At the time of the American Revolution 45% of the nation's wealth existed in the top in 10% of the population. In Boston in 1845 the top 4% owned 65% of the wealth. In Philadelphia in 1860 the top 1% owned over 50% of the wealth. In relative terms the gap between rich and poor was widening, but the booming economic growth meant that absolute standards were rising for all Americans.
The laissez fairs idea was popular, but government did much to assist capitalism throughout American history. Federal and state governments provided what has been called "social overhead capital," which includes such things as internal improvements—canals, harbors, and so on. As wealth increased, prejudice against corporations broke down (a trend aided by the decisions of John Marshall), and most states passed general laws of incorporation rather than specific laws passed for individual businesses. Protective tariffs were designed to aid American manufacturers. The government also created markets by adding new territory such as the Louisiana Purchase and the Mexican Cession. America's open immigration policies provided a steady stream of cheap labor, which was used for such things as railroad building.
Development capital came from the Northeastern merchant class. By 1860, 1500 major banks existed with assets of $1 billion. The insurance industry also boomed as insurance companies had to provide protection against risks. The American experiment in capitalism was on the move, and there seemed to be no limits to its possibilities.
World History
