The development of capitalism in the early history of the United States was hampered by the high cost of wage labor. Settlers showed a distinct preference for self-employment over either capitalism or feudalism.
Excerpt from Charles Sellers' The Market Revolution: Jacksonian America, 1815-1846
Cheap land, virtually free at first, not only elevated the mass but imposed a limit on wealth by making labor expensive. With farm ownership readily attainable, Euro/Americans would not labor for others except briefly and at high wages. A few years of high wages financed enough cheap land to yield a comfort and independence inconceivable to poor Europeans. With wages too high for most farmers to pay, production was limited---no matter how much land they had---by the family labor available. While raising European immigrants to an exhilarating rural well-being, the person/land ratio inhibited further accumulation. The resulting society of roughly equal landowning families was the seedbed of American republicanism.
Sellers recognized the tensions created by the coexistence of alternative class processes, in particular self-employment (or the ancient class process) and capitalism. However, Sellers confuses the conflict with one between land and market, viewing the availability of cheap land as not only a condition of existence of self-employment but in many ways collapsing these two phenomena: available land = self-employment. Similarly, Sellers confuses the market with capitalism: markets = capitalism. The existence of markets is a condition of existence of capitalism to the extent that widescale buying and selling relationships are a condition for the existence of wage labor markets. No wage labor markets, no capitalism. However, markets can also, under certain circumstances, be conditions for the existence of self-employment, slavery, or feudalism. In other words, it is problematic to see the rise of market exchange as necessarily leading to problems for self-employment and the rise of capitalism, as Sellers seems to do in his text. Indeed, the growth of certain export markets may encouraged the growth in self-employment, making it possible to generate sufficient cash flow from self-employment to make it a viable alternative to wage laboring. Therefore, if the "market revolution" coincided with a dramatic increase in capitalism (capitalist wage labor) then one needs to sketch out a more complex picture of how that process came into being. Simply demonstrating that markets expanded is not enough.
Sellers writes that:
Profound cultural differences arose from these contrasting modes of production. The market fostered individualism and competitive pursuit of wealth by open-ended production of commodity values that could be accumulated as money. But rural production of use values stoped once bodies were shelted and clothed and bellies provided for. Surplus produce had no abstract or money value, and wealth could not be accumulated. Therefore the subsistence culture fostered family obligation, communal cooperation, and reproduction over generations of modest comfort.
Firstly, "the market" is not a mode of production. The market is simply a site(s) where exchanges of commodities (usually for money but sometimes for other commodities) occurs. Since many "modes of production" are shaped, in part, by the presence of markets, then it makes no sense to refer to the market as a mode of production. Rather, in combination with other social and natural processes, market exchange may be a condition for the existence of particular modes of production, just as the availability of land is such a condition. In order to define a set of processes as a mode of production, one needs to define a particular type of relationship involving production. Market exchange can take place without being directly linked to relations of production. Market exchange does not, therefore, presuppose any particular relations of production. A merchant may require the acquisition of commodities in order to survive as a merchant, but he may acquire these commodities without being connected to a particular "mode of production." He might buy slave produced commodities or capitalist commodities or the commodities produced by self-employed direct producers. Thus, while Sellers' makes the point that the growth in market exchange had significant impact on American culture, economics, and politics, it is not correct to assume that this is the same as the decline in particular production relationships and the rise of others. These are different phenomena requiring different explanations and different undertandings of their relative impacts on other social and environmental aspects of the United States as a social formation.
Nevertheless, Sellers is correct to point out that the growth in market exchange had these knock-on effects. Quite definitely the growth in market exchanges coincided with the growth in important institutional structures and associated political, economic, and cultural processes. But it is also correct to argue that the growth in non-market processes were important conditions for the existence and extension of market processes. The causality is not one-way. Sellers does not completely ignore this. He recognizes the importance of environmental conditions in the growth of market processes. Indeed, he argues that the adjacency of waterways and coastlines were important to the growth of market exchanges. The same argument could be made for political and cultural processes, using the same logic. And, most certainly, one could make a strong case for the role of growth in market exchanges, as well as other economic, political, and cultural processes, in the growth of capitalism. However, similar arguments can be made for the role of these processes (perhaps in different combinations and certainly with distinctly different types of impact) on the transformation (and growth) in slavery, feudalism, and self-employment. The point is that one must be conscious of the necessity of making the argument and, perhaps more importantly, one must be conscious of the definitional distinctions between the different class processes. How can one see that capitalism was differentially shaped by markets when compared to slavery without recognizing the difference between capitalism and slavery, for example? And this would include understanding the way markets may have created tensions between slavery and capitalism, even while acting as a condition of existence for both. The same could be said of self-employment.
