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A Living Wage

Author(s):Glickman, Lawrence B.
Reviewer(s):Schneirov, Richard

H-NET BOOK REVIEW Published by H-SHGAPE (April, 1998)

Lawrence B. Glickman. A Living Wage: American Workers and the Making of Consumer Society .Ithaca and London: Cornell University Press, 1997. xvi + 220 pp. Notes, bibliographical references, index $35.00 (cloth). ISBN 0-8014-3357-6.

Reviewed for H-Net by

Richard Schneirov, Indiana State University

This book has enormous implications for historians of the Gilded Age and Progressive Era. To understand precisely how first requires a capsule summary of nineteenth century labor historiography. From the 1960s through the early 1980s, U.S. labor historians sought to write a history of the making of the American working class much in the manner done so masterfully for the English working class by Edward P. Thompson. New labor historians located a nascent socialist critique of the wage labor system in a working class version of artisan republicanism grounded in the classical labor theory of value. Most of the new generation of labor historians found that the career of labor republicanism came to a halt in the late nineteenth century with the defeat of the Knights of Labor and rise of the pure and simple or business unionism, commonly associated with the American Federation of Labor. Other historians pushed back the “fall” of labor into the twentieth century, but in most cases a working class that was “made” throughout most of the nineteenth century was “unmade” at some point in the twentieth.[1]

For nonlabor historians of the Gilded Age and Progressive Era, the conclusions of the new labor historians tended to reinforce a much older view of American history as exceptionalist–that is, lacking sharp class divisions and a viable socialist or labor political presence as existed in Europe and Britain. In the newest version of the old story, exceptionalism was not inherent in American history but emerged historically out of working class failure.

A Living Wage is so important because it provides us with some of the conceptual tools required for resolving labor history’s impasse. Glickman grounds the fin de siecle crisis, whose resolution created the foundation for modern America, in the dissolution of a producers’ understanding of how value was constructed. With the sundering of the labor theory of value from the calculus determining prices and wages–the premise for neoclassical economic theory–the producers’ critique of the wage labor system lost its intellectual and ultimately its cultural force. One outcome which Glickman does not discuss is the marginalist revolution, which facilitated the acceptance of corporate administered prices and wages. Glickman’s book tells of a different outcome, one that emerged out of the late nineteenth century labor movement. Accepting the modern premise that wages no longer were determined by the cost of labor, trade union activists, inspired by the writings of eight-hour theorist Ira Steward, began to promote a needs theory of value, according to which human needs would have priority over market forces in determining wages. In the terms of the day, labor advocated a “living wage” whose value would be determined by the ever-expanding needs and wants of workers in their capacity as consumers. As Samuel Gompers’ associate Frank Foster put it, “It is not the value of what is produced which determines the wages rate, but the nature and degree of the wants of the workers” (p. 70). Whether labor leaders knew it or not, the new regulative principle was quite in accord with the thinking of Marx whose maxim of socialism was “from each according to his ability, to each according to his needs.”

The significance of this development has been largely ignored by labor historians because the doctrine of the living wage and its corollary, the need for a constantly rising (American) standard of living, necessarily entailed the acceptance of what was then called “wage slavery.” Many historians have viewed the abandonment of the goal of self-employment through producers’ cooperation and the acceptance of a consumerist consciousness as equivalent to a passive and narrowly apolitical acquiescence in the inevitability of capitalism. But, as Glickman shows, the living wage doctrine was actively constructed by workers themselves, partly out of the producers’ ideal of a moral economy as an alternative to the commodification of toil, but also out of an acceptance of those very relations. In Glickman’s view acceptance, rather than being equivalent to acquiescence, was the necessary condition for actively reshaping and regulating market relations according to an ethical standard external to those relations, viz. workers’ self-perceived needs.

Glickman traces the development of living wage thinking from its first flowering in the eight-hour movement of the late 1880s to the rise of the 1890s trade union label movement long associated with business unionism. Inherent in both movements, according to Glickman, was the vision of a “social economy” that abandoned the idea that wages should return to workers the full fruits of their labor. Though much of the old producerist vocabulary continued to frame labor leaders’ thinking, Glickman demonstrates that trade unionists tried to reshape and control market relations by making them subject to a socially determined standard of living emerging from the sphere of consumption and collective bargaining.

By the early twentieth century, reformers outside the ranks of labor picked up the living wage ideal and turned it into a Progressive reform, known as the minimum wage. Because the minimum wage was defined as a subsistence wage fit only for those, like immigrants and women, working below the American standard, AFLers pulled back from the movement. Yet, even the minimum wage challenged the prevailing legal doctrine of freedom of contract and the still powerful producerist ethical ideal that wages should be based on an equivalent of services rendered. The idea that wages should be based on consumers’ proliferating needs and wants eventually came into its own during the New Deal. In their understanding of the 1930s depression as due to underconsumption, New Dealers and progressive businessmen endorsed the idea that rising purchasing power, which in part depended on rising wages, was necessary for the successful functioning of a mass production economy. The 1938 Fair Labor Standards Act establishing a minimum wage is for Glickman a monument to the triumph of a nonproducerist and nonmarket criterion of value determination in regard to wages.

The implications of Glickman’s book are at least several. It strongly suggests that historians abandon a time-honored view of pure and simple trade unionism as “conservative” and circumscribed by “bread and butter” concerns. To the contrary, Glickman provides us with a way of understanding this consciousness as an integral part of an ongoing class formation that occurred simultaneously with an accommodation to wage labor. Moreover, by demonstrating that socialism could have both a consumerist and producerist foundation, this book furthers the understanding that socialist principles and relations were intermixed in twentieth century corporate capitalist society and in modern liberalism.[2] Finally, it provides a way in which a re-thought labor history can incorporate the history of women workers and feminists whose agency was often focused in the sphere of consumption rather than production.

The book does have several limitations that should be mentioned. First, by promiscuously mixing quotations from the 1880s with those from the early twentieth century, Glickman misses the opportunity to suggest in specific ways how and why this new consciousness developed historically. In this regard, some labor historians will be disappointed that the book does not directly confront the prevalent argument that the living wage was gained only by abandoning skilled workers’ control over the workplace. Second, there is a basic ambivalence in Glickman’s treatment of consumption. At some points, he argues that organized workers began to view the sphere of consumption as displacing the sphere of production. At other points, he suggests that workers merely understood that the two spheres were interrelated and of roughly equal importance in determining class identity, a more defensible position. Finally, there is an implication in the book that the labor movement was the sole or prime source in defining an American standard of living. This ignores the long nineteenth century history of Whig and Republican sponsored protective tariff proposals that party spokesmen argued were necessary to protect high American wages.

These qualms should not detract unduly from a provocative and important monograph. Glickman’s book is concise (162 pages of text), well written, and his argument is easy to follow, making it accessible to undergraduates as well as graduate students. It promises to become a major text for the next round of rethinking labor history in the Gilded Age and Progressive Era.

Notes

[1]. For example, see Kim Voss, The Making of American Exceptionalism: The Knights of Labor and Class Formation in the Nineteenth Century (Cornell University Press, 1993); for a survey see Larry G. Gerber, “Shifting Perspectives on American Exceptionalism: Recent Literature on American Labor Relations and Labor Politics,” Journal of American Studies, 31 (1997): 253-74.

[2]. Martin J. Sklar, The United States as a Developing Country: Studies in U.S. History in the Progressive Era and the 1920s (Cambridge, 1992); James Livingston, Pragmatism and the Political Economy of Cultural Revolution, 1850-1910 (University of North Carolina Press, 1994); and Richard Schneirov, Labor and Urban Politics: Class Conflict and the Origins of Modern Liberalism in Chicago, 1864-1897 (University of Illinois Press, 1998).

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Subject(s):Labor and Employment History
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII

Endless Novelty: Specialty Production and American Industrialization, 1865-1925

Author(s):Scranton, Philip
Reviewer(s):Khan, B. Zorina

EH.NET BOOK REVIEW

Published by EH.NET (June 1998)

Philip Scranton. Endless Novelty: Specialty Production and American Industrialization, 1865-1925. Princeton: Princeton University Press, 1997. xiv + 415 pp. $39.50 (cloth), ISBN 0-691-02973-3.

Reviewed by B. Zorina Khan, Dept of Economics, Bowdoin College.

Philip Scranton’s past research has illuminated our understanding of “proprietary capitalism,” or a mode of production based on small artisanal shops and domestic manufactures. His current book explores the history of the Second Industrial Revolution from the perspective of specialty production, and is to be recommended as essential reading for anyone who wishes to fully understand the progress of American manufacturing after the Civil War. It is a densely structured, exhaustively detailed discussion of the role of custom and batch production in American industrialization in the pre-World War II period. Exhibitions such as the Centennial Exhibition in 1876 and the World’s Columbian Exposition in 1893 served to showcase these examples of American creativity and excellence in manufacturing. Scranton is persuasive in his view that useful business history requires the analysis of the enormously complex network of transactions that linked technology, marketing and employment, and that this objective is best achieved through the study of businesses in the “putative periphery”.

He argues that, although many consumers clearly value differentiation, uniqueness and quality, it is still necessary to emphasize the role of “Endless Novelty” for the benefit of students of industrial organization. American dominance in manufacturing is typically traced from the factories of Lowell, through the assembly lines of Ford, to the boardrooms of giant corporations that are held to be dependent on the mass production of standardized products. In the process, the implicit assumption is made that organizations evolve linearly from small scale, inefficient modes of production, to large productive enterprises that benefit from economies of scale and scope. Scranton argues that the relentless glare of the spotlight on the rise of the modern corporation has blinded researchers to the role of specialty manufacturing. Part of their myopia is, he charitably concedes, due to the lack of systematic data and tidy modes of analysis that economists weight so heavily when deciding which topics are worthy of analysis. Scranton suggests that this area of industrial organization is more suited to the talents of historians, with their reverence for description and attention to details. This contention may be true, and one cannot refrain from admiration at the creative use of biography as metaphor, the masterly weaving of myriads of diverse examples to illustrate the main theme, the apt quote from a file extracted from a remote and hitherto unexplored archive. At the same time, this work likewise illustrates the danger of information overload that may arise in the absence of a cohesive theoretical superstructure of the sort that economic analysis provides.

