Economic History Association

What Do Bosses Really Do? Author(s): David S. Landes Reviewed work(s): Source: The Journal of Economic History, Vol. 46, No. 3 (Sep., 1986), pp. 585-623 Published by: Cambridge University Press on behalf of the Economic History Association Stable URL: http://www.jstor.org/stable/2121476 . Accessed: 04/01/2012 14:25
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THE JOURNAL OF ECONOMIC HISTORY

VOLUME XLVI SEPTEMBER 1986 NUMBER 3

What Do Bosses Really Do?

DAVID S. LANDES If employers make so much money, why don't workers hire machines and expertise and make the money instead?This questionhas generateda large body of writing, including Stephen Marglin's much-cited article "What Do Bosses Do?" Marglindraws on historyto arguethat the employer,who added nothingto technical efficiency, used specialization of tasks to divide labor and impose himself as boss, thereby creatingan artificial,unproductiverole. These arrangements were embodiedin domestic industryand were reinforcedwhen employers turned to the factory system as a more effective disciplinarymode. This article argues that such a thesis misreadshistory and is essentially ideological.

Marxist rumors about surplus value were true, one would have to assign a large, indeed inordinate share of product to profit. This implicitly poses an interesting problem: if bosses make (cream off) so much money, why shouldn't boss-free enterprises (cooperatives, collectives, small self-employed workers, and the like) be able to outdo those capitalisticunits that pay so heavy a toll to owners and managers? Why shouldn't workers be able to get together, share tasks and responsibilities, hire capital and expertise as needed, and sell for less? The explorationof problemssuggestedby these questions has given rise to a large and still growing body of literature,from the theoretical and hortatoryto the empiricaland historical. As my title indicates, the paper that follows takes up a theme first presentedby Stephen Marglinin 1974in a seminal essay entitled "What Do Bosses Do?"'1In a later article on the same subject, Marglinwrote that this essay had circulatedin scholarlycircles as samizdat, that is, as a kind of contrabandliterature.2It is hard to imagine how such a fate
Journal of Economic History, Vol. XLVI, No. 3 (Sept. 1986). ? The Economic History Association. All rightsreserved. ISSN 0022-0507. The authoris Professorof Economicsat HarvardUniversity,Cambridge, Massachusetts02138. A reply by StephenMarglinwill appearshortlyin this JOURNAL. ' "WhatDo Bosses Do?: PartI," The Review of Radical Political Economy, 6 (Summer1974), pp. 60-112. The article was republishedas "What Do Bosses Do?" in Andre Gorz, ed., The
Division of Labour: The Labour Process and Class Struggle in Modern Capitalism (London, 1976),

If

pp. 13-54. Page referencesin this article are to the reprintin Gorz. 2Stephen Marglin,"Knowledge and Power," in Frank H. Stephen, ed., Firms, Organization
and Labour: Approaches to the Economics of Work Organization (London, 1984), pp. 146-64; on

samizdat, p. 156. In fact, the article is part of a larger stream of revisionist literatureon the

585

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could befall the work of a professor of economics at Harvard University; but if it will make Stephen Marglinfeel better, I shall do my best here to take note of his contributionto the history of capitalism and industrialenterprise, which has had far more resonance than he seems to recognize or cares to admit. In the beginningthere was Smith, and Smithtold us about the division of labor. Book I, Chapter I of The Wealth of Nations (1776) opens: "The greatest improvementin the productivepowers of labour, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour."3 Smith, of course, was not the first. Stephen Marglintakes us back to Plato-"the attributionof the division of labour to efficiency antedates Adam Smith by at least two millenia[sic]."4 And Edwin Cannan,in his note to this passage, reminds us that Bernard de Mandeville, in his well-known but well-neglected Fable of the Bees (1714), had already marked this phenomenon, noting, if not distinguishing between, the social or occupational division of labor on the one hand and process division or specializationwithin an occupation on the other.5But it was Smith who explicitly analyzed the advantages of the procedure, which Mandeville took as almost self-evident, and made it the linchpin of his model of economic growth. Although not unattentive to division of labor as occupational differspecialization entiation, Smithfocused his scrutinyon intraoccupational and chose for his example the pin manufacture.He could have found an even more advancedexample of division in the watch trade, which most but of his predecessors had taken for illustration;6 the very apparent
as organizationof laborand the structureof the firmand has drawnnotice from mainstream well of as from radicaleconomists. See, for example, OliverE. Williamson,"The Organization Work: A Comparative Institutional Assessment," Journal of Economic Behavior and Organization, 1 Adam Smith "The HistoricalBackground: (March1980),pp. 6-11; and CharlesP. Kindleberger, and the IndustrialRevolution,"in ThomasWilsonand AndrewS. Skinner,eds., TheMarketand
the State: Essays in Honour of Adam Smith (Oxford, 1976). Marglin's new article does make some

changesin his earlierthesis, andI shalladvertto these whenrelevantto the discussionthatfollows. 3Page referencesin The Wealthof Nations are to the ModernLibraryedition, edited by Edwin Cannan(New York, 1939). 4 Marglin,"What Do Bosses Do?" p. 47, n. 2. Kindleberger,"The Historical Background," arguesthat Smith's emphasison the division of laboractuallycame from Plato, ratherthan from his immediate predecessors or from experience; he cites on this point Vernard Foley, "The Division of Labourin Plato and Smith," History of Political Economy, 6 (1974), pp. 220-42. 5 As does Marx,who never misses a chance to diminishSmith:Capital,vol. 1, p. 335, n. 1. Page references are to the Moscow edition, Progress Publishers,which is a translationof the third Germanedition, edited by FriedrichEngels.
6 Thus

Henry Martyn (Martin), Considerations on the East India Trade (1701); and Bernard de

Mandeville,TheFable of the Bees (5th ed., London, 1728).

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587

simplicity of the pin as an object made the degree of specializationin its manufacture that much more impressive. It was, he wrote, "a very triflingmanufacture;but one in which the division of labour has been very often taken notice of."7 "The division of labour," he went on, "so far as it can be introduced, occasions, in every art, a proportionableincrease in the productive powers of labour." These gains in productivityhave three sources: (1) The specialization of the workmanincreases his dexterity. (2) Specialization saves the workmanthe time and trouble of setting up for new tasks. (3) The simplificationof tasks opens the way to improvements in technique, among other things, to the invention of machines.8Concentrationon a single operationconcentratesthe worker's mind and hands, and suggests "easier and readiermethods of performing"the work. In this connection, note that Smith does not take account of the contribution of simplification to mechanical imitation or reproduction of the work process. Karl Marx understoodthe link better: "The manufacturing period simplifies,improves, and multipliesthe implementsof labour, by adapting them to the exclusively special functions of each detail labourer.It thus creates at the same time one of the materialconditions for the existence of machinery, which consists of a combination of "9 simple instruments. Smith's emphasis on the psychological advantagesof specializationwhat we may call the inspirationof monotony-has exposed him since to criticism and some mockery. Marx, for example, who accepted the general thesis of the gains to efficiency from division of labor, deSmith, Wealthof Nations, p. 5. Kindleberger, "The HistoricalBackground," 7, remarksthat p. the consequencesof divisionof labor"can be foundworkedout completewith referencesto pins"
in Carl, Traitg de la richesse des princes et de leurs 9tats et des moyens simples et naturels (1722).
8 Smith's "machines" were not necessarily engine-powered devices. He specifically remarks thatthe handmillis also a machine.Lectures,p. 167,cited by Cannan Smith, Wealthof Nations, in p. 9, n. 17. In his discussion of the gains to divisionof labor, moreover,Smith makes no explicit referenceto what we could call a factory,thatis, a largemanufacturing usingmachinesdriven unit by nonhumanpower. There is no evidence that Smithhad ever seen such a unit, which had only recently appearedin cotton spinning.But such units had existed since early in the centuryin silk throwing,and Smithmust have knownof theirexistence. Even so, my sense is that Smith'sworld was prefactory,prepowermachinery;and that he had no awarenessof the IndustrialRevolution, then in its inception. There is some disagreement this: most economic historianssay he was on unaware; historians of economic thought say he was not. Like Charles Kindleberger("The I HistoricalBackground") think the "unawares"have it. For a similarpoint of view, see Hiram Caton, "The Preindustrial Economicsof AdamSmith,"this JOURNAL, 45 (Dec. 1985), pp. 833-53. For this reason, I findincongruous statementthat "Marglin Smithagreein allowingearly the and factories, both mechanizedand nonmechanized [thatis, poweredand nonpowered],considerable potentialfor measuredproductivitygrowth." KennethL. Sokoloff, "Was the Transitionfrom the ArtisanalShopto the Nonmechanical FactoryAssociatedwith Gainsin Efficiency?: Evidencefrom

the U.S. Manufacturing Censuses of 1820 and 1850," Explorations in Economic History, 21 (1984),

factories-that is, true, powered p. 352. Not that Smith would have had trouble incorporating factories-into his division-of-labor paradigm. 9Marx, Capital, vol. 1, p. 323.

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nounced him for assigning to "common workmen" (Smith's words) inventions due rather to "learned men, handicraftsmen, and even peasants."10 In fairness to Smith, though, he sought his inventors in a wider sphere than hiredlabor alone. Thus, althoughin the passage cited above he does not speak of invention by employers, only by workmen, he would surely have argued that simplificationgave ideas to both, if only because, in small shops, the employer was one of the workmen. And on the very next page he recognized that inventions might well have to come from other sources:
All the improvementsin machinery,however, have by no means been the inventions of those who had occasion to use the machines. Many improvementshave been made by the ingenuityof the makersof the machines,when to makethem became the business of a peculiar trade: and some by that of those who are called philosophersor men of speculation,whose trade it is not to do any thing, but to observe every thing;and who upon that account, are often capable of combiningtogether the powers of the most distant and dissimilar objects. In the progress of society, philosophy or speculation becomes, like every other employment,the principalor sole trade and occupationof a particularclass of citizens. Like every other employmenttoo, it is subdividedinto a great numberof differentbranches,each of which affordsoccupationto a peculiartribe or class of philosophers;and this subdivisionof employmentin philosophy, as well as in every other business, improvesdexterity, and saves time. Each individualbecomes more expert in his own peculiarbranch, more work is done upon the whole, and the quantityof sciences is considerablyincreasedby it.1"

Marx's principal objection was not to Smith's economics, for he essentially repeats the argumentspro division of Smith & Co., but to the social and moral consequences of a system that deprived the workman of his independenceand convertedhim "into a crippledmonstrosity, by forcing his detail dexterity at the expense of a world of productive capabilities and instincts."12The one thing that Marx added to the economics, he picked up from such bourgeois writers as Andrew Ure and Charles Babbage. This is the cost advantage that accrues to the disaggregationof a productiveprocess into tasks of differentdegrees of that enables the employer skill and complexity. It is this disaggregation to select workers accordingto theircapacity, payingnone more than the nature of the task warrants.Thus Babbage:
The master manufacturer,by dividing the work to be executed into different
?0Ibid., p. 329, n. 4. 1" Smith, Wealthof Nations, I-i 10. Marx'scriticism(Capital,vol. 1, p. 329, n. 4), then, is not justified. But then, Marx saw in Smithwhat he wantedto see. 12 Capital, vol. 1, p. 340. And in a rhetoricalfluorish:"As the chosen people bore in their as workman the featuresthe sign manualof Jehovah,so divisionof laborbrandsthe manufacturing jibe propertyof capital"(p. 341). A characteristic by Marx,who borein his own features"the sign manualof Jehovah." As is generallytrue with people who run from their origins, so with this by of reincarnation a biblicalprophet,Jewishby descent, Christian parentaldecision, atheisticand antireligiousby conviction, and vocally anti-Jewishbecause of this deliberate break with a Jewish lineage. distinguished

What Do Bosses Really Do?

