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Romer: Why, Indeed, America Article Critique


The author focuses mainly on the use of economic history and growth theory to highlight the mass production success in America in comparison to other countries during the first half of the 19th century. The technological developments during the period placed America ahead of many countries, and the article seeks to illustrate how such success was achievable. According to Romer (1996), economic history and new growth theory can only effectively show the picture of technological development alone. A complementary approach is necessary for understanding the early industrialization complex, which saw America grow substantially with the benefits of large stocks and the ability to utilize them. The article shows how a country endowed with immense resources can perform less than another based on the utility of such materials and techniques that either facilitate or impede mass production. An advantage in sustainable approaches to mass production allowed America to change from mainly importing most products to exporting. The economic power achieved through successful industrialization facilitated American industrialization in the 19th century, and more changes happened in the 20th century due to technological developments. This article provides a diverse view of industrialization, with examples and practical views, by combining economic history and new growth theory.

Article Critique

History is a significant factor in the article because the author depends on past events and developments to make a case for why the United States achieved faster growth than Britain within a relatively short period. Some of the countries identified in the historical context of the article include the United States, Britain, Australia, and Argentina because of their present influence on the global markets and their positions. History is crucial for the article to elaborate on the comparative relationships between countries and further highlight the role of industrialization in developing economic power (Woodman, 1972). The language in the article is clear and compelling in presenting how the United States featured against Britain and other countries. For example, Romer (8984) explains that the United States had only 75% of the per capita income of Britain in 1870, but the relationship changed drastically by 1929 when the value increased to 130%. The historical perspective provides a critical foundation for the article to show how various factors contributed to making the United States an economic giant.

An economic scope in the article involves illustrations of how industrialization depends on utility and capital development. The author presents the idea that economic success in a country results from various components working in sync to make the overall results impactful. Besides, comparing and contrasting Britain and the United States in terms of investments, technological developments, and material endowment further highlights the importance of economic concepts in the article. Economic models provide a rich background supported by history for the article to develop a basis for explaining the early industrialization trends in the United States (Romer, 1996). The most significant economic idea involves technology and the impact of developing machinery to enhance productivity in the United States so that British savers were attracted to invest abroad. An illustration of net foreign investment and net domestic investments for Britain in 1914 shows that the article relies on historical and economic information to evaluate the industrialization trend in the United States.

However, the article has yet to include political aspects of various countries to understand the industrialization development in America, although governance and policymaking trends impact economic success. Both the United States and Britain have distinct political projections, and their past policies influenced the industrialization era. The article does not cover such crucial points as protective tariffs to encourage domestic manufacturing, internal improvements of infrastructure, land policies for abundant production, patent systems for encouraging innovation, and the banking system. The effectiveness of such policies determines the investment appetite from both within and outside, and the United States achieved successful industrialization due to creating an attractive business environment that supports growth. For example, the Homestead Act of 1862 was crucial for attracting settlers to the United States and westward expansion facilitated by a stable financial system. Industrialization success relied on political influence to thrive under free trade policies and other attractive terms, which encouraged technological growth for mass production (Theodoridis et al., 2018). The article could achieve more coverage by incorporating a political perspective and using the information to distinguish the economic performance between Britain and the United States.

The author argues that the significant differences in investment rates between Britain and the United States were not the results of exogenous variations in saving rates. The supporting information describes an almost equal value of net domestic and net foreign investments in Britain and a significant bias as British savers channeled money into the United States (Theodoridis et al., 2018). The argument builds on whether technological differences between the two countries contributed to the resultant differences. A standard model-testing is disputed in the article for purposes of understanding the role of technology in the industrialization era since the author describes such an attempt as a flaw if the overall goal involves understanding the global events influencing economics. The author’s general argument for understanding differences in investment trends between Britain and the United States involves encouraging the use of a formal theory and economic history (Romer, 1996). The author identifies problems with economists who object to formal theories and highlights Richard Dawkins’s (1978) evolutionary theory in answering how a locomotive engine works. The arguments develop to show that understanding the economic performance of the United States during early industrialization requires breaking the topic into levels and finding out how each part contributes to the function of a whole system.

Another central argument is that neoclassical growth theory reaches a dead end on the theoretical dichotomy of classifying goods as either private or public. The author borrows from Dawkins’ illustration of a steam engine to show that the neoclassical growth theory fails to effectively provide details about technology as a factor for economic development. The neoclassical growth theory inadequately addresses the question of technology, and the article establishes that changes to the overall idea and understanding of technology as routines within firms are more effective (Theodoridis, 2018). The arguments build on breaking the question of industrialization into smaller facets and understanding technology better than what recent neoclassical growth theorists describe as technology causing economic growth. Therefore, the argument takes on two broad perspectives of “ideas” and “things” and concludes that ideas are nonrival so that they can be stored in a bit string and facilitate arranging or rearranging things (Romer, 1996). As a result, the author associates economic growth with technology in the form of finding new concepts to convert raw materials into more valuable products because ideas can rearrange things, as was the case in the early industrialization era.