Scranton does provide a coherent conceptual framework, by distinguishing between custom, batch, bulk and mass production methods. Custom and batch modes were flexible and directed towards changeable market demand; bulk and mass production arguably involved more routinized methods in stable markets. Scranton analyzes regional differences in the strategies and outcomes of specialty firms and contends that their importance increased over time, especially in the older trade centers of the Eastern Seaboard. The book also includes 23 tables drawn primarily from the manufacturing censuses that attempt to distinguish between classifications of specialty or mass production. But these data are not entirely informative because, as the author points out, his categories relate more to approaches than to specific institutions or sectors; for instance, specialty and mass production could be combined in a single firm. He contends that it is still possible to identify sectors that were dominated by one or other approach, such as cigars, kitchen accessories, sewing machines and cheap watches (bulk and mass production), or carpets, leather goods, tools, hats and women’s clothing (specialty). Historians of individual industries and firms are certain to contest these divisions. Because census divisions don’t match Scranton’s conceptual boundaries, the tables are of limited utility in assessing the quantitative importance of specialty production relative to other sectors of the economy, and how this changed over time. Nevertheless, one can hardly fail to be impressed with an account that ranges over ninety three industries, and yields insights into the operations, functions, and characteristics of lace and carpet weavers, furniture-makers and jewelers; as well as assessing the activities of metalworkers in Connecticut, apparel designers in New York City, and fine chemicals in Philadelphia.

The book also includes numerous individual case studies, such as an account of George Corliss’s career in the postbellum custom and machinery trades. Corliss, a skilled machine designer, used family connections to finance and market his inventions and patents. Many transactions depended on mutual trust between suppliers and clients. As a sole proprietor, Corliss did not delegate authority, and was a demanding but fair employer, who was able to ensure the quality and precision that specialty machine building required. Through the experiences of small machine-shop owners who created networks that intersected both the social and economic spheres, Scranton convincingly delineates the advantages of small scale production. Specialists adopted diverse modes of operation and, through innovative pricing and product differentiation, achieved both profitability and efficiency in input and output markets. For instance, tool builders in Cincinnati, although they accounted for only a small fraction of national output, provided a highly reputable product in a trade where reliability was paramount, and were thus able to extract higher returns than their size might warrant. Still, specialty producers were not averse to fixing prices or acting collectively to increase their influence, so their profitability does not necessarily signal efficiency.

Scranton finds that even firms which entered the mass production market retained their specialist capabilities. Thus, mass production has never been fully achieved, for firms like Armour and American Tobacco employed specialist inputs. Rather than merely peripheral historical artifacts, the latter were critical to the process of industrialization. In the modern economy standardization may even be decreasing in relative importance as the business world becomes more complex and changeable. Making to order and eschewing large inventories, these firms are responsive to market demands and technological change. Technological change itself enhances the ability to tailor outcomes to individual tastes, such as software that can generate a wide variety of individualized musical compilations that can be recorded to disks. Now as much as then, American dominance in manufacturing depends on the individualism and creativity which Scranton’s impressive book celebrates.

(Scranton is a professor in the School of History, Technology, and Society at the Georgia Institute of Technology.)

B. Zorina Khan Department of Economics Bowdoin College.

Professor Khan’s research is primarily on patenting in the antebellum U.S. and Britain. She has also written articles on married women’s property rights, patent litigation, civil litigation in Australia, and women inventors. She is currently working on a project relating to patent and antitrust conflicts. At Bowdoin she teaches courses in American Economic History, Law and Economics, and Financial Economics.

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Subject(s):Business History
Geographic Area(s):North America
Time Period(s):19th Century

Records of American Business

Author(s):O'Toole, James M.
Reviewer(s):Jimerson, Randall C.

EH.NET BOOK REVIEW

Published by H-Business@eh.net and EH.Net (May 1998)

James M. O’Toole, ed. The Records of American Business. Chicago: Society of American Archivists, 1997. xvii + 396 pp. Bibliographical references and index. $39.95 (cloth), ISBN 0-931828-45-7.

Reviewed for H-Business and EH.Net by Randall C. Jimerson , Western Washington University

The Challenges of Documenting Modern American Business

The challenges of documenting American business have led archivists to develop techniques for selection, appraisal, and use of a wide variety of records that provide essential information for depicting aspects of business history and corporate operations. Often working closely with business historians and corporate leaders, archivists have attempted to mine the rich resources worthy of preservation from vast mountains of modern business records. In order to understand past and present approaches taken by archivists to preserve documentation important both to company officials and to outside researchers, this book is essential reading. The Records of American Business provides a variety of perspectives on the current state of archival practice, both for in-house corporate archives and for repositories that collect records relating to American business and enterprise.

This volume is a tangible result of the Records of American Business Project (RAB), sponsored by the Minnesota Historical Society and the Hagley Museum and Library and funded in part by the National Endowment for the Humanities. This project brought together the two collecting repositories with the largest holdings of business records in North America in a joint effort “to refine and redefine the appraisal and use of corporate records” (p. vi). Many of the essays in this volume were first presented at the RAB symposium in April, 1996. By that time, the project had broadened its scope to include many of the most significant institutions and individuals actively engaged with American business records, including corporate archivists, archivists from universities and historical societies, and independent consultants. The variety of perspectives offered in this volume is impressive. The diversity of views indicates that there is no consensus concerning a particular approach to solving archival conundrums, but rather a healthy discourse representing different viewpoints.

The Records of American Business begins with a foreword by the editor, James M. O’Toole, who outlines some of the major themes that emerge from this collection of fourteen essays. One of the most basic issues is placement: should business firms establish in-house archival programs, or place their records at an external research institution? Other issues include the complex process of appraisal, by which archivists determine the long-term value of records. Changing technology has had a significant impact on archival operations, particularly in business firms, which often have confronted new technologies, such as the computer, before other institutions. Finally, O’Toole makes a strong case for the necessity of business archives to redefine their clientele and to build alliances of all kinds with other groups. “Only if alliance building comes to be seen as part of the core of archival services–equal in importance to appraisal, arrangement, description, preservation activities, and all the other familiar archival tasks–will archivists be able to meet the multifarious challenges of modern records,” he concludes (p. xvi). O’Toole insists that these essays have a wider applicability than American business records, since all archivists face similar challenges and problems. This is true, but in straining to make the point he overreaches, advising the reader to substitute the word “academic” or “religious” or whatever term applies to your own setting whenever the word “business” appears (p. vii). I tried this; it simply doesn’t work all the time. Many of the issues presented here apply only, or principally, to a business context. After all, that is the presumed rationale for a volume devoted to business records. That said, it is true that many of these techniques can be adapted to fit other types of institutional settings, and the volume will be useful for all archivists, and it should find a wide audience.

In his introduction, “Business and American Culture: The Archival Challenge,” Francis X. Blouin, Jr., director of the Bentley Historical Library at the University of Michigan, provides the context for the essays that follow. Quoting Calvin Coolidge’s famous dictum, “The chief business of the American people is business,” Blouin writes that, despite the enormous impact of business institutions on American life, relatively little is known about them. Blouin blames this in part on trends in academic history, which has not focused much attention on business institutions, and in part on the fact that, compared to political, religious and educational institutions, “there is very little documentation with which to work” (p. 1). Blouin discusses the narrow definition of business, as “a set of organizations that have structure and purpose focused on the delivery of goods and services,” and the broader sense of the term, as “an institution that defines culture and values” (p. 3). Both senses should be considered in reading the diverse articles in this volume, he says. Blouin then provides a succinct overview and interpretation of the essays to follow, showing how they relate to three major challenges facing archivists dealing with business records: appraisal, use, and technical issues. This volume presents a variety of perspectives, Blouin states, and this pluralistic approach appears necessary to meet the needs of a diverse group of users.

The fundamental divergence represented here is between corporations that establish their own internal archives and “external” repositories, such as universities, historical societies, and research libraries, which collect records from many different business firms. Although archivists generally encourage businesses to maintain their own archives, over the past decade there has been “a downward trend in the creation of business archives programs in corporations” (p. 351), and several major corporations have closed well-established and apparently successful archives programs, according to Winthrop Group consultant Karen Benedict. Benedict, formerly corporate archivist for Nationwide Insurance, provides an analysis of the choices facing company officials in deciding between maintaining an in-house archives program or placing company records in an outside repository. Although arguing strongly for the first option, Benedict acknowledges that many companies will prefer contracting out for archival services. This, at least, is preferable to destroying caches of significant historical documentation, which is all too common among corporations worried about disclosure of sensitive information.

Many of the reasons for this concern for corporate privacy are implicit in the essay by Philip F. Mooney of Coca-Cola, who is curiously the only contributor actively employed as an in-house business archivist. Mooney contrasts archival myths about business archives with the corporate reality he sees daily. He contends that corporations are “a historic by their very nature” (p. 60), and that in-house “archival professionals need to develop more precise tools to measure bottom-line contributions” (p. 61) and must “constantly seek new opportunities to market [the archives] resources and service to its constituents” (p. 63). Although a few business leaders might appreciate the value of history for institutional memory, decision-making or maintaining corporate culture, Mooney counters that they are rare exceptions. Corporate archivists will have a difficult time justifying their contributions to the financial well-being of the company.

Despite these difficulties, Marcy Golstein depicts in-house business archives moving from a narrow traditional focus to a more flexible approach emphasizing a variety of business uses for archival records. A former archivist for AT&T, now working as a consultant, Goldstein emphasizes corporate archives as “the repository of the corporate memory” (p. 41) and as “knowledge management centers and not historical warehouses” (p. 54). Such arguments sound persuasive, but the declining numbers of corporate archives suggest that fewer business executives are convinced that the costs and potential liabilities of in-house archives justify their continuation.

To demonstrate that some corporate executives have championed the establishment and development of in-house archives, the volume presents brief excerpts from oral history interviews with three such business leaders. These statements repeat some of the traditional arguments in support of in-house archives, but there is not much context or background with which to form a clear perspective on their comments. It would have been more interesting to hear comments from different viewpoints, such as an executive who opposes funding for archives or one who was converted from a skeptic to a true believer. This would help us understand the challenges faced by corporate archivists.

The other side of the debate, comprising most of the essays in this volume, is framed by archivists who do not have direct ties to in-house archives. While corporate archivists seem to be waging a battle for survival and attempting to adapt to ever-changing corporate climates, several major archival institutions have been developing significant research collections of business records. Many of these collections result from business closings or corporate takeovers, with surviving records often being spotty or coming to a repository without opportunity for the archivist to determine in advance which records should be saved. The challenges faced in such circumstances involve selection and acquisition, appraisal, and filling documentary gaps. These are the themes explored in the remaining essays.