589

processes, each requiring differentdegrees of skill or of force, can purchaseexactly that precise quantityof both which is necessaryfor each process; whereas, if the whole work were executed by one workman,that person must possess sufficientskill to performthe most difficult,and sufficientstrengthto execute the most laboriousof the operationsinto which the article is divided.13

To the best of my knowledge, it is not until our own time that the economic-as opposed to the moral-basis of the division of labor has been challenged. This revisionist view has come from the Left, a somewhat vague, heterogeneous cover term that I use to compensate for my ignoranceof the sectarianalignments.Among the firstcritics was Stephen Marglin, in "What Do Bosses Do?" As part of an argument tending to demystify the capitalist ideal of technological efficiency, Marglinwrote that Smith's advantageswere not what they seemed. Let me take the points in his order (which is not Smith's): (1) It is true that division of labor saves set-up time; but this does not necessarily entail specialization by task. "To save the time that is commonly lost in passing from one species of work to another, it is necessary only to continue in a single activity long enough that the 14 set-up becomes an insignificantportion of total work time." (2) Smith's thirdargumentregarding encouragementto innovation the "is not terriblypersuasive."" As Smith himself notes, repetitive labor does not stimulate creative faculties; rather it stultifies, making the worker "as stupid and ignorantas it is possible for a humancreatureto become."16 (3) As for Smith's first advantage, the gain in dexterity due to practice, it may make sense when speaking of musicians or dancers or surgeons, but not pinmakers.The argument,by implication, is that for run-of-the-millindustrial work, there is no significant difference between tasks that would warrant specialization by age, experience, or strength. Marglin does not deal specifically with the Babbage-Ure analysis, but in effect rejects it by omission. My own sense is that it raises questions of cost efficiency that he prefers to avoid or deems irrelevant. This equal-skill thesis is not entirely consistent with the distinction Marglindraws between division of labor and specialization, or between "separationof tasks" and "capitalistdivision of labor." The former, he recognizes, is found in all systems of production; by implication, therefore, it has a raison d'etre in the natureof complex work. This, he
13 On the Economy of Machinery and Manufactures (London, 1832), chap. 19. See also the comments in Harry Braverman, Labor and Monopoly Capital: The Degradation of Work in the

Twentieth Century (New Yorkand London, 1974),pp. 79-82. Braverman's revivalof this issue was badly needed. 14 Marglin,"What Do Bosses Do?" p. 18. 15Ibid. 16 Smith, Wealthof Nations, p. 734.

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says, is not necessarily bad: "In precapitalist societies, industrial production was organized according to a rigid master-journeymanapprentice hierarchy, which survives today in anything like its pure form only in the graduate departmentsof our universities."17A good reference? Marglinfinds in such relations importantvirtues: that they are what he calls linear, with provisionfor promotionup along the line; further, that the master "works along with" the apprentice, instead of simply telling him what to do.'8 He contrasts this with pyramidal arrangements,in which a few direct many and only a handfulare chosen for advancementto higher status. This is what we have in capitalism:the separationof tasks becomes what Marx called detail labor, that is, labor in which differentworkers carry out differentpieces of work and produce nonproducts,defined as objects that have no "wide market." The producer, in these circumstances, writes Marglin, is obliged "to make use of the capitalist as intermediary to integrate his labour with the labour of others and transform the whole into a marketableproduct."19"Why," he then asks, "did the division of labour under the putting-out system entail specializationas well as separationof tasks? In my view the reason lies in the fact [sic] that without specialization,the capitalisthad no essential role to play in the productionprocess."20 And further: "The capitalist division of labour, as developed under the putting-outsystem, embodied the same principlethat 'successful' imperialpowers have utilized to rule their colonies: divide and conquer.''21 Create a problem and then solve it, thereby inventinga role-a highly lucrative role. The economic historian who encounters this kind of a priori argument, with a few swift allusions to the pin industrythrown in by way of obeisance to empiricalevidence and a potent anti-imperialist metaphor by way of bona fides, is hard pressed to know where to begin. Three questions at the least call for consideration.The first is the bread-andbutter question: Is this the way it happened?The second is an exercise in the sociology of knowledge:Whereis Marglincomingfrom?The third is: So what? On what actually happened-or, what did bosses really do?-I shall
Bosses Do?" p. 16. an irresistibletemptation the partof social criticsto idealize past arrangements on by way of contrastwith an undesirable present.(See Friedrich Engel's view of the putting-out system
18 Thereis

17Marglin,"WhatDo

in The Condition of the Working Class in England) In fact, the traditional apprentice contracted to

obey his master and did what he was told-even to the extent of non-work-related errandsand tasks for the master's household. That was in the natureof an open-endedrelationshipbetween "parent" and "child." As for graduatedepartmentsin universities today, it is true that the students,unlikeapprentices,have a greatdeal of autonomy.Thereare limits, however,as in a large course in which professorand teachingassistantsdisagreeabout methodor content. 19Marglin, "WhatDo Bosses Do?" p. 16.
20Ibid.,
21

Ibid.

p. 20.

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591

follow Marglin'sorder of the advantages,alleged or true, of the division of labor: (1) Set-up time: It is true that a skilled worker could in principle perform all the tasks that went into the manufacture of finished commodities, from the preparationto the workingto the finishing. But no skilled worker would, if he could help it, performthose simple tasks that would waste his time and experience, or whose characterrendered them dirty, noxious, or disagreeable. (Comparative advantage, we know, holds in interpersonal as in international exchange.) Unless strength requirements imposed the use of an adult male, there were women and children to do those jobs. This was indeed the kind of specialization that characterizedthe household (the oikos, which gave us our word economics); and the workshop, which was initially an enlargementor extension of the household producingunit. It should not be thought, moreover, that this specialization, which is almost as old as work itself, was simply a matter of efficiency and convenience. It was at the same time the vehicle for instruction and training. This was the way youngsters learned the techniques of the masters, by doing the simple and roughjobs to startwith and graduating to more difficulttasks. In this sense, it is no accident that handicraft shops, reflectingthe organizationof the household, broughtmaster and apprenticestogether in principleas fatherand children.There was even an established calculus of training and advantage: it was a commonplace, for example, in the clock and watch trade that in the first years the apprenticecould not be entrustedwith the more highly skilled tasks: he would only botch the job. By the thirdand fourth years, though, the apprenticecould begin this kind of work, and the loss from badjobs was compensated by the low wage. And then, in the last year or two, the master appropriatedan increasing surplus over and above the cost of labor. Hence some very bitter litigation between masters and those apprentices who left too early: such departuresdeprived the master of the best years of the apprenticeshipcontract.22 In this sense, the speculationthat skilled workers could reduce set-up time by a serial arrangement tasks is simply fantasy-what we might of call economoneirics, or dream economics. They could, but they wouldn't. Not unless they could not find childrento hire, or women, or illegal aliens, or such other labor as was ready to work for a lower wage. (2) Invention:It is true that repetitiouslaborcan be stultifying,so that detail workers may not be a very good source of new ideas. I say "may not be," because I am not sure whether this is invariablytrue. At least we are often told that workers, with appropriateencouragement and
22 See, for example, E. Develle, Les horlogers bhesois au XVIe et au XVIIe sikle Nogent-le-Roi, 1978) pp. 58-59.

(3rd ed.,

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incentives, can be a rich source of suggestions regardingimprovements in technique, and that employers would do well to mine this vein. Yet as we noted above, Smith himself realized that the effects of repetitious labor might be deleterious and that inventions might well have to come from other sources. And even that misses the point, which is that simplificationsuggests and facilitates the imitation by machines of manual skills. (3) The increase of dexterity: Every witness we have testifies to the gains to skill accruingfrom specialization. Even hostile witnesses: the poet Robert Southey, recollecting the children in a Manchester cotton mill, spoke of "the unnaturaldexterity with which the fingers of these little creatureswere playingin the machinery."23 We have a proverbto this effect: practice makes perfect. Marglindoes not really question this, but argues that some skills are so elementary that anyone could learn them. We are not talking here, after all, about neurosurgery. To be sure; and indeed, it is precisely because so many tasks, once simplified, can be learned quickly, that it pays to reduce them to elemental forms. Not only can the employer thereby hire low-wage, unskilled labor, but he can shape it to the habits and performance desired. This is no small matterwith old hands, who can offer an intense resistance to new ways, and it is no accidentthat entrepreneursdesirous of launching new techniques have often established themselves in strange places and drawn on an untrainedlabor force.24 But Marglintakes the argumenthere a step further.If these tasks are so simple, why specialize at all? Why can't everyone learn every task? And he takes his example from Smith's pinmakingindustry: "It would
23 Citedin C. Aspin, Lancashire,the First Industrial Society (Helmshore,1969),p. 36. The book has no footnotes, even for quotations. 24 Some critics of the concept of proto-industrialization have tried to discreditit by noting that areasof cottage industryhave not always(or have often not) movedon to the factorystage (Marx's ModernIndustry).But this is precisely what one would expect. For an example of this kind of CottageIndustry,Social reasoning,see Rab Houstonand K.D.M. Snell, "Proto-industrialization? ChangeandIndustrial Revolution,"TheHistoricalJournal,27, no. 2 (1984),pp. 490-91. In fairness does to Messrs. Houston and Snell, the word "proto-industrialization" seem to imply a promise, and that promiseis not always fulfilled.We mighthave done betterto stick with good old "cottage industry"and "puttingout." On new locations and new labor, see GregoryClark, "Authorityand Efficiency:The Labor Marketand the Managerial Revolutionof the Late NineteenthCentury,"this JOURNAL, 44 (Dec.

1984), p. 1077 and n. 31; David S. Landes, Revolution in Time: Clocks and the Making of the

Modern World(Cambridge,Mass., 1983), pp. 289, 380 Table 2, on the introductionof machine of manufacture into the Swiss watch industryand the incorporation a new laborforce; and Carol and the Demand for New Labor in Advanced Economies: Heim, "StructuralTransformation InterwarBritain,"this JOURNAL, 44 (June 1984),pp. 585-95. The emphasisof economists on the value of "firm-specific"skills, therefore, is one-sided. Such skills do matter within a given technologicalcontext; but change the technology(introducenew machines, for example) and an Marketsand asset turnsinto a handicap.On the valueof firm-specific skills, see OliverWilliamson,
Hierarchies: Analysis and Anti-Trust Implications (New York, 1975).

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appear to be the case that the mysteries of pinmakingwere relatively quickly learned, and the potential increase in dexterity afforded by minute division of tasks was exhausted. Certainlyit is hard to make a case for specializationof workmento particular tasks on the basis of the pin industry."25 Really? In that case, why hire adult males at all? If Marglin'sanalysis were true, this would imply a strangely irrationalpattern of entrepreneurial behavior. Marglinrelies here on an article by T. S. Ashton on pinmakingin the early nineteenth century, which he says shows that "there were no special skills" in the industryand "no great discrepan26 cies among the various branches of pin production." Fortunatelyfor entrepreneurialrationality, a reading of Ashton's article shows something very different. There were apparently major skill differences among the componenttasks. Some were reservedto men who earned 20 shillingsand more a week. Some could be performedby childrengetting as little as Is. to Is. 6d. And these childrengenerally worked with and underthe eye and hand of women who earnedfive times as much, partly for their work but even more for their role as supervisors of the child labor. And for their role as beaters: the treatmentof working children was sometimes brutal,as much in cottage industryas in the later factory system; and parentswere not much kinderthan strangers:"When I was five, my mother took me to lace school and gave the mistress a shilling. She learnedme for half an hour, smackedmy head six times, and rubbed my nose againstthe pins." The youngerthe better: "Six is the best age, you can beat it into them better then. If they come later, after they have been in the streets, they have the streets in their minds all the while." And the more frightenedthe better; in the words of a pacemakers' ditty:
There's three pins I done today, What do you think my motherwill say? When she knows I done no more, She'll take and turn me out of door, Never let me come in any more.

Even a hard mother was better than a stranger.27 When all is said and done, then, Smith and the other advocates (admirers)of the division of labor seem to have had a realistic sense of
25 Marglin,"What Do Bosses Do?" p. 20. 26Ashton, "The Records of a Pin Manufactory,1814-21," Economica, 15 (Nov. 1925), pp. 281-92. 27 The most common ailment was a nervous stomach. The above quotationsare from G.F.R. of in Spenceley, "The Healthand Disciplining Children the Pillow Lace Industryin the Nineteenth Century," TextileHistory, 7 (1976), pp. 166-69. Depressingbut important.See also the classic

study by Ivy Pinchbeck, Women Workers and the Industrial Revolution (London, 1930), pp. 232-35.

