Cheap (5 page)

Representative Wright Patman of Texas was perhaps less provocative than Long, but no less vehement. In an impassioned statement he railed: “The wide distribution of economic power among many independent proprietors is the foundation of the Nation’s economy. Both Franklin and Jefferson feared that industrialization would lead to a labor proletariat without property or hope. Small-business enterprise is a symbol of a society where a hired man can become his own boss. . . . History shows that the elimination of the independent businessman has been the first step in the development of totalitarianism.”

In the view of Patman and others, a thriving small-business sector was essential to thin out and redistribute the thick, concentrated power of big business. Several state and municipal legislatures responded to these concerns by charging steep licensing fees and imposing heavy graduated taxes on the chains. They put caps on the number of stores a corporation could open in a single community and even tried to make chain stores themselves unlawful. And it was not just brick-and-mortar chains that got the bruising. Shopping through mail-order-house catalogs carried such a powerful stigma that Sears shipped merchandise shrouded in plain brown wrappers.

As the new century emerged, a crescendo of critics voiced alarm at the growing trend toward Cheap, in particular as it applied to the production of America’s most iconic object: the automobile. Even efficiency guru Frederick Winslow Taylor seemed to think things had gone too far when he scoffed at the mass-produced Model T Ford as “very cheaply and roughly made.” Henry Ford, who famously pioneered the moving assembly line in 1914, could only marvel at this criticism. His assembly plant in Highland Park, Michigan, dubbed the “Crystal Palace” for its abundant windows, was a model of scientific management. As did North before him, Ford broke each step of his production process into individual tasks and assigned workers to perform just one. Where before a skilled mechanic and a couple of helpers would build an automobile engine, now the engine block was pulled down the line past a hundred workers, each contributing his own little bit. One line worker would ream bearings, one bearing every other second; another would file the bearings, one every fourteen seconds; another would put the bearings on the camshaft, one every ten seconds, all day long, day after day, bearing after bearing. The automated assembly line allowed a division of labor that took the brain work out of building a car. While one out of every three workers had once required special skills, now only one out of every five workers required skills. Ford needed fewer mechanics and craftsmen, and he hired more unskilled immigrant laborers, many of whom did not speak English. To prevent slowdowns, managers walked the assembly line, stopwatch at the ready. Sales skyrocketed from 10,600 in all of 1909 to 16,000 a month in 1913. And as demand increased, the assembly line sped up and the pressure boiled over. Ford paid his workers $2.25 for a nine-hour shift, which was pretty good money at the time but not good enough to keep his overstressed workforce happy. In 1913 the company was rehiring between 40 and 60 percent of its workforce
every month
. Unlike Woolworth, Ford did not consider his workers disposable. To slow the stratospheric turnover, he designed the “$5 a day” plan, a profit-sharing scheme that offered bonuses to employees who stuck to the job. This sounded too good to be true, and in a sense it was. Not everyone received the bonus, only those who passed muster with a sort of vice squad of thirty Ford employees who followed workers around to make sure they didn’t gamble, drink, or have wives who worked outside the home. Incredibly, few workers objected to this Big Brother treatment, and the plan resulted in an extremely stable workforce. It also increased wages across the industry, as other automakers were forced to follow suit. As Carnegie Mellon historian of technology David Hounshell wrote, “Ford had given the world the first system, in the fullest sense of the expression, of mass production: single-purpose manufacture combined with the smooth flow of materials; the assembly line; large-volume production; high wages initiated by the five-dollar day; and low prices.”

