CHAPTER XXVII

THE DEVELOPMENT OF INDUSTRIAL TECHNIQUE ¹

It is not easy to define accurately the concept of the factory. We think at once of the steam engine and the mechanization of work, but the machine had its forerunner in what we call “apparatus”—labor appliances which had to be utilized in the same way as the machine but which as a rule were driven by water power. The distinction is that the apparatus works as the servant of the man while in modern machines the inverse relation holds. The real distinguishing characteristic of the modern factory is in general, however, not the implements of work applied, but the concentration of ownership of workplace, means of work, source of power and raw material in one and the same hand, that of the entrepreneur. This combination was only exceptionally met with before the 18th century.

Tracing the English development, which determined the character of the evolution of capitalism—although England followed the example of other countries such as Italy—we find the following stages. 1. The oldest real factory which can be identified (though it was still driven by water power) was a silk factory at Derwent, near Derby, in 1719. It was conducted on the basis of a patent, the owner of which had stolen the invention in Italy. In Italy there had long been silk manufacture with various property relations, but the product was destined for luxury requirements and belonged to an epoch which is not yet characteristic for modern capitalism, although it must be named here because the implements of work and all material and product belonged to an entrepreneur. 2. The establishment of wool manufacture (1738) on the basis of a patent after the invention of an apparatus for running a hundred bobbins at once by the aid of water power. 3. The development of half-linen production. 4. The systematic development of the pottery industry through experiments in Staffordshire. Earthen vessels were produced under a modern division of labor and the application of water power and with the ownership of work place and implements by an entrepreneur. 5. The manufacture of paper, beginning with the 18th century, its permanent basis being the development of the modern use of documents and of the newspaper.

The decisive factor, however, in the triumph of the mechanization and rationalization of work was the fate of cotton manufacture. This industry was transplanted from the continent to England in the 17th century and there immediately began a struggle against the old national industry established since the 15th century, namely, wool, a struggle as intense as that in which wool had previously been involved against linen. The power of the wool producers was so great that they secured restrictions and prohibitions on the production of half-linen, which was not restored until the Manchester Act of 1736. The factory production of cotton stuff was originally limited by the fact that, while the loom had been improved and enlarged, the spindle remained on the medieval level, so that the necessary quantity of spun material was not available. A succession of technical improvements in the spindle after 1769 reversed this relation and with the help of water power and mechanical aids great quantities of usable yarn could be provided while it was impossible to weave the same quantity with corresponding speed. The discrepancy was removed in 1785 through the construction of the power loom by Cartwright, one of the first inventors who combined technology with science and handled the problems of the former in terms of theoretical considerations.

But for all this revolution in the means of work the development might have stopped and modern capitalism in its most characteristic form never have appeared. Its victory was decided by coal and iron. We know that coal had been used in consumption, even in the middle ages, as in London, in Luttich and Zwickau (above p. 191). But until the 18th century the technique was determined by the fact that smelting and all preparation of iron was done with charcoal. The deforestation of England resulted, while Germany was saved from this fate by the circumstance that in the 17th and 18th centuries it was untouched by the capitalistic development. Everywhere the destruction of the forests brought the industrial development to a standstill at a certain point. Smelting was only released from its attachment to organic materials of the plant world by the application of coal. It must be noted that the first blast furnaces appear as early as the 15th century, but they were fed with wood and were used not for private consumption but for war purposes, and in part also in connection with ocean shipping. In the 15th century, furthermore, was invented the iron drill for the preparation of cannon barrels. At the same time appeared the large heavy trip hammer, up to a thousand pounds weight, driven by water power, so that in addition to the handling of cast iron with the drill, mechanical forging was also possible. Finally, in the 17th century the rolling process was also applied in the modern sense of the word.