The author argues that the United States achieved industrialization success due to an abundance of resources so that stakeholders developed technologies for specialized machinery, standardized goods, and interchangeable parts. The argument develops upon different pieces of information as the article seeks to validate the importance of infrastructure in encouraging industrialization. A geographical pattern showing patent awards in the United States by 1988 supported the idea because transportation networks influenced innovation trends. The author illustrates that homogenous consumer preferences allowed the manufacturers to design products and produce them in large quantities. Furthermore, the illustration highlights the role of technology in economic growth because a larger population in the United States than in Australia and Argentina meant that economic products had a ready market and sufficient infrastructure for logistical purposes. The author’s argument on resources contrasts the United States and Australia because having more resources per capita in Australia did not automatically translate into greater industrialization.

The author makes independent arguments by adding individual perspectives to those established by experts on the topics of growth theory and economic history. One of the notable independent arguments involves improving the approaches of the neoclassical model to include technological growth. The author creates a new perspective to improve the neoclassical model by showing how ideas conceived as goods can gain economic value by overcoming barriers to reach more consumers (Romer, 1996). The objective is to eliminate a dead end in the neoclassical model and incorporate the role of technology in industrialization. The article further shows how industrialization in the United States achieved immense success through machinery production, which allowed subsidiary manufacturers to break ties with their mother companies and expand their market coverage, similar to Australia’s early development (McLean, 2012). The new argument supports the article’s objective of uncovering the distinctive industrialization performance in the United States because various stakeholders found ways to satisfy market demands. The author’s idea is that barriers to spreading ideas limit development, and economic value for goods increases proportionally to market coverage. The argument is plausible because firms in the United States had a large domestic market to serve, and the need encouraged invention.

The author needs to make explicit efforts to distinguish experts’ ideas from their own because most additional views are placed under the overall concepts advanced by others. The arguments before explicitly writing about industrialization in the United States are diverse and primarily based on other people’s ideas. The challenge of distinguishing the author’s arguments from those of experts is due to many complementary concepts that describe similar topics in varying words. However, there are several examples in the article that support an idea presented in the paragraph, but the author adds new information in a creative way to make the point relatable. For instance, the illustration of industrial chemistry developing in the United States to manage animal waste resulting from increased quantities of meat is an original idea used to support the overall discussion (Romer, 1996). The independent arguments are introduced with such words as “For example” in the article. The independent arguments demonstrate mastery of the topic and the author’s ability to reflect the industrialization in the United States as a relatable topic for reading.

Most information in the article comes from studying experts’ works on the topic of industrialization in the United States. The author relies on the experts’ research and data to make informed arguments while citing their details to give credit. The article is sufficiently formal, and the information given does not blatantly show personal biases because each claim has data or historical facts to back it up. The use of other people’s information in the article includes a direct quote from Dawkins’ analogy of functionality in a steam engine because the piece aligns with the main topic of economic development. The author indicates in later arguments that economic growth combined with growth theory offers a clear illustration of how each component of the entire system contributes to functionality (Romer, 1996). Such an approach in the article emphasizes the importance of using other sources to support an argument because individual views could be biased and unable to utilize accurate historical facts. Therefore, the article has enough external sources with supporting information to understand the United States’ economic growth in the 19th century.

The author uses facts from past economic developments and new growth theories to support various arguments. The pieces of evidence are selected carefully to align with the author’s argument, but there are limited instances of refuting diverging opinions. The most evidence used in the article comes from experts’ pieces from the past, which concentrated on the United States’ economic growth. The author relies on sources covering the 19th and 20th centuries because the overall argument builds from the past to explain the present economic progress in the United States. Evidence in the article also involves mathematical statements to express relationships between different factors that influence economic output (Romer, 1996). Such a technical approach increases the credibility of the author’s argument when making statements on the overall developments that put the United States ahead of Britain in industrialization. The evidence makes arguments credible, and the author adds individual perspectives to the project without necessarily exploring deep into the technical factors during the 19th century.

Assumptions in the article emerge when the author presents the arguments as if factors were constant in all the areas of reference. The most glaring assumption is that political conditions in the United States and Britain were similar around 1870, as were the developments in the 19th century. Different countries contend with unique challenges and explore opportunities in varying approaches. The author does not account for the differences in government policies. While laissez-faire philosophy was applied in Britain, the United States implemented an interventionist government approach by protecting domestic industries and providing infrastructural support (Aldrich, 2002). Political influences in the two countries led to varying trends in investment and sustainability of the industries. The friendlier domestic environment in the United States allowed companies to employ more technological inputs for increased productivity. Such differences led to more remarkable economic development in the United States than in Britain over a single century despite similar qualities of human capital as measured by education years and experience levels (Romer, 1996). The assumption leaves out a crucial aspect of industrialization because the author could have identified how policies influence industrialization in the historical aspect of the article.

