The Jacksonian Economy

Peter Temin. The Jacksonian Economy. New York: W.W. Norton & Company, 1967

Peter Temin is an economist and economic historian who has written several books on 19th century American economics. This is one of his first books, and it has been a fairly influential one. Published in the late 1960s as a corrective to then-prevalent existing orthodoxy, which held that Andrew Jackson was primarily responsible for the Panic of 1837 due to his Bank War and Specie Circular. In the intervening decades, Temin's thesis seems to have won out and his argument accepted.

It is an economic argument, and for readers not used to the field might find the argument a little hard to keep track of. Temin's prose is straight-forward if more than a little dry, and even a novice such as myself can understand what he is saying even if much of the content is abstract and somewhat bloodless.

Temin's argument, in a nutshell, is that nothing Jackson did brought on the Panic, and that while some of his actions probably retarded the recovery, even those negative effects were limited. The real culprit was a combination of events in Britain and China. Improved wheat harvests in Britain produced a surplus of capital which was funneled to investment opportunities in the United States. At the same time, Chinese opium users were increasing their purchases from Britain, therefore diverting the flow of Mexican silver from China to the United States because it was quicker and cheaper to use American credit for purchase. Therefore, the United States saw an increase in specie, which increased the money supply, which in turn led to inflation.

A later cut in British credit was followed by a decline in the price of cotton, which brought the American economy to a halt. The chain of events continued through the 1840s, resulting in a long period of deflation and an end to the economic boom times of the 1830s. Land sales slowed, and the value of American money depreciated.

It is, admittedly, a difficult argument to keep straight if one is not used to speaking and thinking in pure economics. Still, the argument seems sound and the book is useful to have on hand when reading about the economic aspects of Jacksonian America.