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Institutions, Innovation, and Entrepreneurship: New York City During the Industrial Revolution, 1790-1860

Martin Ruef
Duke University

Date: May 16, 2014
Time: 10:30 am - 12:00 pm
Location: Room 245 

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Classic accounts of the industrial revolution suggest a process in which small artisanal entrepreneurs were displaced over time by large-scale enterprise, owing to innovations in mechanized production and the increasing capital intensity of business. In this paper, I suggest that institutions shaping labor markets may have been more important than technological change in dictating entrepreneurial outcomes over the course of early American industrialization. Drawing on data that include 25,847 households in New York City and all matched businesses, I examine how the shift from various institutions of unfree labor (slavery, indenture, and ‘long’ apprenticeship) to a wage labor market affected rates of entrepreneurship between 1790 and 1860. Findings reveal that the transition to mechanized factories and capital-intensive technology in the city was minimal, even by the mid-19th century. Meanwhile, the composition of household labor pools was linked to entrepreneurship as a result of institutional change, with substantial reliance among business owners on slaves and young white males during early stages of industrialization and more reliance on women and free adult males at later stages. Given the disproportionate importance of unfree and dependent labor to entrepreneurs with limited wealth, I conclude that the institutional transformation of labor may provide a more satisfactory account for the demise of the small entrepreneur than the common emphasis on technological industrialization.  

For more information, please contact Rola Zoayter at: rola.zoayter [at] mcgill.ca.Ìý