The relentless revolution: a history of capitalism (41 page)

Electricity did more than inspire new inventions; it provided a new form of power. Switching from steam to electrical power in manufacturing proved complicated and costly. It was not just a question of turning on a switch, but of converting the entire equipment of a plant. Sources for electrical power had to be secured. Both water—hydropower—and steam-driven turbines produced electricity for manufacturers who could either purchase their electricity from a new utility company or generate it at their sites. George Westinghouse played a major role in popularizing electricity by developing the transformer, which could deliver electricity over long distances. He tapped the power of Niagara Falls through generating stations that lit up Buffalo twenty miles away. He was also the champion of alternating current when Edison championed direct current. Direct current had the disadvantage of fading after traveling a mile while Westinghouse’s alternating current went hundreds of power-filled miles. This contest took a bizarre twist when publicists claimed that the danger of AC was proved by its efficient use in New York’s electric chair.

The transfer from steam to electricity was uneven and took more than half a century. Apparel and printing firms led the way, with fabricated metals and transportation equipment following closely behind.
⁴¹
Unforeseen ramifications unfolded. Elevators, for instance, made possible the skyscrapers that characterized modern architecture. Electricity changed one of the most conservative occupations, that of the building trade. The circular saw, lathe, router, and drill sped up the work of construction, but the rhythms remained human. The man (and sometimes woman) walking the beams on a building site still control the tool in his or her hand. The same could be said about the wonderful gadgets that began filling kitchens and home laundries.

In almost every Western country a mechanical wizard was working on a model of an “automobile.” As early as 1771, the Frenchman Nicholas Joseph Cugnot had designed a steam-powered vehicle. The Germans Gottlieb Daimler and Wilhelm Maybach succeeded with a two-cylinder internal-combustion engine. Their competitor Karl Benz put a car into production. He celebrated his three-wheeler’s success by taking his wife on a motor tour in 1888. The American Ransom Olds enthralled the American public in 1901 with his “merry Oldsmobile,” the first car produced in any quantity. At the turn of the century there were fifty start-up companies attracting millions of venture dollars, marks, francs, and pounds, each trying to exploit the potential of placing a machine inside a carriage and letting it rip. The group backing the new Ford Motor Company wanted to produce cars for the rich. Their inventor, Henry Ford, had a different idea. He wanted to figure out how to cut costs, speed up production, make partners out of his salesmen, and supply cars for Mr. Everyman.
⁴²

His 161 patents demonstrated Ford’s technical prowess, but his real genius turned out to be in the classic capitalist activities of production, competition, labor management, and marketing. In all these aspects of running a successful company, everything Ford did was original, totally original. His investors were not. When they failed to get on board his program, he bought them out. Most critical to Ford’s phenomenal success was his vision that the car could be a popular acquisition if he could cut costs and enhance efficiency on the shop floor. This was his lodestar.

When Ford began, cars were made by craftsmen, one at a time. He revolutionized production by taking unskilled laborers, assigning them simple tasks in a thorough division of the labor, and assembling the cars in a line. He invented mass production. His mass producers at one factory spoke fifty different languages, but it didn’t matter, because they needed to know how to do only one task.
⁴³
Ford’s success can be measured by the fact that his famous assembly line, when perfected, could turn out a car in ninety-eight minutes! The Model T made its appearance in 1908; it was elegant in design and engineering and available in any color, Ford announced, “as long as it was black.” More important, most middle-class Americans could afford one, including Ford’s workers, whom he started paying five dollars a day in 1914. His goal was for his men to earn wages high enough for them to buy what they produced. And buy they did.

The scientific management of labor had already attracted the attention of Frederick Winslow Taylor, who carefully observed men working in the steel industry in the 1880s and 1890s. Taylor brought to his research the conviction that scientific management could blend the interests of bosses and workers. This was probably too much to be expected, but Taylor did describe how to make time and motion at the work site more precise and management more attuned to workers’ rhythms. He introduced the idea of rest breaks in the work schedule. Production rates rose. Taylor had the distinction of being admired by both Adolf Hitler and V. I. Lenin. Taylorism became the perfect complement to the rationalization of corporation management and what came to be known as Fordism, a melding of mass production and mass consumption.

