Chapter 9 of 14

The Factory: Industrial Capitalism

About 23 minutes to read

Elizabeth Bentley's evidence

On 4 June 1832, a young woman named Elizabeth Bentley gave evidence before a committee of the House of Commons in London. The committee, chaired by the Tory MP Michael Sadler, was investigating the labour of children in factories, and Bentley, aged twenty-three, had come down from Leeds to describe her life.

She had begun work, she told the committee, at the age of six, in a flax mill in Leeds. In ordinary times the hours were from six in the morning until seven at night. When the mill was busy, they ran from five in the morning until nine at night — sixteen hours — with forty minutes' break at noon. Her job was as a "doffer", taking the full bobbins off the spinning frames and replacing them with empty ones, keeping pace with the machines. If she was late, or fell behind, she was strapped by the overlooker. The children were beaten, she said, most of all at the end of the day, when they were tired. She described how the work had worn her down until her body had become deformed. By the time she gave evidence, she could no longer work, and was living in the poorhouse.

Elizabeth Bentley's testimony is one of dozens collected by Sadler's committee. Its report, published in 1833, caused a sensation and helped to pass the first effective Factory Act. It has also been criticised, then and since. Sadler was a campaigner for factory reform who chose his witnesses carefully, the factory owners were not heard before he lost his seat, and some economic historians, notably W. H. Hutt in the 1920s, argued that the report exaggerated the evils of the mills. A further government commission, which did hear the employers, confirmed many of its findings while softening others. The best way to read Bentley's evidence is as testimony: one person's account of her own childhood, given in public, on the record.

Her story tells us what the farm became when it moved from the field to the factory. In the previous chapters we have watched the human farm take grain, labour, rent, tithes and human beings themselves. In the factory it took something new: time — measured by the clock, sold by the hour and supervised by a man with a strap.

Free labour

The factory was built on a revolution in technology. In the 1760s and 1770s, a series of inventions — James Hargreaves's spinning jenny, Richard Arkwright's water frame, Samuel Crompton's mule — mechanised the spinning of cotton thread. In 1771 Arkwright opened a water-powered spinning mill at Cromford in Derbyshire, often described as the first modern factory. Within a few decades, steam engines had freed the mills from the rivers, and the cotton towns of Lancashire, above all Manchester — "Cottonopolis" — had become the workshop of the world. As we saw in the last chapter, the raw material for this revolution was grown by enslaved people in the American South.

But the factory was also built on a social revolution, the one described in Chapter 7. Enclosure and the decline of small farming had created a growing population that owned nothing but its capacity to work. The factory workers of the industrial revolution were not serfs and not slaves. They were legally free. No law bound them to any particular employer or any particular place. They could, in principle, refuse any job, leave any mill, move to any town.

That freedom was real, and it mattered. But it operated within a fence that was every bit as effective as the old ones. A worker who refused to work would starve, or enter the workhouse described in Chapter 7. A worker who left one mill would, in most cases, find the same hours, the same wages and the same discipline in the next. And the law, as we will see, still treated a worker who broke a contract very differently from an employer who did.

The first factory workforces were often made up of those who had the least choice. Mill owners recruited women and children, who could be paid less than men and were thought to be more docile. In the early water-powered mills, located in remote valleys, owners took in "pauper apprentices": children from the workhouses of London and other cities, sent by parish authorities glad to be rid of the cost of keeping them, and bound to the mill owner until the age of twenty-one. At Quarry Bank Mill at Styal in Cheshire, built by Samuel Greg in 1784, an apprentice house built in 1790 housed up to a hundred such children, who worked in the mill in return for board, lodging and clothing. Greg was regarded as a relatively humane employer. That this counted as humane is part of the story.

The discipline of the clock

What was new about the factory was not hard work. Peasants, weavers and craftsmen had always worked hard, often harder than any factory hand. What was new was the kind of work, and who controlled its rhythm.

Before the factory, most work followed the tasks to be done and the seasons in which to do them. A handloom weaver working at home might work through the night to finish a piece and then take a day off; a farm labourer's day followed the light and the weather. The historian E. P. Thompson, in a famous essay of 1967, "Time, Work-Discipline, and Industrial Capitalism", described how the factory replaced this "task orientation" with the discipline of the clock. Work began when the bell rang and ended when it rang again. Lateness was fined. Talking, singing, whistling and leaving one's machine were forbidden, and fined. Factory rule-books from the period list long scales of fines for such offences, deducted from wages that were already low.

