Assembly Line For the first time, Henry Ford s entire Highland Park, Michigan automobile factory is run on a continuously moving assembly line when the chassis the automobile s frame is assembled using the revolutionary industrial technique. A motor and rope pulled the chassis past workers and parts on the factory floor, cutting the man-hours required to complete one Model T from 12-1/2 hours to 6 hours. Within a year, further assembly line improvements reduced the time required to 93 man-minutes. The staggering increase in productivity effected by Ford s use of the moving assembly line allowed him to drastically reduce the cost of the Model T, thereby accomplishing his dream of making the car affordable to ordinary consumers. In introducing the Model T in October 1908, Henry Ford proclaimed, I will build a motor car for the great multitude. Before then, the decade-old automobile industry generally marketed its vehicles to only the richest, because of the high cost of producing the machines. Ford s Model T was the first automobile designed to serve the needs of middle-class citizens: It was durable, economical, and easy to operate and maintain. Still, with a debut price of $850, the Model T was out of the reach of most Americans. The Ford Motor Company understood that to lower unit cost it had to increase productivity. The method by which this was accomplished transformed industry forever. Prototypes of the assembly line can be traced back to ancient times, but the immediate precursor of Ford s industrial technique was 19th-century meat-packing plants in Chicago and Cincinnati, where cows and hogs were slaughtered, dressed, and packed using overhead trolleys that took the meat from worker to worker. Inspired by the meat packers, the Ford Motor Company innovated new assembly line techniques and in early 1913 installed its first moving assembly line at Highland Park for the manufacture of flywheel magnetos. Instead of each worker assembling his own magneto, the assembly was divided into 29 operations performed by 29 men spaced along a moving belt. Average assembly time dropped from 20 minutes to 13 minutes and soon was down to five minutes. The immediate impact of the assembly line was revolutionary. The use of interchangeable parts allowed for continuous work flow and more time on task by
labourers. Worker specialization resulted in less waste and a higher quality of the end product. Sheer production of the Model T dramatically increased. Also workers gained advantages too! The assembly line also drastically altered the lives of those in Ford s employ. The work day was cut from nine hours to eight hours so that the concept of the three shift workday could be implemented with greater ease. Although hours were cut, workers did not suffer from lower wages; instead, Ford nearly doubled the existing industry standard wage and began paying his workers $5 a day. Ford s gamble paid off his workers soon used some of their pay increases to purchase their own Model Ts. By the end of the decade, the Model T had truly become the automobile for the masses that Ford had envisioned. The assembly line was important during this time due to its purpose in mass production. But, to this day is still used as the main form of manufacturing and is a big factor in commerce around the globe. It allowed vehicles to be produced less expensively for both the consumer and the company. It saved the companies money by helping them pay less for their labor per vehicle produced. It allowed the consumer to have a vehicle as part of their everyday life. The ease of production also led to companies charging less for their vehicles and that is what allowed more consumers to obtain a vehicle. Questions: 1. Who started/profited from the process of the moving assembly line? Where did he get this idea from? 2. In what ways did the moving assembly line benefit the individual and his company? 3. Why was the assembly line so important? 4. In what ways did the workers benefit from the moving assembly line?
The Rise of Labour Unions Times of the Industrial Revolution stand out as pivotal turning points for all western nations that brought prosperity and fast paced expansion. The rise of labour unions can be linked to Europe (in the late eighteenth century) and in North America (in the nineteenth century) where the movement from rural to urban life in order to work in factories and machines was the most pronounced. This max influx of workers into the workplace helped provide gains in profits of developing industries, however at the expense of less than ideal working conditions. Labour unions arose because there were many who found difficulty in accepting how big business was run; on the backs of the workers in the factories who saw very little in compensation. Along with less money, mechanized production of goods replaced household manufacturing, but these machines were difficult to use and could be dangerous to work with. Labour unions helped spread the balance of power more evenly so that labourers could bargain for more rights such as more pay and better working conditions. Labor unions could legally exist after 1824 and members could meet and bargain for better working conditions. In the 1870 s British unions finally won the right to strike without being held legally liable for financial damage inflicted on employers. Unions had the benefit of providing workers with strength through unity. An organized group had in its power the threat of a strike a bargaining tool only viable when the workers were united. Unions also provided members with some social-security measures from union dues, including unemployment and retirement benefits. Unions concentrated on bargaining for better wages, decreasing hours of employment, and improving working conditions. The imbalance of power between industry and labourers made the first few labour movements, such as the National Labour Union, limited in their success.
