Industrial economy

“ In centralizing manufacturing plants in cities, certain industrial economies are secured, such as: (1) economy in motor power, whether it be water or coal; (2) economy in machinery—it is not necessary to duplicate machines ”

“ The real question arises as to the manufactures of these materials. But we count upon larger industrial rewards, in the form of wages, and profits, here than in England; we must get more from an industry than England in order to satisfy us. ”

“ This important feature in the economical progress of nations will receive full consideration and discussion in the succeeding book.256 It is obviously a totally different thing from a want of market for commodities, though often confounded with it in the complaints of the producing and trading classes. The true interpretation of the modern or present state of industrial economy is, that there is hardly any amount of business which may not be done, if people will be content to do it on small profits ”

“ But above any other factor, and perhaps greater than all of them combined in contributing to the high maintenance efficiency attained in these countries must be placed the standard of living to which the industrial classes have been compelled to adjust themselves, combined with their remarkable industry and with the most intense economy they practice along every line of effort and of living. ”

“ The efficiency of labor, in this connection, is highly important in its practical aspects, and as affecting the labor question, because as a function of cost of labor, that is, as an element affecting the quantity of things advanced to the laborers in comparison with the quantity of things returned to the employer, it includes the whole influence of machinery, labor-saving devices, and the results of invention. The quantity of produce depends, for a given advance, on the kind of machinery, the speed with which it is run, and on the general state of the arts and industrial inventions. ”

“ It is true that the same amount of capital can be raised by bringing together many small sums. But this (besides that it is not equally well suited to all branches of industry) supposes a much greater degree of commercial confidence and enterprise diffused through the community, and belongs altogether to a more advanced stage of industrial progress. ”

“ The opening of a foreign trade, by making them acquainted with new objects, or tempting them by the easier acquisition of things which they had not previously thought attainable, sometimes works a sort of industrial revolution in a country whose resources were previously undeveloped for want of energy and ambition in the people; inducing those who were satisfied with scanty comforts and little work to work harder for the gratification of their new tastes, and even to save, and accumulate capital, for the still more complete satisfaction of those tastes at a future time. ”

“ Large investments of capital, specialization in production, the use of machinery in every process, and the consequent subdivision of labor in particular lines in which the technical skill of the handicraftsman is not required, together with the utilization of waste products and the rapid exchange of commodities, mark the progress of activity in the industrial arts. ”

“ The development of large scale factory production, the benefit of combination in the competitive struggle, and the tremendous advantage of concentration in securing possession of the unoccupied opportunities, were so great that vast accumulations of capital became the normal agency of the industrial world. ”

“ Capital and the Administrative Staff—Capital and the Manual Workers—The Manual Workers inter se—The Administrative Staff and the Manual Workers—Industry and the Consuming Community—Industry and the Nation.
Before we can construct any scheme of reform of our industrial system we must have a clear idea of what is industry. In the prosaic language of economics it is a purposive production of commodities and services, the immediate object of those engaged in it being to provide, through the result of their work, the material means of satisfying their wants and desires. ”

“ Turning our attention again to the industrial organism, we shall strive to ascertain the chief changes that have been brought about in the size and structural character of industry, in the relations of the several parts of the industrial world, of the several trades which constitute industry, of the processes within these trades, of the businesses or units which comprise a trade or a market, and of the units of capital and labour comprising a business. It will then remain to undertake closer studies of certain important special outcomes of machinery and factory production. ”

“ In industry, we must support our objective of higher industrial growth with investments in relatively labor-intensive finished consumer goods industries, the second stage of import substitution for selected intermediate and capital goods industries, and the generation of exports. ”

“ Nothing in modern times has exerted a more profound or far-reaching influence upon the general course of civilization. The factory is the symbol of a new economic order. It has been said, and rightly, that three things,—steam, steel, and credit,—have revolutionized industry during the past hundred years.
Industrial Organization of Today.—In the days of hand-industry men needed no large amounts of capital in order to engage in the production of goods. ”

“ The question how industry would be located, assuming the whole surface of the globe was brought into a single market or area of competition, with an equal development of transport facilities in all its parts; or in other words, "What is the ideal disposition of industry in a world-society making its chief end the attainment of industrial wealth estimated at present values?" ”

“ Industry is the means by which the material resources of the world are transformed, through human intelligence and human energy, with the aid of natural powers, tools, and machines, into commodities and services available for human use. It is a vast process of transformation, itself a series of transforming processes so inter-related and numerous as to unite mankind, in this age of world-wide industrial expansion, in an enterprise that encompasses the globe.
The Parties to Industry We are accustomed to discuss the problems of industry in terms of Capital and Labor. ”

“ The statement is, however, that labor received only 20 per cent of the value of the product which it served to create.
Even with a superficial knowledge of economics and industrial processes one ought to perceive that the laborers employed in manufacturing industries by no means create the full value of the products which these industries place upon the market. The laborer in the factory does not create the raw material which the factory uses; labor on the farm, in the mine or in the forest entered into that. ”