The early theorists of the factory were quite clear about what they were doing. In The Philosophy of Manufactures (1835), the Scottish chemist Andrew Ure, an enthusiastic champion of the factory system, explained that the main difficulty facing Arkwright had not been mechanical but human: training human beings to give up their irregular habits of work and to identify themselves with the "unvarying regularity of the complex automaton". The worker was to become part of the machine. Ure's book was a hymn to the factory; to its critics, it read like a confession.

This was the factory's version of the fence: not walls or chains, but the clock, the bell, the rule-book and the fine. It had a further, quieter effect. The worker who sold his time by the hour no longer owned his day. The farm had always taken a share of what people produced. Now it took the hours of their lives themselves, and organised every minute of them.

The feed: Engels' pause

How did the factory workers fare? This question, known as the "standard of living debate", has divided historians for more than a century. "Optimists" have argued that industrialisation raised living standards from early on; "pessimists" that the first generations of industrial workers paid a heavy price for growth from which they gained little.

The most careful modern estimates suggest that the pessimists were broadly right about the first half-century, and the optimists about what came afterwards. The economic historian Robert Allen, drawing on the real-wage series compiled by Charles Feinstein and estimates of national output by Nicholas Crafts and Knick Harley, calculated that between 1780 and 1840, output per worker in Britain rose by about 46 per cent — but the average real wage rose by only about 12 per cent. In the same period, the share of national income going to profits rose sharply. Allen called this "Engels' pause", after the young Friedrich Engels, who described the condition of the Manchester working class in 1845. Growth was real; workers' share of it was not. Only after about 1840 did real wages begin to rise substantially, eventually outpacing output.

Other measures point the same way. Studies of the heights of British army recruits and convicts — a rough indicator of childhood nutrition and health — suggest that average heights stagnated or even fell for cohorts born in the early nineteenth century, though these findings, too, are debated. And in the new industrial cities, death rates were terrible. Edwin Chadwick's Report on the Sanitary Condition of the Labouring Population of Great Britain (1842) calculated the average age at death of different classes in several towns. In Manchester, by his figures, it was 38 for professional people and gentry, 20 for tradesmen and 17 for labourers and their families. Those averages were dragged down by the deaths of infants and young children, so they do not mean that labourers typically died at seventeen. But they show where the deaths fell. Engels's own book drew on the same kinds of evidence, and on his own walks through the slums of Manchester, to describe what he called a war of each against all in which the working class was being steadily destroyed.

For Karl Marx, writing Capital two decades later, this was the core of the factory farm. A worker's wage, he argued, was the price of his labour-power — enough to keep him and his family alive and working. But in the course of a working day he produced goods worth more than his wage. The difference, which Marx called surplus value, went to the owner of the factory. The longer the working day, and the more intense the work, the larger the surplus. Economists since Marx have largely rejected his labour theory of value, and the factory owners of the time would have said that their profits were the reward for their capital, their risk and their organisation. But the conflict Marx described — over the length of the working day and the share of output going to wages — was not a theory. It was the central political struggle of the nineteenth century.

The fence of the law

The law of the industrial age was formally neutral between masters and men. In practice, it was not.

In 1799 and 1800, at the height of the war against revolutionary France, Parliament passed the Combination Acts, which made it a criminal offence for workers to combine together to demand higher wages or shorter hours. Employers' combinations were also formally illegal, but prosecutions of employers were almost unknown. The Acts were repealed in 1824, after a campaign led by the radical tailor Francis Place, but trade unions remained subject to legal restrictions for decades.

Even more important were the Master and Servant Acts. Under these laws, a worker who left his job before the end of his contract, or disobeyed his employer, could be prosecuted before a magistrate — often himself an employer — and sent to prison. An employer who broke a contract with a worker could only be sued for damages in a civil court. In the 1860s, thousands of workers were prosecuted under these laws every year in England and Wales. It was not until the Employers and Workmen Act of 1875 that the law put breaches of contract by workers and employers on the same footing.

