Industrialization

Industrialization. Industrialization encompasses the growth of manufacturing, the increased adoption of mechanical means of production and natural‐resource forms of energy, the spread of the wage‐labor system, and the advent of factory enterprise. Although industrial development in the United States dates to the 1820s, the process unfolded unevenly in different trades and regions at different times and rates. In the late twentieth century, with plant closings and significant losses in manufacturing jobs, the United States experienced industrial decline.

Before 1800, many manufactured goods—for example, garments, shoes, furniture, and tools—were produced in the home for direct family consumption. European settlers in North America also relied on British imports. Urban artisans produced elite custom goods based on venerable craft traditions and practices. In theory, British mercantile policies and prohibitions on colonial manufacture may have constrained manufacturing—and sparked grievances among the colonialists—but, in practice, a limited market, natural transportation obstacles, and cheap imports effectively dampened colonial industrial progress.

Beginnings in the Early National Era.

Despite their new nation's underdeveloped industry, Americans of the early national period vigorously debated the benefits and pitfalls of industrialization. Advocates such as Alexander Hamilton and the Pennsylvania political economist Tench Coxe argued that it would ensure America's fiscal integrity and economic autonomy and eliminate idle labor. In the early 1790s, Coxe and Hamilton even promoted a failed experiment to build an industrial city in what later became Paterson, New Jersey. Thomas Jefferson and his allies, on the contrary, feared that a large, permanent class of factory workers would threaten a democratic republic based on virtuous yeoman producers and citizens.

This debate shaped but did not thwart industrialization, especially in textile production. U.S. textile manufacturing, benefiting from a period of extraordinary invention of textile machinery in Great Britain, followed four distinct paths.

In 1789, Samuel Slater (1768–1835) immigrated to America from Great Britain fresh from an apprenticeship in a cotton textile mill. He was only the first of a cohort of immigrant British mechanics who brought new technologies. Financed by the Brown family of Providence, Rhode Island, Slater established the nation's first successful cotton mill in Pawtucket, Rhode Island, in 1793, and then built similar cotton‐mill villages throughout southeastern New England. They were characterized by water‐powered spinning mills operated by women and children; hand‐loom weaving by men in company‐provided houses; and company‐established schools, churches, and stores. Spreading across the Northeast and the South, the company‐owned mill village based on family labor became a basic component of American industrialization.

Francis Cabot Lowell (1775–1817) of Massachusetts had a grander vision. After observing the latest technological developments in Britain, Lowell secured financial support from other Boston merchants and constructed a fully‐integrated and mechanized textile factory in Waltham, Massachusetts, in 1814. When waterpower there limited expansion, Lowell and his associates planned a large industrial works at the falls of the Merrimack River, thirty‐five miles north of Boston. Lowell died before the industrial city bearing his name was built.

Textile production at the Lowell mills represented a revolution in business practices including: the corporate form of ownership and the amount of capital amassed; the concentration of all stages of production under a single roof, from the cleaning, carding, and spinning of raw fibers to the weaving and finishing of cloth; the application of technology (including fully mechanized power looms); the scale of employment (by the 1850s, more than thirteen thousand workers labored in the city's fifty‐two mills); and the encouragement of mass consumption as bolts of inexpensive broadcloth flowed from the mills. Lowell also entailed a remarkable human story, as young New England farm women came to work in the factories and reside in company boardinghouses. In the 1830s and 1840s, protesting deteriorating working conditions, they participated in the nation's earliest strikes by industrial workers.

Along with Lowell and Slater‐like mill villages, a third kind of industrial system characterized by diversity and specialization emerged in the larger cities. Textile production in Philadelphia, for example, involved the manufacture of fancy cloth in separate spinning, weaving, and finishing establishments. A vast array of products—from garments to jewelry, machine parts, fine surgical instruments, pottery, and paints—flowed from homes, sweatshops, craft shops, mills with hand‐powered machinery and more mechanized factories in the nation's metropolitan centers. The typical nineteenth‐century manufacturing firm in New York City or Philadelphia was small‐to‐medium sized, was family owned and operated, produced small batches of quality or seasonal wares, and often relied on skilled labor. Insufficient waterpower, the presence of niche markets and skilled workers, and the technological know‐how and entrepreneurialism of British and German immigrants all figured in the creation of an urban industrial base characterized by variety and small‐scale modes of production.

