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CHAPTER 17 Capital and Labor in the Age of Enterprise, 1877-1900

Industrial Capitalism Triumphant

Great Deflation: late 19th century, global economic stagnation but not in USA where were awesome

Growth of the Industrial Base

Factories consumer goods > capital goods (railroad equip., machinery, construction materials) add to nations productive capacity Steel-making revolution in 1872 Carnegies steel mill outside Pittsburgh w/ Bessemer converter Designed mill that functioned on integrated operation > Edgar Thompson Works model Spurred exploration of mineral sources Mesabi Range iron ore, Appalachian coal Energy revolution to electric power: coal used a lot for steam turbines > electric generator

The Railroad Boom

Constructing the Railroads Payment by free enterprise lured by government incentive (financial aid, railroad bonds, land grants) Government gave railroads corporation enabled $$ to be raised hugely (investors had limited liability, borrow $$ through bonds) Construction companies (primary arm) got workers to accept bonds as payment / get cash to persuade them to work, owners $$$ Business for $$$ - Forbes, Vanderbilt competitive, subject to boom/bust, earned huge capital & created largest rail network The Railway System Became more efficient from jumbled mess: 4 time zones, standard track gauge, single unit shipping Technology advancing: durable steel rails, powerful / more cars, Westinghouse > cheaper to move / efficient Investors costs of growth very high (fought competition by cutting $$, huge debt, went down with economy) Investment bankers fix after railroad fails, get investors for lower interest rates / more $$, consolidated rivals (less comp.) Business center shifted to Wall Street

Mass Markets and Large-Scale Enterprise

Post-Civil War scale of economic activity grew > population jumped (immigration/birth), to cities, railroads connected markets, telegraph, accessible to all Gustavus Swift and Vertical Integration Chicago Porkopolis system could last indefinitely; Swift designs meat system w/ refrigerator cars and packing plant Built own network of branch warehouses, fertilizer, chemical, and by-product facilities, handle other perishables, more packing houses in other places Swift & Co. pioneered vertical integration absorbed activities of small specialized enterprises into a national structure The Birth of Mass Marketing Others too Rockafeller Oil Company + system, Singer Sewing Machine Co. Americans all okay with using standardized, mass-marketed goods (clothes same) Retail business changed to mass market: selected goods, department stores, chain stores Modern advertising born to get consumers, advertisements become important part of American business

The New South

Many southerners agreed that the Old South (plantation) economy had to be put aside Few cities, primitive distribution, few manufacturing > railroad boom + competitive with country Remained agricultural poor = farmers, cotton despite soil depletion, low productivity, unprofitable prices Southern Industry Low agricultural wage produced Souths hopes for industrialization new mills paid nearby farmers less, compete w/ NE Labor system: hired whole families > family life, incl. young and females but not blacks, long hours South had tobacco > Duke and cigarettes used black field labor + white women machine tending, lumbering racially integrated black + white Economic Retardation Souths boom did not lift region out of poverty still used soil, industries produced raw materials Blamed North: took up most capital, integrating processes made national above regional interests, firms maintained interregional status quo Economic backwardness was Souths own fault: remained tributary economy that supplied the North Cheap labor prevented it from becoming technologically advanced workers discouraged by being replaced with machines, low wages attracted labor-intensive industry, cheap labor market inhibited investment in education b/c educated would leave for $$ Southern market insulated from rest of North: immigrants didnt come in, Southerners didnt leave b/c culturally different

The World of Work

Labor Recruits
Need a lot of labor, but doesnt use white Americans (educated, white-collar jobs in offices/retail), blacks (lower tier), or women (domestic) Immigrant Workers Great migration started in 1840s (Irish potato famine), from commercialization/bad peasant economies Europe to USA

Ethnic origin determined work (German artisans, Irish unskilled common labor), took jobs from experience or common pool of unskilled Technology advancement doesnt need skill, Italian and Slavic (SE Europe) unskilled flood factories Hunky Moved within well-defined networks of relatives or villagers to get jobs, ethnic clustering Immigrants only came for $$, half left when they saved enough or didnt have work Used for worst jobs and always available to employers, ideal labor supply Working Women and the Family Economy > 4 million women wage-workers, of nonfarm labor force, gender-restricted Wives (except AA) supposed to stay at home, so usually young (<24) and unmarried or else husbands died/left/no job No mens work/lower paid, didnt need it b/c husband had $$ & she supposed to do domestic service 1) domestic servants; 2) white-collar jobs (teaching/nursing/sales/office); 3) industry (garment/textile/light occupations/no day laborers) Sex typing giving jobs a gender: women weaker sex, employers profited by paying women less Restricted by ethnicity and race (white-collar for native-born, menial jobs for black women, clustering patterns) Womens domestic work a necessity for whole family, but working-class need $$ w/ kids: unmarried sons/daughters/children contribute to house 1890s child labor laws & regulate teen work hours, require <14 school, so married women have to start working for $$ > start being part of labor