The “complex relationship between historical scholarship and the keeping of archival records” is the theme of the lead essay, by Michael Nash of the Hagley Museum and Library. Writing more for archivists than for business historians, Nash provides an historiographic survey from the founding of the Business Historical Society in 1925 to recent studies that focus on trends in American economic, political, and social life, and the impact of gender, race, and workers on business. From a citation study of more than 67,000 footnotes in fifty major business history monographs and five leading journals, Nash concludes that “over time, there appears to be a declining reliance on archival sources” from business firms (p. 35). Nash offers only a few observations based on this finding, principally that archivists should make a more systematic effort to collect records from industry trade associations, lobbying groups, political action committees, and other entities that “can potentially provide the sources that scholars are seeking in order to document the relationship between business, culture, politics, and society” (p. 35). Unfortunately, this recommendation is the final sentence of his essay, so there are no specific suggestions for how this can be accomplished.

The most ambitious effort to answer the questions raised by Nash comes from Mark A. Greene and Todd J. Daniels-Howell, both archivists at Minnesota Historical Society (MHS), who first proposed the RAB Project. Their essay presents a lengthy case study of the MHS effort to develop a pragmatic approach to selecting modern business records for archival preservation. The “Minnesota Method” they developed is based on the assumption that “all archival appraisal is local and subjective” (p. 162), but that, through careful analysis of both records creators and the records themselves, archivists can establish appraisal and selection criteria that are “rational and efficient relative to a specific repository’s goals and resources” (p. 162). The strategy they propose includes: defining a collecting area; analyzing existing collections; determining the documentary universe, including relevant government records, printed and other sources; prioritizing industrial sectors, individual businesses, geographic regions, and time periods from which records will be sought; defining functions performed by businesses and the collecting levels needed to document major functions; connecting documentary levels to priority tiers; and updating this process every three to seven years. They outline priority factors used in making these decisions, documentation levels, and decision points to refine the priority levels. This Minnesota Method combines features of archival approaches to collection analysis, documentation strategy, appraisal, and functional analysis. Complete with eight flow charts, as well as other outlines and charts listing various procedural steps and criteria, the essay presents a detailed explanation of this strategy. Despite the authors’ statement that this “pragmatic method of selection … may seem a modest goal on paper” (p. 206), many archivists would find it a daunting task to adapt the Minnesota Method to their own repositories. The essay’s greatest value, however, is in outlining the complex issues that must be addressed in making appropriate and effective decisions regarding archival selection and acquisition. This is one essay that clearly suggests applicability to other types of historical records beyond the sphere of business.

Whereas Greene and Daniels-Howell focus on documentation for entire industries, Christopher T. Baer examines appraisal of records within a single firm. Baer draws on his extensive experience at the Hagley Museum and Library to explain four parameters that shape his approach to appraisal of business records. Baer’s approach reflects a number of influences, including Alfred D. Chandler’s seminal work and Michael E. Porter’s “Five Forces” of competitive strategy. The four parameters he posits for evaluating business records are function (actions required to achieve elemental purposes), structure (i.e., external structure), strategy (referring to both strategy and tactics), and detail (level of specificity and completeness for a particular record). In explaining the application of such criteria, Baer reviews much of the business management literature of recent decades and provides detailed analysis of factors affecting appraisal of business records. Ultimately, however, he concludes that the parameters he describes are “at best a kind of mental road map” and that the efficacy of appraisal decisions rests “in the archivist’s ability to use them in practice” (p. 120). The archivist is not a scientist searching for abstract truths but “a technologist who must occasionally work in the absence of or in advance of theory and who must use a variety of tools to produce a useful product in response to conflicting and often irreconcilable demands” (p. 121). Baer’s model, not quite as complex as the Minnesota Method, provides a useful starting point for any archivist facing the daunting task of analyzing and appraising voluminous records of a modern business firm. Following a detailed model may not make the work easier, but it should improve the quality and reliability of appraisal decisions.

Compared to the lengthy essays just considered, Bruce Bruemmer’s essay on functional analysis in the appraisal of business records will seem either a welcome relief for harried archivists or a simplistic solution to a complex problem. Bruemmer, archivist of the Charles Babbage Institute at the University of Minnesota, focuses on the documentation needs of individual companies. Borrowing from earlier work by Helen Samuels, Joan Krizack, and others, he applies the concept of functional analysis to business records. This appraisal method concentrates on documenting the most important functions of an organization, rather than its structural hierarchy. Instead of selecting records based on their relationship to the offices that generated them, functional analysis examines the underlying functions performed by the organization as a basis for records appraisal. Particularly as electronic records replace traditional means of communication, archivists must define the documentary needs of the organization at the middle or even the beginning of the records cycle. As Bruemmer argues, “Functional analysis is one of the few tools at the command of archivists to help guide archival practice in the electronic environment because it dictates documentary requirements before records are analyzed” (p. 155). In addition to the proximate goal of ensuring adequate documentation of business, he posits the further goal of strengthening the role of business archivists: “If we rise to the challenge, we may discover that the archive itself has become an essential business function” (p. 158). Although less sweeping in its purview and less complex in its design, functional analysis provides another useful model for documenting modern American business.

As historians well know, the history of business is not told entirely through the records generated by business firms. The forms of “external documentation” that supplement corporate records, according to Timothy L. Ericson, include a broad array of sources created by an individual or agency outside the company. Ericson, archivist at the University of Wisconsin-Milwaukee, examines the types of records that document businesses, including printed materials, newspapers, government records, personal papers of business founders or former employees, photographic and cartographic records, oral history, electronic data bases, and the World Wide Web. In some cases, these external sources may be the only records available for studying certain companies, either because official company records have been lost or destroyed or because of access restrictions placed on such records. In some situations, Ericson contends, such limited documentation might be all that is needed for companies that have limited national or even local impact. In other cases, external documentation may provide “a more appropriate level of information” (p. 319) than detailed records of every action taken within a corporation. This approach will be especially useful for small or defunct businesses, for businesses subject to extensive government regulation, to fill documentary gaps, or when only general or summary information is required.

Several essays in The Records of American Business examine specific types of records that are important for business archives. Richard J. Cox examines the impact of electronic records on corporate archives, emphasizing the internal value of business records as evidence and the role of archivists in protecting intellectual property, transaction security, integrity of data, and privacy. James E. Fogerty makes a strong case for the value of oral history in filling gaps in the documentation of business and in explicating corporate culture. Oral history “allows the creation of documents that cut through the formal record of organization to the internal and dynamic record of everyday operation” (p. 264). Ernest J. Dick, another former corporate archivist now working as a consultant, likewise argues for the importance of sound and visual records in providing a more complete documentation of corporate memory and a clearer understanding of corporate culture.

Most of the essays in this volume address the concerns and needs of archivists, scholars, and corporate officials. An important counterpoint is provided by John A. Fleckner, chief archivist at the National Museum of American History, Smithsonian Institution. Starting from the paradox of the public’s dislike of history as an academic subject despite its fascination with history outside the classroom, Fleckner discusses the popular presentation of business history. Drawing examples from history museums, historical sites, corporate depictions of history, and a variety of popular history publications, Fleckner distinguishes three distinct purposes served by popular history of business–to educate an audience; to contribute to business objectives; and to entertain. He urges archivists to look beyond their traditional audiences for business records–scholars and business executives–and to recognize the broader potential for some business records to become “the grist for journalists, public affairs staff, and other popular writers who unlock the history of business to much wider audiences” (p. 345). Given the public’s fascination with old products and advertisements, for example, and the boundless allure of nostalgia, this may well be a valuable approach for archivists to take. Many business advertisers have already discovered this.

The final essay in the volume, “Business Records: The Prospect from the Global Village,” by Michael S. Moss and Lesley M. Richmond, seeks to broaden the perspective beyond the United States. The title is a bit misleading, since the essay deals mainly with the United Kingdom and only tangentially with other European countries, and, after 368 pages of detailed discussion of American business records, this brief essay seems more an afterthought than an integral part of the discussion. Still, the essay does afford a few comparative insights. Reporting that throughout Europe use of business records for research “remains disappointingly low” (p. 381), the authors conclude, “Although a few family historians occasionally consult certain categories of business records … the majority of users seem to be enthusiasts seeking information about a product or service that has captured their imagination” (p. 382). The latter type of use is barely hinted at in other essays in the volume, though for many types of business records it holds true equally in the United States. For example, the majority of researchers in certain collections of railroad records consist of model railroaders and other hobbyists. Moss and Richmond also point out that public sector archives can earn revenue by providing research services for distant researchers, and by selling copies of items in their collections. Particularly significant are their comments about the relationship between historians and archivists. “Throughout Europe there is a complaint, echoing North America, that the archival community has lost contact with historians” (p. 386), they conclude, citing criticism of appraisal methods and demands that more records be preserved for research use. “The historians, for their part, need to understand the issues that confront the archivist and to be aware that they no longer (if they ever did) represent more than a mere fraction of the user community; the records they need for their research are very vulnerable to deaccessioning programmes,” they write (p. 387). Finally, due to the growth of a global economy, they argue that archivists from all countries need to exchange ideas about documentation, appraisal, and use of business records. This call for international collaboration and joint projects is, perhaps after all, a fitting conclusion to a volume of essays about American business records.

The Records of American Business will not be the last word on the subject. But it is a significant step forward in providing broad coverage of a wide range of issues, concerns, and perspectives regarding the selection, appraisal, and use of modern business records. It is essential reading for anyone interested in the process and outcome of archival efforts to ensure adequate documentation of American business in the coming decades.

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Subject(s):Business History
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

The Great Lobster War

Author(s):Formisano, Ron
Reviewer(s):Mullin, Debbie

EH.NET BOOK REVIEW

Published by EH.NET (March 1998)

Ron Formisano, The Great Lobster War. Amherst: University of Massachusetts Press, 1997. vii + 150 pp. $35.00 (cloth), ISBN: 1558490523. $14.95 (paper), ISBN: 155849071X.

Reviewed for EH.Net by Debbie Mullin, Department of Economics, Oberlin College.

Ron Formisano tells us about a group of men who, dismayed by their economic prospects, band together to fight large commercial interests in the hopes of preserving their standard of living. At first glance, one would think that this is another story of a union’s struggle to negotiate for higher wages, but that is far from the case presented in The Great Lobster War. The men who banded together were not employees; they were independent businessmen, and their attempt at collective action resulted in legal charges against them under the Sherman Antitrust Act.

Faced with declining prices for their lobster catches over the summer of 1957, Maine’s lobstermen in their distress grumbled that they were certain that the wholesale dealers were in a collusive arrangement to depress prices at the dock. The price had fallen to 30 cents per pound, a level which the lobstermen claimed was insufficient to provide a decent living. Figuring that the dealers had fired the first shot, members of the Maine Lobstermen’s Association (MLA) held a July meeting to call for lobstermen to tie up their boats and stay on shore until a 35-cent minimum price was established.