Sellers talks a good deal about subsistence production and clearly views this as the alternative to the market. However, subsistence production, even when it occurs (and it is none too common), only refers to producing to meet the immediate needs of the producer (and perhaps her family). Subsistence production, in this sense, is an alternative to all forms of class process because it definitionally precludes the existence of surplus labor. Because subsistence production is non-social production then the role of subsistence production in a larger social formation is, in a sense, a negative one. Subsistence production negates social production. It implies the disconnection of certain economic agents from the social sphere. But history is ultimately about the connections between human beings (including their various roles as economic agents). By juxtaposing subsistence and the market, Sellers essentializes the market as the motor-force in social life, while subsistence is the negation of social life. In other words, he overestimates the importance of markets, turning markets into a transcendental force in the history.
In this Sellers is not unique. It has become something of a commonplace to transform the mundane process of buying and selling into a transcendental market, a market that becomes the deux et machina in social evolution. Indeed, Sellers goes so far as to blame the market for the "disappearance" of the indigenous population in many parts of the United States, downplaying (or ignoring) the role of other social processes (including violence by the settlers).
Sellers dualistic framework does not allow him to understand the complexity of the communal economy and polity of the indigenous communities, not as something strange and uncivilized (anti-civilization), but as simply a different set of social processes. If he could break free from the dualistic trap, he might better understand "the ease with which whites converted to Indian ways" because he would be forced to explore the specific aspects of the settler culture that would have made the political and economic arrangements within the indigenous communities attractive. For example, Sellers describes communal aspects of settler life, without any recognition that what he is describing may have implications for certain commonalities between indigenous and settler lifestyles: Moreover neighboring farm families balanced their varying productive capabilities, shortages, and surpluses by constantly exchanging labor and commodities . . . Through sociable communal labor, neighbors lightened each others' most onerous tasks --- raising houses and barns, cutting logs and splitting rails, harvesting wheat, and shucking the corn crop." If Sellers had better understood this common form of civilization between settler and indigenous, then he might also have better understood the obstacles that needed to be cleared away for the rise of capitalism, not the rise of markets per se but the specific set of institutional relationships by which self-employment and communal labor would give way to wage labor. Instead, Sellers is unable to give to either the indigenous or settler communities the richness of analytical specification that they deserve because he has presumed certain simplicities that get in the way of such an analysis. His discussion of the intersection and interaction of the settler and indigenous communities becomes a simplistic interaction of civilized and primitive (anti-civilized).
Because Sellers wants to create a dualistic notion of social existence (market versus subsistence), he also seems to downplay clear evidence that the subsistence culture of rural America really isn't about subsistence at all, but is rather more complex and includes market exchange. He writes:
Subsistence families were not wholly self-sufficient. Much of their comfort and security derived from a neighborhood division of labor. Some farmers, as a sideline, furnished specialized skills to the community. During the winter months, when farm work was slack, the farmer/shoemaker carried his tools from house to house, supplying each family's yearly needs for footwear. Every Sunday the farmer/preacher left his fields to dispense the Christian gospel. Other part-time farmers operated such essential community facilities as the grist mill, blacksmith's shop, tannery, and sawmill. All rendered their services, not to an impersonal market, but to meet immediate needs of lifelong neighbors, who usually furnished the raw materials and made return in farm produce or labor.
Sellers is clearly describing a market exchange, albeit one that was more direct than the market exchanges that usually followed upon capitalist production. Nevertheless, Sellers is once again mistaking the market exchange process for the underlying productive relationships.
Sellers also conflates patriarchy into his concept of the land-based/anti-market/subsistence lifestyle. He seems to argue that the two go hand-in-hand, yet he ignores the fact that patriarchy, as a relatively autonomous political process (command relationships wherein maleness serves as a necessary condition for dominance within the site of social relationships), is no less important in the early capitalist institutions of settler society than it was in the rural farming communities. The market does not necessitate the existence of patriarchy, nor does market exchange preclude patriarchy. Again, one needs to do the analytical work of showing how patriarchy and the market can condition each other's existence in certain circumstances and in other circumstances pose problems for each other. One would need to do exactly the same thing in making sense of the relationship between patriarchy and self-employment. And, in addition, in exploring the social processes prevalent in rural settler communities, one would need to do a careful analysis of the various economic, political, and cultural processes participated in by members of those communities, including various class processes occurring within the nuclear and extended families. It is not sufficient to posit the existence of patriarchy or subsistence and then proceed from there.