2. Because of falling transport costs, the American West after the1860s grew rapidly into major exporter of wheat and cattle to European markets. From 1866 to 1870, just 4 years, the quantity of exports of all kinds from the American West DOUBLED.

3. As American wheat, especially, flooded into European markets, the prices of wheat grown by British, French, and other European farmers tumbled, setting of a great agrarian depression in the 1880s and 1890s. These were hard times for farmers. Some were forced out of business; others adapted to the increasing international competition by converting from arable farming (cereal grains) to stock raising and dairy farming; and the vast majority saw their incomes fall. In Britain, the government continued with a policy of laissez-faire, the key principal of liberal economic policy, and let farmers deal with the crisis as best they good. In France, pressure from farmers eventually convinced the government to pass protective tariffs on imports of American wheat and other products.

4. Falling prices in wheat and cattle, while they hurt farming interests, were a boon to urban working class families, for as their wages remained rather stable or increased slightly, the cost of food to feed their families dropped. In short, their real incomes (purchasing power) increased. This rise in real incomes was boosted also by the decline in the cost of mass-manufactured goods such as clothing.

5. This great depression of the 1880s and 1890s was arguably the first crisis of globalization. It is interesting to reflect on this crisis and those of globalization today. Consider, for example, how farmers in African and other parts of the developing world have been affected in recent years by artificial downward pressure on agrarian products due to large subsidies paid to farmers in the United States, Europe, and Japan.