Sunday, September 22, 2013

Industrial Capitalism in Antebellum America

Rather than merely rely on my interpretation for the development of capitalism in Antebellum American (meaning before the American Civil War), we'll start off this presentation by listening to a lecture from someone a bit more sympathetic to these developments, professor Donald Miller (no relation):

I. Division of Labor and the Factory

A. Outwork--the manufacture of some goods took place in the Early National period not in factories, but in the home, or in home-based shops.

1. Shoe Manufacturing in Lynn, Massachusetts--outwork began with the recruitment of workers from the countryside. Entreprenuers hired skilled craftspeople to cut leather hides into usable shapes (called "blanks"), and then recruited farmers and their families to sew the soles together, and attach the uppers to the sole. The market for "ready-made" shoes was largely the slave labor force in the South.

B. Factories--factories grew from established small shops, as master craftsmen ("masters") expanded their operations. As these larger shops became economically successful, they attracted other investors who new nothing about the manufacture of goods--but much about squeezing greater profits from a business.

1. Porkopolis--in the 1830s Cincinnati merchants built large slaughterhouses that slaughtered thousands of hogs every month. This was accomplished by developing a system of overhead rails that eased transportation of the hog carcasses around from station to station (the predecessor of the assembly line), dividing the slaughtering process into a number of discrete steps.

2. Textile manufacturing--

a. Great Britain--was the leading manufacturing nation in the world, largely on the strenght of its textile industry. To keep this position, economic and political leaders worked together to attempt to prevent the immigration of mechanics who held much of the manufacturing knowledge--especially the manufacture of machine tools.

i. "Free trade"--because of the manufacturing advantage Great Britain held over much of the rest of the world, British politicians became the strongest proponenets of the idea of "free trade"--of lowering trade barriers so the British could export their inexpensive manufactured goods.

ii. "Protectionism"--countries, including the United States, responded to this competition be "protecting" their own nascent industries by imposing tariffs (taxes on imported goods). These tariffs made imported goods more expensive, but also helped to protect and promote manufacturing--and therefore manufacturing jobs--in the host country.

b. United States--the earliest textile factory in the United States was located in Pawtucket, Rhode Island (near Providence) at the falls of the Blackstone River. The falls powered the water wheel that, through a series of belts and pulleys, provided power to the machinery in the factory.

i. Finding workers--initially, workers at the Slater Mill in Pawtucket were recruited as family units. Fathers were expected to enforce factory discipline. This workforce, however, was largely resistant to the implementation of this factory discipline, taking days off to fish or hunt, and fathers often failed to discipline their offspring for their actions at work. By the 1820s, families were replaced by young, unmarried women from surrounding farms, who looked to work in factories as an escape from the drudge work on these family farms. This was first implemented at a mill in Waltham, Mass., and became known as the "Waltham Plan."

C. American Mechanics and Technological Innovation

1. Mechanic--today, we use the term "mechanic" to refer mainly to someone who works on automobiles; in the early 19th century, however, a mechanic was a highly-skilled mechanical generalist, able to build machine tools (machines used to make other machines); to be called a mechanic was very high praise,

2. Eli Whitney--was one of the premier mechanics in the Early National era. Whitney's mechanical genius led not only to the invention of the cotton gin, but also to the development of precision machine tools and interchangeable part. Whitney and a partner manufactured manufactured military weapons, and Whitney designed and built machines tools that could rapidly produce interchangeable musket parts. Being able to manufacture interchangeable parts was a huge leap forward in developing the manufacturing process, because the modern factory could not operate without it.

D. Wage workers and the Labor Movement--from early to the mid-19th century, many American craft workers espoused artisan republicanism, an ideology based on liberty and equality. They saw themselves as a group of small-scale producers, equal to one another and free to work for themselves.

1. Formation of unions--with the development of the outwork and factory system, more workers were becoming dependent upon wages, and less likely to become a small-scale producer (although this myth lived on for decades after this time). To assert their independence, workers rejected the term "master" and began using the Dutch work "boss" (which means master) instead. At about the same time, these workers also rejected the term "servant" for themselves, and instead became "hands" or "hired hands."

a. Workers with skills not easily transferred to machines--stone masons and members of other building trades were the most prominent examples--were able to retain a great deal of independence. Other workers, like shoemakers, hatters, printers, furniture makers, and weavers, saw their skills undermined by outwork and the introduction of machines--and as a result their status fell.

