Nonnenmacher on Klein, _The Genesis of Industrial America, 1870-1920_

[Book Reviews in Economic and Business History]

Published by EH.NET (December 2008)

Maury Klein, _The Genesis of Industrial America, 1870-1920_. New York: 
Cambridge University Press, 2007. xii + 224 pp. $23 (paperback), ISBN: 
978-0-521-67709-7.

Reviewed for EH.NET by Tomas Nonnenmacher, Department of Economics, 
Allegheny College.


In _The Genesis of Industrial America_, Maury Klein (University of Rhode 
Island) offers an engaging narrative overview of the growth of American 
business during the 50 years following the Civil War. Relying largely on 
a series of brief case studies and biographies, Klein uses the metaphor 
of a hothouse to describe the source of the tremendous economic growth 
experienced in the United States. In this hothouse, entrepreneurs grew 
big business, which ultimately reshaped not only the economy, but 
culture and society as well. Mass consumption and distribution required 
an organizational revolution, which spread beyond the confines of 
business into all aspects of American life. Klein’s major critique of 
the growth of big business is that it was done in a short-sighted 
manner. Path dependence generated consequences that were unintended, far 
reaching, and welfare reducing.

Beginning in Chapter 2, Klein focuses on three sectors of the economy 
and provides short biographies of several entrepreneurs who played key 
roles in reshaping their industries. Chapter 2 covers the business of 
farming. Technological change forced a restructuring of agricultural 
production, but did not allow farmers to grow rich like urban captains 
of industry. Only corporations and speculators were able to become 
fabulously wealthy off of the land. Chapter 3 provides a broad overview 
of the transportation and telecommunication revolutions. It focuses on 
Cornelius Vanderbilt and Theodore Vail as examples of business leaders 
who transformed the shape of their industries by pushing forward 
technological and organizational change. Chapter 4 focuses on 
innovations in power. Considerable time is spent examining the AC vs. DC 
debate by telling the stories of George Westinghouse, Thomas Edison, and 
Samuel Insull.

In the next two chapters, Klein switches from an industry focus to a 
broader perspective on the organizational revolution. In Chapter 5, he 
covers how business reorganized itself in order to direct mass 
production. In the next chapter he argues that the organizational 
revolution not only transformed the way business was done, but 
transformed other activities as well. Government, unions, professional 
associations, and social organizations all either arose for the first 
time or became bigger and more centrally controlled, partially in 
response to the growth of business. Klein argues that the era of the 
individual was over, and the era of the organization had begun.

The final two chapters concern the social and cultural implications of 
the growth of big business. Chapter 7 deals broadly with the topic of 
urbanization, and in specific with the growth of political machines. 
Klein argues that machine politics were part of the organizational trend 
that swept all aspects of society. To achieve political outcomes, 
hierarchies were required to organize and incentivize voters. Chapter 8 
concerns the marketing and advertising of mass produced output. 
Producers began to appeal directly to consumers rather than wholesalers 
or retailers, and brand names became more important. Mass consumption 
and distribution largely destroy the “small town” traditions of consumption.

Klein believes that Americans have been too sanguine about the trend 
that “the more things change, the more they become big business” (p. 
196). Americans’ lack of foresight is not limited to the shortcomings of 
big business though. The theme of path dependence is touched upon 
frequently throughout the book. According to Klein, the natural 
abundance of the country led to short-sighted decision-making. This 
argument may be pushed too far when he argues that the “Louisiana 
Purchase revealed yet again the willingness of Americans to embrace 
economic opportunity in the short term regardless of what long-term 
consequences might ensue” (p. 9). The long-term consequences to which he 
refers in this case are the continued spread of slavery and the 
devastation of the Civil War. Other examples of the short-sightedness of 
Americans include the depletion of natural resources (p. 10), the 
misallocation of land in both rural and urban settings (p. 40), the 
unchecked growth of corporations (p. 108), and the elevation of work and 
material gain above traditional social and cultural activities (p. 161). 
While many of the cases of path dependence led to costly outcomes, Klein 
could have done more to systematize his thoughts on the topic. It is not 
clear whether American short-sightedness was unique or whether it was a 
characteristic shared by entrepreneurs around the world. Path dependence 
is a recurring theme of this book, and yet no analytical framework for 
studying it is provided.

The intended audience for this book seems to be the general public 
rather than economic and business historians focused on this era. The 
book has no footnotes or citations, relying instead on a list of 
“sources and suggested readings” for each chapter. Authors and books are 
frequently referenced in the text but missing in the sources and the 
data concerning economic growth are not referenced. Klein has not 
included much of the recent scholarship on this era, relying heavily 
instead on classics in the field, including his own important work. The 
book’s shortcomings for an academic audience are made up for by clear 
writing, lively prose, a consistent narrative, engaging biographies, and 
a nuanced critique of the growth of big business.


Tomas Nonnenmacher is Associate Professor of Economics, Allegheny 
College, Meadville, PA. His most recent article, “Culture, Coercion, and 
Contracting: Labor and Debt on Henequen Haciendas in Yucatán, Mexico, 
1870–1915”  is coauthored with Lee Alston and Shannan Mattiace and will 
appear in the _Journal of Economic History_ in March 2009.

Copyright (c) 2008 by EH.Net. All rights reserved. This work may be 
copied for non-profit educational uses if proper credit is given to the 
author and the list. For other permission, please contact the EH.Net 
Administrator (administrator at eh.net). Published by EH.Net (December 
2008). All EH.Net reviews are archived at http://www.eh.net/BookReview.