The United States began as an agricultural based economy. The colonies, settlements, westward movement and other expansions were all based in land development for agricultural purposes. In 1750 almost all settled land was used for the purpose of cash crops. The remaining land was largely used by individual substance farms and family farms. In 1790 more than 75 percent of the labor force was employed in the agricultural field. The use of slave labor expanded greatly, notably for exploitation by the plantation farming system. Voluntary immigration to the United States was greatly motivated by the availability of fertile land. The vast use of land created mass displacement and in many cases death of the native tribal peoples also known as the Native Americans or American Indians.

CS Question #1: Think about the vast use of land, labor and slave labor needed to fuel an agricultural economy. What might the challenges be to sustain an agricultural economy?

U.S. innovation in mechanical technology changed the economy base from agriculture to industry. This period in history is known as the industrial age or the industrial revolution. It occurred between the late 1700s and 1800s with emerging factories and mass production. Factories brought about city growth as workers moved from rural areas. The industrial revolution was successful in the United States because of the:

• large amount of natural resources
• large amount of other resources including creativity and knowledge to create technology
• highly literate population
• large market for goods and service within the country
• free market system
• stable political and legal system

The immense size of the nation presented challenges of communication and transportation. U.S. citizens relied on the railroad system and the telegraph to meet these challenges. They also created the system of manufacturing that used the mass production of small similar or interchangeable parts. The division of labor was introduced creating a very efficient system. Then, in 1903 Henry Ford created the moving assembly line for the automobile.

The extreme growth that manufacturing created led to changes in organization for production and distribution such as factory layout and scheduling. It also led to the creation of the corporation. The power of business was balanced over the years with antitrust laws, fair labor laws and union development. Agriculture decreased, employing only about 40 percent of the labor force by the end of the 19th century.

CS Question #2: Explain the efficiency of the division of labor or the moving assembly line.

Towards the beginning of the 20th century manufacturing and production was more and more mechanized. Some manufacturing was relocated to other developing nations where the labor and factories were more cost effective. The industrial output increased and the need for industrial labor decreased. This developed economy was characterized by an increase in the service industry. By 1929, the service industry represented 54 percent of the United State's gross national product (GNP). By 1978, it represented 66 percent of the GNP. The service economy gradually evolved to include an information and technology base. The emerging information and technology industry relies on data, computers, telecommunications, the Internet and the World Wide Web. Such highly specialized needs require a more knowledgeable and skilled labor force. The emerging economy will make it difficult for workers without skills in information and technology.

CS Question #3: Think of a way that recent computer and technology innovations have effected the agriculture, manufacturing and service industries. Give one example for each industry.

The United States has the highest GNP and among the highest GNP per capita in the world. The size of the United States economy and vast resources make it the biggest power in world trade. The United States has 20 percent of the world's coal, copper and crude petroleum. It is also responsible for 50 percent of the world's corn output, and 20 percent of the beef, pork and lamb output. The United States is the world's leader of imports and exports. It has also capitalized on some specialization of trade in high-technology goods and services and professional services. In 1959 U.S. international trade was less than 9 percent of the country's gross domestic product (GDP). In 1997 it was 25 percent of the GDP. The United States power in the world economy comes largely from its foreign investment capital. The high amount of U.S. foreign direct investment can be very influential. Likewise foreign investment in the U.S. economy gives other nations vested interest in the continued success of the economy. All of these factors combine to make the United States a clear leader in the global economy.

CS Question #4: What factor of the United States global economic power do you think is most significant? Explain your answer.

Further Thought:

1. What do you think is the most significant change to the United States economy? Explain your answer.
2. What do you think the biggest challenge the United States faces in retaining a global economic stronghold?
3. What skills, education or training will be most important for the United State's labor force in the global economy?