The American South added a fourth strand to early American industrialization: industrial slavery. Before the Civil War, leased and directly owned African‐American slaves worked in southern textile factories, ironworks, tobacco‐processing plants, and lumber and grain mills. However, profitability of cotton plantation agriculture, coupled with southern white fears of forming a concentrated urban work force of slaves as well as southerners' preference for northern and imported manufactured goods, limited industrialization in the antebellum South. Investment flowed more readily into the purchase of land, cottonseed, and slaves than into industrial facilities.

Factors Influencing Industrial Development.

In North and South, population growth, abundant natural resources, prosperous agriculture, and an expanding market stimulated industrial development. Government played a minimal role. While the federal, state, and local governments subsidized canal and railroad building, public moneys were not advanced toward manufacture. Protective tariffs remained a politically contentious issue, and only in a few areas, such as the iron and steel industry, did tariff protection significantly help domestic industries. The nation's political and legal system, however, did affect economic development. The U.S. Constitution, for example, established patent procedures that encouraged invention and reserved to the states substantive powers that included authority to charter businesses. Thus, during the 1840s, states enacted general incorporation laws that promoted the corporate form of enterprise. Judicial decisions also fostered industrial expansion.

One seeming obstacle to industrial development, a relative scarcity of labor, especially skilled labor, actually proved an asset, motivating entrepreneurs to mechanize and to substitute capital for labor. In Lowell, for example, lacking a preexisting labor base, textile manufacture could only be conducted in fully mechanized ways. (Conversely, in places where skilled hands abounded, such as Philadelphia, handwork production persisted.) Similarly with few skilled assemblers of guns available, federal arsenals and private companies pioneered in mass production of standardized interchangeable parts that could be assembled by relatively unskilled labor. British investigators, impressed by the progress achieved in U.S. mass‐production techniques in gun manufacture, clock‐making, sewing‐machine production, and other trades, dubbed what they saw the “American System” of Manufactures.

Yet, the so‐called American System was slow in developing. In the late nineteenth century, U.S. factories still needed skilled assemblers to file and fit in place less than precision‐tooled components. Only with the twentieth‐century advent of conveyor‐belt, mass assembly, first in the automotive industry, did the system of interchangeable‐parts production become fully realized.

Except in Lowell, U.S. industrial development encompassed older forms of production alongside new techniques. In Lynn, Massachusetts, the center of shoe manufacture, for example, shoes were first produced in homes through an outwork system; later, the attachment of the upper leathers to the soles moved into centralized handwork shops. Mechanized factories emerged by the mid‐nineteenth century, but older work settings persisted.

Labor conflict also marked early American industrialization. Journeymen demonstrated against the dilution of craft practices in artisan shops and their subordination as wage laborers. In the new factories, industrial workers protested against the harsh conditions of work. Women especially led and participated in notable strikes in Lowell and Lynn.

From the Civil War to 1900.

By the Civil War, industrialization had made great strides. While the war was affected by industrialization—accuracy of machine‐tooled rifles increased casualties and altered military strategies—it did not modify the established path of economic growth. The post–Civil War Era, however, saw extraordinary manufacturing growth, with a five‐fold increase in output between 1870 and 1900, by which time 35 percent of the world's production of manufactured goods was pouring from U.S. factories, more than the combined output of rivals Great Britain, Germany, and France.

This industrial growth was based primarily on more workers in more factories producing more goods rather than on technological innovation or gains in productivity. The geographical expansion of industry in the late nineteenth century abetted the nation's rise to industrial supremacy. During this period, a wide manufacturing belt stretched from the Northeast to Chicago, extending southward to Ohio and Pittsburgh, Pennsylvania, the world's center for iron and steel production. Chicago, with its mechanized meatpacking and meat‐processing plants, steel mills, and farm‐machinery works, attracted the greatest attention, yet diversified industry flourished throughout the new industrial heartland. Philadelphia and New York City, with their shops, mills, and factories, remained major manufacturing centers, and textile production spread across New England. Wilmington, Delaware, became famous for gunpowder, leather tanning, and—somewhat later—chemicals; Trenton, New Jersey, for ceramic wares and wire cable; Paterson for silk cloth; Providence for machinery and jewelry; Troy, New York, for iron stoves; Rochester, New York, for photographic materials and equipment; Buffalo, New York, and Cleveland, Ohio, for steel; Cincinnati, Ohio, for soap; and Grand Rapids, Michigan, for furniture.