Autonomous Labor
Autonomous workers (men) flourished: miners, cotton mule spinners, iron puddlers/rollers, glass blowers : skilled workers Abided by the stint: self-imposed limit on daily work: personal dignity + brotherhood w/ coworkers, but inefficient : keen sense of craft customs Wage women develop craft group culture, and young wage-earning women have brief fun time w/ each other, helps w/ bad work conditions Had solidarity and self-respect rebellious culture + job grievances = astonishing strike movements Skilled male workers craft power: supervisors earn $$ and pay helpers from own earnings > similar inside contracting in complex factories Dispersal of authority: higher-ups autonomy, subordinates sometimes exploited, but usually made overall human relationships/ties/strike support > technology = < worker independence = deskilling process Mass production (Ford) from skilled machinists to dedicated machines that did the same job over and over Employers pro-automatic machinery because it increased output, made it easier to control workers > management = < cost of production Scientific management: engineers approach to management, (1) move brain work from manual labor to managers (2) deprive worker authority Time-and-motion study: engineer timed each job w/ stopwatch, paid differential wage if time met/more $$ if faster Assumed $$ was all that a worker cared about and theyd like it, but really felt like slavery, was expensive, embittered relationships on the floor Taylor = teachings/disciples went farther into new management to maximize productivity Workers lost more and more autonomy as they were made to fit industrial system

Systems of Control

The Labor Movement

Reformers and Unionists
Crushed aspirations of the independent American worker Labor Reform and the Knights of Labor Noble and Holy Order of the Knights of Labor: national movement w/ republican views of egalitarian society where capitalists = workers Fraternal spirit harnessed to labor reform through cooperation: set up shops owned & run by employees > cooperative commonwealth More devoted to educating all workers exc. lawyers & saloonkeepers, bringing about gradual development of co-op commonwealth w/ + members Trade Unionism Trade unions tended to everyday needs of workers closed shop jobs and specified work terms, defended traditional skill and rights Expressed social identity of the craft, specific to each trade, and emphasized mutual aid in and out of work National union, uniting local unions of the same trade, became dominant organization form for trade unionism Workers then part of both trade union and liberal Knights of Labor: politically active, accepted many women after 1881 and (grudgingly) blacks

The Triumph of Pure and Simple Unionism

1880s Knights: (winning strikes, + power, + members) which frightened trade unions into divergence of labor philosophies Samuel Gomperss P&S unionism: avoid grand theories/schemes, instead focus on concrete gains org. by craft and occupation at the workplace 8-hour workday struggle difference in opinion: Knights +leisure but unionists +concrete workers everywhere went on strike on May 1, 1886 Haymarket affair: Chicago anarchism stateless society local anarchists organized, police came, bomb thrown > gunfire, 4 executed / prison Employers broke strikes violently, compiled blacklists of strikers, and forced signing of yellow-labor contracts: no labor organizations December 1886 national trade unions formed American Federation of Labor (Gompers Pres.) for workers realistic goals, European political opp. Knights faded in mid 1890s, AFL rose to power

Industrial War
American employers dont want to give up larger share, opposed collective bargaining heavily The Homestead Strike Carnegie wants to replace comfortable workers w/ machinery, pussies out to Scotland leaving Henry Clay Frick, coal/labor vet, in charge Frick announced on July 1, 1892 no more membership w/ Amalgamated Assoc. of Iron & Steel Workers, attacking town working unionists lives

July 6 barges w/ Pinkerton Detective Agency men ordered to take control of plant came, strikers attacked and won, incl. enraged women Frick got PA gov state militia + martial law, steel workers taken over, opened to strikebreakers, union leaders arrested Defeat market beginning of end of trade unions in steel industry, ushered decade of workers hating corporations and government The Great Pullman Boycott Pullmans town wages cut, but not rents for company housing strikes by Pullman workers of American Railway Union ARU leader got members not to handle Pullman sleeping cars in secondary labor boycott using railroads to attack Pullman Railroads brought federal government in on account of U.S. mail cars also being stopped, Cleveland got Army (failed @ getting trains running) ARU leaders prohibited from striking, then arrested and jailed, so the strike ended b/c of use of government power

American Radicalism in the Making

1900s radicalism forged out of industrial strife of the 1890s Eugene V. Debs and American Socialism Debs resigned from respectable post @ old trade unions indifference to the low-paid, devoted to ARU (regardless of skill) industrial union Pullman sentence of 6-months made him emerge a radical socialist (Karl Marxs revolution between workers and capitalists, classless society) Socialist Labor Party (est. 1877, Germans) in disarray in 1897 weak under De Leon, Debs joined rival Socialist Party of America in 1901 Debs made socialism understandable to ordinary Americans, gaining support outside immigrant base and becoming a political force Western Radicalism New western mining camps taken over by big corporation who wanted to get rid of Western Federation of Miners and cut wages Violence caused 1892 Coeur dAlene gunfight/explosives car threat/martial law etc. Government intervention naked and unrestrained due to politics of west either miners dominated or (mainly) owners would arming + gov. elect 1905 WFN + socialists to create Industrial Workers of the World (Wobblies) Syndicalism - supported socialism at workplace run directly by workers through industrial unions Socialism + syndicalist IWW limited success, but showed American radicalisms potency against injustices in new industrial order