In the United States, the fence took other forms. In the coal fields and mill towns, workers were often paid in scrip, tokens that could only be spent at the company store, at company prices; the practice survived into the twentieth century, and its memory lives on in the song "Sixteen Tons" ("I owe my soul to the company store"). Courts issued injunctions against strikes. Employers hired private armies — most famously the Pinkerton National Detective Agency — to guard their property and break strikes, and governors and presidents sent in the militia and federal troops. Employers made workers sign "yellow-dog contracts" promising not to join a union, and blacklisted those who did.

The most complete version of the industrial farm was the company town. In the 1880s the railway-car manufacturer George Pullman built a model town for his workers south of Chicago, with brick houses, parks, a library, a church and a hotel, all owned by the company. Pullman intended it to be a showcase of orderly, sober, contented labour. Workers paid rent to the company, bought gas and water from the company, and shopped at the company's arcade. When the depression of 1893 hit, Pullman cut wages by around a quarter, but did not cut rents. In May 1894 his workers went on strike. The American Railway Union, led by Eugene Debs, supported them with a nationwide boycott of trains carrying Pullman cars. The federal government obtained a sweeping injunction against the union and sent in federal troops; in the violence that followed, dozens of people were killed. The strike was broken and Debs was jailed for contempt of court. In prison, he read Marx, and came out a socialist.

The shepherds of the factory

Every factory had its hierarchy of shepherds. At the bottom were the overlookers and foremen, usually promoted from the shop floor, who set the pace, kept order and, in the early mills, used the strap. Above them were the mill managers, clerks and engineers. As firms grew larger in the second half of the nineteenth century, especially the railways, steel mills and oil refineries of the United States, they developed entirely new layers of salaried professional managers. The business historian Alfred Chandler called this the "visible hand" of management, which replaced the invisible hand of the market in coordinating vast enterprises.

At the start of the twentieth century, the engineer Frederick Winslow Taylor set out to turn management into a science. In The Principles of Scientific Management (1911), he described how he had used stopwatch studies to break each job down into its simplest motions, determine the "one best way" to perform it, and set workers precise tasks with bonuses for meeting them. His best-known example concerned a Dutch-American labourer at the Bethlehem Steel works, whom he called "Schmidt", whose job was loading pig iron into railway cars. Under Taylor's instructions, Schmidt's daily load was raised from about twelve and a half tons to forty-seven. Taylor explained that a man suited to such work must be so stupid and so phlegmatic that he more nearly resembles in his mental make-up the ox than any other type.

It is a line that belongs in this book. The founding text of modern management compared the worker to a farm animal, and meant it as a technical description.

Taylor's methods spread rapidly through American and European industry, and their descendants still shape work today, from the assembly line to the warehouse. They also completed a shift that had begun with the factory itself: the transfer of knowledge about how work was done from the workers to the managers. A skilled craftsman had controlled his own methods and pace. Under scientific management, the method and the pace were decided by the planning department, and the worker's job was to carry them out. The shepherds no longer merely watched the herd. They designed its every movement.

The story: freedom, self-help and the survival of the fittest

The factory needed a story, and the nineteenth century supplied several.

The first was the story of freedom of contract. The worker, unlike the serf or the slave, had freely agreed to his wage and his hours. If he did not like them, he could go elsewhere. Any interference with that bargain — by laws limiting hours, or by trade unions demanding higher wages — was an interference with liberty itself, and would harm the workers it was meant to help. In 1837, the economist Nassau Senior — one of the architects of the 1834 Poor Law — argued against proposals to limit factory hours by claiming that a mill's entire net profit was made in the last hour of the working day. Cut the day by an hour, and the profit would vanish, the mills would close and the workers would be ruined. Marx later mocked the argument at length in Capital. When the Ten Hours Act was eventually passed, the mills did not close.

The second story was self-help. Samuel Smiles's Self-Help, published in 1859, opened with the maxim that "Heaven helps those who help themselves" and told the stories of men who had risen from poverty by hard work, thrift and perseverance. It was an enormous bestseller, and its message was genuinely inspiring to many working people. But it carried an implication that was useful to the farm: if some could rise by their own efforts, those who did not rise had only themselves to blame.