The largest union at this time was the Order of the Knights of St. Crispin that represented the shoe and printing industry. They sought to decrease the trend toward mechanized production that stood to replace master cobblers and printers. Ultimately, as we see today, efficient machines took their place in the industry and prevailed. Labour unions saw much more promise when the American Federation of Labour sought to focus on improving wages and the working conditions of its members. Today, we see the effects that these early labour unions have had with helping our labour force. The laws developed to set minimum wage standards, living wage standards, maximum hours worked etc. were all developed with pressure from these early labour unions. Whether fighting for better working conditions, compensation when hurt on the job, or better wages the principles that labour unions stood for during the industrial revolution are still incredibly relevant. Questions: 1. Why did labour unions rise during the Industrial Revolution? 2. What did labour unions do for workers of the Industrial Revolution? 3. How were labour unions and strikes connected? How did strikes benefit the workers? 4. In what ways have labour unions affect us today in society?
Capitalism: The Free Market The people living during the industrial revolution were the heirs to the enlightenment. Their task was to figure out how to deal with the new problems facing society due to industrialization poverty, disease and unemployment. Capitalism, Socialism and Communism are three ideologies that appeared during this time period. Think of them as: Socialism You have two cows, give one to your neighbor Communism You have two cows, you give them both to the government. The government will give you milk. Capitalism You have two cows. Sell one and buy a bull. In the previous economic system during the Middle Ages, peasants typically worked the land and in exchange they would perform services or labor for a noble lord. In many parts of Europe, peasants were tied to the land as serfs. As we saw in our earlier discussion of pre-industrial society, the introduction of financial innovations such as stock markets, joint stock companies, and national banks were all instruments for a new free-market economic system that had been evolving over centuries. The feudal system gradually eroded, and during the Industrial Revolution, the free market took its place. The innovations during the Industrial Revolution accelerated the rise of an economic system called the free market, also known as capitalism (some people use the French phrase laissez faire, meaning let them act ) All these terms imply pretty much the same thing: in a pure free market, buyers and sellers (private business owners) satisfy their own interests by voluntarily agreeing to exchange money for a product, without the interference of the government. So, for example, when Apple Computer, a private company, sells an ipad to a customer, that s the free market at work. Apple makes a product it thinks consumers want, and the buyer chooses to use his or her money to buy the ipad. Business owners compete in a free market to make the best product or service at a price that will attract the most buyers. The successful businesses grow larger and employ more workers, thereby growing the economy. Unsuccessful businesses go out of business. The government does not intervene. Supporters of the free market believe that this system encourages innovation, high quality goods, and increases the wealth of countries. The government does as little as possible in a free market economic system. In its purest form, governments should protect private property, improve
infrastructure such as roads, and maintain a stable rule of law for trade. That s about it. According to pure capitalism, healthcare, education, retirement benefits and other social services should be provided by private businesses rather than the government. This now widely embraced idea of a free market system came to fruition during the Industrial Revolution. We have learned about how private individuals took risks to create technologically innovative products such as the flying shuttle or the power loom and then tried to sell them or use them to make a profit. This spirit of invention was not new, but during the Industrial Revolution it was relentless and occurred on a scale that was unprecedented. When the Industrial Revolution was in its infancy, in 1776, Adam Smith, a Scottish economist, wrote the most influential and famous economics book ever, entitled An Inquiry into the Nature and Causes of the Wealth of Nations. He argued that when individuals pursue their self-interest in a free market, they benefit society as a whole because the competition keeps prices low while encouraging quality and innovation. Questions: 1. What is capitalism? How does it operate? 2. What is the government s role in capitalism? 3. What do supporters of capitalism believe capitalism does for society? 4. According to Adam Smith, how does capitalism benefit society?
