The antebellum interregional growth hypothesis provides another perspective on the importance of falling transportation costs to the early growth of a national market. Douglass C. North advanced the argument with quantitative evidence derived from earlier works (especially Callender 1930) and added theoretical specifications and structure. Briefly stated, North argues that U. S. growth from 1815 to 1843 was propelled primarily by the growth of British demand for southern cotton, which encouraged southern regional specialization in cotton. In turn, this raised the demand in the South for western foodstuffs and cheap northeastern manufactures, mainly boots, shoes, and coarse-fiber clothing for slaves. Growth in the size of the national market, through falling transport costs, realized economies of large-scale productions and greater regional economic specialization. As the Northeast became more specialized in manufacturing and more urbanized, the growing demand of the South for western foodstuffs was reinforced. Each region advanced along lines dictated by its respective comparative advantage in production, and each demanded goods produced in the other regions in increasingly greater amounts. After 1843, the primary initiating role of foreign demand for cotton diminished, and internal market forces ascended in importance. The railroad linking the West to the North also contributed to the lessening forces of the South. The evidence on the timing and waves of western migrations and land sales and prices of key regional staples supports North’s argument. Evidence on Southern food production, however, for the years after 1840—the only years providing us with reliable food-production data—suggests that the South was relatively self-sufficient in food (especially Gallman 1970; also Fishlow 1964 and the following discussion by Fogel 1964). Yet, as Lloyd Mercer has shown, pockets of food deficits in the South may have been sufficient to have a significant impact on western food production for market, especially before 1840 (Mercer 1982). Furthermore, the magnitude of self-sufficiency may hinge critically on how “the South” is defined. For example, should the border states of Kentucky and Tennessee, with their large meat surpluses, be considered southern or northern states (Sexton 1987)? Despite the inconclusiveness of the interregional linkages in this debate, the hypothesis provides a useful framework of analysis and an international perspective on the advances and linkages of the regions and of the formation of a national economy during that vital period of the transportation revolution.
World History