The third story was evolutionary. The philosopher Herbert Spencer coined the phrase "survival of the fittest" in 1864 and applied it to human society: competition between individuals weeded out the weak and rewarded the strong, and attempts to protect the poor would only interfere with this natural process. In the United States the sociologist William Graham Sumner, in What Social Classes Owe to Each Other (1883), answered his title's question, in effect, with "nothing". The great fortunes of the age, in this view, were the natural reward of fitness.

The most sophisticated version of the story came from economics. In 1899 the American economist John Bates Clark published The Distribution of Wealth, in which he argued that in a competitive market each factor of production — labour, capital, land — tends to receive a reward equal to what it adds to production. Wages, in other words, were exactly what workers produced; profits were exactly what capital produced; and the distribution of income was not merely efficient but just. Clark's "marginal productivity theory" became the foundation of mainstream economics. Whatever its merits as a model, its political function was clear. Where Marx had seen a surplus taken from the workers, Clark saw everyone getting what they had earned. It was the factory's version of the belly and the limbs.

The Gilded Age

In the United States, the decades after the Civil War produced the greatest concentrations of private wealth the world had ever seen. Mark Twain and Charles Dudley Warner gave the era its name in their satirical novel The Gilded Age (1873): an age of glittering surfaces over a base of corruption.

John D. Rockefeller's Standard Oil, through ruthless competition, secret rebates from railways and the buying-out or crushing of rivals, came by around 1880 to control some ninety per cent of the oil refining in the United States. Andrew Carnegie built the largest steel company in the world, and in 1901 sold it to a group organised by the banker J. P. Morgan, which merged it into the new United States Steel Corporation, for about 480 million dollars. Railway magnates such as Cornelius Vanderbilt, Jay Gould and Leland Stanford built empires on land grants, government subsidies, watered stock and political influence. Their wealth was colossal: at his peak, Rockefeller's fortune was equivalent to well over one per cent of the entire output of the American economy.

The modern statistics of inequality, reconstructed by economists such as Emmanuel Saez and Gabriel Zucman from tax and estate records, show the result. In the United States, the share of the nation's wealth held by the richest 0.1 per cent of households reached around a quarter by the late 1920s. In Britain and much of western Europe, wealth was even more concentrated: on Thomas Piketty's estimates, the richest one per cent held around two-thirds of all wealth in Britain on the eve of the First World War. These were the heights from which, as we will see in Chapter 11, the twentieth century would bring the farm crashing down — for a while.

The Gilded Age also produced the most eloquent defence of great wealth ever written by one of its holders. In 1889, Andrew Carnegie published an essay, later known as "The Gospel of Wealth", in which he argued that the concentration of wealth in the hands of a few was the inevitable and beneficial result of the law of competition — a law that might be hard on individuals, he wrote, but was best for the race because it ensured the survival of the fittest in every department. The rich man's duty was to live modestly, provide moderately for his family, and spend the rest of his life distributing his surplus wealth for the public good, as a trustee for his poorer brethren. "The man who dies thus rich dies disgraced," he wrote. Carnegie followed his own advice, giving away most of his fortune, most famously to build thousands of public libraries.

Three years after the essay, in 1892, at Carnegie's steel works at Homestead, Pennsylvania, the company's manager Henry Clay Frick, with Carnegie's backing, set out to break the skilled workers' union. He locked the workers out, fortified the plant and hired three hundred Pinkerton guards, who arrived by barge on the Monongahela River. In the battle that followed on 6 July, several strikers and several Pinkertons were killed. The state governor sent eight thousand militiamen to take over the town, strike-breakers were brought in, and the union was destroyed. Wages fell and hours rose. The libraries were built with money from Homestead.

The juxtaposition is not hypocrisy in any simple sense. Carnegie believed in his gospel. It is the farm's oldest pattern, appearing in a new form: the owner who sees himself as the herd's protector and benefactor, and who will not tolerate any attempt by the herd to bargain for itself.

A divided workforce

The factory brought workers together in numbers no landlord had ever assembled on a single estate. That was its great danger to its owners, and they learned early to manage it by keeping the workforce divided.

