Populism and the First Wave of Globalization: Evidence from the 1892 US Presidential Election

The reasons for the famous agrarian unrest in the United States between 1870 and 1900 remain debated. We contribute to this debate with a simple economic argument. Falling transportation costs allowed for the extension of the frontier, where farmers received the world price minus the transaction costs involved in getting their produce to market. Many considered these costs to be unfairly large, owing to the perceived market power of rail firms and the discriminatory practices of middlemen, with farmers closer to the frontier most affected. Consistent with this, we find that the protest, as measured by vote shares for the Populists in the 1892 Presidential elections, is negatively related to wheat prices, and the transportation costs to the international export hubs – New York City and Chicago.