By 1929 the River Rouge plant in Michigan was turning out a car every ten seconds. In the previous two decades the cost of a Model T had dropped from $850 to $260—or fifty-two daily paychecks for someone working the Ford assembly line. The 122 million Americans then, half of them under the age of twenty-six, were enjoying the pleasure of driving seventeen million cars, a good percentage of them Fords.
⁴⁴
At the same time, France, Germany, and Great Britain, with an aggregate population comparable to that of the United States, had fewer than two million cars. Amazingly, America led the world in both agricultural and industrial output.

Ford pioneered another marketing innovation. He established dealerships where his Model Ts, or tin lizzies, as they were called, might be bought and serviced. By 1912 seven thousand Ford dealerships had opened with fancy showrooms to lure in consumers from Harrisburg to Houston, Portsmouth to Portland. Still, he had to compete with 273 other companies manufacturing cars in 1909!
⁴⁵
The automobile had taken the place of the railroad as the first gear of the economy by 1920. When Henry Ford closed down his River Rouge plant for six months in 1927 in order to switch to the Model A, America’s industrial production index dropped 11 percent.
⁴⁶

William Durant proved that there was room for more than one genius in the automobile industry. Beginning with the Buick, Durant next acquired Oldsmobile and seized the chance during the stock market panic of 1907 to buy up lots of other automobile companies along with firms that made automobile accessories. By 1908 he had created General Motors, which was to give Ford more than a run for its money. Like a cat with more than one life, Durant went under in 1911, only to bounce back with a fierce competitor to the Model T that he called Chevrolet. Seeing an opening in Ford’s insistence upon making black cars that looked like boxes, Durant offered buyers attractive colors, softer seats, and the chance to buy one of GM’s five cars—Cadillac, Buick, Oldsmoble, Pontiac, and Chevrolet—on credit.
⁴⁷
As a later president of General Motors, Alfred Sloan, said, a “car for every purse and every purpose.” Soon Ford had to follow suit; a pattern had been set for Detroit automakers.

Moving through the ranks of the automobile industry was Alfred P. Sloan, Jr., who became GM’s president in 1923. An electrical engineer and graduate of the Massachusetts Institute of Technology, Sloan turned General Motors into the largest automotive corporation in the world—a leader in both sales and profits. In the 1930s he made the Chevy, not the Ford, the car of choice for most American buyers. Taking advantage of Ford’s fetish about standardization, Sloan introduced style changes for each year’s models, much to the delight of American consumers.

While the kinks were being worked out of automobile production during the first decade of the twentieth century, Wilbur and Orville Wright had been experimenting with kites, gliders, and biplanes in anticipation of their highly publicized fifteen-second airplane flight from Kitty Hawk, North Carolina, in 1908.

Imperatives of Automobile Driving

Retrospectively, the conversion to private transportation seems to have unfolded smoothly, but consider what a demanding novelty the car was. Instead of sitting in a bus or train, ordinary people had to learn to operate a complicated machine. Driving any distance depended upon the construction of roads as well as the availability of fuel. Formerly bought in grocery stores, the oil needed by the car promoted a new retailing business, drive-in gas stations along the roads between cities. People even had to acquire new mores to accommodate the automobile. The limited distance covered by a walker or horseback rider had now extended far beyond the watchful eyes of parents, bosses, and policemen. Greater mobility and an enclosed space allowed for greater sexual freedom—or at least parents feared this was so.

Initially cars used the rutted roads of carriages, carts, and wagons, but the rattling of passengers’ teeth drove home the point that a smoother ride would be desirable. Macadam roads made of pressurized broken stone had been around for a half century; with cars, various additives were tried to give the macadamized roads more stability. Tar with crushed rocks did yeoman service for a while until cars triggered their own solution to the paving challenge. The steady demand for petroleum produced more and more by-products, like asphalt, that proved excellent in surfacing roadbeds. Urbanites preferred cement, which was smoother and better suited for making curbs, a new addition to the modern city. It’s staggering to think of the thousands of construction teams sent out across the country to level, grade, and lay mile upon mile of paved roads, all summoned by the automobile and its rough cousin the truck.

