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Markets for the products Essay

Why did mass-production emerge as the dominant industrial process in the late 19th/early 20th century? Provide examples to support your argument.”As a concentration on principles of power, accuracy, economy, system, continuity and speed – mass production is one of the most prolific production technologies the world has ever known.” (Hounshell D, 1984) Mass production is not merely quantity production or machine production, for this may be had with none of the requisites of mass production. It is characterized by mechanical pacing of work, no choice of tools or methods, repetitiveness, minute subdivision of product, minimum skill requirements and surface mental attention. (Huczynski A and Buchanan D; 2001)

The late 19th / early 20th century saw the rise of mass production as the dominant industrial process; where single-purpose machines and unskilled labour were combined to produce standard goods. This essay will endeavor to evaluate the emergence of mass production as the undisputed emblem of industrial efficiency and throw light on some examples to support this view. Furthermore, the essay will outline the decline of mass production, and compare and contrast it with flexible specialization. However, before dwelling into the aforementioned aspects it is essential to study the classical view which throws light

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on mass production as a historical necessity.

The core of the classical theory of economic development as seen through the writings of Smith and Marx is the idea that increases in productivity depend on increasingly specialized or product specific use of resources. For Adam Smith, the crucial source of increased productivity was the division of labour that led to the concentration of a narrower range of activities and allowed specialists to perfect their skills more rapidly, wasting less time switching operations. He recognized the need to design and use man-machine systems for the production of items in large quantities. For Marx, specialization of manual work was also important for the increase of industrial productivity because it led to the introduction of special purpose automatic machinery. In Smith’s perspective however, the division of labour was limited by the extent of the market.

Until and unless there wasn’t a potential market for a product, there wouldn’t be a point in rearranging production to increase output. This was directly linked to the second great theme of classical political economy: the transition from the agrarian world of a small holder peasantry paying dues to feudal lords, to the world of industrial capitalism, and, more particularly, the emergence of Great Britain and United States as industrial powers. Both Smith and Marx interpreted these transformations as a story of progress from self-sufficiency to specialization. They believed that the triumph of capitalism was proof that the constant struggle to increase productivity meant that for every satisfaction, new desires are created. This classic synthesis put forward the view that capitalization creates mechanization which in turn leads to mass production. (Sabel, C and Zeitlin J; 1985)

The stimulus for mass production derived largely from the invention and increasing availability of mechanized methods of production, a development, which in turn was dependant on the design and use of power resources. The use of water, and then steam power accelerated the development of production mechanization. The development of machine tools and other ‘mechanical’ production equipment came to a climax in the 18th and 19th centuries, and consequently it was around this period that mass production as a ‘technology’ began to evolve.

During the 1850s and 1860s, modern forms of large-scale business enterprise had only emerged in a few limited areas, such as the railway industry. The next half-century witnessed a business revolution, in which an ever-widening range of manufacturing, mining and service companies in the industrial economies adopted structural forms pioneered by the railways. According to Alfred D. Chandler, the railroads aggregated demand and elaborated administrative techniques that proved indispensable to the new mass manufacturers outside the transportation industry.

Despite growing at different rates and in varying forms between the 1850s and 1930s, modern, large-scale business corporations in Europe and America shared some common characteristics. Employment of larger capital assets, horizontal and vertical integration, product diversification, multi-plant operations and continuing R&D programmes were some of these. The emerging large-scale ‘managerial firms’ of the late nineteenth and early twentieth centuries as contrasted with the traditional ‘entrepreneurial firms’ signified the shift from a system of proprietorial capitalism to one of big business and managerial capitalism. (Schmitz C, 1995)

The key factor in these transformations was technological change in the middle decades of the nineteenth century. On the supply side, innovations in fuel and production technology helped the industries to have a higher speed and volume of output, whereas the demand side saw the developed communication and transportation systems that created integrated national and international markets for the new mass producers. As stated before, the construction of the railway networks in Western Europe and the United States between the 1840s and the 1860s is generally identified as the most significant element in the development of markets for the products of agriculture and industry. In Britain of the 1850s and 1860s, there were only a few industrial companies with assets of more than $2.5 million, but 19 railway companies had each raised capital in excess of $15 million.

Organizational forms developed by the railways were transmitted to other areas of business, through new professional journals or management schools. They also arose in specific instances through the medium of individuals. Andrew Carnegie, who learnt his craft in the pioneering managerial atmosphere of the Pennsylvania Railroad, was one such individual. He moved to the primary metal sector; where application of meticulous accounting and monitoring procedures helped make him the most cost-effective mass producer of steel by the 1880s and 1890s (Wall, 1970 cited in Schmitz C, 1995)

Big businesses spread rapidly to other industries from the 1880s and 1890s. However, they clustered in certain sectors like food, chemicals, primary metals and transportation equipment. Major public utilities like gas, electric power and telephone companies also developed into large-scale managerial enterprises. Chandler, in The Visible Hand, describes the conversion of an increasingly fragmented business world in early 19th century America to expanding markets, high volume manufacturing technologies and increasing internalization of production and distribution activities within firms of 1870s and 1880s. The American system grew and changed in character so much that by the 1920s the United States possessed the most prolific production technology the world has ever known. This was “mass production.”

In the 1850s, the principle of manufacturing interchangeable parts, which originated in Europe, was developed in America to facilitate the economic production of fairly complex small arms in response to military demand. This principle, known as the ‘American system of manufacture’, was studied by British visitors like Joseph Whitworth and John Anderson. They pointed out that the special techniques used in the armories could be applied most universally in metalworking and woodworking establishments. This new manufacturing technology spread first to the production of a new consumer durable, the sewing machine (I. M Singer & Co.), and eventually it diffused into such areas as typewriters, bicycles and eventually automobiles, thus providing a foundation on which to further develop mass production. (Wild R, 1972)

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