The tie-up was short-lived (about three weeks), and almost as soon as lobster boats were back on the waters, federal antitrust charges were brought against the MLA and its president, Leslie Dyer. Government lawyers asserted that, by encouraging this fleet of perfectly-competitive firms to act collectively (or, more precisely, to collectively refuse to act) the MLA had created a combination in restraint of trade. The two-week trial took place the following May in Portland. I trust that I will not ruin any suspense by revealing that the jury found Dyer and the MLA guilty, and that the judge imposed suspended fines for each defendant. Formisano concludes that little changed in the industry as a result of these legal proceedings.

Events leading up to the tie-up occupy roughly the first half of the book; the remainder recounts the testimony of trial witnesses and legal strategies of government lawyers and attorneys for the defense. Regrettably, no part of the volume is devoted to careful analysis of the economics of this case. The reader is left to wonder about some key questions.

First, was there an initial collusion among the dealers? There is no convincing evidence presented one way or another as to whether the prevailing 30-cent price was inconsistent with what 1957 market conditions would have produced as an equilibrium price. Formisano seems to be of the opinion that dealers were up to something underhanded, as they were secretive about their pricing decisions. A dealer might sometimes be heard saying that the lobster price is moving up, or is moving down. Formisano suggest that this is evidence of conspiracy, as it shows that the dealer is trying to hide his own choice behind the disguise of market forces in order to absolve himself of the harmful effects of his pricing “decision”.

The author further suggests that there is evidence of a dealer conspiracy in the fact that the total lobster catch for 1957 increased over that of 1956 by four million pounds, but that the total revenue collected by the lobstermen fell by about two percent. Introductory economics students would take this as an illustration of the inelasticity of the demand for food, not as any proof of dealer collusion.

Another question left hanging is why it makes any difference economically that the tie-up was a collective action by firms, not by employees. MLA members expressed disbelief that they were being prosecuted under the Sherman Antitrust Act, a law intended in their minds to go after big business. We are just independent businessmen trying to make an honest living at a fair price for our product, they claimed. To these men, it seemed a technicality that they were in a classification which left them legally vulnerable, rather than providing them with the protection of the rights of organized labor. It’s true, presumably, that unions seek to establish a wage above the competitive level, just as a cartel of firms would hope to enforce a noncompetitive price. But the economic effect is different when there is a monopoly price for a product versus a monopoly price for the labor used to make the product. Readers who are looking for economic analysis will be disappointed by the lack of discussion of market outcomes; the only group whose welfare is discussed is that of the lobstercatchers.

In fact, it is the lack of economic analysis that ultimately classifies The Great Lobster War as a work of narrative reporting rather than of economic history. It is not just a technicality that the MLA was viewed as a trade association rather than as a union. Economic theory predicts that lobstercatchers would have no cohesion as a union. The very nature of lobster-catching is a zero-sum game. It revolves around a set of dynamic incentives very different from those that characterize an employment situation. An additional catch for one lobsterman reduces that of another. In a typical employment situation in a unionized industry, workers are not viewed as stealing work, and therefore revenue, from one another. Of course, the fact that union solidarity would be undermined also predicts that a cartel would be unsuccessful. But readers may be disappointed that this volume fails to address the relationship between market incentives and market outcomes.

Formisano presents us with a story of characters; he depicts the Maine lobstermen who testify at the trial as strong Americans and good-humored individualists who were unintimidated by government attempts to rob them of their way of life. The author seeks to have readers agree with him that they couldn’t possibly have been as evil and greedy as men who run Big Business. Formisano apparently does not recognize that monopoly prices have harmful effects, even when not charged by monopolies. His claim that the lobstermen were not greedy rings hollow. He supports the MLA’s claim that lobstermen only wanted to earn a “fair living”. But the full story of course, is that they wanted to earn that fair living without having to change their skills or their way of life. One might argue, as has James Fallows, that Americans are characterized by the good nature with which they re-learn, re-tool, and relocate when market forces change the relative fortunes of different sectors of the economy. When any group of workers claims that they are entitled to “fair” compensation even if they persist in an unproductive sector of the economy, we see the universal nature of the desire for “more” and are reminded that the wealth of our nation has been built by the strength and adaptability of those who embrace new opportunities.

Debbie Mullin is Vice President of Marketlion LLC and teaches economics at Oberlin College. Her article describing the wage effects of early AFL unions can be found in the January 1998 issue of the Industrial and Labor Relations Review.

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Subject(s):Labor and Employment History
Geographic Area(s):North America
Time Period(s):20th Century: WWII and post-WWII

World of Possibilities: Flexibility and Mass Production in Western Industrialization

Author(s):Sabel, Charles F.
Zeitlin, Jonathan
Reviewer(s):Jaffe, James A.

Charles F. Sabel and Jonathan Zeitlin, eds., World of Possibilities: Flexibility and Mass Production in Western Industrialization. New York: Cambridge University Press, 1997. x + 510 pp., $80.00 (cloth), ISBN: 0-521-49555-5.

Reviewed for EH.NET by James A. Jaffe, Department of History, University of Wisconsin-Whitewater.

The essays gathered in this collection build upon the ideas presented more than a decade ago in Charles Sabel and Jonathan Zeitlin’s influential article “Historical Alternatives to Mass Production” (Past & Present, No. 108, August 1985, pp. 133-76). Indeed the arguments laid out then bear so significantly upon this collection that some recapitulation is in order. Based in large part on Sabel and Michael Piore’s earlier work, that 1985 essay emphasized the persistence of small firms in “advanced” industrial societies as well as the economic success of “flexible” firms using multi-purpose machines and skilled labor to make specialized products for niche markets. Moreover, Sabel and Zeitlin expanded upon those observations and launched a broader attack on some of the more fundamental tenets of the economic historiography of industrialization. Foremost among their objectives was to reconsider the received wisdom elaborated by such prominent authors as David Landes and Alfred Chandler who, it was argued, privileged the role played by mass production in the development of the modern industrial economies. The explanatory power of the mass production model of industrialization, Sabel and Zeitlin wrote at the time, was weakened by a number of historical inconsistencies, including the obvious persistence of small firms using batch-production techniques. They also questioned the dominant assumption that self-interest and economic rationality ultimately determined economic decision-making and industrial development rather than political institutions or cultural predispositions. Indeed the mass production factory-based model, Sabel and Zeitlin concluded, was “merely a restatement of what happened, not the summary expression of an inevitable logic of interest and efficiency.”

In contrast to what they perceived to be an overly-deterministic model, Sabel and Zeitlin repeatedly emphasized a “many-worlds history of industrialization” that shifted attention toward a more protean approach to technological development, an approach based principally upon the recognition that a “craft alternative” continued to thrive in “industrial districts.” These districts developed a self-reinforcing dynamic. In them, small firms used highly skilled labor and adopted new technology; they were as likely to cooperate as they were to compete; and they successfully produced a wide range of products for a variety of differentiated markets. Moreover, these districts constructed an alternative community of sentiments in which children brought up to a trade acquired a set of tacit rules governing their conduct. These rules promoted forms of “fair” competition at the same time that they attached moral sanctions to destructive economic behavior. Therefore, these districts tended to be characterized by hitherto unrecognized forms of collaboration both between employers and employees and among the small firms themselves.

Such a wide-ranging thesis did not go unchallenged, of course. The flexible specialization model in general drew criticism from those who argued that it did not adequately characterize the nature of mass production, that it misrepresented the effects of small-scale specialization on labor, and that it replaced one set of teleological assumptions with another.

Generally, the essays presented in this collection do not attempt to directly respond to these criticisms. Instead they seek to amplify and elaborate the historical and institutional contexts within which the “craft alternative” was tried and tested. Moreover, the articles are discursively located within Sabel and Zeitlin’s alternative reading of the history of western economic development that was also briefly suggested in their original article. At that time, Sabel and Zeitlin had offered a “reconceptualization” of the industrialization process that emphasized the fact that the history of mechanization was not necessarily the history of throughput. They proposed instead a tripartite historical schema and it is roughly this periodization that informs this collection. Thus the first essays in this collection focus on why and how some regional ancient regime industries adapted and survived through the means of flexible specialization to changing markets and competition; a middle group of essays, roughly covering the late nineteenth and early twentieth centuries, illustrates the struggles that took place in several sectors between models of mass production and those of flexible specialization; and a final group emphasizes the contemporary success of several flexibly-specialized industrial sectors.

The essays on late eighteenth and early nineteenth-century manufacturing constitute some of the most compelling case studies in the book as well as nearly one-half of its bulk. Taken together they investigate not only the adaptability of several trades to both changing markets and technology, but perhaps more significantly emphasize the social, political, and institutional foundations for their relative success. The exceptionally interesting essays by Alain Cottereau and Beatrice Veyrassat adopt comparative approaches that highlight the sources of the flexible specialization’s competitive advantage over mass production techniques. Under conditions of what Cottereau has called “collective manufacture,” (p. 82) institutional practices and social relations developed that both shared risks and tamed competition among both domestic workers and manufacturers. One such institution, whose essential importance remains largely understudied, was the mutually-respected price-list (“tarif” in France and “Preisverzeichnisse” in Germany), but there were others including the important regulatory functions performed by the Conseil de Prud’hommes in France or more local organizations such as the Societe d’emulation patriotique in the Swiss canton of Neuchatel. These institutions, it is argued, reflect a corporate or collective response to competitive pressures that ensured the viability of craft production and facilitated a flexible approach to production through negotiation rather than conflict. Moreover, their survival apparently contradicts the so-called “British model of industrialization” not only in terms of the advent and introduction of mechanization, but also in terms of its assumed structural supports of private property, free trade, and “cynical individualism” (p. 107). These arguments, it should be added, are extended in different ways in the contributions of Carlo Poni on Lyons silk merchants and Rudolf Boch on the Solingen cutlery trades. When taken together, these essays may serve not only to draw attention to the distance that separated the ideological thrust of the British model, or more accurately the Lancashire cotton-spinning model, from contemporary practice but also to stimulate further research into that model’s own historical viability.