In the face of the further development arose two difficult problems. These were set, on the one hand, by the danger of deforestation and, on the other, by the perpetual inroads of water in the mines. The first question was the more pressing because in contrast with the expansion of the textile industry the English iron industry had shrunk step by step until at the beginning of the 18th century it gave the impression of having reached its end. The solution of the problem was reached through the coking of coal, which was discovered in 1735, and the use of coke in blast furnace operation, which was undertaken in 1740. Another step in advance was made in 1784 when the puddling process was introduced as an innovation. The threat to mining was removed by the invention of the steam engine. Crude attempts first showed the possibility of lifting water with fire and between 1670 and 1770, and further toward the end of the 18th century, the steam engine arrived at the stage of serviceability which made it possible to produce the amount of coal necessary for modern industry.

The significance of the development just portrayed is to be found in three consequences. In the first place, coal and iron released technology and productive possibilities from the limitations of the qualities inherent in organic materials; from this time forward industry was no longer dependent upon animal power or plant growth. Through a process of exhaustive exploitation, fossil fuel, and by its aid iron ore, were brought up to the light of day, and by means of both men achieved the possibility of extending production to a degree which would have previously been beyond bounds of the conceivable. Thus iron became the most important factor in the development of capitalism; what would have happened to this system or to Europe in the absence of this development we do not know.²

The second point is that the mechanization of the production process through the steam engine liberated production from the organic limitations of human labor. Not altogether, it is true, for it goes without saying that labor was indispensable for the tending of machines. But the mechanizing process has always and everywhere been introduced to the definite end of releasing labor; every new invention signifies the extensive displacement of hand workers by a relatively small man power for machine supervision.

Finally, through the union with science, the production of goods was emancipated from all the bonds of inherited tradition, and came under the dominance of the freely roving intelligence. It is true that most of the inventions of the 18th century were not made in a scientific manner; when the coking process was discovered no one suspected what its chemical significance might be. The connection of industry with modern science, especially the systematic work of the laboratories, beginning with Justus von Liebig, enabled industry to become what it is today and so brought capitalism to its full development.

The recruiting of the labor force for the new form of production, as it developed in England in the 18th century, resting upon the concentration of all the means of production in the hands of the entrepreneur, was carried out by means of compulsion, though of an indirect sort. Under this head belong especially the Poor Law, and the Statute of Apprentices of Queen Elizabeth. These measures had become necessary in consequence of the large number of people wandering about the country who had been rendered destitute by the revolution in the agricultural system. Its displacement of the small dependent peasant by large renters and the transformation of arable land into sheep pastures—although the latter has occasionally been overestimated—worked together constantly to reduce the amount of labor force required on the land and to bring into being a surplus population, which was subjected to compulsory labor. Anyone who did not take a job voluntarily was thrust into the workhouse with its strict discipline; and anyone who left a position without a certificate from the master or entrepreneur was treated as a vagabond. No unemployed person was supported except under the compulsion of entering the workhouse.

In this way the first labor force for the factories was recruited. With difficulty the people adapted themselves to the discipline of the work. But the power of the possessing classes was too great; they secured the support of the political authority through the justices of the peace, who in the absence of binding law operated on the basis of a maze of instructions and largely according to their own dictates. Down into the second half of the 19th century they exercised an arbitrary control over the labor force and fed the workers into the newly arising industries. From the beginning of the 18th century, on the other hand, begins the regulation of relations between entrepreneur and laborer, presaging the modern control of labor conditions. The first anti-trucking laws were passed under Queen Anne and George I. While during the whole middle ages the worker had struggled for the right to bring the product of his own labor to market, from now on legislation had to protect him against being paid for his work in the products of others and to secure for him remuneration in money. Another source of labor power was in England the small master class, the great majority of whom were transformed into a proletariat of factory laborers.