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its economic advantages; but less of its social disadvantages (the eighteenth century thought work was good for children, that it built character). It did make possible important savings in the cost of productionand, given elastic demand, opened new marketsthat in turn promotedfurtherspecialization. Smith, writingabout the pre-Industrial Revolution world, made this dynamicthe engine of economic growth in the days before mechanization.And that it was. Was the system more "efficient" than unspecialized production?-Marglin's question. To appreciate his answer, one has to understand that he is speaking of technological efficiency, defined as output over input, with input of labor measured not by cost but by labor hours weighted for effort. His comments on this subject are relevant to the shift from cottage work to supervised work, rather than from the craft workshop to the cottage: "Even if labour is the only input, a new method of production might require more hours of labour, or more intensive effort, or more unpleasant working conditions, in which case it would be providing more output for more input" and would not necessarily be technologiA cally superior.28 change in technique that substituted child for adult or unskilledfor skilled, and thereby achieved the same output at labor, lower cost, falls outside this conceptual framework. Technologicalefficiencyis, he says, crucialto his argument,but to an economic historiantryingto understandthe motivationof entrepreneurial choices, it is only part of the story. The historianwants to know the options as they presented themselves to a manufacturer,and here what mattered was cost efficiency and predictability(enforceability)of output. The Babbage-Ure analysis is right on target. The organizer of productiondid not ask whether skilled adult males could work as fast and do as much as a mix of people of varyingskill. He simply knew that a team of detail laborers could do the job for less and undersell unspecialized manufacture;also, as we have seen, that women and children could be compelled to "deliver" work that adult males could not be counted on to perform. For Marglin, however, costs are irrelevant and detail labor a figment-an artificialconstruct by "capitalists" who saw here a way of making a place for themselves they would not otherwise have had: "without specialization,the capitalisthad no essential role to play in the production process. "29 I am not sure what this means: that the capitalist's role was useless and could be dispensed with? No one with any experience of business would make such an argument.The ability to combine the factors of productionin such a way as to make goods The cheaper is one of the central aspects of entrepreneurship.30 state28 Marglin,"WhatDo

Bosses Do?" p. 16.

29 Ibid., p. 20.
30 In

his second article ("Knowledgeand Power," p. 150), Marglinexplicitly recognizes this:

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ment has to be turned around: in a premachine era, the ability of to "capitalists" (merchant-manufacturers) break down productioninto a numberof simple tasks and assign them to workersof differentdegrees of skill and experience, hence working for different wages, was the essential task of the capitalist. Marglinfurthersuggests that even if the capitalisthad played a useful role in organizingnew forms and modes of production, once that task was accomplished, the worker could have dispensed with him:
into a If each producercould himselfintegratethe componenttasks of pin manufacture marketable product,he would soon discoverthat he had no need to deal with the market for pins through the intermediationof the putter-outer.He could sell directly and to appropriate himself the profitthat the capitalistderivedfrom mediatingbetween the producerand the market.31

Yes and no. The question is, sell directly to whom? To final users or retail shops? That kind of thing is time-consumingand could play havoc with production. To distant markets? That took even more time and often called for language skills not commonly found among industrial producers. And none of this was good for the health: in Britain, at any rate, the commercialtravelerwent by horsebackfrom inn to inn, on bad roads and in all kinds of weather, carrying(and loading and unloading) stock, while imbibing nostrums for "coulds," "coffs," "the ague" (now there's a word one doesn't hear any more), and unspecified "fevers." The boldest men could turn to jelly at the thought of another season on the road: I'd rathertake up the file, wrote J. B. Vacheron to his partnerin Geneva. He hadjust worked his way over the Apennines, in a coach to be sure (but before the constructionof the autostrada, this was, and is, a miserable route, even on paved roads in well-sprung automobiles);and as any moviegoer knows, nothingwas so attractiveto a brigandas a stage coach.32 The manufacturercould, of course, put his goods in the hands of an intermediary,a wholesaler; but then he would be back at square one, making the goods for others to sell. Or he could engage a traveling salesman to sell his work; but he would have to produce or buy up a large and diverse stock to keep a specialized salesman busy, and then, lo and behold, our small, independent, complete pinmakerwould have turned into a capitalist himself. As might his employee: given the semi-independenceof cottage workers, the salesmancould buy stock on
ability." But then he goes "the essence of the capitalist'scontribution not capital,but organizing is on to say that that ability was unnecessary:it is only because the capitalisthas "imposed" an organizationalform that makes him essential that he is able to "secure a reward" from the productionprocess. So the capitalistcould (and can) be dispensed with. See also Andre Gorz, "The Tyrannyof the Factory:TodayandTomorrow,"in Gorz, ed., TheDivisionof Labour,p. 55. 31 Marglin,"What Do Bosses Do?" p. 20.
32

Landes, Revolution in Time pp. 252-53.

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his own (conceivably includinggoods made from materialsfurnishedby and embezzled from his own employer), sell it alongside that of his himself. employer, and eventually become a merchant-manufacturer Employee turnover was rapid. The only reliable salesman was a partner,better yet a blood relative.33 All of this may seem in its turn hypothetical, but this was the way of trade and trades. Take, for example, the clock and watch manufacture. It is one well worth considering because it requires work of widely varying skill and hence lent itself from the beginningto specialization and division of labor. Indeed, most of the early writers on this subject used it as the ideal example of such division. Besides, it is an industry I know something about, and it is always a good idea to write about things one knows about. In clocks and watches, the work was originally done in shops organized along classical handicraft lines (in German: das alte Handwerk). Each shop had its master, assisted by one or more apprentices and possibly one or more journeymen, that is, craftsmen who had completed their trainingbut were not yet ready or able to open shop for themselves. These shops came early to be governed by corporate or guild regulations,designed partly to ensure the quality of work, but even more to restrict competition without and within. In particular, shops were limited in size and masters were forbidden to purchase and resell work done outside the shop. These constraints were, of course, a response to marketchanges threateningthe stability of the manufactureand the theoretical parity of its members.34 These sources of instability came on both the demand and supply sides. On the one hand, consumerspreferredthe work of some masters over others, so that some shops had more to do than they could, while others lacked for orders. On the other hand, the formation of apprentices tended to outstrip the openings for masters, so that there developed a class of skilled journeymen looking for work and ready to produce for others in spite of rules to the contrary. Some masters, became in effect capitalists. The best respondingto this disequilibrium, of them, or perhaps the most enterprising, soon found themselves devoting an inordinatepart of their time to selling ratherthan making. They signed their clocks and watches, but made no part of them. They did not have to invent specialization to make a place for themselves. The specialization was already there; the gains to specialization made the market;and producersresponded to market opportunity. were merAlongside these workers turned merchant-manufacturers chants looking for workers. Some of these entrepreneurscame from
3 There is good material in S.R.H. Jones, "The Country Trade and the Marketingand of Hardware,1750-1810,"BusinessHistory,26 (March1984),pp. 24-42. Distribution Birmingham 34 See Landes, Revolutionin Time, chap. 13: "The Good Old Days that Never Were."

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related trades-jewelers and goldsmiths, for example-whose clients also wanted watches, or who, in the course of attending the fairs and travelingfrom city to city, found buyers for other articles. The medieval and early modernmerchantwas ajack-of-all-trades,ready to buy cheap and sell dear and resistant to any efforts to put him in a box-business, like love, laughs at locksmiths. It is these merchants who came back from Istanbuland broughtlarge contractsfor "Turkishwatches" to the makers of Blois and Geneva-themselves usually etablisseurs, that is, merchant-manufacturers; who plantedthemselves at Cantonand sent or back to correspondents in the Jura orders for "mandarinwatches," thereby laying the basis for the importantFleuriersection of the Swiss watch manufacture. These merchants were not intruders, levying an unnecessary, hence unjustified,tax on producer victims. On the contrary, they brought in the business and made it possible for the producersto work. They also broughtin opportunitiesfor growth based on a continuous tendency toward division of labor cum specialization. By 1830the mountainSwiss had broken up the manufactureof a watch into fifty parties brisees and this in the absence of mechanization.35 Nor was this the limit: the pressure toward simplificationcontinued, because it was the key to lower costs; also to the removal of craftwork obstacles to the pace and characterof the productionprocess. If one wants to find instances of "artificial,"parasiticalhierarchyin industrial relations, one of the best places to look is among serf producers in eastern Europe.36 These peasants were bound personally to their lord and did such work as he required. In the early modern period, more and more of this work was industrial-in particular spinningand weaving. Flax yarn, for example, was sold by peasants to "yarn collectors," themselves often peasants or peasants-turnedpublicans and -innkeepers, who sold the yarn at weekly markets to village weavers. These in turn sold the cloth to merchants, who sometimes moved about and inspected the pieces on the loom. The lord meanwhile levied his tax on all transactions-a tax that was nothing more than a "feudal" rent: he was rentingthe labor of his serfs. In this system, then, the lord was a parasite;the peasant, a proletarian-pure source of labor power; and the merchant,an enterpriser.The availability of this large source of cheap labor (even with fees to the lord) made central and eastern European serf manufactures highly
35Ibid., p. 451, n. 30. A report of 1798-1799 stated that one hundred and fifty workers contributedin one way or anotherto the makingof a watch-probably an exaggeration,but still strongevidence of the strategythat made Switzerlandsynonymouswith watches. 36 The paragraphs that follow drawheavily on RobertMillward,"The EarlyStages of European underSerfdom,"Explorationsin EconomicHistory, 21 Industrialization: EconomicOrganization piece, but marredby heavyjargon. Do economic historiansfeel (1984),pp. 406-28. An important their that they have to sell theircompetenceto economists?They woulddo betterto communicate results to historiansas well. It mighthelp recruitpeople into the discipline.

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competitive. Outputgrew fastest, of course, precisely in those districts with the poorest soil, for it was there that cultivation was least remunerative and the marginal utility of labor lowest. The richer peasants (those with animal teams and subject to full corvee) were typically not involved; but cottars and bordars and day laborers (Hausler, Kdtner, and Kossaten) were fodder for industry. At this point, one might imitate Marglin's approach and ask a hypothetical: Why didn't the lord manage this whole operation and collect more than his fees? Why did he let these outside merchantscome in, distributeand collect, and make the much biggerprofitsderived from buying and selling? It was not, after all, for lack of experience: if one goes back in time, the peasants in these areas had long delivered manufacturesas part of their seignorialdues; the lord consumed some of these and resold the rest. But as opportunitiesopened up for sale to distant markets, outside merchantswere allowed to enter the estate and take over the role of commercialintermediary. The answer is twofold. To begin with, the merchant knew far more about market opportunitiesand the composition of consumer demand thanthe lord did: it paid the lord, therefore,to give the merchanta hiring as well as a huntinglicense. But equallyimportant was the code of social values, which defined some activities as appropriateto gentility (nobility) and some as not. To use Marglin's "more neutral language," the lord's snobbery was a preferencefor graceful, dispendiousleisure. It is no accident that large estates always hired stewards(the word originally meant the keeper of the pigsty); day-to-day supervision of dusty and work for a propergentleman.And this muddytasks was not appropriate sometimes meant that the steward became richer and more powerful than his master: stywardgave us stewardgave us Stewart or Stuart, the name of Scotland's royal family. But one does not have to look to such class- and status-bound societies as those of central and eastern Europe for hierarchy cum intermediation. In eighteenth-centuryBritain, middlemen putters-out sprang up between manufacturersand weavers-like the man who advertised that he "would be willing to engage with any Manufacturer to put out Checks by Commission. .. as he is fix'd in a town famous for making a remarkablestout Article and can command a Set of the very best Workmen. He could get some Cotton Yarn."'' And middlemen hosiers intervenedbetween the merchant-manufacturers, owners of the and the knittingworkers, who had traditionallyrented knittingframes, these directly. These middlemenhired numbersof frames and re-rented these to the workers. The frame owners thereby settled for less, while
37A. P. Wadsworthand Julia de L. Mann, The Cotton Trade and Industrial Lancashire,
1600-1790 (Manchester, 1931), p. 277.