The author makes a noticeable assumption by stating that variations in the rates of investment between Britain and the United States were not outcomes of exogenous differences in savings rates. The saving culture in a particular country contributes to the overall outcome of investment quality because people have a particular way of spending. The savings cultures further influence the consumer behaviors of such citizens, and industries align with the market demands to make products (Crafts, 1998). The author overlooks the fact that Britain’s net foreign investment was close to the net domestic investment prior to 1913. The article presents another assumption of applying theories to a complex topic by stating that such a theory should ease the understanding of the physical world. However, a theoretical approach only sometimes offers solutions to the physical world in a rigid mathematical statement because the various factors involved change from one situation to another. The theoretical concepts regarding production offer essential perspectives to help stakeholders make informed decisions, although the specific components often require modifications to suit the situation (Romer, 1996). The assumptions do not compromise the quality of the article or lead to wrong conclusions because the author uses them to make arguments for the project.

The author has made a strong case for the importance of combining economic history and new growth theory to understand technological change. I agree that using both approaches on the same topic provides a better picture of the problem, and the author’s argument is plausible. Besides, I agree that early industrialization was due to different factors playing crucial roles in the entire system of economic development in the United States. The United States’ larger markets and stocks than Britain ensured that stakeholders in industrialization were responsible for identifying opportunities to use the resources (Aldrich, 2002). Technological growth was a result of competing ideas and things readily available for utility to solve problems. The techniques of production in the United States improved significantly because industries were targeting a large and mainly homogeneous population, so mass production was feasible. The author makes a good case for incorporating economic history into the discussion, which involves new growth theory.

I agree that achieving a successful evaluation of early industrialization requires theoretical models and economic history to provide evidence. Using testing models alone in the study of economic growth leaves out important information that could identify critical factors that contributed to past developments. A successful analysis of early industrialization requires breaking the topic into sections and learning the complex functions within the scope before compiling the whole information (Crafts, 1998). In this case, the author has provided sufficient details with an illustration of the steam engine so that researchers can generate content by breaking down the topic of early industrialization. The abundance of natural resources in the United States facilitated technological growth because the market required products to serve a large number of people (Romer, 1996). I agree with the author on selecting the United States for the study of industrialization and applying the two approaches because there were significant changes in the country due to mechanization. American technology is applied domestically and in foreign economies due to innovative ideas of market expansion.

The author concludes that the abundance of resources and scale effects enabled Americans to make specialized machinery, standardize goods, and produce interchangeable parts. I agree that the large number of different resources in America was a critical factor in advancing early industrialization far ahead of Britain. Scale effects apply to products because goods increase in value when they can be used in many parts of production, and consumers can access them (Crafts, 1998). The author’s illustration of textile machinery shows the power of interchangeable parts because the manufacturers expand their opportunities by serving others who were previously not part of the market. The intensive use of resources in the United States worked perfectly with early power in manufacturing technologies to create economic power. Using historical data and new growth theory is vital to finding all the necessary information to understand the past. Besides, the present global market conditions are the results of past activities and the interplay of conditions which alter production. The author achieves the objective of highlighting scale as a crucial factor in industrialization.


In conclusion, the article is comprehensive and effective in supporting the main ideas with sufficient details. The author has used a formal approach and a neutral tone to present arguments engagingly. The use of historical data in the article further illustrates the effectiveness of economic history in understanding different topics. A theory is essential for simplifying the physical world relationships between various factors, and the author successfully showed its application. I agree with the author’s argument because the ideas flow effectively to generate a well-designed article that invites a conversation about early industrialization. The author points out the importance of viewing the physical world in its components that make a functional system. I agree that economists will learn all about industrial growth in America by developing a theory and integrating economic history for evidence. Overall, the article is clear and effectively presented for the readers to understand and learn from the content.


Aldrich, R. J. (2002). Ian Jackson. The Economic Cold War: America, Britain and East-West Trade, 1948–63. (Cold War History Series.) New York: Palgrave. 2001. Pp. Ix, 239 [Review of Ian Jackson. The Economic Cold War: America, Britain, and East-West Trade, 1948–63. (Cold War History Series.) New York: Palgrave. 2001. Pp. Ix, 239]. The American Historical Review107(4), 1198–1199. Oxford University Press.

Crafts, N. (1998). Forging Ahead and Falling Behind: The Rise and Relative Decline of the First Industrial Nation. The Journal of Economic Perspectives12(2), 193–210.

Graeme m. holmes. Britain and America: A Comparative Economic History, 1850–1939. New York: Barnes and Noble. 1976. Pp. 224. $12.50. (1977). The American Historical Review82(5), 1258–1258. Oxford University Press.

McLean, I. W. (2012). Why Australia prospered: the shifting sources of economic growth (The Princeton economic history of the western world) (1st ed., Vol. 43, pp. xiv–xiv). Princeton University Press.

Romer, P. M. (1996). Why, Indeed, in America? Theory, History, and the Origins of Modern Economic Growth. The American Economic Review86(2), 202–206.

Theodoridis, D., Warde, P., & Kander, A. (2018). Trade and overcoming land constraints in British industrialization: an empirical assessment. Journal of Global History13(3), 328–351.

Woodman, H. D. (1972). Economic History and Economic Theory: The New Economic History in America. The Journal of Interdisciplinary History3(2), 323–350.


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