In the market for the products of these newly established industries, two great sources of demand appeared, namely war and luxury, the military administration and court requirements. The military administration became a consumer of the products of industry to the extent that the great mercenary armies developed and the more so as army discipline and the rationalization of arms and all military technique progressed. In the textile industry the production of uniforms was fundamental, as these could by no means be the product of the army itself but were a means of discipline in the interest of unitary regimentation, and in order to keep the soldiers under control. The production of cannon and fire arms occupied the iron industry, and the provision of supplies did the same for trade. In addition to the land army there was the navy; the increasing size of the war ships was one of the factors which created a market for industry. While the size of merchant ships had changed little before the end of the 18th century and as late as 1750 the ships entering London were typically of about 140 tons burden, war ships had grown to a size of a thousand tons in the 16th century and in the 18th this became the normal burden. The demand of the navy, like that of the army, increased further with the growth in the number and extent of the voyages (and this also applies to merchant ships) especially after the 16th century. Down to that time the Levant cruise had normally occupied a year; at this time ships began to remain much longer at sea and at the same time the increasing magnitude of campaigns on land necessitated a more extensive provision with supplies, munitions, etc. Finally, the speed of ship building and of the construction of cannon increased with extraordinary rapidity after the 17th century.

Sombart has assumed that the standardized mass provision for war is among the decisive conditions affecting the development of modern capitalism. This theory must be reduced to its proper proportions. It is correct that annually enormous sums were spent for army and navy purposes; in Spain 70 % of the revenues of the state went for this purpose and in other countries two-thirds or more. But we also find outside the western world, as in the Mogul Empire and in China, enormous armies equipped with artillery (although not yet with uniforms), yet no impulse toward a capitalistic development followed from the fact. Moreover, even in the west the army needs were met to an increasing extent, developing in parallelism with capitalism itself, by the military administration on its own account, in its own workshops and arms and munition factories; that is, it proceeded along non-capitalistic lines. Hence, it is a false conclusion to ascribe to war as such, through the army demands, the role of prime mover.in the creation of modern capitalism. It is true that it was involved in capitalism, and not only in Europe; but this motive was not decisive for the development. Otherwise the increasing provision of army requirements by direct action of the state would again have forced capitalism into the background, a development which did not take place.

For the luxury demand of the court and the nobility, France became the typical country. For a time in the 16th century, the king spent 10 million livres a year directly or indirectly for luxury goods. This expenditure by the royal family and the highest social classes constituted a strong stimulus to quite a number of industries. The most important articles, aside from such means of enjoyment as chocolate and coffee, are embroidery (16th century), linen goods, for the treatment of which ironing develops (17th century), stockings (16th century), umbrellas (17th century), indigo dyeing (16th century), tapestry (17th century), and carpets (18th century). With regard to the volume of the demand the two last named were the most important of the luxury industries; they signified a democratization of luxury which is the crucial direction of capitalistic production.

Court luxury existed in China and India, on a scale unknown in Europe; and yet no significant stimulus to capitalism or capitalistic industry proceeded from the fact. The reason is that the provision for this demand was arranged leiturgically through compulsory contributions. This system maintained itself so tenaciously that down to our own time the peasants in the region of Peking have been obliged to furnish to the imperial court the same objects as 3000 years ago, although they did not know how to produce them and were compelled to buy them from producers. In India and China the army requirements were also met by forced labor and contributions in kind. In Europe itself the leiturgical contributions of the east are not unknown, although they appear in a different form. Here the princes transformed the workers in luxury industry into compulsory laborers by indirect means, binding them to their places of work by grants of land, long period contracts, and various privileges—although in France, the country which took the lead in luxury industries, this was not the case; here the handicraft form of establishment maintained itself, partly under a putting-out organization and partly under a workshop system, and neither the technology nor the economic organization of the industries was transformed in any revolutionary way.

The decisive impetus toward capitalism could come only from one source, namely a mass market demand, which again could arise only in a small proportion of the luxury industries through the democratization of the demand, especially along the line of production of substitutes for the luxury goods of the upper classes. This phenomenon is characterized by price competition, while the luxury industries working for the court follow the handicraft principle of competition in quality. The first example of the policy of a state organization entering upon price competition is afforded in England at the close of the 15th century, when the effort was made to undersell Flemish wool, an object which was promoted by numerous export prohibitions.