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the knitters paid more; the middlemen took the difference.38Again a hypothetical:Why did the large hosiers do this? These were, after all, experienced businessmen; they didn't have to put up with an "artificial" intruder.The answer, of course, is that it paid them to do so-not in income per working frame, but in stability of return and in trouble avoided (they too had their leisure preference). And that's why it pays a giant like the telephone company to sell blocks of time to wholesalers, who then resell these to consumers at retail rates lower than those practiced by the telephone company itself. Or why it pays the town of Brookline, Massachusetts, to rent municipal parking lots to private operators, who rent the same old space to the same old parkersat a new and higher price. But back to the early modernperiod and to the cottage manufacture that was the primary focus of industrialexpansion. Guilds and guild regulationswere urbanphenomena;and althoughviolations took place all the time, the city was not a place to increase output, if only because the overproduction of skilled artisans became undersupply when the marketextended far beyond the local area. The answer lay in tappinga new supply of labor, outside the guild domain and necessarily less skilled than trained journeymen. This was found in the countryside, among rural populations whose irregularwork calendarleft them time had no illusions for industrial occupations. Merchant-manufacturers about turningthese people into mastersby means of apprenticeshipsof several years' duration. They wanted results quickly, and the answer lay in assigning simple tasks, fragmentsof the largerprocess. With such simplification, as we have seen, inexperienced workers were actually advantageous, in that they offered a tabula rasa: the employer could train them to his needs. Whereas a highly skilled worker had acquired habits and normative standards that might oppose novelty, these newcomers would do as they were told. No one was more articulateon this point than Josiah Wedgwood, who had very strongideas on what he wanted:
You observe veryjustly thatfew handscan be got to paintflowersin the style we want them. I may add, nor any other work we do-We must make them. There is no other and way. We have stepped forwardbeyond the other manufactures we must be content to trainup hands to suit our purpose. Whereamongour Potters could I get a complete Vase maker?Nay I could not get a handthroughthe whole Potteryto make a tableplate without trainingthem up for that purpose, and you must be content to train up such Paintersas offer to you and not turnthem adriftbecause they cannot immediatelyform
38

On middlemen in hosiery, John Rule, The Experience of Labour in Eighteenth-Century English

Industry(New York, 1981),p. 141f., who may not be sayingquitethe same thingas I am. See also in similararrangements hardwarein Jones "The CountryTrade," p. 25.

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theirhandsto our new stile, which if we considerwhat they have been doingall theirlife we ought not to expect from them.39

The Wedgwood enterprise,as Josiah himself pointed out, was exceptional- "beyond the other manufactures." Both source and consequence of its lead were its innovations in management:the design (and sometimes creation) of a multitude of administrativeand supervisory functions at both shop and office levels. Wedgwood hired clerks, weighers, scribes, packers, and similarspecialists, inventing tasks and proceduresto promoterationaluse of all the factors of production.In all this, he was exceptional only by his precocity: the growing complexity of managerialresponsibilities,anythingbut artificial,finishedby imposing its own division of labor.40Some of these white-collar employees, we have seen, became employers in their turn; some of them became managers-a new profession. When workers learn that they can do without the capitalist, it is because they have become capitalists themselves. It is this widespread pattern of occupational and functional mobility that gives meaningto Marglin'srhetoricalquestion: "Why didn't some enterprising and talented fellow organize producers to eliminate the capitalist putter-outer?"His answer is that such an enterpriser could not capture the gains and remain a producer, that is, a worker. His co-workers might have bought him a gold watch, but not much more. "To glean rewards from organizing, one had to become a capitalist putter-outer!""4 Exactly. But one didn't have to become a capitalist; such an organizer was one already. And that was the point of the exercise. In such flexible, fuzzy circumstancesof transition, of course, it was not uncommonfor producersto continue workingwhile hiringothers to augment output. Workerand capitalist were one. This combination of old role and new was frequent in the watch trade, where most putters-outwere old hands at the bench. But increasingresponsibilities on the managementand commercial sides tended to pull such people away from production, except insofar as they continued to design layouts and check quality.42 Besides, highly skilled work is very
9Letter of Josiah Wedgwood to Thomas Bentley, 19 May 1770, in Ann Finer and George
Savage, eds., The Selected Letters of Josiah Wedgwood (London, 1965), p. 92.
40 On the developmentof

"white-collar"specialties, see MarieB. Rowlands,Masters and Men

in the West Midland Metalware Trades before the Industrial Revolution (Manchester, 1975), pp.

84-87. 41 Marglin,"WhatDo Bosses Do?" p. 21. 42 A further encouragementto the separationof roles is the desire to avoid the confusions of fellowship and intimacy. Such a considerationcould be importantfor both sides, especially in situationsof disagreementand conflict of interest. See RichardPrice, Masters, Union and Men:
Work Control in Building and the Rise of Labour, 1830-1914 (Cambridge, 1980), p. 129: what was

probablythe first business manualfor buildersurgedemployersnot to work along with the men, because that would confuse the true characterof the relationship.

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demanding,and idleness does not make fingersnimbler.As the concert pianist put it, "If I don't practice one day, I know it. A second day, and the critics know it. A third day, and the public knows it." By comparison with customary guild wages, of course, rural labor power came cheap; but from the point of view of these farm people, the new sources of income were a major addition to well-being and independence. So effective was this symbiosis that village life was transformed:population grew rapidly as industry migratedto areas of easy settlement, because that was where their burgeoningworkforce could move; young people, accustomed to waiting long years before they could achieve the independence of farm ownership, now could support themselves, marryearly, and buy out their parents.43 It was this expansion into rural areas that made European and especially English (later British)industrialproducts competitive worldwide and laid the foundationsof the IndustrialRevolution-not the big manufactories (protofactorieswithout central power, hence equipped with hand tools and machines), for all their resemblance in physical appearance and spirit of organization to the later factories; but the cottage manufacture,which built on specialization,found the cheapest labor available, and cut the cost of the final product.44
And fromthe workers'pointof view, see HobsbawmquotingStedman-Jones quotingHodgskin: masters who belong to the "useful classes" are "labourersas well as their journeymen," and insofaras they are needed "to directand superintend labour,andto distributeits produce," are all right; but they are also "capitalistsor agents of capitalists, and in this respect their interest is decidedly opposed to the interests of their workmen." E. J. Hobsbawm, "Artisan or Labour Aristocrat,"Economic HistoryReview, 2d ser., 37 (Aug. 1984),p. 361. 4' The best descriptionof this patternis to be found in Rudolf Braun, Industrialisierung und
Volksleben: Verinderungen der Lebensformen hunter Einwirkung der verlagsindustriellen Heimarbeit in einem ldndlichen Industriegebiet (Zurcher Oberland) vor 1800 (Erlenbach-Zurich,

1960; 2d ed., G6ttingen, 1979). This was written before the invention of the term protoindustrialization, it was the first majorstudy of this phenomenonin its social and culturalas but well as economic aspects, and it is still the best book on the subject. Furtheron this: FranklinF. Mendels, "Proto-Industrialization: First Phase of the Industrialization The Process," this JOURNAL, 32 (1972), pp. 241-61; and Peter Kriedte, Hans Medick, and JurgenSchlumbohm, Industrialization Before Industrialization: Rural Industry in the Genesis of Capitalism (Cambridge and

Paris, 1981). 44 Houston and Snell, "Proto-industrialization?" (cited in fn. 24, above), are skeptical,because they assumethatif cottageindustrypromotedthe development modernindustry,one shouldfind of factories appearingin areas of dispersed manufacture. They miss the implicationsof lower-cost ruralmanufacture the extent of the marketand risingdemand,hence as a stimulusto a change for in the mode of production,not necessarily in situ. Karl Marx, who had no access to the information now have on the historicalrole of cottage we industry,stressed the role of handicraftshops and the manufactory the preliminary modern as to industry. He may have been influencedin this by the history of manufacture the Continent, on where efforts to industrialize from above accordedthe manufactory special role as vehicle for a investment and technologicalchange. But Marx would surely have been pleased to incorporate putting-out into his stage schema, for it would have provided him with a congenial social explanationfor the shift from hand tools and machines to powered equipment,in terms of the internal contradictionsof the older mode. See David S. Landes, The Unbound Prometheus:
Technological Change and Industrial Development in Western Europe, 1750 to the Present

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The expansion of industry due to putting-out and its success in drawingnew and cheap laborinto manufactureset the stage for the next step: the introductionof a new mode of production-the factory system. For this, it is crucial to specify the termini a quo and ad quem. The move took place in the cotton manufacture,and it was a move from putting-outto the factory, not from craft shops or large workshops or manufactoriesto the factory. Here I think Marglingets the story right. I ought to think so, because he adopts the model of explanationthat I put forwardin The Unbound Prometheus. This, I confess, is a source of considerable satisfaction, partly because an endorsement (even an implicit endorsement) by so keen a critic is no mean reference, partly because one rarely has the pleasure of seeing one's ideas still current some fifteen years after publication-at least not in so active a field as economic history. Let Marglinstate the thesis:
Thus the very success of pre-factorycapitalismcontained within it the seeds of its own transformation.As Britain's internalcommerce and its export trade expanded, wages rose and workers insisted in [sic] taking out a portion of their gains in greater leisure. However sensible this response may have been fromtheir own point of view, it was no way for an enterprisingcapitalistto get ahead. Nor did the capitalist meekly accept the workingsof the invisible hand.45

Instead, the capitalisttriedto compel the workerby fines (and worse) to finish his tasks promptly and deliver the finished goods as promised, undiminishedby theft of material;but these efforts failed, as incentives to embezzlement grew and competition for labor increased. Marglin goes on: "It is no wonder that, as Landes says, 'the thoughts of employers turned to workshops where the men would be brought together to labour under watchful overseers.' "46 Marglinagrees, then, that the motivationfor the move from puttingout to factory was the employer's desire to gain control over the work process. Factory equaled discipline cum supervision. To quote Marx quoting Ure: " 'Order' was wanting in manufacture based on 'the scholastic dogma of division of labour,' and 'Arkwright created order.' "48 Where Marglinand I disagree, however, is that he thinks that this was enough to give the factory an edge and make it a dominant mode of production. This is clearly not so. Before enteringinto reasons, however, I want
(Cambridge,1969),pp. 58-60. Marx's discussionof the problemscaused by workerinsubordinalabor (Capital,vol. 1, pp. 346-47). tion refers to skilled handicraft 45 Marglin,"What Do Bosses Do?" p. 35. 46 Ibid., p. 37. 47 I learnedthis very important pointfrommy teacherAbbottP. Usher. He hintedat it in his still
valuable Introduction to the Industrial History of England (Boston, 1920). And he stressed it in

class. 48Marx, Capital, vol. 1, p. 347.

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to clarify a point that is the source of some confusion. A factory, as noted above, is not simply a large production unit or workshop. A factory uses power-drivenmachines, and such units do not appear in Britainbefore the eighteenthcentury-first in silk, then in cotton. Large workshops, however, go back centuries before; and it is worth considering where and why they appear. We find them in fulling, dyeing, brewing, tanning, papermaking, glassmaking, ceramics, metallurgy, shipbuilding,and, on an ad hoc basis, in construction(the chantier). A glance at the technology quickly explains this tendency to concentration: these branches are characterizedby one or more of the following features: (1) They consume relatively large amounts of heat or other energy. (2) The work requires more space than is available in a room or cottage, either because the object produced is very large (a ship or a building), or because the manipulations take room (large tables for shearing or printing), or because stocks of raw materials and semifinishedobjects take room (furniture,hats). (3) The materialsemployed are so costly (precious metals, mercury, best-quality silk or wool) that one cannot affordthe embezzlement that invariablyoccurs with unsupervisedlabor. (4) The tools and machines(hand-driven) employed are too expensive for most workers (smallwaresmanufactureusing the "engine loom"). (5) Their noxious or noisome characterlimits locational opportunity: not everyone will have them (tanning). (6) There are special security considerations (arsenals; secret techniques of manufacture,as at the Muranoglassworks near Venice). In such circumstances it pays to bring workers together in largerunits. Some of these processes, to be sure, can be than-handicraft-shop effected by one or two artisansworkingalone: one can dye fabrics, for example, or make hats to order. But as soon as one startsproducing"on speculation," that is, making goods in advance for customers somewhere "out there," it pays to work cooperatively, to assign tasks by strengthand skill, and to grow to such size as will exhaust economies of scale. These considerationswere not relevant to the most importantindustry of all in terms of factors employed and value of product:the textile manufacture,or more exactly, spinningand weaving. Here the instruments of production,the wheel and the loom, were such that there was
49These economies, as Marx pointed out, are determinedin large part by the appropriate of combinationof specialists:an efficientunit is one that exhausts the potentialcontribution each worker(Capital, vol. 1, pp. 326-29). On the tendencyto growthof handicraft shops in the United States, see the Sokoloff article cited in fn. 8, above. This is an analysis of census data and establishesconclusivelythe tendencyto growthandthe gainsto efficiencyfromincreasingsize. On the other hand, the associationbetween size and efficiencyis not an explanation,and the article invites attentionto the techniquesof the branchesstudied.

