Chapter Content
Okay, so, let's talk about, uh, manufacturing. This whole idea of how things get made, right?
So, you know, there's this quote from Andrew Carnegie, about how the best way to stay on top is to, you know, sell finished stuff that needs a ton of materials. Makes sense, right? And this whole idea of a company as, like, a machine? It kinda shaped how manufacturing grew from, you know, the start of the Industrial Revolution all the way to the mid-20th century. Even though it's, like, less relevant today, its influence is still pretty huge.
There was this economic historian, Sir John Clapham, and he was kind of, you know, giving Adam Smith a hard time, saying he should have, like, actually gone and visited the Carron Works, you know, where they were making cannons, instead of, uh, focusing on this pin factory that wasn't even really a factory in the modern sense.
Turns out, Smith probably didn't even see a real pin factory. Another Scottish Enlightenment guy, Adam Ferguson, he wrote about the division of labor, and apparently talked about pin factories in his lectures. Smith and Ferguson actually accused each other of, like, stealing the idea! Ferguson said they both got it from a drawing in some French encyclopedia. Apparently, pin-making was a thing in Normandy, France. Anyway, this whole thing kinda messed up their friendship for a while. Awkward.
But not everyone was thrilled with the Industrial Revolution, you know? Robert Burns, the famous Scottish poet, he actually went to the Carron Works, and he wasn't impressed at all. He was basically saying, like, "I didn't come here to learn anything, just in case I go to hell, so I won't be surprised." Heh.
Someone else visiting around the same time, when Adam Smith's "Wealth of Nations" came out, said the Carron Works had like, 1,200 workers, which they thought made it the biggest industrial site in Europe, maybe even the world! David Hume, he thought it was even more. He wrote to Smith during a recession, saying the Carron Company was struggling and that it employed, like, ten thousand people, which was a huge deal. He was all like, "Hey Smith, does this mess with your theories?" Hume was probably exaggerating a bit, though. Ten thousand seems like a lot.
Like, Smith didn't really get it, but Clapham did, that ironworks and textile mills were, you know, the big things of the Industrial Revolution. The Carron Works used those new iron-smelting methods from Coalbrookdale, and Richard Arkwright's mill used steam and water power with cool textile machines. Then, you had Sir Robert Peel, who, at the beginning of the 1800s, was probably one of the biggest employers in England, with all those textile mills in Lancashire.
And get this, Arkwright's spinning frame? Invented by a John Kay...but not the John Kay who invented the spinning jenny, or the John Kay who drew that caricature of Adam Smith! And none of them are related to me, by the way. Haha. None of these Kays really made much money off their inventions, even though they tried to get patents.
Arkwright's mill and Coalbrookdale, those processes were easy to copy. That's why those John Kays didn't get rich. Trade secrets were another way to try and stop the competition, which could be why Burns wasn't allowed into the Carron Works. They didn't want him to see how it all worked. But mostly, these early industrialists weren't very good at keeping their secrets from competitors, either at home or in America and Germany.
Then you had Francis Cabot Lowell, this, like, super-elite Boston guy. He went to Britain to, basically, steal their industrial secrets. They weren't allowed to export textile machinery, so Lowell memorized the designs! When he got back to Massachusetts, he started a textile mill in Waltham. After he died, his company built another, bigger mill. The product was all the same, the process was simple and repetitive, which was perfect for Taylorism, you know, scientific management. These businesses needed to be in big factories to make it easier to divide the work, to specialize, and to get the benefits of using water-powered and steam-powered engines.
Railways, after 1830, that was the next big thing. These businesses needed, like, super-organized and disciplined operations. They even copied the military's uniforms and ranks. The train only works when everything's on time, right? And time itself changed because of business. Towns used to have their own local time, but then they all switched to "railway time," and the British Empire made Greenwich Mean Time the world standard. These transport improvements let industries centralize the production of things like beer and meat, which used to be made by local craftsmen. It wasn't the local brewer and butcher that people would talk about anymore, but guys like Edward Guinness and Philip Armour.
There's this quote from Adam Smith: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." He never got married and lived with his mom who, you know, made sure he had dinner every night. So, he might not have talked to the butcher about his humanity. His mom probably just put the dinner on the table!
This repetitive manufacturing idea led to the assembly line. Henry Ford, and this engineer William Knudsen, they changed the auto industry with this. In 1909, Ford made 10,000 Model Ts. Six years later, it was a quarter of a million, and the price was way down. After World War I, the price went even lower, and they sold over a million cars a year!
If you have a repetitive manufacturing process, most of the uncertainties can be figured out with math. There was this guy "Student," that's W. J. Gossett, he joined the Guinness brewery and did a bunch of stats work. He helped them build their first brewery in England. Then you had Motorola and GE using stuff like "Six Sigma" to mean they had almost no defects in their manufacturing. These math models were used in finance too, but finance is way different than making stuff, as GE found out later.
