The United States has generally followed four tenets of economic policy in the twentieth century: laissez faire with minimal interventions, frequently, uncoordinated intervention in a mostly free market, systematic state guidance of private decision-making, and thorough state management and decision-making for the whole economy. In 1798, there was the first Congressional tariff act regarding imported foreign goods. In 1828, there was a protectionist tariff which was indicative of the US’s outlook and opinion on foreign trades and goods. This was directly in contradiction of the modern belief of free trade, as the US was relatively and consistently protectionist in the nineteenth century. It was also during this period of time that Henry Clay introduced the first thoroughgoing program for economic development, or the American System – “cherishing the foreign market, creating a home market… giving further scope to the consumption of the produce of the American industry… counteracting the protectionist policy of foreigners and withdraw the support…to their industry, and stimulate that of our own country”. Essentially, he was speaking about import substitution – this was very nationalist. This was opposed during and before the civil war.
Additionally, in 1870s, there were significant federal aid given to railroads to stimulate their growth. Additionally, cities and states gave aid to banks, canals, and other infrastructure – this was influenced by the emphasis of a nationalist economy.
The government also had a role in promoting businesses in America, specifically big businesses. With the second industrial revolution, manufacturing entities were more people-oriented and demanded structured management. This introduce complications about how workers were treated, which the government had to address. This was seen again later on in the 1900s, especially the great