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nothing one could do in a large shop that one could not do as well and cheaper in the home of the worker. Dispersed manufacture, indeed, He offered important cost advantages to the merchant-manufacturer. was able to shift capital expenditures (plant and equipment) to the worker, along with the risk of fluctuationin demand. If orders fell off, the putter-outhad only to stop buying. He had no machines to stand idle eating up the interest on capital. For another, labor costs were lower in cottage industry. This was the more so because workers preferredto work at home ratherthan in someone else's place under supervision. At home, wife and childrencould be of help when needed: the household, as we saw, constituted its own little realm of specialization. And at home, it was the worker who set the pace-worked when he wanted, rested when he wanted, ate when he wanted. It took higher wages to lure or seduce these people into workshops; and given the established preference for leisure, high wages were not enough. No wonder, then, that cottage manufactureheld on tenaciously even after the factory rendered it technologically uncompetitive. It was ideally suited to accommodate the variable portion of demand, and numbers of factory enterprises, in wool for example, hired and fired cottage weavers while keeping their own loom sheds occupied. Analogous was the earlier tendency (late eighteenth century) in the wool manufacture to bring some hand processes into concentrated units. Marglinmakes much of the appearanceof such manufactoriesin the woolen branch, arguingthat this proves that "factory spinning did not depend for its success on a superiormachine technology" and that supervision alone was enough to make such units competitive.5SYet this was not part of a larger effort to impose discipline on wayward workers, and it is highlyunlikelythat handspinningor weaving sheds by themselves could have competed with cottage labor. Rather such units were a response to the introduction of machines into the earlier, preparatorystages of manufacture(cardingand subbing) and aimed at ensuring throughputto the heat-intensive, power-drivenfinishing processes (fulling, dyeing, printing). If clothiers were going to invest in factories at both ends of the productionprocess, they wanted to be able to keep plant and equipmentbusy.51
50Marglin,"WhatDo Bosses Do?" p. 31. 51 In the West Country linkedwith largeworkshopswere almostinvariably woolen manufacture, beginningand end processes that used power and heat, while adoptingthe new machines(carding jennies) that exceeded the resources and scribblingengines and the jenny) in sizes (eighty-spindle were slow to introducewaterand of the cottage worker.In this branchof the trade,manufacturers steam power, using insteadadultmales (blindmen sometimes)to turnthe wheels; or horse gins, a dirtierand moretroublesomesourceof powerthanthe waterwheel. Thereis considerablematerial
in Kenneth Rogers, Wiltshire and Somerset Woollen Mills (Edington, Wilts., 1976).

the Even in the moreadvancedYorkshirewoolenmanufacture, firstmillsdid not appearuntilthe natural of as 1770sandthen multiplied the technicalproblemsof machinetreatment the recalcitrant fiberswere progressivelysolved. See the tables and mapsin D. T. Jenkins, The WestRiding Wool
Textile Industry, 1770-1835 (Edington, Wilts., 1975), pp. 15, 17, 20-21; also Jenkins, "Early

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The penetration of machines into the wool manufacture posed a problem to that sector of the industry that did its work in small, autonomous units rather than by puttingout to dispersed cottages and that would therefore seem best to embody the Marglinideal. This was the woolen (as opposed to the worsted) branch around Leeds and Wakefieldin the West Ridingof Yorkshire,and ever since Daniel Defoe described it in his classic Tourthro' the WholeIsland of Great Britain, it stood as the archetype of small-scale, nonhierarchical,independent enterprise:
this Division of the Land into small Pieces, and scattering of the Dwellings, was occasioned by, and done for the Convenience of the Business which the People were generally employ'd in, and that, as I said before, though we saw no People stirring without Door, yet they were all full within;for, in short, this whole Country,however mountainous,and that no sooner were we down one Hill but we mountedanother,is yet infinitely full of People; those People all full of Business; not a Beggar, not an idle
Person to be seen.... This Business is the Clothing Trade.... almost at every House

there was a Tenter, and almost on every Tenter a Piece of Cloth, or Kersie, or Shalloon.... Among the ManufacturersHouses are likewise scattered an infinite Number of Cottages or small Dwellings, in which dwell the Workmen which are employed, the Women and Childrenof whom are always busy Carding,Spinning,&c. so that no Hands being unemployed,all can gain their Bread, even from the youngest to the antient; hardly any thing above four Years old, but its Hands are sufficientto it
self.52

Yet the Yorkshire woolen manufacture,as Defoe's description tells, was something less than the "boss-less" democracy it was reputed to be. As G.D.H. Cole writes in his introductionto the 1927reprintedition, "Commentators have often written as if De Foe had described the country round Halifax as a paradise of prosperous artificers, each earninga good competence by the sale of his own productsin the market at Leeds or Halifax, owning no masterand treatingno man as servant." "In fact," he goes on, "De Foe's West Riding manufactureris not an independentcraftsmanso much as a small employer of labour, the scale of whose productive operations is still limited by the absence of power-drivenmachinery." 53
Factory Development in the West Ridingof Yorkshire, 1770-1800,"in N. B. Harte and K. G.
Ponting, eds. Textile History and Economic History (Manchester, 1973), pp. 247-80. 52 Daniel Defoe, A Tour thro' the Whole Island of Great Britain .. . (1st ed., 3 vols., 1724-1726;

reprint2 vol., London, 1927),vol. 2, pp. 600-2. different fromthe clothiersof the rapidly 53 Ibid., vol. 1, pp. xiv-xv. Even so, he was significantly growing worsted branch around Bradford,who gave out all their work to dispersed cottage weavers, employed far greaternumbers,disposed of much more capital, and were far quickerto to On of move fromputting-out factorymanufacture. the divergentcharacter the two branches,see the the excellent and well-documented articleof Pat Hudson, "Proto-industrialisation: Case of the no. West RidingWool Textile Industryin the 18thand Early 19thCenturies,"History Workshop, 12 (Autumn 1981), pp. 34-61. One caution: Hudson, like Houston and Snell (see footnote 24, above), makes much (too much?) of rectifyingwhat she sees as an erroneous "proto-industry model," which is portrayedas linear: ruralindustryis essentially homogeneousand progresses thatthis normallyandnaturally the next stage, factoryproduction.Hudsonclearlydemonstrates to is not so and (followingin Braun'sfootsteps) that the agrarian context shapes both the forms of ruralindustryand its development.

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The small clothier in woolen, much though he loved the old ways, could not remainindifferentto the new technology. He had known and come to terms with power machineryin the form of fulling mills as far back as the Middle Ages. But these were always seen and used as complementaryto the spinningand weaving that were at the heart of the production process. Only when mechanization began to touch these central stages did it pose a challenge to the older mode of production. The new carding and scribblingmachines (used in preparingfibers for spinning)were incompatiblewith cottage or house shops because they were power-driven, took a lot of room while growing bigger from one generation to the next, and cost more money than a modest clothier could afford.Their capacity, moreover, exceeded the needs of the usual Yorkshire unit and would have constituted gross overcapitalization unless they could service a multiplicity of cottage shops. Which is exactly what the clothiers arrangedto do: drawingon small accumulations of capital and borrowingon land held in freehold or copyhold, the clothiers pooled their resources to create what Pat Hudson calls company mills ("producer cooperatives" would perhaps be better) to provide them with these mechanized services. The participantsin the co-op were expected to give it all their work; and the co-op in turn extended favorable terms of payment and credit in hard times.54 Thanks to this symbiosis, the small Yorkshire clothier with cottage weaving shop was able to survive into the second half of the nineteenth century. But one should not overestimate the efficiency and competitiveness of these enterprises. As machines got bigger and better, more and more cloth was made in factories, and increased supply pressed on prices, such that these tenacious, ingenious producers held out at the price of long hours, low wages, and increasing recourse to inferior One defense of beleagueredsmall shops is an insistence on materials.55 high quality and individualityin opposition to mass production. But the low road is also there, and even those who want to maintainstandards are often forced to trade them for survival. Small bosses are bosses too. No, what made the factory successful in Britainwas not the wish but the muscle: the machines and the engines. We do not have factories
"Pat Hudson, "From Manor to Mill: the West Riding in Transition," in Maxine Berg, Pat
Hudson, and Michael Sonenscher, eds., Manufacture in Town and Country before the Factory

(Cambridge,1983), pp. 124-44. Hudson notes that similarservices were supplied, at least in an earlierperiod,by mills built and financedby landowners,who linkedtheir operationsto the needs of of tenantclothiersand saw the combination land, shop, and access to mill as a packagedesigned to attract renters and enhance the revenue of their estates. The biggest such operator, Lord owned nineteenmills in 1805(p. 139).Such were some of the varietiesof enterprisein Dartmouth, society. an enterprising 55 On hardtimes in the woolen trade, see ibid., p. 143.

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until these were available, because nothing less would have overcome the cost advantage of dispersed manufacture. But this implies an important question: Where were those early millowners to find their hands? Cottage workers, we know, were not ready to enter these establishmentsif they could help it-although the women and children who did the spinning and helping were more mobile, willy-nilly, than were the adult males who did the weaving. The problemis pertinentbecause of the later relianceon involuntarylaborthat of young women and children, especially of parish apprentices assigned by poor law authorities as the equivalent of indentured servants. Marglin does not raise this issue, but his emphasis on the significance of institutionalizedpower in foisting "artificial" arrangements on an ostensibly or nominallycompetitive market system makes such a question relevant to an appreciation of the economic and commercial "validity" of the entrepreneurial role- "what bosses do." To answer the question requiressome knowledgeof the technological sequence. The earliest inventors of textile machinery, in the late seventeenth and early eighteenthcenturies, took it for grantedthat there would be more than enough free labor to work their devices. They gave no thought to the possibility of conscription; on the contrary, they worried (because others were worrying) about the eventual displacement of labor, and they sought to justify their projects by minimizing their expected impact on employment or by noting that their machines would provide work for otherwise idle hands: the poor, the very young (to be saved from mischief and vice), the blindand lame. Withhindsight, to be sure, we look upon many of these as involuntaryrecruits;children, we have seen, did as they were told. But one has to put oneself in the mind of the day and recognize that it was not only their product that made such workers so attractiveand deserving of concern; it was also the perceived philanthropyin furnishingtasks to those spiritually(even more than materially)imperiledby idleness. By the 1760s, however, fears of technological unemployment were irrelevant: they were not raised, for example, against Richard Arkwright,"inventor" of the water frame (1768). The majorcenters of manufacturewere sufferingfrom an undersupplyof yarn, and workers were being energetically wooed by manufacturersand intermediaries. An outriderwho had under his command a large stable of productive spinners could and did advertise his wares and took his pick of customers. The introductionof thejenny (from 1767on) into this kind of labor marketdid not initiallypose a threatto domestic spinning.On the contrary,it increasedoutput in the cottages, and there was a moment of hectic prosperityfor those who could buy or rent the new device. We are talking of a short time-perhaps a decade. The invention of the water framedid not initiallychange that picture, because the water frame made tough warp yarn, while the jenny turned

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out the softer weft. The two were thus complementary.But the water frame, as the name indicates, was powered from the start, hence used in factories; while the jenny rapidlygrew biggerto where it was no longer suitablefor small cottages. In 1779,moreover, the invention of the mule (so-called because it was a crossbreed of jenny and water frame) made it possible to spin weft with powered machinery. The first mules were small, with sixty spindles; but they were already more than even a strong man could drive. A new kind of work force was needed. The first solution was to hire men. There was a pool of adult males used to working in branches where technology had already imposed cooperative labor in large units. Arkwright,for example, moved immediately (1768) from Lancashire, where workers were hard to find, to Nottingham, home of the hosiery manufacture.There he found capital, labor, and a friendly environment. For one thing, Nottingham did not spin yarn and had to import from outside, indeed from as far away as India; so there was no local opposition to the introductionof machines. For another,there was in the hosiery tradea populationof spinnersused to working with hand-driven machines (the knitting frame) under supervision, and it was among these stockingers that Arkwrightfound his first hands. But this was no more than an interim arrangement.Two years later Arkwrightset up an additionaland much largerinstallationat Cromford (Derbyshire) on the Derwent, and this became the prototype for numerouscompetitive establishments,all of them plantedalong streams for their water power. This first generationof country mills was located in large part away from centers of population, hence far from the big labor pools. But populationdensity was uneven, even in the seemingly empty countryside, and employers, as always, went after people: "I should go from north to south in search of a place that was the most inhabited, where I could have the greatest choice of workmen, and where I conceived labour would be cheapest. '56 In the water-framebranch of the industry, these "workmen" were largely women and children. Where were they to come from? In Derbyshire, we are told, they were found in the families of lead miners already working in the district: "When Mr. Arkwrightestablished his works... ., he did not establish them where the people had been in the habits of spinningat all; but he establishedthem at Cromford. .. where till that time the People [women and children]had been almost wholly unemployed, except in the washing of lead.' 7 In other instances-the most famous example is that of Samuel Oldknow at Mellor-families
56 Testimonyof a leadingManchester fustianmanufacturer the House of Lords in 1785,cited to in Stanley Chapman,"Workers'Housing in the Cotton Factory Colonies, 1770-1850," Textile

History, 7 (1976), p. 118.