Ford's River Rouge complex was the biggest industrial place in the world when it was done in 1928. It was built as a car factory, with all the special equipment owned by the company. It was huge, over 2,000 acres! By the middle of the 20th century, Ford and General Motors were, like, the classic big manufacturing companies.
Now, let's talk about capital. The Carron ironworks was built by some business guys who put up the money for the works and the equipment. They also paid for the materials. So, businesses needed money for the buildings and equipment, you know, fixed capital, and money for the materials, working capital. Talented engineers who didn't have money might partner up with rich people who had money but not as many ideas.
Marx thought that the rise of capitalism was tied to the end of European feudalism. He called the taking of common land "primitive accumulation," which Smith had also talked about as something that had to happen before the division of labor. Smith thought it was about being thrifty, but Marx thought it was more like theft. Probably somewhere in between.
So, the Carron Works was a typical capitalist business from the Industrial Revolution. The founders' wealth came from land, and they made more money with their business. They owned the plant, and they controlled how it was run. It was all about personal wealth, owning the buildings and machines, and having the power to manage everything.
Marx thought this whole system would fail. He thought the capitalists would take all the value made by the workers and keep it for themselves. He thought the workers would take over the factories and control everything themselves.
Communism in the Soviet Union, what they called "really existing socialism," was kind of similar, even after they took the wealth from the rich. Instead of the rich, you had these party bosses. The government controlled by these bosses decided how income and wealth were distributed, owned the factories, and told businesses what to do.
Marx thought that social roles and political power were super important, so the workers had to organize to get what they deserved. Economists thought that you could switch between using labor and capital, and that determined how much income went to each. In the Taylorist view, capitalists watched the workers carefully to get the most out of them. So, both politics and economics mattered. It's kind of the same today, even though how it all works is different.
And about labour, as the common land was taken over, these peasants became workers. The guys at the Carron Works came from the Scottish fields, driven by population and looking for wages in the new factories. They had nothing to offer but their work, and they didn't have unions, so they worked for barely enough to live on. Someone visiting Scotland at the time said that the Carron Works was great because it taught the people how to work.
As things got more industrialized, they moved to the cities. The leaders of the Industrial Revolution built factories and also built communities, housing, and other stuff for their workers. Some went further. After a cholera outbreak, Sir Titus Salt, this textile guy, spent his money on his employees' well-being. Other guys like William Lever and George Cadbury built model villages for their workers, like Port Sunlight and Bournville. Lowell even built a town for his workers in Massachusetts.
But these factory jobs in steelworks and textile mills were, you know, boring. They required physical work, not brain work. Workers weren't trained much and could be moved around between jobs. It was the same in the auto plants in Detroit. Labour was just seen as a thing, like iron ore or coal.
At Ford's River Rouge plant, the language of capitalism seemed to fit just as well as it had for the Carron ironworks. Industries needed a lot of money, and it was expensive to build a plant. Those who had the money controlled everything. The capitalist might be nice, but you were still at their mercy if you needed the job.
These days, there's no production at Saltaire or Port Sunlight. Only Cadbury still makes stuff at Bournville. After World War II, the mills on the Charles River closed. Lowell became the headquarters of Wang Laboratories for a bit, but then it failed. Now, the town is an industrial heritage site, a museum of the Industrial Revolution.
Labour Fights Back, right? Lowell had one of the first strikes when the workers got their wages cut. They "turned out." But it didn't work. It would be a while before unions became powerful.
As the rich got richer, the fight between capital and labor that Marx talked about became real, partly because of his ideas. Unions became legal in Britain, and courts in America weren't as quick to side with employers. But the strikes against the Pullman railroad and at Carnegie's Homestead Works failed.
Then, in 1911, there was a fire at the Triangle Shirtwaist Company in New York. The doors were locked to prevent theft, and 146 people, mostly young women, died. The owners were charged with manslaughter but were found not guilty. The accident led to laws to control working conditions, which had started earlier with the UK Factories Act and the Massachusetts Factory Act.
The growth of unions gave labor more power to ask for better pay and conditions, and the right to vote gave workers political power. In the British election, the Liberal Party won big. The Labour Representation Committee, which had only held two seats, won 29 and became the Labour Party. They changed the Taff Vale judgment right away. Less than twenty years later, the Labour Party would be in government. The workforce was getting smarter, learning skills on the job. After World War I, socialist parties became important in Europe. In Russia, the Bolsheviks took over and started the first government that called itself Marxist.
Assembly lines are still used to make cars, but if Henry Ford saw a Toyota or Tesla plant, he'd wonder where everyone was. In 1962, General Motors sold over half the cars in America, and Ford had 27 percent of the market. But that was the best it got for them. The 1960s were when this model of business based on the assembly line peaked and started to decline.
The biggest assembly lines today make airplanes. The Boeing factory in Everett, Washington, is the biggest building in the world. But the land it's on is smaller than Ford's River Rouge complex.
The Airbus assembly place in Toulouse is the biggest building in Europe. Modern airplanes are super complicated to mass-produce. It's a long way from the pin factory and the Carron Works to the production lines of Boeing and Airbus, you know?