life. In this interactive activity, you'll explore some of the most significant inventions and innovations from this transformative period.
The Telephone: Invented by Alexander Graham Bell in 1876, the telephone revolutionized communication by allowing people to speak with each other over long distances. This invention was particularly important for businesses, as it made it easier to coordinate operations and communicate with customers.
The Light Bulb: Thomas Edison invented the incandescent light bulb in 1879, which allowed homes, factories, and streets to be lit at night. This extended the workday and made it safer to travel and work in the dark.
The Automobile: Henry Ford revolutionized the automobile industry with the development of the assembly line, a method of mass production that allowed cars to be produced quickly and cheaply. Ford’s Model T became the first affordable car for ordinary Americans, transforming transportation and leading to the growth of suburbs (communities outside of cities).
The Airplane: The Wright brothers, Orville and Wilbur Wright, made the first successful powered flight in 1903. While airplanes did not immediately have a significant economic impact, they laid the foundation for the development of the aviation industry, which would become important in later years.
The Impact of Technology on Factories and Production
New technologies, like the assembly line, made it possible for factories to produce goods faster and more efficiently than ever before. In the past, products were made by skilled workers who would craft each item by hand. With the assembly line, each worker was responsible for a single task, and products moved down the line from one worker to the next. This method of production allowed factories to produce large quantities of goods in a short amount of time.
As a result, the price of goods decreased, making them more affordable for consumers. Items like cars, clothing, and household appliances became available to the middle class, transforming daily life. However, the shift to mass production also led to the decline of skilled labor. Many factory jobs required little training, and workers were easily replaceable, leading to lower wages and less job security.
In this video, you will identify Henry Ford’s role in transforming the U.S. economy, society, and landscape through mass production and the introduction of the automobile.
Technological Innovations and Their Impact on the Economy: Interactive Questions
15. Who invented the telephone, revolutionizing communication in 1876?
16. What was Thomas Edison’s major contribution in 1879?
17. How did Henry Ford revolutionize the automobile industry?
18. What did the Wright brothers achieve in 1903?
19. What is the key advantage of the assembly line in production?
20. What was a consequence of mass production on the workforce?
Positive and Negative Effects of Industrialization
Industrialization brought about significant changes in the American economy, but it also had both positive and negative effects on society. While the growth of factories and new technologies created economic opportunities, they also led to social challenges.
This political cartoon shows workers keeping wealthy business owners afloat.
Library of Congress, Washington, D.C. (LC-USZC4-3108 )
Positive Effects of Industrialization
Economic Growth: The rise of factories and corporations led to unprecedented economic growth in the United States. The country became a global leader in manufacturing and production, and Americans enjoyed a higher standard of living than ever before.
Technological Advancements: New inventions and technologies improved everyday life. The telephone, light bulb, automobile, and airplane revolutionized communication, transportation, and daily activities. These innovations made life more convenient and efficient.
Job Opportunities:Industrialization created millions of jobs in factories, railroads, and other industries. While working conditions were often poor, many people were able to find employment in urban areas, which provided a steady income and the chance to improve their economic status.
Poor Working Conditions: Factory jobs were often dangerous, with long hours, low pay, and little regard for worker safety. Many workers were injured or killed on the job, and there were few regulations to protect them.
Overcrowded Cities: The rapid growth of cities led to overcrowding, poor sanitation, and the spread of disease. Tenement buildings, which housed many factory workers, were often unsanitary and unsafe, contributing to health problems in urban areas.
Environmental Damage:Industrialization led to the increased use of natural resources, such as coal and iron, which caused environmental degradation. Factories released pollutants into the air and water, leading to problems like smog and contaminated water supplies.
The rise of corporations, heavy industry, mechanized farming, and technological innovations in the late 19th and early 20th centuries transformed the United States from an agrarian society to an industrial powerhouse. These changes reshaped the economy, leading to the growth of cities, the decline of rural life, and the rise of new technologies that improved daily living.
However, industrialization also brought challenges, including poor working conditions, environmental damage, and social tensions in urban areas. The positive and negative effects of this transformation continue to shape American society today.
The legacy of industrialization can be seen in the modern economy, where large corporations still play a dominant role, and new technologies continue to drive economic growth. The shift from agrarian to industrial society was a turning point in American history, laying the foundation for the modern world.
Now that you have learned about the changing American economy, complete this activity to check your knowledge.
