Stern School of Business

New York University

                 

                                                            


B30.2330     Prof. R. Sylla
Spring 2002 KMC 8-65, 998-0869
Tu, 6:00-8:50     Office Hrs:  Tu 4-5:30 & by appt.
Tisch 200   email: rsylla@stern.nyu.edu
   
   
   
Economic and Business History of the U.S.

This course examines the historical development of the American economy from its small beginnings to the present.  The focus is on long-term trends of the economy, including the growth of institutions and markets, industrialization, and the impact of governmental economic policies.  The format is lecture (informal) with class discussions.  Topics are arranged in rough chronological framework from colonial times to the present.  See the course outline below.

Why would an MBA candidate or other professional consider taking such a course?  One reason is that economic history deals with how and why economic, business, and financial systems change over time, often abruptly, for economic and non-economic reasons.  An appreciation of past change can, I think, aid in anticipating--or at least expecting--the changes that lie ahead, as well as how they might affect individuals, firms, industries, and the economy.  That could be of some use during a several-decade career.

Also, an incredible range of economic experience characterizes American history: from hunting/gathering of native Americans to agriculture to industry to the first post-industrial society; from unfree labor systems to a free labor market; a co-existence of backward regions and "cutting edge" regions; from disgruntled farmers and striking workers to "robber barons" conspicuously consuming wealth; from the depths of depression to the heights of prosperity.  There are lessons for everyone, not just Americans.  Indeed, it can be argued that American economic history is a microcosm of where the whole world has been and is going (examples: Europeans and others in our time are attempting to fashion the sort of larger, integrated political and economic entity that Americans created more than two centuries ago, and "globalization" in our time is perhaps an extension of how the US historically integrated its economy internally and with the rest of the world).

Finally, the history of the American economy on the whole is a "success" story: a country whose people two centuries ago numbered less than the current population of Brooklyn and Queens now, with but 4+% of world population, produces about a quarter of the world's output of goods and services.  People from everywhere in the world came to participate in America's growth and development.  How did all that happen?  What were the ingredients of US economic success?

Course Reading are drawn mainly from two volumes, purchase of which is recommended.  The first is Sidney Ratner, et al., Evolution of the American Economy, 2nd edition (Macmillan, 1993, now Prentice-Hall).  This is a standard textbook with topical chapters organized within each of five chronological eras of U.S. economic history.  For breadth, we shall read essentially all of it.  For more depth, we turn to:

Alfred D. Chandler, Jr., Thomas McCraw, and Richard S. Tedlow, Management Past and Present: A Casebook on the History of American Business (South-Western College Publishing, 1996).  It is a compilation of cases and case materials that the authors, leading business historians, have used in a highly popular course at the Harvard Business School.  The cases are intensive studies of key issues, turning points, institutions, and individuals in American economic, business, and financial history.  Plus a few supplementary articles; see syllabus.

 

Expectations.  You are expected to do the assigned readings and to participate in class discussions.  There will be (1) a Midterm Essay assignment due March 19 (assigned in week of March 4), and (2) a Final Essay assignment due May 6.  The essays will be graded.  A 12-page (3000 wds) paper on a mutually agreed topic in economic history (due May 6) can substitute for the final essay if one prefers to write a term paper on a topic of special interest, which is encouraged. 

Short (max. 1 page) weekly writing assignments geared to that week’s reading assignments will also be given.  These will not be graded, but each one not submitted adjusts one's final grade downward a mark, i.e., a B+ becomes a B if one is missed, etc.  The assignments will be emailed to the class roster.  Your one-pagers can be submitted in class or emailed to the Course TA, Charlon McIntosh <cm667@stern.nyu.edu> or to both her and me.  To get the most out of the course, these assignments should be done for the week they are assigned, but they can be submitted anytime up to the end of the course if your schedule precludes timely submissions.  

           

Course grades will be determined by the following weights:  50% on the midterm, 50% on the final essay or paper.

 

With once-weekly meetings, my plan is to discuss with you the broad historical dimensions of a topic or era at the first part of the class, and then focus more in the second part on the related case or cases.  I'll furnish you with a question or question to think about and respond to in each week's writing assignment.  But you should also have your own questions, etc., about history and the historical materials.  Raise them in class, for answers or opinions as the case may be.    

