The Beet Sugar Entrepreneurs of Antebellum America: An Industry's Failure and an Economy's Success
Posted: 30 Oct 2006
Date Written: October 28, 2006
Laymen and scholars alike often lament the failure of business firms and business historians focus most of their efforts on the small percentage of successful entrepreneurs. That is unfortunate because the failure of firms often and ironically leads to the success of economies. In a world haunted by the specter of bounded rationality, asymmetric information, nontrivial transaction costs, and uncertainty, entrepreneurs test the margins of economic reality. This paper shows how early nineteenth century America's failed agricultural manias, particularly the beet sugar craze of the late 1830s, helped the burgeoning American economy to learn where its comparative advantages lay, and where they did not. Early American beet sugar is also a story of abolition and slavery, technology diffusion and confusion, laissez faire ideology and government interference in the economy, and surprisingly advanced capital and money markets.
Keywords: beet sugar, entrepreneurs, capital markets, economic growth
JEL Classification: N21, N41, N51, N61, N81
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