Karl Marx & Socialism/Communism Capitalism, Socialism and Communism are three ideologies that appeared during the Industrial Revolution. Think of them as: Socialism You have two cows, give one to your neighbor Communism You have two cows, you give them both to the government. The government will give you milk. Capitalism You have two cows. Sell one and buy a bull. We have briefly discussed the new economic system known as capitalism (the free market economy) that grew out of the Industrial Revolution, in which private businesses compete to produce the best products and services for consumers. The government, capitalists believe, should not intervene to tax or regulate businesses. They contend that, when left on its own, the free market can solve economic problems through competition and free trade. Primarily, capitalists hold that government should protect private property and individual freedoms. However, in the 19th century, some people in England and the rest of Europe, known as socialists, believed that capitalist societies rewarded greed for power and wealth at the expense of economic justice, social cooperation, and the common good. Socialists argued for an economic system based on human dignity and equality that would provide guaranteed healthcare, housing, jobs, education, and pensions for all citizens. To carry out these costly public benefits, a socialist government would own the property and wealth of a nation and put them to use for the common good. In short, socialists called for an overthrow of private property and the entire capitalist system. The most important socialist thinker was Karl Marx (1818-1883). Though German, Marx spent most of his life in England reflecting on and writing about how to redress the negative effects of industrialization. Unmoved by gradual reforms, Marx believed a complete overthrow of capitalism was necessary and inevitable. His ideas challenged the very economic foundations of the modern world and eventually led to uprisings against western capitalism on every continent. Marx s theories of socialism must be understood as reactions to early 19th century capitalism. He focused much of his work on analyzing and critiquing capitalism, which he believed served the interests of the wealthy at the expense of the poor. He thought that capitalism s emphases on private ownership, competition, and efficiency actually harmed society. Socialists such as Marx argued that it was the supporters of capitalism such as factory owners and big corporations that fought against laws to protect children in the workplace, against healthcare for the poor, against support for the elderly when they retire, and against laws to protect worker safety. Capitalism did not effectively provide key public needs, such as education and healthcare for all, national defense, workplace safety, clean water, and a clean environment. Socialists believed that capitalism
inevitably resulted in unequal classes in which the wealthy relentlessly exploited the working classes. Marx believed that all societies would inevitably go through a series of economic stages from feudalism to capitalism to socialism. Marx analyzed how workers created the real value of manufactured goods through their labour, and how the owners nevertheless profited the most by using their wealth and power to exploit the powerless workers. The rich continually got richer and the poor got poorer. He observed how most governments controlled by the upper classes made it illegal for workers to organize or go on strike to demand better working conditions. In capitalism, Marx argued, the lower and upper classes live in a continual state of tension and conflict. Marx argued that the working classes of the world would struggle to gain power against the wealthy classes and eventually rise up and overthrow them. As the lower classes grew larger, they would gain more power and more awareness that they were exploited. Eventually, they would revolt. In a new socialist society, the government would own the property and ensure cooperation and equality. The government would guarantee all citizens the right to food, housing, healthcare, a job, retirement benefits, and healthy working conditions. In return, citizens would forgo private property and instead hold it in common or commune. There would be no more upper or lower classes. Equality and economic justice would be achieved. Indeed, people would learn to cooperate so well that, over time, the need for any government or state would wither away. At such a point, true communism would be achieved, and people would naturally share resources with each other. The last stage of Marx s theory, then, was to be communism, a stateless and classless society. Questions: 1. What do socialists believe is wrong with the capitalist framework? 2. What did socialists argue for? 3. Outline what a new socialist society would look like. 4. How is socialism connected with communism?