Economic History of the U.S.  
Outline and Readings  
   
1/29   Economic history.  The record of American economic growth.  Colonial economic development, 1607-1776.
  Readings: Ratner, Chs. 1, 2:  America and the Developing World Economy; Regional Patterns of Colonial Development
  Chandler, Case 1: Ben Franklin and the Definition of American Values.
2/5 Economics of empire, revolution, confederation, and the Constitution.
  Readings: Ratner, Chs. 3, 4:  Growth and Welfare in the Colonies; Foundations of Economic Independence
2/12     Public and private finance to 1860.
  Readings: Ratner, Ch. 7:  Critical changes in the financial system
  Chandler, Case 5: The Second Bank of the United States.
  Sylla, "US Securities Markets and the Banking System, 1790-1840," Fed of St. Louis Review (May-June 1998).  Handout.
2/19   Transportation developments and land policies to 1860.
  Readings: Ratner, Chs. 5, 6 (133-141),:  Revolutions in Transportation and Communications; Land Policy...
  Chandler, Case 4:  The Rise Of New York Port.
  Case 7: The coming of the Railroads.                                                  
2/26   Industrialization and commerce to 1860.
  Readings: Ratner, Chs. 8, 9:  Beginnings of the Industrial Revolution in America; Growth and Change in Domestic and Foreign Markets
  Chandler, Case 6:  Samuel Slater, Francis Cabot Lowell, and the Beginnings of the Factory System in the United States.
  Case 19: Work:...Factory in 19th C. America, Document #s 2-7, pp. 4-40 to 4-51.                                                 
3/5   Unfree labor: the economics of slavery; Economic progress to 1860.
  Readings: Ratner, Ch. 6 (141-55), 10: Agricultural Expansion and the Political Economy of Slavery;  Economic Growth and Social Welfare
  Chandler, Case 18: Slavery.     
Spring Break  
3/19   Railroads, management, and the rise of regulation after 1865.
  Readings: Ratner, Ch. 14: Building Nationwide Railroad and Communication Networks
  Chandler, Case 9:   Jay Gould and the Coming of Railroad Consolidation. 
  Case 11:  The Railroad Problem and the Solution.
3/26 The rise of big business.
  Readings: Ratner, Chs. 12, 13:  Mass Production and the Advent of Big Business;  Labor in the Industrializing Society.
  Chandler, Case 14:  The Integration of Mass Production and Mass Distribution.
  Case 15:  The Standard Oil Company: Combination, Consolidation, and Integration.    
  Gavin Wright, "The origins of American industrial success, 1879-1940," American Economic
  Review (Sept 1990), 651-68. [Accessible online: Bobst, Bobcat, E-Journals and texts, JSTOR basic search, type in author, title, date, click on search, article.]
4/2  The financial system in the "robber baron" era.
  Readings: Ratner, Chs. 15, 16:  The Financial System Under Stress; National and World Markets for Mass Production
  Chandler, Case 10:  J.P. Morgan, 1837-1913.
  Richard Sylla, "Federal policy, banking market structure, and capital mobilization in  the United States, 1863-1913," Journal of Economic History (Dec. 1969), 657-86. [JSTOR]      
  Hugh Rockoff, "The `Wizard of Oz' as a monetary allegory," Journal of Political Economy (Aug. 1990), 739-60. [JSTOR]    
4/9   "The Progressive Era," World War I, and the 1920s.
  Readings: Ratner, Chs. 17, 18:  The Economic Impact of World War I; The 1920s: A Taste of Affluence.
  Chandler, Case 23: Antitrust: Perceptions and Reality in Coping with Big Business
  Case 26: Henry Ford and Alfred P. Sloan
4/16 The Great Depression and the New Deal.
  Readings: Ratner, Chs. 19:  The Great Depression and the Expanding Role of Government
  Chandler, Case 24:  The New Deal and the Mixed Economy. 
4/23     World War II, postwar institutions and economic trends
  Readings :Ratner, Chs. 20, 21:  The Planned Economy of World War II; The Good Years, 1945-65.
  Chandler, Case 25:  The Federal Government and Employment.
4/30  The economy and economic policy since the 1960s.  The 1990s expansion in historical perspective.  Summary of course: looking back, now, and ahead--a third "American century?"
  Readings: Ratner, Chs. 22, 23:  The Great Inflation, 1965-1982; 
  Debts, Deficits, and Defaults, 1980-1992
  Chandler, Case 27:  Michael Milken.
   
   

RICHARD SYLLA

 

 

 

           

Richard Sylla is Henry Kaufman Professor of the History of Financial Institutions and Markets at the Stern School of Business, New York University.  He is also a Research Associate of the National Bureau of Economic Research.

 

Sylla received the B.A. summa cum laude (1962), the M.A. (1965), and the Ph.D. (1969), all from Harvard University.

 

He is the author of The American Capital Market, 1846-1914 (1975); co-author of The Evolution of the American Economy (1993; 1st ed., 1980) and, with the late Sidney Homer, A History of Interest Rates, (3rd ed. Rev.; 3rd ed., 1991); and co-editor of Patterns of European Industrialization—The Nineteenth Century (1991), and The State, the Financial System, and Economic Modernization (1999), as well as of journal articles, essays, and reviews in economics and economic history.

 

Sylla is a former editor of The Journal of Economic History and has served as a consultant on institutional history to such firms as Citibank and Chase Manhattan Bank.  His current research focus is on the financial history of the United States in comparative contexts.  He served as chairman of the board of trustees of the Cliometric Society, 1998-2000.

 

In 2000-2001 Sylla was president of the Economic History Association, the professional organization of economic historians in the United States.