The world’s industrialization began in the 1760s with the British Industrial Revolution, marked by James Watt’s invention of the steam engine, which replaced manual labor and greatly increased productivity. The use of steam engines gradually spread to Europe and North America. By the 1790s, the United States had begun its own industrial revolution. By the 1860s, after 70 years of development, the U.S. had fully entered the steam-powered industrial era, establishing its own machinery-based industrial system.

In the early 19th century, the U.S. was still primarily an agricultural country, much like China under the Qing Dynasty at the time. Outside agriculture, industry consisted mainly of small workshops and household manufacturing, such as shoemaking and weaving. The U.S. industrialization really accelerated after the War of 1812, closely following Britain. Meanwhile, China remained largely self-sufficient and agrarian, and only the Opium War of the 1840s began to awaken industrial awareness.

Like Britain, the American Industrial Revolution began with the cotton textile industry. By the 1830s, manufacturing grew rapidly, especially in New England’s textile mills. By the 1840s, Northern industry took off, driven by railroad construction and heavy industry. By 1860, the U.S. had become the world’s second-largest manufacturing nation, second only to Britain.

The second phase of industrialization, beginning in the 1870s, is characterized by electricity, electric motors, and internal combustion engines—the electric age. While Britain had led in the steam era, the U.S. led in the electric age.

This era was also the Golden Age of American inventors, producing numerous inventions and patents. The most famous was Thomas Edison, the “Wizard of Menlo Park,” who held over 1,000 patents and had a profound influence on U.S. industrialization.

After the Civil War, American inventors created breakthroughs across many sectors: in agriculture, cotton gin powered by water, mechanical reaper, gasoline tractors; in mining, air compressors, oil refining technology; in communication and logistics, telegraph technology, automated loading and unloading equipment, refrigeration; in manufacturing, metallurgy, electric motors, internal combustion engines; and in daily life, sewing machines, flour mills, electric irons, telephones, electric lights, vacuum cleaners.

These inventions greatly increased productivity and changed production conditions, forming a modern industrial base including food processing, textiles, steel, electricity, and machinery. Electricity was especially transformative, replacing steam power and revolutionizing daily life.

Between 1860 and 1900, U.S. wealth grew rapidly in two major waves: 1860–1873 and 1873–1900. Previously, from 1805–1830, shipping and banking were the easiest paths to wealth; 1830–1860, real estate drove growth. During the Civil War, railroads, steel, coal, oil, and finance dominated. Wealth restructuring after the war had regional, cultural, and political dimensions. Many new wealthy still lived modestly and held strong religious beliefs.

From 1840–1850s, U.S. total wealth was $10–20 million; by 1880–1890s, it had grown to $200–300 million. By 1890, GDP was seven times that of 1840. Population increased fourfold, the U.S. built the largest railroad network in the world, and technological innovation surpassed Britain and Germany. By 1900, the U.S. became the world’s leading industrial power.

Wealth distribution was uneven: by 1900, there were over 4,500 millionaires, compared to just 10 in 1800. Farmers on the Great Plains had incomes lower than in the 1850s; skilled workers saw slight gains.

1873 marked a turning point. The Transcontinental Railroad was completed in 1869, connecting North America’s coasts. Four years later, railroads became overbuilt, leading to the Panic of 1873–1874, ending the North’s economic boom. Railroad stock prices dropped nearly 50% compared to the September 1873 peak. The economy remained depressed for six years.

Between 1860–1900, U.S. technology and wealth grew rapidly. Steel and oil industries drove manufacturing output from $1.9 billion to $11 billion. By the 1880s, Edison’s inventions began to be applied in factories. By 1900, the U.S. had 190,000 miles of railroad, with over $10 billion invested, generating $1.5 billion annual profit.