 

 

 

THANKS TO THESE
increased efficiencies, the sticker price of a Model T dropped from $850 in 1908 (the same price as a Cadillac) to $290 in the early 1920s. Ford’s “$5 a day” enabled some of his workers to purchase the fruits of their own labor (at least theoretically), offering yet another steady if not exactly gushing customer stream. Gradually, semiskilled, blue-collar laborers came to recognize their power not only as workers but as consumers. Rather than being mere “cogs in a wheel,” they were now in a position to get themselves their own wheels, wheels that properly balanced, might set the entire nation rolling into prosperity. By satisfying their own individual material desires (a new car) these workers were boosting the economy not only by their labors but through their purchases. In his book
Sold American
, historian Charles McGovern argues persuasively that in the early decades of the twentieth century Americans “came to understand spending as a form of citizenship, an important ritual of national identity in daily life. . . . Americans embraced a material nationalism that placed goods and spending at the center of social life.”

The mass manufacture of consumer goods and the lowering of prices led eventually to what Harvard historian Lizabeth Cohen called “a consumer’s republic,” an economy, culture, and politics built “around mass consumption linked both to an enhanced material life and to the promise of greater freedom, democracy and equality.” These so-called citizen consumers were not satisfied watching other, richer Americans get the goods; they demanded affordability, and it became the worker’s patriotic duty to provide it. Writing in the mid-1920s, Yale economist Walton Hamilton, an advisor to Franklin Delano Roosevelt, suggested that industrial laborers greet their friends and neighbors not with “Good morning” or “How are you?” which he considered relics of an agricultural past, but with the more forward-looking “Low prices.” Americans formed coalitions such as the National Consumers League, asserting themselves as much through their power to purchase as through their power in the voting booth. The suspicion then, as it had been since the dawn of industrialization, was that prices were too high, and that protections were needed to keep corporate greed-heads from pushing them even higher.

In 1930 more Americans lacked a car, a radio, and a washing machine than owned one, but it seemed that nearly every American believed that he or she had a claim to ownership. A growing national media and advertising industry made popular the idea that purchasing goods of all kinds was not a privilege but a right, even a patriotic duty. An advertisement for General Motors that appeared in the
Saturday Evening Post
in 1936, for instance, argued against government controls on business, reasoning that America “outstripped the nations of the world because the energy and enterprise of our people were free to
multiply
wealth, to
go forward
instead of ‘stabilize,’ to succeed in the productive task of making
more
things at
lower
prices for
more
people. . . . Today in America more people want and need better things than ever before! In the satisfying of these wants is America’s opportunity to serve progress.” As historian Charles McGovern wrote, “Market replaced polis in a new communal public life characterized not by geography, religion, or politics, but by spending.”

There was something thrilling, even patriotic, about the Sears catalog making available to Americans from Texas to Maine the same brand of blanket or sewing machine or overalls at the very same low price. Mass production had led to such a proliferation of affordable consumer goods that the challenge became not making things but convincing consumers to buy them. “The key to economic prosperity,” General Motors researcher and inventor Charles Kettering declared in 1929, just days before the stock market crash, “is the organized creation of dissatisfaction.” Dissatisfaction was well within reach, although not the sort Kettering envisioned. The tidal wave of unemployment and fiscal misery brought by the Great Depression reshaped the nation’s economic landscape and dimmed its optimism. Wanamaker’s claims notwithstanding, the presumed link between godliness and unfettered capitalism came under fire. There was a growing and understandable distrust of large corporations, and the government strove to rally economically weak groups to balance out more powerful interests. With unemployment peaking at over 20 percent, prices were fixed to prevent large retailers from forcing smaller ones out of business. As part of the New Deal, the National Industrial Recovery Act set codes of conduct for business, including guidelines for hours worked, wages paid, and fair-trade practices. Low prices, it was feared, would force a dip in wages and profits, pushing more businesses into bankruptcy. To help minimize this, Congress passed the Robinson-Patman Act of 1936, one of several fair-trade laws designed to forestall predatory price cutting by prohibiting chain stores from entering into exclusive contracts with manufacturers. A year later Congress passed the Miller-Tydings Act to exempt fair-trade laws from antitrust legislation. Under this law, manufacturers could set minimum retail prices for products that carried their brand name, thus setting a legal floor that not even huge conglomerates could undercut. Although not consistently enforced, the law offered some protection against escalating price competition and downward spiraling prices.