57

Ibid.

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were hired as units. Wife and childrenworked in the mill, and husband was occupied on roads or in transportor on a farm cultivated expressly because it furnishedemploymentto the most expensive member of the team. But Oldknow also took casual (tramp)labor, and parish apprentices from as far away as London.58Increasingly,manufacturers found their readiest supply in poorhouses, which were only too happy to ''apprenticeout" dozens of young boys and girls by way of relievingthe ratepayers of their statutory burden. (Note that this was not a new practice: small, independentmasters had been takingon parish apprentices for years, thereby fillingin the gaps in their home labor supply. It would be too much to expect every weaver to have the children he needed. And those who had more than they needed hired them out to neighbors as industrialworkers and domestic servants.) Here was a relatively cheap and stable work force. (I say "relatively" because these involuntaryworkers were not so careful and diligent as free agents; and numbers of them fled their indenturesbecause of the hardshipsimposed by mean masters and hard supervisors.) There was a saving in capital as well: when these country mills were built in isolated, undevelopedplaces, it was often necessary for the employerto build lodgingsfor his employees, and these young people were normally housed in dormitories-more economical obviously than regularfamily housing would have been. The construction of largejennies (up to eighty spindles by 1784)and the invention of the mule gave the key position in machine spinningto the adult male: the need to throw back the spindle carriage called for greater strength than women or children could furnish. The second generation of factory labor, then, placed less reliance on forced labor, especially after and perhapseven before legislationrestrainedaccess to and use of parish apprentices.59 Employers had to find workers in the free market,and one formulaagainwas to hire familyunits:fatherto run the mules, children to help as piecers of broken threads, women to prepare the fibers for machine spinning. Such evidence as we have, however, admittedly local, indicates that only a small minority of
58 On the significanceof tramp labor for the early textile mills, see M. M. Edwards and R. Lloyd-Jones, "N. J. Smelser and the Cotton Factory: A Reassessment," Textile History and Economic History (Manchester,1973),p. 309. 59 Involuntary laborwas not so productiveas free labor,for understandable want of motivation, to say nothing of active hostility. See the fascinating testimony of James McConnel to the Children'sEmploymentCommissionof 1841-1842,in Parliamentary Papers, 1843, vol. 14, b-63. The firmof McConnel& Kennedy, then the largestin the kingdom,had acquireda country mill workedby parishapprenticesand decided to offerthem theirfreedom-to leave or stay on as free wage labor.The reasonfor this apparent benevolencewas purelypractical: these indentured young women were more troublethan they were worth-obviously unhappy,sensitive and quarrelsome in the smallestmatters,ripefor rebellion.They sang, he said, revolutionary songs as they marched in ranks to and from the mill.

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childrenwere employed or supervisedby a relative. The bulk of the new work force, then, came from a more undifferentiated pool.60 Access to this pool was facilitated by the shift of the locus of manufacture: with the adaptation of Watt's steam engine to rotary motion, power productionwas freed of dependence on site and could move to the centers of population-Manchester first and Glasgow and other cities after. One effect of this move was the appearanceof what we might call the multi-cellular mill: a building housing a number of spinning rooms, each a semi-independentfief run by a master spinner assisted by boys often linked to him by blood or neighborhoodties. These master spinners were from one point of view workers-the core of what came to be known as the labor aristocracy. But they were also bosses, small subcontractorstakingtheir share of surplusproduct. Following the Marglinmethod, we may well ask whether their role was in some way artificial-an imposition on a system that did not need them. It depends, I suppose, on the value that millowners placed on such delegation of functions and authority:it was obviously worth it to them to shift the responsibilityfor much of the hiringand firing, as well as the bulk of the supervision, to others. It is a system that reflects the limitations of early factory managementand was eventually to disappear. But it lingered in the textile manufacture to the end of the nineteenth century; and in a field such as shipbuildingthe so-called butty system was still dominantin the twentieth.61
' On labor recruitmentfor the early factories and the creationof a factory work force over a
period of generations, see Frances Collier, The Family Economy of the Working Classes in the

Cotton Industry, 1784-1833(Manchester,1964;this is the printedversion of her M.A. thesis of

1921); and Neil Smelser, Social Change in the Industrial Revolution: An Application of Theory to the Lancashire Cotton Industry, 1770-1840 (London, 1959).

For a critiqueof the Collier-Smelser thesis, see Edwardsand Lloyd-Jones,"N. J. Smelserand the Cotton Factory," pp. 304-19. Edwardsand Lloyd-Jonesused the 1816reportto the House of Commonsto show that at Preston(Lancashire),only 11.6 percentof the childrenwere employed by a parent, brother, or sister. (What about friends and neighbors?)In a recent article based Frances J. Mather, and Clark primarilyon the Lords' report of 1819, HermanFreudenberger, Nardinelli("A New Look at the Early FactoryLaborForce," this JOURNAL, 44 [Dec. 1984],pp. 1085-90),come to the same conclusion:"the evidence suggeststhatindividuals,not families,were the basic units of labor in cotton factories" (p. 1087). 61 Such arrangements to reflectthe inabilityof centralizedmanagement extract "full" laborfor wages: a small groupbiddingfor the work and assigningtasks by consent, or workingunderthe would deliver more productfor the money. The shift to direct eye of a producer-entrepreneur, for centralizedcontrolwas a responseto effortsby workersto constrainor withholdperformance, good and bad reasons, and called forth new, more effective techniques of supervision and and record-keeping. "monitoring" similarmatters,see ArmenA. AlchianandHaroldDemsetz, On AmericanEconomic Review, 62 "Production,InformationCosts, and Economic Organization," fortha streamof commentandreaction; (Dec. 1972),a seminaltheoreticalanalysisthathas brought of also Williamson,Marketsand Hierarchies,and "The Organization Work";and the thoughtful article by Gregory Clark, "Authority and Efficiency:The Labor Market and the Managerial Revolutionof the Late Nineteenth Century,"this JOURNAL, 44 (Dec. 1984), pp. 1069-83. Clark writes: "If radicaleconomists are correct (that giving control of productionto workers is more efficient)then, ironically,the efficientorganization disappearedbecause workersused control of

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Could power-machine technology have succeeded had it not been possible to recruitforced labor?Here one has to distinguishbetween the forced labor of parish apprentices and the implicitly forced labor of dependent women and children. Apprentice labor was in one sense easier to recruiten masse, but left much to be desired from the point of view of productivity.In the beginning,ease of recruitmentwas probably more important,and the availabilityof such indenturedservants added to the profitabilityof these enterprises.But had they not been available, the mills would have found what they needed, paid the price, and still made money because the carding machines, water frame, and mule were so efficientby comparisonwith handlabor. (One possible recourse was foreign labor: the Irish, for example, were not normallyemployed in Englishmills, but they could have been, as they were in Scotland, and at wages well below the English level.)62What is more, this difference grew with astonishing rapidity as new machine builders entered the industry, flouted the efforts of such patent holders as Arkwright to protect their monopoly, and introducedthat stream of small unpatentable improvements that constituted the greater part of subsequent technical progress. The steepness of this learningcurvejustifies, moreover, the argument that even if the first machines had not been dominant, the new technology would have made its way, with or without parish apprentices. It is true that the failureof an innovationcan and often does serve as a deterrentto pursuitof a given line of technical experiment;also that there are in principle alternativelines of advance, such that one can at least imagine the possibility of inventions more compatible with older forms of industrialorganization,as indeed the early jennies were. Yet this is not, in my opinion, what would have and could have happened here. In the first place, technological advance does not normally proceed like a feedback robot, changingcourse at each obstacle. On the contrary, it typically takes the form of a series of probes, feeling out a particular line, withdrawing and revising the better to go forward, buildingand improvingon previous failures;and this line of experiment is normally suggested by need and opportunity. This is in fact what happened in the eighteenth-centurytextile industry: the first devices (Wyatt and Paul) were built for wool, which proved relatively intractable; then switched to cotton, at that time a far less importanttextile fiber. Even so they ran into all mannerof technical difficulties, so that
productionto drive up wages and limit output. If workers had not managedto exercise power within firms, they would have had more control over their productionactivities" (p. 1072). 62 There was good precedent for the employmentof alien workers in large shops using new technologies: thus in the silk industry; and in the smallwares trade, in connection with the introduction the Dutch loom, to the point where agitationby conventionalweavers againstthis of "develishe invention" took the form of xenophobic riots. Wadsworthand Mann, The Cotton
Trade, pp. 101-2.

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the first enterprises failed. This did not stop numerous inventors from pluggingaway at what was clearly a majorbottleneck, until success was finallyachieved in the 1760s. This is not to say that some people did not feel discouragement;even Arkwrighthad his moments of disbelief. But so keen was the interest and so greatthe supposed advantagesthat there was no lack of mechanics to try their hand or capitalists to advance funds. Secondly, the nature of the techniques tried is to a large extent dictated by the task undertakenand the character of known devices. Technology has its preferences. In the case of textiles, the models were furnished by the existing spinningwheels, and the aim of the machine was to multiply these in such fashion as to allow a single person or, better yet, an engine to work many spindles at once.63 The new and hardest part of the task was somehow to imitate the motion of the humanhand drawingand twisting the thread. The two systems eventually employed were alreadyin use on the hand machines: the older and more delicate (thejenny) imitatedthe distaffby turningthe spindle while letting the threadcome off its end; the second (the water frame), quicker but rougher, ran the thread to the spindle through a flyer rotating at a differentspeed; the differenceimpartedthe twist. It was this legacy that set the terms of the innovations and opened the door for further dominant. improvementsofjust that sort that made factory manufacture Once the problem had been solved for more than one spindle, it was essentially solved for a hundredor a thousand. And so it was. This bringsme to a furthermajorpoint of disagreementwith Marglin: the contributionof the factory mode to technological change. This has always been something of a given, and it is useful to have Marglin question the conventional wisdom and compel us to think about the issue. Marglinis not preparedto concede intrinsicinnovative superiority to the factory. Insofaras it furnisheda greaterstimulusto invention, this too was nothing more than an artifact:"the factory's superiorityin this domain rested in turn on a particularset of institutional arrangefor ments, in particularthe arrangements rewardinginventors by legal monopolies vested in patents."64 Nothing, says Marglin, compelled British society to reward inventors in this manner. There are other
63 There were several precedentsthat served as models: thus the Dutch loom or engine loom, of invented in 1604and used in the manufacture smallwares(tapes, ribbons, garters, and such), the thougha weavingratherthana spinningmachine,set the exampleof multiplying workingparts by replicationso that one motor could drive them and one person could make a dozen or more devices followeda similarlogic: see the patent spinning pieces at a time. The earliest,experimental Hainesin 1678,whichpromiseda device thatwoulddrive grantedto RichardDerehamandRichard six to a hundredspindles, by humanpower no less (ibid., pp. 98-106, 413-14). 4 Marglin,"WhatDo Bosses Do?" p. 33.