The second set of essays, on the conflict between mass production and flexibly-specialized systems, elaborates the ways in which individual sectors responded to both the threat and temptation of de-skilling, the adoption of single-purpose machinery, and the cultivation of mass markets. The contributions here, including those by Alain Dewerpe on the Italian engineering firm Ansaldo, Zeitlin on British engineering, and Peer Hull Kristensen and Sabel on Danish dairy cooperatives, are highlighted by Philip Scranton’s sparkling essay on American textile manufacturing. Rather than succumb to the idea that there is an “immanent logic to historical change,” (p. 342) Scranton emphasizes the “situational particularities” (ibid.) that characterized different sectors of the trade and which led some branches to adopt mass production and others batch production techniques. Not only does Scranton outline the comparative risks and advantages to both bulk and batch production, he also attempts to establish the fact that different branches of the industry exhibited relatively coherent “clusterings of decisions” (p. 313) on a wide variety of issues including finance, marketing, management, and labor relations. Such attempts to delineate a spectrum of industrial possibilities are similarly characteristic of Zeitlin’s contribution, which argues that British engineering firms “selectively adapted” to mass production techniques giving rise to hybrid forms, and Dewerpe’s interesting case study of the ways in which the same firm adopted both craft and mass production methods under different market and political conditions.

The final group of essays emphasizes three regional success stories of flexible specialization: Vittorio Capecchi on the Bologna packaging industry, Jean Saglio on the transition from comb-making to the plastics industry in Oyonnax, France, and Hakon With Andersen on Norwegian shipping, brokerage, and insurance. They share as well an emphasis on the importance of social and institutional linkages that served to share information, encourage collaboration, and reduce risks. In the case of Bologna, Capecchi argues that the Bolognese packaging industry developed first as an “industrial subsystem” (p. 393) of engineering through the creation of a multitude of new firms from one “mother” firm, relying on both indigenous skills and local university talent. For Norway, Andersen discusses the creation of links between many small “frontline” shipping and shipbuilding firms and “supporting” groups, such as brokers and insurers. Through the creation of a complex of marketing and sales organizations, certification and classification organizations, shipbuilders’ associations, collaborative research projects, and the like, small Norwegian shipping firms from the north-west were able to compete with large-scale integrated firms by sharing information. Finally, Saglio’s essay is most notable for its innovative attempt to understand the situational rationality of local actors as they comprehend the ways in which their trade and local society functions as well as their own place in the scheme of things.

These essays, therefore, are a welcome contribution to the historical debate that began with the publication of Sabel and Zeitlin’s article in 1985. They attempt to extend our knowledge in several critical areas as well as offer a nuanced approach to the way in which the industrialization process needs to be understood. Naturally, in a project of this scope some discordant elements creep in. For example, there seems to be a relatively weak consensus on the precise nature of mass production, many authors preferring to adopt alternative terms such as “serial production,” “routinization,” or “standardized production.” Similarly, the fundamental dynamism of the “industrial district” is replaced at times with alternative classificatory schemes such as the “industrial subsystem” or the “collective manufacture.” Finally, the editors themselves, in a relatively brief introduction, appear to be pushing the argument in newer directions, towards the understanding of economic history both as a postmodern narrative project and as a rule-making process. Such arguments may not immediately resonate among economic historians, and indeed deserve to be pushed further, but they may very well help to refashion the questions they ask.

James A. Jaffe Department of History University of Wisconsin-Whitewater

James Jaffe is author of The Struggle for Market Power: Industrial Relations in the British Coal Industry (Cambridge, 1991) and the forthcoming Asymmetries: Work and Labor Relations during the Industrial Revolution.

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Subject(s):Markets and Institutions
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Growth Triumphant: The Twenty-first Century in Historical Perspective

Author(s):Easterlin, Richard A.
Reviewer(s):Costa, Dora L.

EH.NET BOOK REVIEW

Published by EH.NET (August 1997)

Richard A. Easterlin, Growth Triumphant: The Twenty-first Century in Historical Perspective. Ann Arbor, MI: The University of Michigan Press, 1996. Pp. xiv + 200. $37.50 (cloth), ISBN: 0472106945.

Reviewed for EH.NET by Dora Costa, Department of Economics, MIT.

In this masterful synthesis, Richard Easterlin (Department of Economics, University of Southern California) draws on the disciplines of economic history, demography, sociology, political science, psychology, and the history of science to present an integrated explanation of the origins of modern economic growth and of the mortality revolution. His emphasis is on long-term factors and on similarities across nations. His book should be easily accessible to non-specialists and will give them a sense of why economic history can inform our understanding of the future.

Richard Easterlin convincingly argues that technological change underlies both modern economic growth and the morality revolution. Underlying this technological change is a set of procedures and attitudes that include reliance on experiments and observed facts. In the case of modern economic growth, this technological change should not necessarily be equated with industrialization, but rather is simply the introduction of new technology, including agricultural, in the economy. This technological change has produced certain commonalities in development, including the gradual acceleration in real per capita income growth, urbanization, and the growth of a white collar work force.

According to Easterlin, modern economic growth began before the modern rise in life expectancy because technological change in the physical sciences preceded technological change in health and medicine, simply because the conceptual state of the physical sciences was far more advanced. Easterlin argues that although modern economic growth may have increased resistance to disease (for example, by increasing food intake), it also increased exposure to disease. In contrast, in developing nations the mortality revolution has often preceded economic growth both because we know how to control disease (e.g. sewage and clean water) and because the necessary public health investments are inexpensive. Because urbanization created demand for public municipal services, he views the rise of government as a direct consequence of technological change.

Once mortality, particularly childhood mortality, fell, Easterlin argues that we moved from a society of high to low fertility. At first the increase in the number of surviving children caused fertility to fall after families realized that they could achieve their target number of children with fewer births, then the target number of children fell as children became more expensive thanks to advances in education, urbanization, and the introduction of new goods. The population explosion of developing countries should, therefore, slowly reverse.

Easterlin presents a very optimistic picture of the future, arguing that modern economic growth will spread to all countries of the world and neither declining population growth nor an aging population will lead to economic stagnation. We have the technology and many of the preconditions for economic growth, such as institutions for the accumulation of physical and human capital and the mobility of labor and capital, are already present in developing countries. In an example of the sort of long-run perspective that the book is best at, Easterlin shows that even the aging of the baby boomers will not produce a dependency burden that is high by historic standards.

Within this optimistic scenario, he sees two causes for concern. One is that the spread of economic growth shifts the balance of power to newer, more populous developing countries that do not share our commitment to democracy and human rights and this may produce political as well as military clashes. The other is that income cannot buy happiness and that despite previously unimaginable levels of affluence, material concerns are as pressing as ever. According to Easterlin technology will always produce new goods that we will want and, because people measure happiness in relative terms, they will forever be stuck on a hedonic treadmill.

It is this last point, “the triumph of material wants over humanity” that I found controversial and whenever there is controversy, the drawbacks of a synthesis become readily apparent. The reader wants to know more, wants further breakdowns of the data. Easterlin cites surveys that show that people in both the United States and abroad are no happier than they were twenty years ago despite increases in per capita income. He also cites surveys that show that personal income, family, and health are individuals’ primary concerns in all countries surveyed. But, what about recent polls showing that 48 percent of U.S. workers had either cut back on hours of work, declined a promotion, reduced their commitments, lowered their material expectations, or moved to a place with a quieter life during the preceding five years? What about the tremendous decline in market hours of work, whether measured in terms of weekly hours, increased vacation time or sick leave, or increasing number of years spent in retirement? As wages have risen so has the opportunity cost of these hours. The history of modern economic growth is not just one of increasing numbers of consumer goods, but also one of increasing hours of leisure. These hours of leisure have enabled more and more individuals to achieve some kind of self-realization. There will always be individuals who will not know what to do with their free time or spend it in ways we disapprove of, such as watching television. But, what of the individuals who work in order to be rock climbers or who teach classes in order to do research? I am not surprised that when surveyed individuals state that they would like more money (more is always better than less), but the question that we must ask is whether they are willing to trade off time that could be spent with family members or in enjoyable pursuits for more material goods and how this trade-off has changed over time.

Dora L. Costa Department of Economics Massachusetts Institute of Technology

Dora Costa is author of a forthcoming (1998) book, The Evolution of Retirement: An American Economic History, 1880-1990.

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Subject(s):Economic Development, Growth, and Aggregate Productivity
Geographic Area(s):General, International, or Comparative
Time Period(s):General or Comparative

Ships for the Seven Seas: Philadelphia Shipbuilding in the Age of Industrial Capitalism

Author(s):Heinrich, Thomas R.
Reviewer(s):Brown, John K.

Thomas R. Heinrich. Ships for the Seven Seas: Philadelphia Shipbuilding in the Age of Industrial Capitalism. Baltimore: The Johns Hopkins University Press, 1997. x + 290 pp. Illustrations, tables, notes, essay on sources, and index. $39.95 (cloth), ISBN 0-8018-5387-7.

Reviewed by John K. Brown, University of Virginia, for H-Business <

Forty or more years ago, business, economic, and technological historians took a great interest in ships, maritime trade, and shipbuilding, topics of seminal works by Robert G. Albion, Howard I. Chapelle, Louis C. Hunter, John G. B. Hutchins, Samuel Eliot Morison, David B. Tyler, and others. After the fertile work of this World War Two generation of scholars, academic historians turned away from the sea just as earlier Americans did following the War of 1812. But the popular interest in maritime history remains strong on many levels, as evidenced by: the present craze over the Titanic, resurgent interest in maritime museums, Jack Aubrey’s continuing chain of victories over Napoleon’s naval might, and the improbable success of a twelve-volume maritime history encyclopedia. Little wonder. So much of maritime history consists of those transforming events that offer dramatic narratives: humans’ epic struggles with the sea, the rise of successive maritime powers, voyages from old worlds to the New, and technological transformations from wood to iron and steel ships and from sail to engine-driven vessels.

So popular interest in maritime history continues, despite the waning of academic studies. Analysis has dethroned narrative in the work of professional historians, perhaps one reason for their apparently declining interest in maritime topics. But the moment is ripe for a new cadre of Morisons who combine the two approaches. A good story always interests general audiences — indeed a powerful tale can even sway the most rarefied intellectual. Furthermore, many of the analytical approaches and insights of the past forty years of land-based scholarship should travel well. In going to sea they offer new departures for maritime history.

Thomas Heinrich demonstrates this potential for a new maritime history in his Ships for the Seven Seas. Written for a broad range of readers, the book provides a “history of iron and steel shipbuilding in metropolitan Philadelphia . . . from the Civil War to the 1920s” (pp. 2-3). Heinrich takes the stance of an industrial historian — combining threads from political, labor, business, economic, and technological history. This multi-faceted approach is one of the book’s major strengths. For instance cogent summaries of merchant and naval history in each shipbuilding epoch provide admirable technological and economic context about the markets in which the shipbuilders operated. The book is well-designed, nicely illustrated, and free of most proofing errors (although misspelled proper nouns crop up too often). Heinrich tells a good story, and the book deserves the broad readership that its publisher wisely targeted.