The first division was by sex and age. Women and children were paid a fraction of a man's wage for work on the same machines, and their presence was used to hold down men's wages in turn. In the British cotton industry of the 1830s, women and children under eighteen made up a large majority of the workforce in many mills. Much of the early campaign for shorter hours was framed as a campaign to protect women and children — partly from genuine concern, and partly because men's own hours could be shortened only indirectly, through theirs. The economic historian Jane Humphries, who studied hundreds of working-class autobiographies, has shown how central child labour was to the industrial revolution, and how young many of the children were when they began work.

The second division was by origin. The factories of Lancashire drew in hundreds of thousands of Irish migrants, especially after the Great Famine described in Chapter 7. Engels described how Irish workers were crowded into the worst housing and the lowest-paid jobs, and how English workers resented them as competitors who drove wages down. In the United States, successive waves of immigrants — Irish, German, Italian, Polish, Jewish, Slovak, Chinese, Mexican — supplied the labour of the mills, mines, railways and stockyards. Employers learned to mix nationalities on the same shop floor, so that workers who spoke different languages would find it harder to organise, and to bring in new immigrant groups as strike-breakers when older ones organised.

The third, and deepest, division in the United States was race. After the end of slavery, Black workers in the North were largely shut out of skilled industrial work, and many white trade unions excluded them from membership. Employers in turn recruited Black workers as strike-breakers, which deepened white workers' hostility and reinforced the exclusion. In the West, Chinese labourers, who had built much of the Central Pacific Railroad, became the target of a violent movement by white workers that culminated in the Chinese Exclusion Act of 1882, the first federal law in American history to ban immigration by members of a specific national group. Some labour organisations, such as the Knights of Labor in the 1880s and the Industrial Workers of the World after 1905, made a point of organising across lines of race and nationality; the Knights, however, themselves supported Chinese exclusion. Others built their strength by defending the privileges of white, native-born men against everyone else.

This is the pattern that Edmund Morgan described in colonial Virginia and that B. R. Ambedkar called a division of labourers. It was not always engineered by employers; very often, it was the workers' own fears and prejudices that built the walls between them. But it served the farm extremely well. A workforce that experienced itself as English against Irish, native against immigrant, white against Black or men against women was a workforce that found it hard to act together against the people who owned the mills. Every successful breakout of the industrial age, as we will see, depended on overcoming at least some of these divisions.

The breakouts

The industrial farm faced resistance from the beginning, and its breakouts eventually changed it more profoundly than any since the Black Death.

The first resisters attacked the machines. Between 1811 and 1816, groups of textile workers in the Midlands and the North of England, signing themselves "General Ludd" or "King Ludd", smashed the knitting frames and shearing machines that were destroying their livelihoods. They were not opponents of technology as such. They were skilled workers fighting against the use of machinery to cut wages, employ unskilled labour and evade the customs of their trades. The government responded by making machine-breaking a capital offence and deploying more soldiers against the Luddites than it had sent to Portugal to fight Napoleon in 1808. Luddites were hanged, transported and imprisoned, and the movement was crushed.

In August 1819, a crowd of some sixty thousand people gathered peacefully at St Peter's Field in Manchester to hear the radical orator Henry Hunt call for the reform of Parliament, in which none of them had a vote. The local magistrates sent in the yeomanry, a mounted volunteer force of local businessmen and their sons, to arrest Hunt, and then the regular cavalry to disperse the crowd. Some fifteen to eighteen people were killed and hundreds injured. The massacre was quickly named "Peterloo", in bitter mockery of Waterloo.

In the 1830s and 1840s, the Chartist movement demanded votes for all men, secret ballots, annual parliaments and pay for MPs, so that working men could sit in Parliament. Its national petitions gathered millions of signatures — over three million, it claimed, in 1842. Parliament rejected all of them. But every one of the Chartists' demands except annual parliaments eventually became law.