2. Labor ideology--with the formation of early labor unions, there also developed an ideology to support these unions: producerism and the labor theory of value.

a. Labor theory of value--held that the price for a particular good should be determined by the amount of labor required to produce it--and that the worker should get the lion's share of the profit, rather than the owner of the factory, who did nothing to add value to products. Although this idea was popularized by Karl Marx (who appropriated the idea from an English philosopher/economist named David Riccardo), but the idea first gained hold in early 19th century America.

II.             Canals – canals made the inexpensive transportation of raw materials from the hinterland to the city, and finished materials from the city to the hinterland, possible, which created markets both for farmers in these hinterlands (and encouraged them to begin to grow more to satisfy the market, rather than for their own subsistence) and for merchants in the cities (which also increased demand for inexpensive manufactured goods, which encouraged the construction and implementation of factories.

A.   Erie Canal – the construction of the Erie Canal ensured that New York City would remain the commercial center of the United States; its success spurred the construction of canals all over the country in the first half of the 19th century.

1.    Construction costs – although calls for the federal government to finance construction of the canal, in the end the state had to finance the project.  It did so by selling bonds to citizens, most of which was sold initially in relatively small increments ($1000-$2000); eventually the bonds were sold on the London Stock Market, and as far away as China, but the initial construction was financed by small investors within the state.

2.    Local contractors – were responsible for constructing specific portions of the canal; most had little experience in constructing something like this project, and were forced to learn on the fly; the profession of civil engineering was in fact invented on this project in the United States

3.    First section of canal opened in 1818 – the state of New York built the easiest section of the canal first, to assure success so that more investors would be encouraged to invest money.  This strategy worked; by 1824 the canal bonds were being traded on the London Stock Exchange.

4.    Expansion of markets for New York City – with the opening of the entire canal system, from Albany to Buffalo, then by the Hudson River to New York City in 1826, the market area for New York City became the entire Great Lakes area; raw materials (or near raw materials) where sent to NYC where they were finished into manufactured goods; these goods were then sent back into the hinterlands, or sent to Europe in exchange for European finished goods, which would be shipped to far-flung areas in the market area.

B.    Spur for the construction of other canals – the huge success of the Erie Canal spurred the construction of a large number of other canals.

1.    Pennsylvania Main Line – to connect Philadelphia to the coalfields in the Allegheny Mountains; the engineering problems that they had to be overcome for that the canal took much longer to become profitable.

2.    Baltimore and Ohio – to connect Baltimore to the Ohio River; again the construction costs to build the canal through the Allegheny Mountains prevented the canal from becoming quickly profitable.
3.    Canals in the Midwest

a.    Ohio and Erie – connected Cleveland to the Ohio River at Portsmouth

b.    Wabash and Erie – to connect western Indiana with a Lake Erie port at the Maumee River; Indiana granted land in northwestern Ohio to accomplish this, which the state of Ohio protests.  Eventually becomes two separate canal projects—the Wabash and Erie, and the Miami and Erie canal; the Miami and Erie eventually extends from Cincinnati northward to a city formerly thought to be at the southern boundary of the then territory of Michigan.

c.    Illinois and Michigan Canal – this canal connected a backwater village near the southern shore of Lake Michigan, which had taken its name from the native word for the smell of rotting onions that grew in the swamps in its midst (Chee-caw-go), to the Illinois River, and then southward to the Mississippi River.  This city finds its greatest growth in the second transportation wave, the railroad.

C.   End of the Canal Era – by the 1840s, the greatest era of canal building had ended; none of the canals built during the era were as successful as the Erie Canal; in fact, several states that had built several canals during this time period—namely, Ohio and Illinois—teetered on the edge of bankruptcy as a result.
1.    Capitalization costs – the construction of canals were capital intensive; digging miles of canal, even by cheaply employed immigrant labor, cost a lot of money; upkeep on the canals, once dug, was an added expense.
2.    Technology superceded – the improvements made in the construction of steam engines, which made possible the railroad locomotive, made the canal obsolete.
a.    Railroads – able to move freight year round; canal could only be used during the non-winter months, since they were dependent upon water; railroad also prove to be faster, and able to transport more material in a single load.  Toledo, in fact, was the terminus of a railroad before its canal era began (the Toledo and Adrian railroad, which began operating in 1837)

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