Academic historians will find many rewards here too. Throughout the book Heinrich leavens his narrative with analysis, applying to his study of maritime industry the insights offered by labor process studies, Chandlerian business history, and accounts of batch production by Scranton and Zeitlin. On balance, however, Heinrich favors narrative over analysis — a wise choice given the limitations and problems of the original sources available to him. In sum, this is a finely-crafted book on a fascinating period when technical transformations, political compromises, broad economic changes, and world power aspirations reconfigured American shipbuilding. With its skillful blending of narrative and analysis, it is far more comprehensive and insightful than David Tyler’s The American Clyde, written forty years ago, which covered the same period and firms.

Philadelphia-area builders created the American metal shipbuilding industry, they dominated the trade until 1900 or so, and some of the city’s firms remained major players until after World War Two. So Heinrich has ample justification for his geographic focus. The book’s organization places a thematic approach within a chronological narrative. Chapter One provides an overview of wooden shipbuilding. The wooden builders enjoyed notable success for a century-and-a-half, but sank after the 1850s under combined weight of rising British iron shipping (sail and steam), trade disruptions during the Civil War (when Northern shippers registered their vessels under neutral foreign flags), and the broad shifts in investment capital from shipping to railroads, commerce to manufacturing.

In Chapter Two, Heinrich lays out the Civil-War-era foundations for Philadelphia shipbuilders in shifting from sail to steam and wood to iron. In a well-cast and original analysis, he argues that Philadelphia firms’ wartime success in building steam-driven ironclads established embryonic but valuable skills that later served in building iron steamers for the civilian merchant marine. Philadelphia’s strengths in mechanical engineering and metalworking and its proximity to the iron regions provided further advantages to the city’s early iron steamer industry.

Chapter Three focuses on the business history of the leading Philadelphia shipbuilders following the war. Here Heinrich contrasts proprietary capitalism (dominating at the shipyards) with the new corporate managerial capitalism introduced by the railroads. As he observes, the two forms of business organization became mutually dependent when the shipping subsidiaries of major railways became major customers for the shipyards’ iron steamers. Perhaps more insightful are this chapter’s discussions of the integration of marine engineering (design and construction of power plants for vessels) with shipbuilding — a unique attribute of the Philadelphia firms — as well as their disintegrative strategy of relying on extensive sub-contracting.

In his fourth chapter, Heinrich sketches the growing scale of iron shipbuilding firms circa 1875-1885. The American industry never approached the size, specialized capacities, efficiency, or sophistication of its counterpart in Britain. As a result, “American steamship operators paid 25-35 percent more for iron tonnage than their British rivals” circa 1880 (p. 78). But such U.S. builders as Roach, Cramp, and Harlan and Hollingsworth nonetheless achieved growth in this period. Naval construction did not yet amount to much, but Congress gave US shipbuilders a protected market, requiring American-built ships in the coastwise trade (i.e.: all marine freight and passenger traffic within U.S. borders). Although wooden sailing vessels carried most domestic marine commerce, Philadelphia-built iron steamers had few viable competitors in niche markets: oil tankers on routes from Texas to the East coast, overnight passenger steamers on Long Island Sound and Chesapeake Bay, coastwise towboats in the coal trade, and ocean freighters laden with passengers and Hawaiian sugar. On international routes, some American-owned shipping lines chose to buy U.S. vessels, notwithstanding their higher price. Having sketched the “anatomy of a shipbuilding boom” circa 1880 in this chapter, Heinrich then gives an able description of the labor processes involved in iron shipbuilding and marine engineering. From this he briefly considers labor-management relations and class formation in the industry.

By 1885 or so, American iron shipbuilders had established themselves, yet cheap wooden sailing vessels from Maine limited their ability to penetrate the domestic carrying trade, while cheap iron steamers from British yards took most international commerce. So builders like Cramp and Roach turned to the United States Navy after 1885 — the subject of Chapter Five. Here Heinrich ably describes naval procurement policies and the shipbuilders’ lobbying efforts to create a military-industrial complex that would finance plant expansions and the acquisition of subsidiaries while sustaining their yards when the civilian market evaporated, as it often did. Heinrich takes a critical view of naval shipbuilding and its effect on the yards, arguing that builders “preferred private contracts because they involved fewer organizational problems and were usually more profitable.” The yards had little choice — naval work was better than none — but the “potpourri of high-technology naval construction and low-quality commercial shipbuilding was not terribly efficient” for yard managers, workers, or systems (p. 120).

The history of commercial shipping, naval procurement, and steel shipbuilding from 1898 to 1914 occupies Chapter Six. Here themes of earlier chapters are largely reprised: a growing scale of operations despite boom and bust markets, enhanced skill requirements among the workers needed to operate technically-sophisticated production machinery, further innovations in the yards’ products, the challenges of complex and ever-evolving naval work, and the inefficiencies of generalist production in American yards. New issues in the industry circa 1900 included: the rise of competitors (in Philadelphia and elsewhere) seeking to capitalize on America’s new aspirations as a naval power, labor activism and management’s vehement counter thrusts, and a new corporate model of shipyard management. Narrative dominates in the chapter, leaving this reader wishing for a bit more analysis. For instance, Heinrich details a number of problems with the new managerial capitalism adopted at the Cramp shipyard after 1900. Yet he never really offers a verdict on the suitability of corporate management practices in this industry with its vast sales fluctuations, high skill requirements, and circumscribed influence over markets.

World War I occupies Chapter Seven. Beyond the predictable expansions in wartime, here the story centers on Philadelphia’s massive Hog Island Yard. This wartime emergency plant represented a government-funded experiment in standardized ship construction. With its fifty building ways, Hog Island was the world’s largest shipyard. But intractable problems discredited this attempt to produce ships in volume: inadequate transportation from inland fabricating shops to the yard, coordination difficulties once materials did arrive, and an overburdened market for shipbuilding labor in the Philadelphia area. Heinrich has sifted through a multitude of government reports, and he tells this story well.

The book closes out with an eighth chapter on the 1920s depression. The yards came on hard times when the predictable postwar glut in merchant shipping was matched by the novel Washington Naval Disarmament Treaty of 1922 that closed off naval work for a number of years. The shipbuilding depression reached around the world; in Philadelphia the yards responded by further diversifying into non-marine work (the Cramp yard pioneered this strategy circa 1900). Heinrich uses Cramp as a anchor throughout the book, so when that old-line firm dies in 1927, he conducts a detailed autopsy. His verdict: Cramp lost its viability after Averell Harriman merged the builder into his ocean shipping empire. When the Harriman shipping lines foundered, they dragged down Cramp as well. Heinrich also points to excessive competition in the industry and “the lack of an intelligent [federal] merchant marine policy” (p. 212).

A short Epilogue ends the book, wherein Heinrich summarizes his three main analytical points: 1. Naval demand laid foundations for metal steamship construction; thereafter it provided a useful but problematic market, 2. The American merchant marine and its supporting shipbuilders suffered because the federal government failed to pass maritime policies that offered “incentives for investment” for private American firms engaged in international shipping (p. 221), 3. In the absence of those policies, U.S. metal shipbuilders pursued a generalist policy, building whatever tugs, sand barges, passenger liners, or battleships that their markets demanded. This century’s slow withering of America’s merchant marine and the Philadelphia yards closes out the story.

In ways that may not be immediately apparent in this sketch of its contents, Heinrich has pulled off something of a gamble in this book. Despite the fact that essentially no business papers survive from Philadelphia’s metal shipyards, the author has produced a comprehensive history. He builds his portrait from exhaustive searches of periodical records, newspapers, trade and professional society journals, union periodicals, government documents, insurance surveys, and all relevant secondary sources. It is a monumental effort. Still the lack of internal business papers leaves the book with only scattered insights into profits or losses, work force fluctuations and pay rates, capital/labor ratios, the bidding process, cost accounting controls, the quality and severity of price competition, etc.

If the archives had been more forthcoming, it is possible to project a different explanation of American shipbuilders’ inefficiencies. Heinrich explains their shortcomings by pointing to the lack of federal support for U.S. firms in international shipping. This in turn limited the overall market and forced shipyards into an inefficient generalist approach in production. Charles Cramp and other builders made a similar argument in calling for subsidies during the Gilded Age.

While this view has merit, one could advance an argument that I think is equally plausible: namely that the yards’ inefficiencies arose from those federal policies that protected shipbuilders by targeting their chief customers, the shipping lines engaged in domestic commerce. The statutory requirement for American-built ships in coastwise and inland navigation chiefly benefited New England’s wooden yards since their cheap wooden sailing vessels took most of the business. But such slow schooners were simply unsuited to many trades: passenger service, high-value freight traffic, transport of bulk oil, the Hawaiian sugar trade, etc. Through 1900 or so, ship owners seeking metal steamers for these trades had little choice but to deal with the Philadelphia yards. Without protection, these American pioneers in metal shipbuilding would never have begun; with it they never approached the performance of the world’s leading yards in Britain.

Testing this alternate argument would require the sort of internal business papers that simply do not survive. Equally, this perspective and Heinrich’s argument may both be valid. I only raise the point to underscore how the lack of hard data and extensive sources renders any authoritative analysis problematic. Notwithstanding these difficulties, Heinrich has written a detailed, compelling account of iron and steel shipbuilding — an industry vital to America’s economic growth and its rise to world-power status.

Jack Brown

Division of Technology, Culture and Communication School of Engineering and Applied Science Thornton A-216 University of Virginia Charlottesville, VA 22903 jkb6d@virginia.edu (804) 924-6177

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Subject(s):Transport and Distribution, Energy, and Other Services
Geographic Area(s):North America
Time Period(s):20th Century: Pre WWII

The Artificial River: The Erie Canal and the Paradox of Progress, 1817-1862

Author(s):Sheriff, Carol
Reviewer(s):Laurent, Jerome K.

EH.NET BOOK REVIEW

Published by EH.NET (July 1997)

Carol Sheriff, The Artificial River: The Erie Canal and the Paradox of Progress, 1817-1862. New York: Hill and Wang, 1996. xvii + 251 pp. $19.95 (cloth), ISBN 0 8090 2753 4.

Reviewed for EH.NET by Jerome K. Laurent, Department of Economics, University of Wisconsin-Whitewater.