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incentives-prizes, for example-and these might have tilted the balance by encouragingthose inventions useful in private workshops and cottage industry. "Had the patent system not played into the hands of the more powerful capitalists by favouring those with sufficient resources to pay for licenses (and incidentally contributingto the polarization of the producing classes into bosses and workers), the patent system need not have become the dominant institutional mode for rewardinginventors."65 Most of this is simply wrong. It rests on two assumptions. The firstthat patents were indeed an incentive to invention-has never been proven empirically, at least not to my satisfaction; but it does seem logical and plausible. The second assumption-that it is easier to pay for and capturegains from patents in factory manufacture than in home and shop industry-is more troublesome. Like the first, it is based more on a priori reasoning than on empirical evidence. On the basis of what I know of one handicraftbranch, the clock and watch manufacture,the expected difficultyof recovering royalties-or for that matter, the cost of obtaininga patent-does not seem to have deterredinventors. On the contrary, this is a distinctively creative branch, full of invention and emulation, and the spur of fame seems to dominate pecuniary selfinterest. Precisely because it is so inventive, moreover, patents have limited value: watchmakers, like economists, have always known that there is more than one way to skin a cat. When Thomas Earnshaw invented in 1783 the mechanism that was to become the standard controllerfor precision chronometers, he could not affordthe hundred pounds sterlingneeded to secure a patent. But this did not stop him from boasting of his device and, when he had talked too much and found himself in dangerof being preempted,he found a wealthierwatchmaker to secure the patent for him. Earnshaw,of course, had to reimbursehis stand-in. He did this by making a series of watches using the new escapement and letting the stand-insell them under his own name; and other watches for still other "makers," who paid a royalty of one pound per watch. Meanwhile those unwillingto pay Earnshawhad the option of using a similar, imitative device, invented by Samuel Peto precisely for this purpose. Earnshaw was contemptuous of his rival, who had gone, said he, to a lot of troubleto get in by the back door when the front door was alreadyopen. He was rightabout that, but that was the whole point: the Peto cross-detent escapement was an alternative. What are we to infer from this story? That patent rights were worthless? Or that they were collectible? Or both? The world of watchmaking was a small one: it was hard not to know what other people were doing, and evasion of patent rights may have been more difficultthan in other trades. On the other hand, the watch is a small and
65

Ibid., p. 33f.

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highly personal object, and one could argue that it is precisely the kind of commodity that lends itself to concealment and evasion. Certainlyit would have been easier to defrauda patent on the hidden movement of a pocket timepiece than, say, on steam engines built to drive mills. Yet we know that Boulton & Watt were engaged in a ceaseless effort to enforce theirpatentrights, and the evidence indicatesthat about one out of every two horsepowerproducedat the end of the eighteenth century was generatedby illicit engines. We also know that James Watt himself had to find an alternativeto a preemptivepatent on a cranktransmission for converting reciprocatingto rotary motion. It is hard to believe that the Britishpatent office, sometimes sticky to the point of unreason, was ready to grantprotectionto a device that went back to the MiddleAges. PerhapsWattcould have foughtthe patent successfully on the groundof unoriginality. But it was easier to bypass it, and so he did with his sun-and-planetgearing. On balance, patents were not the major incentive to invention. The biggest and surest source of gain was the application of invention in one's own enterprise-a Schumpeterianheadstart-and the role of the patent, if obtainable, was to discourage other people from using the same or similar techniques. But there were limits to discouragement: every successful innovation called forth imitations, as the author of a history of Nottingham cheerfully recognized: "Various patents have been obtained . . . for making warp lace; but so numerous are the pretensions set up for the invention of differentmovements and various formed meshes . .. that the patentees and other inventors mutually laugh at and invade each other's schemes."66The result was a crisscross of litigationthat made at least the lawyers rich. But that was the point: to increase the cost of imitationand protect those headstartgains. Meanwhile a large part, perhaps the greater share, of productivity increases in factory manufacturewas the result of the accumulationof small, unpatentableimprovements-so unprotectablethat it often paid, as it did in iron and steel, simply to make them availableto competitors in returnfor reciprocity.67 In those instances where such altruism was not encouraged or commandedby reason-in those arts and crafts, for example, that had once been known as mysteries-patents were not always the best way to protect knowledge. Instead, inventors preferred to try and keep
I J. Blackner,Historyof Nottingham(Nottingham,1816),cited in S. D. Chapman,"Enterprise and Innovationin the BritishHosiery Industry,1750-1850,"TextileHistory, 5 (Oct. 1974),p. 25. 67 On the importance unpatented of inventionin advancingtechniquein the Britishironindustry,

see Robert C. Allen, "Collective Invention," Journal of Economic Behavior and Organization, 4

withinthe industry:"If a firmconstructed (1983),pp. 1-24. Allen lays stress on information-sharing a new plantof novel designandthat plantprovedto have lower costs thanotherplants, these facts were made availableto other firmsin the industryand to potentialentrants."And he offers some valuableinsightsinto the materialadvantagesof altruism.

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devices and techniques secret, sometimes by so dividing the process that no one workercould penetratethe technique. This is what the great French watchmakerAbraham-LouisBreguet proposed to do when he planned the mass productionof watches by means of power tools and interchangeableparts: the aim was not discipline (for that, one could hire marriedwomen), but security.68 It is not easy to sum up such impressionisticobservations, which need the underpinningof empiricalresearch. If I were to reason a priori, I would argue that patents were probablymore useful in puttingout than in craft shops, manufactories,or factories, simply because secrecy was unenforceable in dispersed manufacture.As for the chances of maintainingconfidentialityin shops large or small, the better the secret, the greater the temptation to exit and betrayal. Besides, a valuable secret implies growth potential: a small enterprisethat made a better mousetrapwould have been hardpressed to keep fromgrowinginto something bigger, perhapsa factory. A factory, on the other hand, could go a long way on its own unpatented improvements. This, more than anything else, explains the factory bias of technologicalchange: that was where the money was. For one thing, the saving in labor costs was greater, because factory wages were higher. For another, the accumulationof small, incremental improvements was a function of the volume of investment: new plant meant new and often better equipment.69Because of the constant interaction, moreover, between work force and supervision, the factory environmentwas more favorableto the perception of possible improvementsand their introduction.One final consideration: the logic of technology was moving toward ever-wider mechanization, toward doing more and faster, thereby enhancing the advantage of mass production and the factory system. Each success invited others-first, by showing the way and, second, by creating an ever-changing pattern of bottlenecks that promised new rewards to innovation. Here the role of the entrepreneur was crucial-another point of disagreementwith Marglin.No one else was in so strategica position to see the needs and opportunitiesof technologicalchange, for no one else was in a position to look both upstreamand downstream, as well as to competitorson either side. Not all capitalistsplayed this role well; that's
58France, Archives Nationales, F'2 1325A,memorandum A. L. Breguet to the Controllerof General,6 Sept. 1786. 69 See Allen, "Collective Invention," pp. 13-14; Jacob Schmookler,"The Level of Inventive
Activity," Review of Economics and Statistics, 36 (May 1954), pp. 183-90, and "Changes in

of Industryand in the State of Knowledgeas Determinants IndustrialInvention," in RichardR.

Nelson, ed., The Rate and Direction of Inventive Activity: Economic and Social Factors

(Princeton, 1962),pp. 195-232.

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what business competition is all about. But many, includingthose who lacked the technical know-howto prescriberemedies, could and did see possibilities that others could not; and where necessary, they hired the technical help they needed. Note that sometimes the role of strategist fell to others than the owners of enterprise-to managers or, as in late-nineteenth-centuryGermany, to those investment bankers who were bankrolling the operation and had access to a wider body of information than even the best-trained managers had. In socialist economies, technicians and plannersplay a similarrole. But role there is, and one has to be placed high enough to have the wide view that is not visible on the shop floor. As against this positive view of entrepreneurshipand hierarchy, Marglin'sis clearly disapproving.This transpiresin his choice of words: the term cognoscenti, which stands for capitalistsin the 1984version of his model, "is perhaps an unfortunate shorthand, for ambition and greed, single-mindednessand disregardfor the needs and concerns of others, adventurousness and rootlessness, ability to command and difficultyin relatingoutside the hierarchicalmodel: all these play a role along with technical knowledge in shaping the ability to organize production.'"70 Now I am not preparedto make an issue of any of these alleged characteristics, except perhaps for rootlessness, which is not true for many entrepreneursand in any case is a word that the Soviets and their lackeys in EasternEurope have attachedto those groups such as the Jews who would like to leave that working-classparadise. Why don't we try "mobility"? Or "responsiveness to opportunity"?Be that as it may, it is certain that just about all entrepreneurs have been characterizedby one or anotherof these vices (virtues?), and that some have been characterizedby all of them. But in generalizationsof this kind, tone matters. One could, for example, think of another set of characteristics:ambition(if it were so, 'twere a grievous entrepreneurial fault) and aspiration; desire for self-enrichment by serving others, whether by job creation or the productionof socially valued goods and services; an urge to build monuments more lasting than bronze; the habit of command; alertness and flexibility;intelligence and ingenuity; diligence, dedication, thrift,high seriousness, and those other Weberian virtues; et cetera, et cetera. Or, to take the stick from the other end: Marglinwrites, as partof his condemnationof selfish individualism,that "in a culturein which the dominantvalue is every man for himself, only the most exceptional among the upwardly mobile will stop at selfsufficiency."71 One might as easily say that only the laziest among the upwardly mobile would so behave; or the most easily satisfied; or the
70Marglin,"Knowledgeand Power," p. 151.
71Ibid., p. 150.

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fools; or the saints; or the would-be saints. And there would be truth in all of these. ClearlyMarglindoes not like capitalistsas a type or entrepreneurship as a role. Who needed these people? What for? To supply capital? It is true, he says, "that machinery was too costly for the individual workman, and the group was to all intents and purposes nonexistent. But before that time, machinerywas not prohibitivelyexpensive, and since then the [labor]union has become a force that might have offset the high cost of machinery-for the group if not for the individual."72 But the union, he says, is part of the problem. It has preferred the comparativepeace of negotiationwithin the existing arrangements,and has accepted hierarchyand division of labor because this is the easiest way to operate in a growing, changingeconomy. If I may put words in for Marglin'smouth, labor has sold its birthright a mess of transactional pottage. Let us not blame labor. In the last analysis, it is the capitalist who is not forthcoming. "[My] model," Marglinwrites in his second essay,
provides a response to the question of why capitalistsare not in generalcontent to act as rentiers, leasing capital goods to workers. In the present model, the essence of the is capitalist'scontribution not capital, but organizing ability;to secure a rewardfor this service, he must impose an organizationalform that makes him essential to the productionprocess on a continuingbasis. A rentierclass is a class ripe for expropriation.73

Such a statementposes questions of both fact and interpretation.The historicalrecord shows that capitalistshave always been ready to lease equipmentto workerswhen it pays, that is, when leasing yields a secure income. One has only to think of the Nottingham hosiers and the knitting frame in the seventeenth and eighteenth centuries; or of lace in manufacturers the nineteenth, who sold machines worth hundredsof pounds on the installment plan and rented factory space and steam power to the purchasers;or of truck-leasingarrangementstoday.74As for expropriation,experience shows that when political change permits or brings about expropriation,no capital is safe, whether operated by the owner or leased to someone else. To be sure, some forms of capital are more mobile than others and flee when storms approach; while others cannot move, so that the capitalistis easy game. The story of rent control is a good example of legalized confiscationand the involuntary
72

Marglin,"WhatDo Bosses Do?" p. 25. On the lace industry,see the introduction Stanley D. Chapman Felkin's History of the by to

73Marglin,"Knowledgeand Power," p. 150.

74

Machine-Wrought Hosiery and Lace Manufactures (Newton Abbot, 1967), p. xxviii. Cf. the

comparabletransfer of ownership (and risk) in the American silk manufacture-a remarkably effectiveway of turning contentiousworkersinto motivatedcapitalists.PhilipJ. McLewin,"Labor Conflictand TechnologicalChange:The Family Shop in Paterson," in Philip Scranton,ed., Silk
City: Studies on the Paterson Silk Industry (Newark, 1985), pp. 135-58.