That year a General Motors promotional film,
From Dawn to Sunset,
featured scenes of happy assembly line workers in coveralls building Chevrolets, picking up their paychecks, and all but dancing off with their families to unleash their “fresh buying power” in a thriving downtown marketplace. To a stirring soundtrack the narrator trumpeted “the tens of thousands of men on one single payroll . . . [having] the pleasure of buying, the spreading of money, and the enjoyment of all the things that paychecks can buy.” The film depicts worker-consumers in symbiotic synch with the company, one big happy family on an inexorable march to prosperity. Bargains were most decidedly not part of that triumphant picture, as workers and consumers were considered one and the same. If cheap goods are made by cheap men, then the goods these men and their families were buying—everything from violins to cars—were anything but cheap. In this fleeting homage to capitalism, workers earned fair wages and paid fair prices for high-quality goods. What went un-mentioned was that these very same Chevrolet workers had earlier that year waged a successful sit-down strike in Flint, Michigan, to protest unfair and unsafe working conditions, and low wages. The strike helped prompt the creation of the United Auto Workers, arming employees with unprecedented control of their working lives and unprecedented political and economic power. As the car unions won successively larger concessions for their membership in the mid-1930s, Detroit ranked first in the nation in private home ownership.

 

 

 

WORLD WAR II
blotted out this happy picture with the double whammy of scarcity and inflation. There was little on offer, and what was available was priced out of reach for many Americans. Car manufacture came to a halt in 1942, to make way for the war effort, and the price of textiles shot up nearly 30 percent, the cost of farm products more than 40 percent. While before the war the government had set legislation to keep prices from falling too low, now it struggled to stave off price gouging. In 1942 the Office of Price Administration and Civilian Supply issued the General Maximum Price Regulation, requiring merchants to set ceilings on the price of what eventually grew to be 90 percent of all goods. There was rationing of rubber, sugar, gasoline, heating oil, milk, coffee, soap, nylon stockings, and even used cars. The merrily dancing worker/spender bees were gone; thrift, not the “spreading of money,” became the desired norm. The “Consumer’s Pledge,” sung to the tune of the “Battle Hymn of the Republic,” urged Americans to eschew canned goods in favor of “fresh fruits and vegetables [to] save tons of tin” and to “take the best care of your wearables, and mend them when they tear.” Waste was reviled, and recycling elevated to a patriotic duty. Interestingly, despite this enforced frugality, most Americans managed to live well, far better than they had in the roaring twenties when there was enormous income disparity. In 1944 the average factory worker’s pay had grown by 80 percent in five years, while, thanks in part to government-imposed price controls, living costs had climbed only 24 percent. And in 1945 personal savings reached an astonishing 21 percent of disposable income, compared to a mere 3 percent two decades earlier.

In the boom years following World War II, soldiers returned flush with optimism and eager to set up new homes and new lives. Consumers saved to buy their chunk of the American dream, typically a detached single-family home, preferably in the suburbs. No one argued that wages should be kept low to keep prices low. Indeed, social thinkers of the time reasoned that high wages were critical to the nation’s growing prosperity. As one wrote, “There can be no high levels of production unless the products of industry are bought by workers” with their generous slice of the American pie.

As America moved into the Eisenhower era, wartime frugality lifted as the rank and file shared in the postwar prosperity.
Fortune
magazine gushed that “the union has made the worker to an amazing degree a middle-class member of a middle-class society.” Workers were encouraged to derive increasing satisfaction and status from their lives outside of the office or factory. Thanks to high wages and solid benefits, they had both the time and the means to invest in outside interests such as sports, gardening, and travel. They could move uptown for better schools or to a larger home in a leafier suburb for more space. Equality meant not access to the means of production (well out of reach for most workers) but to a growing range of consumer goods. Cultural historian Christopher Lasch noted, “The tired worker, instead of attempting to change the conditions of his work, seeks renewal in brightening his immediate surroundings with new goods and services.”