Cars also had the capability of hurting people and damaging property, so they gave the insurance industry a big boost. And then there was the need for trained mechanics to tune these complicated machines lodged in the garages of millions of people for whom a look under the hood was an invitation to vertigo. That did change, and many an American lad spent his Saturdays lying underneath the family car tinkering with its engine. Tires frequently went flat; changing them became an imperative skill in the male repertoire until radial tires, introduced in the 1970s, made flats a thing of the past. Microprocessors now operating in cars have taken their repair out of the hands of amateurs.

Probably no other invention matched the automobile in its global reach or its power to accelerate the commercialization of raw materials like rubber and oil. Ford may have turned out his Model Ts in ninety-eight minutes, but it took a lot more time to get the needed supplies to the assembly line. Rubber, growing wild in King Leopold’s Free State of Congo, Brazil’s Amazon basin, and Malaysian jungles acquired a new value. With profits beckoning, these “tappers” were virtually enslaved. Even with control, their habits appeared too chaotic for the increasingly rationalized economic system capitalism was becoming. When a British botanist, Henry Alexander Wickham, hybridized seeds sent from Brazil, Great Britain established rubber plantations in Malaysia that in time wiped out the harvesting of wild rubber in Brazil, Africa, and elsewhere. The next step was to make a synthetic rubber, but that development awaited the stimulus of acute rubber shortages during the Second World War.
⁴⁸

And of course there was the automobile’s voracious appetite for fuel. Bubbling up to surfaces all over the globe, oil had been a source of heat, though kerosene had been used in lamps. Gasoline had been an unimportant by-product. When Ford, Olds, Buick, Benz, Daimler, Austin, Morris, and the Peugeot brothers began rolling out their new automobiles, the demand for gasoline soared. Internal-combustion engines soon drove buses, trucks, and military vehicles. They made Rockefeller the wealthiest man in America. As the demand for oil and its many by-products expanded, oil entrepreneurs fanned out across the globe in search of the fossil fuel hidden for millennia beneath the earth’s surface. Enriching foreign investors and local potentates, the “black gold” craze for oil put a premium on local labor. In Europe in the 1880s both the Rothschilds of the banking family and the Nobels of the explosives family became involved in producing oil in the Baku region of Russia.

A Nobel scion had gone to the Caucasus with twenty-five thousand rubles to buy walnut rifle stocks for his brother’s company. Arriving in the midst of an oil boom, he bought a refinery instead and plunged his family into the international oil business. Competition from the likes of Rothschilds and Nobels forced Rockefeller to turn Standard Oil into an international corporation.
⁴⁹
Finding oil in Sumatra, a Dutch visitor started drilling in this jungle site, even gaining permission from William III of the Netherlands to call his company Royal Shell. When oil was found in Curaçao in 1914, the island again became a part of world capitalism. On the site of the old slave market rose a complex of oil refining equipment built by the Royal Shell Company and the Dutch government. Discarded kerosene cans, either blue for Standard Oil or red for Shell, got converted into stoves all over Asia.

British, Dutch, and American firms made a fateful decision when they sought out oil in the Arabian Peninsula and adjacent lands. They found it in great abundance, but not without planting seeds of hatred. As Abdelrahman Munif’s brilliant novel
Cities of Salt
poignantly demonstrates, many Middle Easterners’ first contact with Westerners came from the arrogant company managers and roustabouts on oil rigs that were built in the 1930s. As in Africa, so in the Middle East, the Europeans and Americans involved in foreign enterprises had little respect for the people or the cultures they encountered. They exploited the resources of distant lands as though there were no tomorrow and relied on compliant local leaders to give them access to laborers and the resources they wanted.