Meanwhile, a movement led by the Tory evangelical Richard Oastler, the Tory MP Michael Sadler, the factory workers' own "short-time committees" and, later, Lord Ashley (the future Earl of Shaftesbury) campaigned to limit the hours of factory labour. In 1830, Oastler published a letter in the Leeds Mercury titled "Yorkshire Slavery", in which he argued that the children in the mills of Bradford were in a condition worse than that of the enslaved people of the West Indies, whose cause the anti-slavery campaigners of Yorkshire were championing. The comparison was deliberately provocative, and it worked. The Factory Act of 1833 banned the employment of children under nine in most textile mills, limited the hours of older children and — crucially — created a small corps of government factory inspectors to enforce it. The Ten Hours Act of 1847 limited the working day of women and young people in textile factories to ten hours, which in practice meant the same for men, since the mills could not run without them.

In the United States, the young women of the Lowell textile mills in Massachusetts, recruited from New England farms in the 1820s and 1830s, organised "turn-outs" against wage cuts in 1834 and 1836, and in 1845 formed the Lowell Female Labor Reform Association, led by Sarah Bagley, to campaign for a ten-hour day. On 1 May 1886, hundreds of thousands of American workers struck for an eight-hour day. In Chicago, at a protest meeting in Haymarket Square on 4 May, a bomb was thrown at police; several police officers and an unknown number of civilians were killed in the explosion and the shooting that followed. Eight anarchists were convicted on flimsy evidence of conspiracy, and four were hanged. The international socialist movement made 1 May a day of workers' solidarity in their memory, as it remains in most of the world.

On 25 March 1911, a fire broke out at the Triangle Shirtwaist Factory in New York, where several hundred workers, most of them young Jewish and Italian immigrant women, sewed blouses on the top floors of a ten-storey building. Some of the exit doors had been locked to prevent theft and unauthorised breaks. One hundred and forty-six workers died, many of them jumping from the windows. Among the crowd watching in the street below was a young social worker named Frances Perkins. She later said that the New Deal began on that day. In 1933 she became the United States' Secretary of Labor, the first woman to serve in a presidential cabinet.

Slowly, unevenly, with defeats far more numerous than victories, the factory's breakouts changed the farm. Children were taken out of the mills and put into schools. The working day shortened. Trade unions won legal recognition. Working men, and later women, won the vote. Factory inspectors, safety regulations and, in Germany from the 1880s under Bismarck, the first state systems of social insurance appeared. Bismarck was no friend of the workers; he introduced health, accident and old-age insurance in part to undercut the growing socialist movement. The concessions of the farm, as so often, were made to keep it standing.

What the factory teaches

The fence of the factory age was the absence of an alternative: the enclosed land, the workhouse, and a labour market in which leaving one employer meant finding another just like him. Around it stood the Combination Acts, the Master and Servant Acts, injunctions, company towns, scrip, blacklists and the Pinkertons.

The feed was time: the hours of the working day, measured by the clock and sold by the hour, and the surplus between what workers produced and what they were paid — a surplus that, in the first half-century of industrialisation, flowed overwhelmingly to profits, in what Robert Allen called Engels' pause.

The shepherds were the overlookers and foremen, the new professional managers, and the scientific managers who, following Taylor, took the knowledge of work away from the workers and redesigned their every movement.

The story was freedom of contract, self-help, the survival of the fittest, and the economic theory that everyone receives what they produce — with Carnegie's gospel of wealth as its most generous and most revealing form.

The breakouts were the Luddites, Peterloo, the Chartists, the Ten Hours movement, the Lowell mill girls, Haymarket, Homestead, Pullman, the Triangle fire and the long building of trade unions. Unlike many earlier breakouts, they eventually won much of what they asked for — not because the farm gave way willingly, but because industrial workers, crowded together in factories and cities, could organise as no peasantry ever had.

Bridge: the ledger

On the evening of 2 November 1907, at the height of a financial panic that had seen runs on banks and trust companies across New York, the banker J. P. Morgan gathered the presidents of the city's leading banks and trust companies in his private library on Madison Avenue. According to the accounts of those present, he locked the doors and kept them there through the night until they had agreed to put up the money needed to stop the panic. The richest private banker in the United States had acted as its central bank.

The episode persuaded many in American politics and finance that the country needed a permanent lender of last resort. Six years later, in 1913, Congress created the Federal Reserve System. By then, the farm's centre of gravity was shifting once again — from the land and the factory to the bank, the bond and the balance sheet. In the next chapter we follow the farm into the ledger: money, banking and debt as the modern fence.