Mechanization and Restructuring of the Workplace Flashcards
Dominant 19th century economic trends
→ Rapidly falling prices from 1817 to 1896, except for 1850-1857 (the Crimean war) and 1857-1873 (when prices fell, but gently);
→ Falling profits and interest rates.
What caused falling prices and profits?
→ Rapid rate of innovation in a competitive market
○ This is largely due to mechanization
→ The use of mechanized production spread because:
○ Power prices fell more rapidly than prices in general
→ A series of innovations made machines work better:
○ Improved lubrication, which meant machines were more efficient
○ The substitution of steel for wrought iron
○ Greater precision in the manufacture of moving parts
○ The invention of ball bearings, which reduced friction
→ The constant improvement of machines throughout the 19th century caused prices to fall
→ Mechanization contributed to the development of a set of new assembly industries
○ Ex. sewing machines, bicycles, small arms (cf. the trends in US and British gun prices)
○ In Britain’s guns were manufactured by artisans (high prices), in the U.S they were put through the assembly line (low prices)
Consecutive Sequence of Innovation
→ These innovations - progressively improved machinery - were generally added to existing plant
○ A technological innovation didn’t usually lead to the wholesale scrapping of existing plant and equipment
○ This sometimes caused technological bottlenecks on the assembly line
○ Logistical Strangulation: imbalances representing organizational imbalances
→ Providing employees with machinery raises an interesting question for employers/managers: Should it be used to upgrade the productivity of skilled labour or should it be used to replace skilled labour?
○ Braverman argues that the second option was chosen because of the distributional motivations of employers/managers.
→ The development of the assembly industries followed something like the following sequence:
○ At first, mechanization required skilled labour to operate the machines and to adjust
the parts that didn’t fit together (“fitters”);
○ Then, as the machinery improved it became easier to operate, which reduced the skill
requirement and improved tolerances so that more parts fit together from the beginning
- which reduced the need for skilled fitters.
→ More generally, machines tended to perform tasks for which skilled labour had previously
been required.
→ Unions originally started as strikes by strikes by skilled workers who were at risk of losing their jobs
○ Problematic for employers
→ However a solution for employer’s was to invest in machines effectively allowing them to replace skilled labour and pay employees less
→ However Braverman and Marglin argued that this did not improve engineering efficiency, instead it shifted benefits from workers to owners
Elbaum and Wilkinson
→ In the latter part of the 19th century the British steel industry had a long history, a smallish domestic market, and a large but declining export market. They were losing out to the Germans.
1) There were diverse technical standards
○ Not everyone was functioning at the same technological frontier
○ New equipment was very expensive
○ Some companies used newer equipment, others used outdated machines
2) It was hard for firms to form a common policy
○ Firms had different sizes
○ They were losing the market to the Germans
○ They were unionized by craft trade unions
There was a rapid expansion to respond to the declining market
Steel Industry
→ In contrast, while it also had a long history, the US steel industry had grown recently and rapidly, had a large domestic market (particularly for steel rails), and consequently had pretty much uniformly large, modern, plants.
○ Small number of modern plants
○ UK had many outdated factories
→ Both industries were organized by craft trade unions that imposed craft exclusivity
○ They controlled the supply of labour and limited the capacity of employers to replace skilled with unskilled labour, for whatever reason
→ In the US things came to a head with the Homestead strike at Bethlehem steel in 1892
○ Craft trade unions destroyed
→ This led to wage cuts and reorganization along Taylorist lines (deskilling)
→ This outcome was possible because the employers cooperated with each other.
→ In Britain because of the combination of older and new plants and the dependence on export markets, employers could never organize themselves to defeat the unions
Seems to support Braverman’s argument
What were the efficiency and the longer term wage effects of this?
→ British industry declined, America remained successful
→ And, while the immediate effect of the destruction of the union was wage cuts, in the long run the superior economic performance of the US steel industry relative to its British counterpart meant that, by the 1950s, unskilled US steel workers earned more than skilled British tradesmen.
→ In the long term, quality increased while prices decreased
Braverman’s Analysis
→ It is certainly true that capitalists will seek to reduce costs, including labour costs
○ Deskilling is one way of doing that
→ But Braverman’s analysis neglects is the importance of demand
→ Unless an organization of production provides the economic efficiency required to meet the competition the result will be declining demand.
○ Causes wages to fall, or to grow slowly
○ This is what happened in Britain
→ In the US, the long term performance of the steel industry subsequent to the Homestead Strike suggests that the reorganization was economically efficient; economic efficiency is associated with rising wages in the long run.
○ Productivity growth leads to increased wages
Overall, changes in the organization of production led to productivity gains