The great price revolution of the 16th and 17th centuries provided a powerful lever for the specifically capitalistic tendencies of seeking profit through cheapening production and lowering the price. This revolution is rightly ascribed to the continuous inflow of precious metals, in consequence of the great overseas discoveries. It lasted from the thirties of the 16th century down to the time of the Thirty Years’ War, but affected different branches of economic life in quite different ways. In the case of agricultural products an almost universal rise in price set in, making it possible for them to go over to production for the market. It was quite otherwise with the course of prices for industrial products. By and large these remained stable or rose in price relatively little, thus really falling, in comparison with the agricultural products. This relative decline was made possible only through a shift in technology and economics, and exerted a pressure in the direction of increasing profit by repeated cheapening of production. Thus the development did not follow the order that capitalism set in first and the decline in prices followed, but the reverse; first the prices fell relatively and then came capitalism.

The tendency toward rationalizing technology and economic relations with a view to reducing prices in relation to costs, generated in the 17th century a feverish pursuit of invention. All the inventors of the period are dominated by the object of cheapening production; the notion of perpetual motion as a source of energy is only one of many objectives of this quite universal movement. The inventor as a type goes back much farther. But if one scrutinizes the devices of the greatest inventor of precapitalistic times, Leonardo da Vinci—(for experimentation originated in the field of art and not that of science)—one observes that his urge was not that of cheapening production but the rational mastery of technical problems as such. The inventors of the pre-capitalistic age worked empirically; their inventions had more or less the character of accidents. An exception is mining, and in consequence it is the problems of mining in connection with which deliberate technical progress took place.

A positive innovation in connection with invention is the first rational patent law, the English law of 1623, which contains all the essential provisions of a modern statute. Down to that time the exploitation of inventions had been arranged through a special grant in consideration of a payment; in contrast the law of 1623 limits the protection of the invention to 14 years and makes its subsequent utilization by an entrepreneur conditional upon an adequate royalty for the original inventor. Without the stimulus of this patent law the inventions crucial for the development of capitalism in the field of textile industry in the 18th century would not have been possible.

Drawing together once more the distinguishing characteristics of western capitalism and its causes, we find the following factors. First, this institution alone produced a rational organization of labor, which nowhere previously existed. Everywhere and always there has been trade; it can be traced back into the stone age. Likewise we find in the most varied epochs and cultures war finance, state contributions, tax farming, farming of offices, etc., but not a rational organization of labor. Furthermore we find everywhere else a primitive, strictly integrated internal economy such that there is no question of any freedom of economic action between members of the same tribe or clan, associated with absolute freedom of trade externally. Internal and external ethics are distinguished, and in connection with the latter there is complete ruthlessness in financial procedure; nothing can be more rigidly prescribed than the clan economy of China or the caste economy of India, and on the other hand nothing so unscrupulous as the conduct of the Hindu foreign trader. In contrast with this, the second characteristic of western capitalism is a lifting of the barrier between the internal economy and external economy, between internal and external ethics, and the entry of the commercial principle into the internal economy, with the organization of labor on this basis. Finally, the disintegration of primitive economic fixity is also met with elsewhere, as for example in Babylon; but nowhere else do we find the entrepreneur organization of labor as it is known in the western world.

If this development took place only in the occident the reason is to be found in the special features of its general cultural evolution which are peculiar to it. Only the occident knows the state in the modern sense, with a professional administration, specialized officialdom, and law based on the concept of citizenship. Beginnings of this institution in antiquity and in the orient were never able to develop. Only the occident knows rational law, made by jurists and rationally interpreted and applied, and only in the occident is found the concept of citizen (civis Romanus, citoyen, bourgeois) because only in the occident again are there cities in the specific sense. Furthermore, only the occident possesses science in the present-day sense of the word. Theology, philosophy, reflection on the ultimate problems of life, were known to the Chinese and the Hindu, perhaps even of a depth unreached by the European; but a rational science and in connection with it a rational technology remained unknown to those civilizations. Finally, western civilization is further distinguished from every other by the presence of men with a rational ethic for the conduct of life. Magic and religion are found everywhere; but a religious basis for the ordering of life which consistently followed out must lead to explicit rationalism is again peculiar to western civilization alone.