Jefferson's ideal economy was one based on agrarianism, or the self-supporting farmer. However, by the beginning of the 19th century, his worldview was eclipsed as Hamilton's ideas took hold in an increasingly industrialized economy, particularly in the North. Hamilton's ideas, referred to as the "American System," involved three parts--a high tariff to protect domestic industry, a national banking system, and government subsidies for building roads and canals (and later railroads). Part of the reason that people supported the American System was that the War of 1812 had shown the nation the necessity of constructing good roads and canals for the purposes of self-defense and economic nationalism. In order to best Great Britain, America's rival in the war, it was necessary to embark on a plan to improve American industry. Therefore, by the early 19th century, the economy, particularly in the North, began to favor commerce and industrialization over agrarianism.
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