Recent+Economic+Changes

<[|http://america.eb.com/america/article?articleId=386414&query=**David**+**Wells**]> [Accessed June 15, 2009]. || Machinery is now recognized as essential to cheap production. Nobody can produce effectively and economically without it, and what was formerly known as domestic manufacture is now almost obsolete. But machinery is one of the most expensive of all products, and its extensive purchase and use require an amount of capital far beyond the capacity of the ordinary individual to furnish. There are very few men in the world possessed of an amount of wealth sufficient to individually construct and own an extensive line of railway or telegraph, a first-class steamship, or a great factory. It is also to be remembered that, for carrying on production by the most modern and effective methods, large capital is needed, not only for machinery but also for the purchasing and carrying of extensive stocks of crude material and finished products. Hence, from such conditions have grown up great corporations or stock companies, which are only forms of associated capital organized for effective use and protection. They are regarded to some extent as evils; but they are necessary, as there is apparently no other way in which the work of production and distribution, in accordance with the requirements of the age, can be prosecuted. The rapidity, however, with which such combinations of capital are organizing for the purpose of promoting industrial and commercial undertakings on a scale heretofore wholly unprecedented, and the tendency they have to crystallize into something far more complex than what has been familiar to the public as corporations, with the impressive names of syndicates, trusts, etc., also constitute one of the remarkable features of modern business methods. It must also be admitted that the whole tendency of recent economic development is in the direction of limiting the area within which the influence of competition is effective. And when once a great association of capital has been effected, it becomes necessary to have a mastermind to manage it — a man who is competent to use and direct other men, who is fertile in expedient and quick to note and profit by any improvements in methods of production and variations in prices. Such a man is a general of industry, and corresponds in position and functions to the general of an army. What, as a consequence, has happened to the employees? Coincident with and as a result of this change in the methods of production, the modern manufacturing system has been brought into a condition analogous to that of a military organization, in which the individual no longer works as independently as formerly, but as a private in the ranks, obeying orders, keeping step, as it were, to the tap of the drum, and having nothing to say as to the plan of his work, of its final completion, or of its ultimate use and distribution. In short, the people who work in the modern factory are, as a rule, taught to do one thing — to perform one, and generally a simple, operation; and when there is no more of that kind of work to do, they are in a measure helpless. The result has been that the individualism or independence of the producer in manufacturing has been in a great degree destroyed, and with it has also in a great degree been destroyed the pride which the workman formerly took in his work — that fertility of resource which formerly was a special characteristic of American workmen, and that element of skill that comes from long and varied practice and reflection and responsibility. Not many years ago every shoemaker was or could be his own employer. The boots and shoes passed directly from an individual producer to the consumer. Now this condition of things has passed away. Boots and shoes are made in large factories; and machinery has been so utilized, and the division of labor in connection with it has been carried to such an extent, that the process of making a shoe is said to be divided into sixty-four parts, or the shoemaker of today is only the sixty-fourth part of what a shoemaker once was.
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 * David** A. **Wells** " Machines and Economic Change," //Annals of American History.//

Another exceedingly interesting and developing feature of the new situation is that, as machinery has destroyed the handicrafts and associated capital has placed individual capital at a disadvantage, so machinery and associated capital in turn, guided by the same common influences, now war upon machinery and other associated capital. Thus the now well-ascertained and accepted fact, based on long experience, that power is most economically applied when applied on the largest possible scale, is rapidly and inevitably leading to the concentration of manufacturing in the largest establishments and the gradual extinction of those which are small.

In the great beef slaughtering and packing establishments at Chicago, which slaughter 1,000 head of cattle and upward in a day, economies are effected which are not possible when this industry is carried on, as usual, upon a very small scale. Every part of the animal — hide, horns, hoofs, bones, blood, and hair — which in the hands of the ordinary butcher are of little value or a dead loss, are turned to a profit by the Chicago packers in the manufacture of glue, bone dust, fertilizers, etc.; and accordingly the great packers can afford to and do pay more for cattle than would otherwise be possible — an advance estimated by the best authorities at $2 a head. Nor does this increased price which Western stock growers receive come out of the consumer of beef. It is made possible only by converting the portions of an ox that would otherwise be sheer waste into products of value. … The same influences have also to a great degree revolutionized the nature of retail trade, which has been aptly described as, “until lately, the recourse of men whose character, skill, thrift, and ambition won credit and enabled them to dispense with large capital.” Experience has shown that, under a good organization of clerks, shopmen, porters, and distributors, it costs much less proportionally to sell a large amount of goods than a small amount; and that the buyer of large quantities can, without sacrifice of satisfactory profit, afford to offer to his retail customers such advantages in respect to prices and range of selection as almost to preclude competition on the part of dealers operating on a smaller scale, no matter how otherwise capable, honest, and diligent they may be. The various retail trades in the cities and larger towns of all civilized countries are accordingly being rapidly superseded by vast and skillfully organized establishments — and in Great Britain and Europe by cooperative associations — which can sell at little over wholesale prices a great variety of merchandise, dry goods, manufactures of leather, books, stationery, furs, ready-made clothing, hats and caps, and sometimes groceries and hardware, and at the same time give their customers far greater conveniences than can be offered by the ordinary shopkeeper or tradesman. … From these specimen experiences it is clear that an almost total revolution has taken place, and is yet in progress, in every branch and in every relation of the world's industrial and commercial system. Some of these changes have been eminently destructive, and all of them have inevitably occasioned, and for a long time yet will continue to occasion, great disturbances in old methods and entail losses of capital and changes of occupation on the part of individuals.