Book contents
- Frontmatter
- Contents
- Preface
- PART ONE THE THEORY DEVELOPED
- PART TWO THE THEORY APPLIED
- 5 Land policy and American agriculture
- 6 Organization and reorganization in the financial markets: savings and investment in the American economy, 1820–1950
- 7 Transportation developments and economic growth
- 8 Economies of scale, unsuccessful cartelization, and external costs: some sidelights on the growth of manufacturing in the United States
- 9 Institutional change in the service industries
- 10 The labor force: organization and education
- PART THREE CONCLUSIONS
- Index
6 - Organization and reorganization in the financial markets: savings and investment in the American economy, 1820–1950
Published online by Cambridge University Press: 24 March 2010
- Frontmatter
- Contents
- Preface
- PART ONE THE THEORY DEVELOPED
- PART TWO THE THEORY APPLIED
- 5 Land policy and American agriculture
- 6 Organization and reorganization in the financial markets: savings and investment in the American economy, 1820–1950
- 7 Transportation developments and economic growth
- 8 Economies of scale, unsuccessful cartelization, and external costs: some sidelights on the growth of manufacturing in the United States
- 9 Institutional change in the service industries
- 10 The labor force: organization and education
- PART THREE CONCLUSIONS
- Index
Summary
Introduction
The first commercial banks were organized in the United States during the Revolution, and the New York Stock Exchange can, with some slight stretch of the imagination, trace its lineage back into the eighteenth century. Despite these examples of early capital market arrangements, the financial market was largely unorganized at the beginning of the nineteenth century. Even in the relatively static economy of the first years of that century, there were gains to be realized from more effective institutional arrangements, and with the geographic expansion and economic growth of the succeeding century-and-a-half, these potential profits increased enormously. A meaningful history of finance in the United States can only be told in terms of the rearrangements that resulted from the innovation of new institutions to capture and recapture the profits that, in 1810, were external to any institution. The result of this process is, in the 1970s, an economy marked by a myriad of financial arrangements. The process of organization and reorganization still continues, but even the history to the present is far too much to summarize in so short a chapter. Instead, we will draw from that history a few illustrations to indicate how the search for profits led to arrangemental innovation. For every example that we cite, there are a hundred that are slighted, but the outlines of the tests of the theory are certainly there.
- Type
- Chapter
- Information
- Institutional Change and American Economic Growth , pp. 105 - 134Publisher: Cambridge University PressPrint publication year: 1971