Small‐to‐medium‐sized firms dominated this Northeast and Midwest industrial belt, but a new kind of manufacturing concern emerged in the late nineteenth century, eventually to dominate the economic landscape: the large‐scale, corporately owned, bureaucratically managed industrial enterprise. Several factors contributed to the rise of big business. A transcontinental railroad system created a national marketplace that heightened competition and encouraged manufacturing concerns to grow vertically, from accessing raw materials to distributing final products. Intense competition also led to a wave of corporate mergers and consolidations, including J.P. Morgan's amalgamation of key steel producers into the giant U.S. Steel Corporation in 1901. Finance capitalists encouraged mergers, as they profited by underwriting, issuing, and exchanging corporate securities. Those consolidated firms that created profitable economies of scale and scope through professional managerial structures justified the emergence of mammoth enterprises.

Labor Conflict in the Industrial Age.

Intense labor conflict accompanied the geographical and corporate manufacturing expansions of the late nineteenth century. Between 1880 and 1900, an average of more than 1,000 strikes involving 200,000 workers, and ranging from crippling nationwide walkouts to local job actions, occurred. Workers struck for more than higher wages and shorter hours. The economic and political threat that giant corporations posed to belief in equality and yeoman producership fueled grievances and produced community support for workers' demands. The capricious rule of foremen in large enterprises generated strike activity and calls for union recognition as well as union‐determined work rules to ensure fairness and security.

The power of skilled workers over production processes proved another source of labor tension. Business executives attempted to assert greater managerial control over their skilled employees through technology, embedding the production process in machines and measuring devices; through the scientific management principles of Frederick Winslow Taylor and others; and through concerted antiunion efforts. Two dramatic late nineteenth‐century labor battles involved skilled workers. In Chicago in May 1886, conflict between managers and craft unionists at the McCormick Reaper Company coincided with a nationwide labor protest for an eight‐hour workday; the McCormick strike presaged the Haymarket Square bombing and police riot. In July 1892, a decision by the steel magnate Andrew Carnegie and his chief associate, Henry Clay Frick, to eliminate craft unionism in Carnegie's Homestead, Pennsylvania steelworks led to a pitched battle between strikers and Pinkerton agents.

Not every firm dealt with labor tension through repressive tactics. Some tried to win their employees' loyalty through positive means. George Pullman, manufacturer of the famed Pullman railroad sleeping and dining cars, introduced a notable experiment in corporate benevolence by building a corporate town outside Chicago with housing and other amenities for his employees. Pullman's altruism, however, did not prevent his employees from striking in 1894. The Pullman strike and railroad boycott dampened such paternalistic initiatives but did not deter other corporate efforts to gain worker allegiances through an elaboration of fringe benefits. Many large industrial firms introduced profit‐sharing plans; social and sports activities; and medical, life and retirement insurance plans in the early twentieth century.

The rise of new corporate bureaucracies and of heavy industries such as steel and machine manufacture led scholars to characterize developments in the late nineteenth century as a “second industrial revolution.” Yet important continuities link the ante‐ and postbellum periods. Product diversity; uneven technological progress; varied work environments; the persistence of specialized, small‐batch production; and control by skilled workers and foremen of work processes, even in large‐scale enterprises, remained hallmarks of American industrialization into the early twentieth century. Manufacturing growth could still be characterized as more extensive than intensive.

The Twentieth Century.

A definite growth in productivity, however, occurred in the twentieth century. The most dramatic breakthrough came in automobile manufacturing with the introduction of the moving assembly line. Cars initially were produced by teams of skilled assemblers who fit together crudely made components. Henry Ford, determined to produce an inexpensive car for the mass market, conceived of a different system. Ford first had to improve standardized‐parts production. Rather than relying on suppliers, Ford assumed direct control of components manufacture, overseeing innovations with new precision measuring devices and machinery. Having standardized parts fabrication, Ford in 1910 opened a revolutionary car assembly plant in Highland Park, Michigan. Thousands of workers were stationed along a conveyor‐belt‐driven assembly line, each repetitiously adding parts to Ford's Model T car.

Ford's system did not work flawlessly. Until Ford introduced his innovative Five‐Dollars‐a‐Day wage plan, the company experienced high labor turnover. By the late 1920s, Ford's standardized‐production methods also proved an impediment. General Motors (GM), a new conglomerate of firms, quickly surpassed Ford with a sales strategy that offered a different car for every income level and implemented a more flexible production system involving multipurpose machinery and relying more on skilled labor. Ford adjusted to the challenge only slowly.

