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ECONOMY ECONOMICS

What Caused the American Industrial Revolution?

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By THE INVESTOPEDIA TEAM Updated Jun 5, 2020

The initial vestiges of industrialization appeared in the United States in 1790, when Samuel Slater opened a British-style textile factory in Rhode Island.1 While most historical accounts place the start of the full-scale American Industrial Revolution at either 1820 or 1870, factory labor and entrepreneurial innovation, such as the Slater Mill, were the driving forces of industrialization.

Industrialization was made possible by increases in productivity, capital investment and reinvestment, business expansion, and the rise of corporations. Economic historian Robert Higgs, in The Transformation of the American Economy, wrote that economic growth was preceded by investment in material capital and by Chief Justice John Marshall's influence in securing private property and contract rights between 1801 and 1835.2

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