“ And this third great party should be given its proper share of any gain. In fact, a glance at industrial history shows that in the end the whole people receive the greater part of the benefit coming from industrial improvements. In the past hundred years, for example, the greatest factor tending toward increasing the output, and thereby the prosperity of the civilized world, has been the introduction of machinery to replace hand labor. And without doubt the greatest gain through this change has come to the whole people—the consumer. ”

“ Three classes of men answer to this specialization at the present day: the traders, who are not producers, but act as middlemen between producer and consumer, deciding what shall be produced and concerning themselves solely with buying and selling; the industrial capitalists, who, at the tradesmen’s orders, direct the transformation of the raw materials entrusted to them, in workshops and with machinery which are their property; finally the workmen, who, mere wage-earners, carry out manual or mechanical work as they are told. ”

“ A previous application of labour to produce the capital required for consumption during the work, is no less essential than the application of labour to the work itself. Of capital, again, one, and by far the largest, portion, conduces to production only by sustaining in existence the labour which produces: the remainder, namely the instruments and materials, contribute to it directly, in the same manner with natural agents, and the materials supplied by nature.
We now advance to the second great question in political economy; on what the degree of productiveness of these agents depends. ”

“ To ensure the best results, the organization of productive labor must be directed and controlled by persons having not only good executive ability, and possessing the practical familiarity of a mechanic or engineer, with the goods produced and the processes employed, but having also, and equally, a practical knowledge of how to observe, record, analyze, and compare essential facts in relation to wages, supplies, expense accounts, and all else that enters into or affects the economy of production and the cost of the product. ”

“ There is, however, substantial unanimity of opinion on the important points among economists today, though in practice there still remain many unsolved problems. The modern industrial system has already been characterized as one of capitalistic production, of large-scale enterprises with extended use of machinery. Not less fundamental are the processes of valuation and exchange made possible by the use of money and credit; and also by the machinery for the geographical distribution of goods, our railroads and steamship lines. ”

“ The typical industries, which set the pace for productive work, for competitive gains, and through the standard rates of gain ultimately also for competitive consumption, are industries carried on on a large scale; that is to say they are such as to require a large material equipment, a wide recourse to technological insight and proficiency, and a large draught on the material resources of the community. ”

“ Almost all other forms of economic occupation have subsequently taken on the main characteristics of the factory system, in utilizing improved machinery, in the extensive scale on which they are administered, in the use of large capital, and in the organization of employees in large bodies. ”

“ Our advantages in industrial competition in the abundance and cheapness of raw material and fuel, in the superior efficiency of our skilled labor, in the unexampled fecundity of our people in the invention of labor-saving machinery, and the advances we are constantly making in economies of production are still the subject of much anxious speculation in the great industrial centers of Europe ”

“ Since the onset of the great revolution the goods and services have come increasingly from a factory-office centered occupational apparatus. When we consider the integration of the world economy, it is this industrialized, modern economy that we have chiefly in mind. ”

“ Capital had, therefore, to be brought into manufacturing which had been previously used in trade or other employments. Capital was in reality abundant relatively to existing opportunities for investment, and the early machine spinners and weavers drew into partnership moneyed men from the towns who had previously no connection with manufacturing. Again, the new industry required bodies of laborers working regular hours under the control of their employers and in the buildings where the machines were placed and the (p. 213) power provided. ”

“ INDUSTRIAL DEVELOPMENT.—Industries once carried on in the household or in small factories were conducted on a large scale by great corporations. The machine for making tin cans made possible the canning industry. The self- binding harvester and reaper made possible the immense grain fields of the West. The production and refining of petroleum became an industry of great importance. ”

“ Production is not a fixed but an increasing thing. When not kept back by bad institutions, or a low state of the arts of life, the produce of industry has usually tended to increase; stimulated not only by the desire of the producers to augment their means of consumption, but by the increasing number of the consumers.
We have seen that the essential requisites of production are three—labor, capital, and natural agents; the term capital including all external and physical requisites which are products of labor, the term natural agents all those which are not. ”

“ In production, the particular conditions of each industry will determine how much capital is to be set apart for raw material, how much for machinery, buildings, and all forms of fixed capital, and how many laborers will be assigned to a given machine for a given amount of material. With some kinds of hand-made goods the largest share of capital goes to wages, a less amount for materials, and a very small proportion for machinery and tools. In many branches of agriculture and small farming this holds true. The converse, however, is true in many manufactures, where machinery is largely used. ”

“ THE PROBLEM PRIOR TO THE INDUSTRIAL REVOLUTION.—The distribution of industrial income has to do with dividing the products of industry, or the money which represents those products, among the various individuals who have aided in their creation. ”