Manufacturing Growth and Structural Change in American Economic History

Over past 200 years, industrialization was the driving force in the economic development of most nations experiencing “modern economic growth.” Industrial activity generally expanded faster than the economy as a whole, and the sector grew to account for sizable shares of output, employment, and trade. Manufacturing activities have generally experienced faster rates of productivity growth than the economy as a whole and the sector has often paid higher labor wages. Manufacturing also contributes materiel and technology for military purposes. For these reasons, policymakers and the public have long viewed manufacturing as being of greater importance than other activities. This chapter surveys growth and structural change in the American manufacturing sector over the past 200 years. It chronicles the sector’s transformation during the first (1810–1860), second (1870–1920), and third (1970–present) industrial revolutions. It examines the forces, such as globalization, information technologies, and deindustrialization, shaping the sector today.