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transferof wealth from one group to another-"what's yours is mine" economics. What matters, in other words, is the political and legal context. Capitalists, as Marx understood full well, are in it for the money. They have no philosophical or moral or practical objection to enterprisesper se, as their readiness to unload unsucworker-managed prices shows. cessful plants at bargain-basement Nor do they have some kind of collective repugnance for rentier status, whether for fear of expropriation or other reason. On the contrary, the technological changes that have occurred over the last century have devalued the role of the capitalist, shifting much of his entrepreneurialcontribution to managers and technicians. This has dramaticallyaltered the lines of control in business enterprise, to the discomfitureof many employers now reduced to the role of absentee owners. But this has not stopped capitalists from investing their fortunes in new techniques: they understandas well as anyone that on the managementlevel as on the productionlevel, division of labor and specialization are concomitants of growth. Insofar as some capitalists have opposed this trend, they have failed or been ousted for poor performance.Their own fellow capitalists have joined in firingthem or retiringthem or buying them out. So much for models, such as this one, that reify a capitalist class and present it as moved by some unitary sense of its function and needs. By way of consolation, I do not think that small-scale industry on a nonhierarchical,nonspecializedbasis was a real alternative,at least not in the economic sense. On this point it is instructiveto rereadthe report in 1806 of the House of Commons Committee on the Woollen ManuThe Committeenoted that the woolen industry showed three facture.75 principal forms of organization:factory, putting-out, and small-scale "independent" weaving. The last, we saw, was as close as one might get to Marglin's worthy ideal. These were small units, employing at most a few journeymen, and where necessary, subcontractingfor those operations that could be done economically only in a larger, powered installation. What is more, entry was fairly easy:
as it has been expressly stated to Your Committee,a young man of good charactercan always obtain credit for as much Wool as will enable him to set up as a little Master Manufacturer,and the public Mills, which are now established in all parts of the ClothingDistrict, and which work for hire at an easy rate, enable him to commandthe use of very expensive and complicated Machines, the construction and necessary repairsof which would requirea considerablecapital.Thus, instances not unfrequently occur, wherein men rise from low beginnings, if not to excessive wealth, yet to a situationof comfort and independence.
Papers, 1806,vol. 3 (268).The next three passages quotedare from pp. 10, 12, 75 Parliamentary and 13.

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The Committee took pleasure from the advantages such a system offered to health and morals, especially by contrast with the factory system. But they also noted the technological and commercial advantages of the large enterprise:
for, it is obvious, that the little MasterManufacturers cannot afford,like the man who possesses considerablecapital,to try the experimentswhich are requisite,and incurthe risks, and even losses, which almost always occur, in inventing and perfecting new articles of manufacture,or in carryingto a state of greaterperfection articles already established. He cannot learn, by personal inspection, the wants and habits, the arts, manufactures,and improvementsof foreign countries; diligence, economy, and prudence are the requisitesof his character,not invention, taste, and enterprise.

And they recognized that many of the small clothiers felt threatenedby the new mode of production. Even so, they were not preparedto recommend government intervention on behalf of what they called the domestic system. Freedom of investment was the constitutionalright, indeed the birthright,of every Briton, the basis of national prosperity. Commerce and manufactures had always "flourished in free, and declined in despotic countries." Besides, they wrote, factories contributed to the well-being of the domestic system by furnishingnew designs and qualities:
It is besides an acknowledgedfact, that the Owners of Factories are among the most extensive purchasers at the Halls, where they buy from the Domestic Clothier the established articles of manufacture,or are able at once to answer a great and sudden order; while at home, and under their own superintendence,they make their fancy goods, and any articlesof a newer, more costly, or more delicate quality, to which they are enabled by the Domestic system to apply a much largerproportionof their capital.

In other words, symbiosis. But it was an asymmetricalrelationship. One partnerwas ridingthe wave of technologicalchange; the other was tryingto keep his head above water. The Committeemade its reportjust about the time the power loom was makingits presence felt in cotton. Wool still had some decades to go. But the same techniquesthat worked in cotton would eventually be perfected in wool, and once that happened, the independent clothiers would be forced into the shrinking upper reaches of the market;or they would serve as mere auxiliariesof the-factory system. Their fate, like that of the handloom weavers in cotton, was a calvary of independence in dependence. The workers themselves understoodthis: Eric Hobsbawm, explaining the failure of socialism to capture the imagination and loyalty of mid-nineteenth-century workers, points out that the chief reason was "the very advance of the Britishcapitalisteconomy over the rest, which already made an economy of small commodityproducers, individualor

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collective, somewhatimplausibleor economically marginal."76 Division of labor, in other words, with specializationand hierarchy,was there to stay, at least in those major branches producingin quantity for mass consumption. No complex operationcould be effected at low, competitive cost without such arrangements.Marglinrecognizes this when he asks whetherfactory employmentwas "better than alternativeforces of productive organizationthat would have allowed the worker a measure of control of product and process, even at the cost of a lower level of output and earnings."" Only a political decision could have inverted the pressures toward low-cost mass production. Here Marglinand I come togetheragain, thoughnot comfortably.His main point is that the key to an understanding technological choice is of power, that is, political power; and that this applies as much to socialist as to capitalisteconomies. Technology, he says, is not autonomous (his word is "exogenous") and inexorable. Man makes technique and then chooses; or dictates what techniquesto look for. I think this is right, up to a point. That point is, the choices are not accidental. As I implied above, there is an inherent logic to technological change, which is governed by the law (condition) of minimization of inputs; or conversely, of maximizationof output. The aim is to get the most for the least. This is not to say that innovations that satisfy that condition are intrinsically good or "better"-to use Marglin's word. They just pay more-in money and power, depending on the economic and social system. This is why socialist countries seem to obey the same technological tendencies as capitalist nations: they define their goals differently, but they also want more for less. If, then, we want to abrogate this condition, we have to make a deliberate,collective decision to do so; and in some areas we do. But we
76E. J. Hobsbawm, "Artisanor LabourAristocrat,"Economic History Review, 2nd ser., 37 (Aug. 1984),p. 362. 77 My italics;Marglin,"WhatDo Bosses Do?" p. 37. In his 1984essay, Marglin admittedthat he had in fact underestimated ability of labor to retain some control over the work process and the pace, even in a factory environment.See "Knowledgeand Power," p. 164, n. 12. But it must be recognized that historically, much of this countervailingpower has been exercised by a small fraction of the work force, composed of those highly skilled craftsmanwhose dexterity and experience remainedvaluableif not indispensableeven in the presence of machinery,and who were thereforein a position to open or shut the flow of work. Much of the sharpestlabor conflict of the late nineteenthand twentiethcenturieshas focused on attemptsof management free itself to of this constraintby substituting capitalfor laborand therebydeskillingthese specialties. Even so, the organizedpower of such crafts was such as to maintaintheir leverage even in the absence of technologicalindispensability.But as Hobsbawmpoints out in "Artisanor LabourAristocrat" (pp. 367-68), this was a precariouspower base, the more so as these privilegedworkersoften set themselves off from, and sometimes against, the unskilled remainderof the work force. To paraphrase Marglin,otiose propertyrightsare an invitationto expropriation. a recent study of For this battle in the Americanmachine-toolindustry,with special referenceto GeneralElectric, see David F. Noble, Forces of Production: A Social History of Machine Tool Automation (New York,

1984),and my review, "Machinesand TheirMasters," in The New Republic, Nov. 19, 1984,pp. 37-41.

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should not kid ourselves about such important matters. Technology does have its own reasons, and we ignore them at a price. We ought to know the price before we buy the goods. The second of the questions I posed at the startof this essay was this: Whereis Marglincomingfrom?He has to be situated, I think, in a larger stream of criticism of the structuresand conditions of work going back to the IndustrialRevolution itself. The criticism is multiple:a denunciation of the exploitation of labor (not only in the Marxist sense, which is tautological, but in the real sense of extracting labor on imposed terms); an attack on specializationand the consequent alienationof the workerfrom his work; a rejectionof hierarchy,which lays the economic foundation of social and psychological inequality. This multiple criticismhas as its counterparta dreamand a program. The dream: Why can't things be better? Why can't work be enriching and fulfilling?Why can't workers do what they enjoy doing and receive a wage appropriate their performance,or more ideally, to their need? to Why can't all of us be equal and run our collective activities as equals? The program?Well, that necessarily varies. It is easier to findfault than remedy, easier to unite arounda negative bannerthan an explicit set of goals. In the last twenty or so years, these utopian aspirations have been renewed and have found expression in economics in a growingcorpus of revisionist literatureon the structureof enterprise. Most of this writing is of a theoretical character-as are most of the neoclassical analyses. The authorsoperate in the traditionaleconomoneiricmode: marketsare competitive; workers, like bosses, are rationalmaximizers;all workers are potentially equal, though they may differ in strength and ability; managementis just one more skill (here radicals and business schools come together); if capital can buy it, so can labor; and so forth. That kind of theoretical speculation is intellectually stimulatingand suggestive, but less than useless if not combined with empiricalobservation, preferablyover a long experience. Here lies the meritof the Marglincontribution:he has sought to study history and enlist it in his argument.To be sure, his history is not what it should be, as I have tried to show; and there are those historianswho would ignore the discussion on that account alone. Yet this essay is itself evidence that I thinkthat that is a mistake. For one thing, however incomplete or inaccurate Marglin's history, his concerns and intent must be given serious consideration. He expresses, as we have seen, discontents of long pedigree and considerablejustification, and nothing that old and tenacious should be taken lightly. For another, it is the historian'sjob to respond. His primarytask is to demythifythe past and prevent others from mythifyingit, to come as close as possible to telling

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it like it was. Of course, one can never be sure how close one has come to such an ideal. History is too complex to allow us the kind of near-certaintyavailable to some of the natural sciences; and no historian is exempt of bias. The combinationcan be damaging. Under the circumstances, the best one can hope for is a high degree of plausibility and persuasiveness. The historian is like the attorney addressing a jury-whether the jury of other historiansor a largerpublic. He makes the best case he can, musters the best evidence, reasons by inference whenever possible, controls for alternatives.And then he waits for the verdict, which comes in over a long period of time. Whichbringsme to the last of the questions I posed at the start of this essay: So what? By this I meant: even if Marglinwere right about the origins of industrialcapitalism, would it then artificial,prestidigitarian be "an open question whetheror not hierarchical productionis essential a high material standardof living"?78 In other words, would that to justify us in thinking that we can give up hierarchical technology today-as Marglin points out, in both capitalist and noncapitalist systems-at little or no cost? My own logic (I'm not talking about history now) tells me that the answer is no. There is nothing in the characterof a previous event or decision-the choice of one path rather than another-that implies reversibility. Even an accident changes the future irremediably. Perhaps we should never have taken the road that led us through specialization and putting-outto the factory system and mass production, but we did and have gone a long way; and we cannot turn the clock back. as We can take steps to improve such arrangements we have inherited: to increase worker participationin managementdecisions, to diversify tasks and rotate assignments. But we are not going to abolish degrees of responsibilityand authorityin any operationof any size. Even in small groups committed to absolute equality, it takes a tenacious effort and much euphemism to repress or conceal distinctions. One very popular device that we are all familiarwith is the effortto paperover differences by using more dignifieddesignationsfor what are perceived or defined as the lower rungs of the ladder. But these inventions do not change the substance:in the long run, they only add to the vocabularyof pejorative designations. The difference at bottom between him and me, I suspect, is not so much that we disagree about work structuresand discontents, though we do, at least in part; or about the role of the capitalist entrepreneur, which we do; or about the characterand distributionof individualand social virtue and vice, which we do; but ratherthat we diverge on issues of social and political remedy. He is an economic theorist, and to theorists what is conceivable is possible. I am an historian, and
78

Marglin,"WhatDo Bosses Do?" p. 14.

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historianstend to be disenchantedby the record of humanexperience. We are suspicious of promises. Employers (capitalists) useless? Specializationuseless? The biggerthe promise, the more suspicious we get. In the last analysis, then, I see Marglin's essays as exercises in optative economics, useful for the historical questions they raise, but directed primarilyto true believers as a vision of what might have been and ought to be. His aim, implicit if not explicit, objective if not subjective, is to delegitimize the capitalist today-hence the present tense of his title-and therebyto encourageandjustify some unspecified act of expropriation.That is in the natureof revolutionarypropaganda: to accentuate the negative. As Moses Hess, then editor of the socially furious Neue Rheinische Zeitung, replied to one of his bourgeois backers (who else?) who had complainedabout the pessimistic tone of the newspaper, that was the point: "Alles in Bewegung"-everything in motion. So here: first hold out the promises. There will be time enough for reckoning later. But as every good economist knows, there is no such thing as a free utopia.