This slender volume of 177 pages of text covers the story of the Erie Canal during the antebellum period in a different manner than have prior works on the subject. Carol Sheriff, an historian at the College of William and Mary, differs in her treatment from standard accounts in that she is concerned primarily with the human dimensions of the development and evolution of this medium of transportation in upstate New York. In the words of Sheriff, her study “uses the Erie Canal region as a microcosm in which to explore the relationships between some of the antebellum era’s important transformations: widespread geographic mobility; rapid environmental change; government intervention in economic development; market expansion; the reorganization of work; and moral reform” (p.5). These changes are discussed and evaluated in the context of what the middle classes of the 1817-1862 period would consider to be signs of “progress” or “improvement.” The transformation of this region as a result of the Erie Canal is organized around six topics, each of which is covered by a chapter. They include the “visions of progress,” the “triumph of art over nature,” “reducing distance and time,” the “politics of land and water,” the “politics of business,” and the “perils of progress.” What does the author include under the forgoing headings?

The first details the visions of leading New Yorkers (most prominently Governor DeWitt Clinton) to get the project underway and thereby “represented a growing commitment in the North to the culture of improvement” (p.25). These individuals were what Sheriff calls “adherents to the practical republicanism” who believed that “the nation’s common good depended on prosperity, individual opportunity and an equal emphasis on rural and urban growth” (p.24). A project of the size of the Erie Canal would further their visions of progress, according to Sheriff.

The second chapter details problems in the construction process of the Canal, a project of immense size and complexity for that era. According to the author the Canal was “a tribute to republicanism” and a great “American achievement,” especially for the middle classes.

In chapter 3, the subject of “reducing distance and time” is discussed in terms of the various types of users of Canal services, whether they be tourists, immigrants, business persons or settlers of the region. The Canal had set forth a commercial revolution, encouraged individuals to travel to new areas of the nation and provided a link to those left behind. The hardships of the Canal traveler are detailed. These hardships often made travel an unpleasant experience. Eventually, these problems encouraged travelers and commerce to seek an alternative — the railroad.

Chapter 4, on the “Politics of Land and Water,” is basically a discussion of the state of property rights as found in American society during the period. Professor Sheriff’s example of the Erie Canal region offers insight into how ordinary citizens felt about property, particularly as expressed in their contacts with the Canal Board, the state agency set up to handle various matters relating to the Canal. The Board faced issues relating to compensation for land taken for the Canal route (and changes in the route over time), the use of water resources, and the placement of commercial structures near the Canal. At times the average citizen considered only the negative side of having a canal and neglected the benefits which accrued in having an expanded market. According to Sheriff, many citizens felt that the State had come to serve the special interests of the commercial elite.

The subsequent and related chapter, “The Politics of Business,” also deals with the commercial side of life as relating to the Canal. Many citizens made their living because of the presence of the Canal which brought about issues and problems to be dealt with by the Canal Board. For examples, the State was asked continually to expand the canal system to include connecting canals to the main route; towns had developed along the original route, but some lost out when improvements to the Canal necessitated a shifting of the route to a new location; the level of tolls charged on products and passengers had to be settled upon; and the need to raise enough revenues to pay interest and principal on the Canal debt were topics of concern. Not surprisingly, the business classes claimed to be contributing to the general welfare, whether it was the case or not. In the words of the author, “progress, in their view, did not mean an egalitarian society but rather one in which anyone would have the opportunity to improve in all senses” (p.137).

The final chapter tells us whether the preceding statement was true. In “Perils of Progress,” there were “perils” in having the Canal and this disturbed the middle classes of the region. Many of the Canal workers were children who were taken advantage of every possible way. Wages were low and working and living conditions were poor. Some workers were considered to be a threat to civilized society. As correctly pointed out by Professor Sheriff, the expansion of internal improvements was one of the great changes occurring in the development of a more market-based economy. These changes brought about for many in the middle classes a revivalist fervor in the religious sense. They wished “to convert their sinning brothers and sisters” from undesirable behavior. These reformers sought to bring these workers into the mainstream religious community and some workers had “hopes of elevating their status in a fluid class system” (p.158). Some reformers laid blame for the bad conditions on the business class itself. Thus, some reform groups “reminded the commercial classes that prosperity and progress had their costs,” which needed to be paid (p.170).

By the end of the period (1862, which was the date of the completion of the Erie Canal enlargement project), what Americans had considered to be progress had changed, the Civil War had begun, and the Erie Canal itself had become, in the words of the author, “second nature”. I would agree with this assessment.

Overall, the book is well researched and well written with a light-hearted touch. There is little that I can quibble about. I especially enjoyed reading it as an economist. Nowadays economists leave out many of the topics considered here in researching transportation history. As Peter Temin indicated recently in his presidential address to the Economic History Association, “historians are occupied today with various questions of culture. They are well suited to give us a thick description that can inform economic history. The trick for historians is to tie their investigations of culture into some economic activity” (“Is it Kosher to Talk about Culture?” Journal of Economic History, Vol. 57, No. 2 (June 1997), p. 282). That has been accomplished here. The result is that this slender volume has provided us with a “thick” description and analysis of the culture in a regional setting which has contributed much to transportation history.

Of special note is the exhaustive, but valuable, section on Notes and Sources located at the end of the text material. Professor Sheriff has located and utilized the major available sources for this research effort. In particular, the newly available Canal Board Papers provide an invaluable source of insights into what New Yorkers of the antebellum years thought about their Canal. In addition, other manuscript collections at seventeen different locations in New York and New England were examined.

In short, I would highly recommend The Artificial River to students and scholars alike. Students in American economic history courses should gain by reading this volume; transportation scholars should gain by examining the cultural history of the period as shown in this regional study. Good writing and good research are always appreciated by this economist!

Jerome K. Laurent Department of Economics University of Wisconsin-Whitewater

Jerome Laurent is the author of several articles and papers on Great Lakes transportation history including: “Trade, Transport and Technology: The American Great Lakes, 1866-1910,” Journal of Transport History, Third Series, Vol. 4, No. 1 (March 1983), pp. 1 – 24, and “Trade Associations and Competition in Great Lakes Shipping: The Pre-World War I Years,” International Journal of Maritime History, Vol. 4, No. 2 (December 1992), pp. 117-153.

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Subject(s):Transport and Distribution, Energy, and Other Services
Geographic Area(s):North America
Time Period(s):19th Century

Beyond Labor’s Veil

Author(s):Weir, Robert E.
Reviewer(s):Friedman, Gerald

Robert E. Weir, Beyond Labor’s Veil: The Culture of the Knights of Labor. University Park, Pennsylvania, Pennsylvania State University Press, 1996. xx + 343 pp. Bibliography and index. $55.00 (cloth), ISBN 0-271-01498-9. $23.00 (paper), ISBN 0-271-01499-7.

Reviewed for EH.Net by Gerald Friedman, University of Massachusetts at Amherst .

The Knights of Labor (KOL) was the first national movement of the American working class. At its peak in 1886 the KOL brought together nearly a million members among skilled and unskilled workers in factories and farms from California to Maine, from Minnesota to Louisiana. More remarkable than its large membership, dwarfing any contemporary organizations, was the KOL’s policy of solidarity. Trade unions organized workers of common craft or trade, often excluding women and workers from racial and ethnic minorities in order to reduce the supply of labor to their trade. But the KOL united all workers without regard for trade, race or gender. Under the slogan “an injury to one is the concern of all,” the KOL sought to advance the condition of all through solidarity. A fraternal movement of productive workers would transform society, ushering in a new era of concord, social harmony, and good fellowship.

Despite its successes and pioneering strategy, the KOL has drawn relatively little sympathetic attention from historians. Less has been written of the KOL, for example, than of the much smaller and less influential Industrial Workers of the World not to mention the KOL’s offspring and rival, the American Federation of Labor (AFL). Much of what has been written about the KOL has been hostile. To the classic labor economists and historians, John R. Commons and Selig Perlman, the KOL’s mix of evangelical religion and trade union action made an incoherent stew. The KOL served only one useful purpose: its failure made obvious the superiority of the trade union form of organization upheld by the AFL over the mixed organization uniting workers without regard for skill or trade. And, the AFL’s triumph put to rest illusions that an organization dedicated to fraternity and broad social reform could succeed.

More recently, some historians have reexamined the work of the KOL and reached more favorable judgments. Two notable studies, Leon Fink’s, Workingmen’s Democracy: The Knights of Labor and American Politics (Urbana, Illinois, University of Illinois Press, 1983) and Richard Oestreicher’s, Solidarity and Fragmentation: Working People and Class Consciousness in Detroit, 1875-1900 (Urbana, University of Illinois, 1986), present the KOL as an effective union pursuing trade union ends through industrial organization and political action. A more recent study by Kim Voss, The Making of American Exceptionalism: The Knights of Labor and Class Formation in the Nineteenth Century (Ithaca, Cornell University Press, 1993), goes further. Voss attributes the KOL’s ultimate failures not to its own internal weakness but rather to the exceptional force that employers mobilized against it. Rather than proving its weakness, Voss argues that defeat was a sign that the KOL pursued a strategy so effective that it threatened the bases of class rule in America.

In the new approach, the KOL is no longer the ineffectual fraternal order denounced by Commons and Perlman. Instead, it is a proto-CIO, advancing the interests of all workers through industrial solidarity and radical political action. Robert Weir’s book is indebted to this new approach. He joins Fink, Oestreicher, and Voss in celebrating the KOL’s triumphs and blaming its ultimate failure on the opposition its success aroused among employers and the business community. “For all the KOL’s failures,” he writes, “neither socialists nor the IWW came close to its achievements [in promoting solidarity] and few AFL craft unions bothered to try” (p. 324).

But Weir’s work is much more than a restatement with new examples of a new consensus. Instead, he breaks new ground in ways that challenge the new labor historians as much as their older counterparts. The new consensus defends the KOL by treating it as an industrial union. But to Weir, the KOL was successful precisely because and only when it was not a union. The KOL successfully built solidarity not by promoting workers material interests but by uniting workers in a fraternal movement around ritual, song, poetry, and story. Following anthropological rather than economic historians, Weir argues that the KOL must be understood through its rituals, songs, poems, stories, and such material paraphernalia as pins, gavels, playing cards, and bookmarks. “Knighthood,” Weir argues “was an idea as well as a set of organizational arrangement” (p. 274) and it was constructed through ritual and by involvement with material object more than through the rational assessment of interest and advantage. In constructing solidarity in the KOL, “[o]bjects played an important role in the process by which abstractions were bonded to institutions.” For “many Knights,” Weir argues, “their identity was as much shaped by a dime-sized lapel pin as by the weighty pronouncements of convention delegates” (p. 231).