Despite its difficulties, assembly‐line production spread rapidly in the 1920s, from food processing to electric appliances. Indeed, the 1920s saw a flowering of American manufacture. Automobile production stimulated additional growth in the steel and rubber industries. Such new industries as petrochemicals, electronics, and aviation appeared. Following the lead of the DuPont chemical company and GM, large‐scale firms diversified their product lines, decentralized production and management, and widened their productive capacities in order to tap new mass consumer markets. Industrial workers shared somewhat in the prosperity of the 1920s as the recipients of broader corporate fringe benefits.

Below the surface, however, lay harbingers of economic crises to come—not just the collapse of the economy during the depression of the 1930s, but long‐term declines in industrial production and employment. Indeed, deindustrialization had its origins in the 1920s. New England textile mills closed in the face of low‐wage competition, particularly from the South. Boarded‐up factories appeared in America's earliest industrial sites. To reduce competition, national corporations bought out firms in older industrial centers such as Trenton, New Jersey, and rather than modernize antiquated facilities, simply liquidated operations. In Philadelphia, older firms producing specialized goods failed as American consumers preferred cheaper mass‐produced goods.

The depression‐wracked 1930s witnessed a more general contraction in manufacture, industrial production falling by 35 percent. This was the worst of a series of depressions, including contractions in the 1830s, 1870s, and 1890s that severely tested America's economic development.

Industrial firms during the 1930s also faced a newly militant labor force. Unskilled and semiskilled workers in mass‐production industries—largely first‐ and second‐generation eastern and southern Europeans who remained outside the craft unions affiliated with the American Federation of Labor—successfully organized and gained union recognition and contracts through the Congress of Industrial Organizations. By the early 1940s, the U.S. mass‐production industries were heavily unionized.

The Depression of the 1930s did not end until World War II, when military production regenerated the economy. As in World War I, war production provided employment opportunities for women as well as for African Americans and other minorities who had been discriminated against in hiring for better manufacturing jobs.

High military production continued during America's Cold War Era arms race with the Soviet Union. For the first time, military manufacture constituted a critical element in the nation's industrial system. Military production also led to a geographic shift away from the older industrial heartland. Defense‐related industries (including aerospace manufacture) clustered in southern California and the Pacific Northwest near Seattle, Washington, and in an arc stretching across the South from Columbia, South Carolina, through Huntsville, Alabama, to Houston, Texas.

The end of the Cold War reduced defense spending and eliminated employment in areas that had prospered through military‐goods production. These regions joined older industrial areas in experiencing industrial decline. Through factory closings and corporate downsizing, more than 1.4 million manufacturing jobs disappeared between 1970 and 1995, a 7‐percent loss during a period when total employment grew by 66 percent. (Service‐sector employment accounted for the vast growth in jobs.) While manufacturing jobs represented a quarter of the total in 1970, they constituted 15 percent by 1995; the contribution of service‐sector employment grew, conversely, from 15 to 25 percent. The vanishing industrial jobs often had offered higher pay, union protection, and better fringe benefits.

Foreign competition, new communications and transportation technologies enabling firms to shift manufacturing overseas, poor managerial strategies, failure to modernize facilities, and high wages and inflexible union rules all contributed to the absolute and relative decline of American industry. But the process was uneven. While steel‐industry employment fell by more than 60 percent between 1970 and 1995, the automotive work force grew by 6 percent, and with robotics and other automated technologies, their productivity increased by 33 percent. While employment in the metal and machine trades nearly halved, industrial‐machinery and metal‐products production expanded rapidly. With the spread of computers, employment in computer manufacture grew by 50 percent. Abandoned and vandalized factory buildings and vacant lots in the nation's once proud industrial centers, however, overshadowed the bright spots as decline largely characterized American industrialization at the end of the twentieth century.
See also Automation and Computerization; Aviation Industry; Business Cycle; Canals and Waterways; Capitalism; Chemical Industry; Consumer Culture; Cotton Industry; Dams and Hydraulic Engineering; Depressions, Economic; Economic Development; Electricity and Electrification; Expansionism; Factory System; Global Economy, America and the; Haymarket Affair; Homestead Lockout; Hydroelectric Power; Immigrant Labor; Industrial Relations; Labor Markets; Labor Movements; Mass Marketing; Stock Market; Strikes and Industrial Conflict; Textile Industry; Urbanization; Women in the Labor Force.

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Walter Licht