Weir’s revised history of the KOL emphasizes it cultural expression rather than the industrial disputes and political contests stressed by previous labor historians. Instead of the traditional drama of ideological struggle between socialists and reformers, and advocates of industrial organization against craft unionists, Weir’s KOL is divided over the nature of the secret ritual, the color of union labels, and the choice of poetry and song. In this way, Weir presents a new interpretation of the KOL’s rise and fall. Admitting the power of employer opposition to the Knights, Weir nonetheless places responsibility for the collapse of the KOL elsewhere. “Material desires,” he argues, “ultimately undid the Knights of Labor” by leading the KOL away from ritual and fraternal bonding. By abandoning secrecy and ritual, by “pushing aside the veils of secrecy and taking its crusade for a cooperative commonwealth to the workplace and the street,” Weir laments, “the Knights attracted attention, but not always the kind it wanted” (p. 64). Had the KOL continued the slow but steady work of building a fraternal counter-culture secretly and through the meticulous observance of ritual, then, Weir suggests, the KOL would have been able to stand up even against employer and state repression.

Weir’s work provides valuable insights for labor historians and other interested in KOL. By assuming rational individualism, economists and many labor historians have been blind to the role that ritual, culture, and irrational emotion play in shaping social life. Weir is surely right that the KOL drew on deeper sources than the rational pursuit of individual material interest; one may question how such concerns could ever lead anyone, worker or employer, into collective action. The KOL must, as Weir argues, have built solidarity on emotional connections. But it is less clear that these connections were made, as Weir argues, by ritual and cultural objects, or whether they were forged by participation in social action. The substance of much labor history, public action is slighted by Weir’s focus on private ritual. But it could be that public demonstrations were more important than the rituals he emphasizes, in shaping the KOL’s culture of solidarity. Weir notes the importance of public demonstrations of solidarity in his discussion of KOL parades, picnics and athletic events. But he is curiously oblivious to the equally important, or more important, public demonstrations of solidarity around the traditional events of labor history, including strikes and political rallies. Here the question becomes not whether culture and emotional connection mattered but whether the cultural artifacts central to Weir’s study are at the root of the solidarity created, however ephemerally, by the KOL or whether they are epiphenomenon, a sign of sentiments nurtured elsewhere. And whether these emotional connections were really nurtured in the events described in the traditional labor history.

Seen in this way, Weir’s dichotomy of cultural history versus traditional, economic-determinist history appears forced. Like many historians of his generation, Weir appears determined to break history away from economics and away from anything about which economists have written. But far from discounting the industrial disputes and political conflicts central to earlier labor histories, Weir may well have shown again how important these events can be precisely because it is in these events, more than any other, that emotional connections are made binding workers together.

Despite these reservations, I would recommend Robert Weir’s book to all economic historians and labor historians. Weir has written a valuable book that should be read by all regardless of interest in the Knights of Labor. His study challenges our conventions not just about the Knights or the late-nineteenth-century American labor movement, but about social life in general.

Gerald Friedman Department of Economics University of Massachusetts at Amherst

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Subject(s):Labor and Employment History
Geographic Area(s):North America
Time Period(s):19th Century

The Evolution of International Business: An Introduction

Author(s):Jones, Geoffrey
Reviewer(s):Taylor, Graham D.

H-NET BOOK REVIEW Published by H-Business@cs.muohio.edu (July 1996)

Geoffrey Jones, The Evolution of International Business: An Introduction . London and New York: Routledge, 1996. xii + 360 pp. Bibliographical references and index. Cloth, ISBN 0-415-10775-X; paper, ISBN 0-415-09371-6.

Reviewed for H-Business by Graham D. Taylor, Professor of History/Dean of Arts and Social Sciences, Dalhousie University, Halifax, Nova Scotia

During the 1960s multinational enterprises emerged as a focus of interest (and much controversy) both for economists and for the general public. Much of the literature of that era (leaving aside the important pioneering works of Raymond Vernon, Charles Kindleberger, and John Dunning) provided a very time-bound perspective on this phenomenon. Economists tended to treat multinationals as byproducts of post-World War II international financial integration and improvements in communications and transport technologies. To the broader public, in the United States and elsewhere, they were associated with U.S. economic expansion and indeed were perceived as reflecting a particularly “American” form of business organization.

Since that era, the international economy has changed dramatically: multinational enterprises became truly “multinational” as East Asian and European firms expanded (or, perhaps more properly in many instances, reappeared) in global markets and new cross-national “strategic partnerships” of firms emerged. During the same period, the historiography of multinational enterprise was vastly enriched by scholars such as Mira Wilkins, D. K. Fieldhouse, Peter Hertner, Shin’ichiYonekawa, and many others, who not only probed well into the pre-twentieth-century origins of multinational activities, but also linked their work with broader reinterpretations of the dynamics of business evolution and organization.

Geoffrey Jones has been very much a part of that international community of scholarship on multinationals, and in this book he has undertaken to synthesize that literature. Jones far too modestly designates the study as a “text book” or “introductory survey.” It is in fact a substantial contribution to our understanding of the historical significance of multinational business, broadly defined to encompass more than the conventional category of “foreign direct investment” (FDI). His book provides a needed overview of the global dimensions of this phenomenon and a coherent framework for analysis of major historical trends and central issues emerging from the literature.

Jones’s study opens with a review of the major interpretive approaches to analyzing multinationals, including concepts of ownership advantage, internalization/transaction cost, and Dunning’s “eclectic model,” all of which are well integrated into the historical chapters that follow. He also links the study of multinational evolution to the themes of organizational development associated with Alfred Chandler and the literature on the firm and national competitiveness.

This section is followed by a general overview of the major trends in multinational operations since the mid-nineteenth century, highlighting the distinctiveness of different periods in that evolution (1880-1914; the interwar period; the 1940s to 1960s; and the period since 1971). This periodization indicates both the continuities of growth of international business and the volatility of that history, reflecting shifts in external factors (“the business environment,” encompassing the impact of wars, shifts in global trade and monetary arrangements, nationalizations and other governmental regulatory measures) and consequent changes in the strategies of firms.

The next chapters review the role of multinationals in specific industrial sectors: natural resources, manufacturing and services. There is a certain degree of repetition in these sections, as Jones works through each period for the different sectors. But it is also clear that very different patterns can be discerned in the forms and motivations underlying international direct investment in each sector, as well as in the internal dynamics of firm organization, relations among firms, and between multinationals and governments.

The final chapters focus on particular issues that have emerged in the literature. These include: the variations among nations and cultures in the propensity of their business enterprises to engage in foreign investment; the relationship between foreign direct investment and economic development, in terms of both home economies (of the multinationals) and host economies; and the relationships of multinationals and governments.

Despite its relative brevity, this is a dense book that covers a wide range of topics relating to the history and theory of multinational business, each in a balanced but succinct manner. Consequently, it would be an oversimplification to suggest that it embraces a particular set of themes or line of argument. But there are certain general characteristics of the history that emerge from the study.

From the late nineteenth to well into the twentieth century, most foreign direct investment was focused on the development of natural resources, with some spinoff growth of ancillary services. Latin America and Asia were particularly notable recipients of this investment. FDI in manufacturing expanded slowly through the early twentieth century and more dramatically in the period after World War II, and the geographic center for such investment shifted to Western Europe. This trend in turn was overtaken by developments in the service sector (particularly in finance) in the past two decades, with East Asia and Western Europe, along with the United States, as major areas of investment activity.

Although there have been periods of single-country dominance in outward investment (the United Kingdom between the 1880s and 1914, and the United States in the 1950s and 1960s), perhaps more significant has been the consistent growth of multinational operations over the past century. As noted earlier, Jones’s approach embraces a range of international business activities. During the pre-World War I era, investment flows were tied to some extent to the “imperial” territories of various European nations (with regions such as Latin America becoming a battleground for European and American investors), and occurred through a peculiar (and primarily British) form called “free-standing companies” (local enterprises owned by foreign syndicates) as well as the more familiar home-and-branch operations.

In the interwar period, as national governments imposed a variety of constraints on international trade and capital flows, international cartels flourished, in part as a means of circumventing them. In the period since the 1970s, a new form of “strategic partnership” among firms of different nationalities has emerged, reflecting both the diverse origins of enterprises in global markets and the effects of financial integration coupled with the growth of regional trade blocs. In each era multinational businesses have altered their forms of operation to suit contemporary conditions, while sustaining a general trend toward growth and integration.

The strength of the book lies in its coherence, its ability to provide a clear framework for a complex process of development over a fairly long time-span. Some of this coherence might have been lost had Jones extended his analysis even further back in time, but it might have been a useful exercise to provide a broader historical perspective on the evolution of international business (as opposed to the evolution of multinational enterprise). Jones does devote a section of his chapter on “Multinationals and Services” to a discussion of the large international trading companies of the seventeenth and eighteenth centuries; but generally he focuses on the period after 1880, with an emphasis on improvements in technology (enhancing the internal management of firms in international markets) and financial integration, accompanied by nationalistic trade policies, in shaping a business environment congenial to multinationals.

But, as studies by Larry Neal (on international capital markets), James Tracy and Jonathan Israel (on the Dutch and British “merchant empires”), and Ann Carlos and Steve Nicholas (on the internal organization of trade companies) indicate, by the eighteenth century the international economy had developed strong financial and logistical links, and businesses such as the Hudson’s Bay Company and the East India companies were developing mechanisms for internal communication and management.

Jones’s chapter on multinationals and natural resources understandably gives pride of place to the “nonrenewable” resource sector (mining and petroleum) and does not ignore the “renewable” area. But a review of multinationals in the forest products industry could reinforce some of the points he makes in other contexts. As a capital-intensive industry, forest products (especially pulp and paper) has been a field with a number of multinational actors, such as the British firm Bowater, the Swedish Stora, the U.S. Weyerhaeuser, and Canada’s MacMillian-Bloedel. The intricate links between publishing companies and paper manufacturers in international markets provide another interesting feature of this industry, ranging from direct-investment ventures (such as the Chicago Tribune‘s Canadian pulpmills) to Bowater’s “strategic partnerships” in the 1920s-1940s (not without endless friction) with the British newspaper barons, Rothermere and Beaverbrook, to exploit the forestry resources of North America.

These are minor caveats, however, and do not detract from the general quality and significance of Jones’s study. As noted earlier, the book represents a well-organized synthesis of the state of the historiography of international business today, which at the same time can provide a basis for future research in the field, by identifying major lines of argument and the areas of uncertainty and controversy that still must be addressed.

Graham D. Taylor Dalhousie University

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Subject(s):Business History
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII