Quotulatiousness

November 7, 2013

Children and the early industrial revolution

Filed under: Britain, Business, History, Law — Tags: , , , , , — Nicholas @ 11:35

Wendy McElroy talks about the plight of poor children in the early days of the industrial revolution in Britain:

Parish workhouses existed in Britain long before the Industrial Revolution. In 1601, the Poor Relief Act paved the way for parish officials to collect property taxes to provide for the “deserving poor.” In 1723, the Workhouse Test Act was passed to prevent false claims of poverty. Any able-bodied person who wished to receive poor relief was expected to enter a workhouse; its harsh conditions would presumably act as a deterrent. About the same time as the Industrial Revolution (circa 1760-1840), attitudes toward the poor underwent their own revolution. The Napoleonic Wars (1803-1815) not only bled Britain of money; they also created a flood of injured and unemployable men who returned from battle. Those men had families who were plunged into poverty. Between 1795 and 1815 the tab for Britain’s poor relief quadrupled. Meanwhile, the cost of mere subsistence soared because of political machinations such as the Corn Laws, a series of trade laws that artificially preserved the high price of grains produced by British agriculture. Many people could not afford a slice of bread.

But sympathy for the poor was in short supply. Historian Gertrude Himmelfarb’s definitive book The Idea of Poverty chronicles the shift in attitude toward the poor during that period; it turned from compassion to condemnation. An 1832 government report basically divided the poor into two categories: the lazy who sucked up other people’s money and the industrious working poor who were self-supporting. The Poor Law Amendment Act of 1834 instructed parishes to establish “Poor Law Unions” with each union administering a workhouse that continued to act as a deterrent by ‘virtue’ of its miserable conditions. Correctly or not, statesman Benjamin Disraeli called the act an announcement that “poverty is a crime.”

Pauper children were virtually imprisoned in workhouses. And nearly every parish in Britain had a “stockpile” of abandoned workhouse children who were virtually sold to factories. Unlike parents, bureaucrats did not view poor children as loved or otherwise valuable human beings. They were interchangeable units whose presence was a glut on the market because there would always be another poor child born tomorrow. Private businessmen who shook hands with government did not have clean fingers, either. Factory owners could not force free-labor children to take dangerous, wretched jobs but workhouse children had no choice and so they experienced the deepest horrors of child labor. The horror was not because of the free market or capitalism; those forces, along with the family, were among the protectors of children. Child laborers were victims of government, bureaucracy and businessmen who used the law unscrupulously.

August 26, 2013

A small note from the hand tool trade

Filed under: Business, Tools, USA — Tags: , , — Nicholas @ 08:02

In a discussion of the plight of Sears in the major appliance market, Coyote Blog mentions an earlier Sears mis-step in a different market:

Oddly, I witnessed a similar Sears private label fracas when I worked for Emerson Electric over a decade ago. For years and years, Emerson (not the folks who make the cheap radios and TVs) manufactured many of the Sears Craftsman hand tools and power tools. Sears got tough one year, and negotiated a better deal of some sort with someone else, and an entire division of Emerson saw its sales basically going to zero. So Emerson bought a bunch of orange paint and plastic, went to Home Depot, and cut a deal for a private label tool line at Home Depot (Emerson separately owns the Rigid tool company, so a lot of the items were branded Rigid). Emerson ended up in potentially better shape (I did not stay long enough to see how it turned out), partnered with a growing rather than a declining franchise.

August 22, 2013

QotD: Politicians and the world of real jobs

Filed under: Business, Humour, Politics, Quotations — Tags: , — Nicholas @ 00:01

Whenever I hear a politician or pundit talk about a modern economy like they understand it well enough to run it, I want to burst out laughing, or cry, or both. If you can’t even keep pictures of your dick off the Intertunnel during an election cycle, I imagine being Emperor of the Economic and Social Universe is probably well above your abilities. Politicians have to take tours of factories because to them, everything and everybody in a factory might as well be alchemy performed by men from Jupiter.

“Sippican Cottage”, “Mene, Mene, Tekel, Upharsin” Sippican Cottage, 2013-08-21.

August 2, 2013

The self-inflicted wounds of Britain’s post-war auto industry

Filed under: Britain, Business, Europe, Germany, History — Tags: , , , — Nicholas @ 09:09

Dominic Sandbrook contrasts the rise of the German auto industry from the literal rubble of the post-war world with the slow decline of Britain’s once-mighty car makers:

If you want to know why Angela Merkel calls the shots in Europe, Germany’s car factories are a pretty good place to start.

By contrast, Britain’s car industry is a shadow of its former self. We do still make almost one and a half million cars a year, which is good news for thousands of British engineers. But these days, we make them for other people.

The iconic Mini plant at Cowley, for example, is celebrating its centenary this year. It was founded in 1913 by the entrepreneur William Morris as the home for his legendary Morris Oxford.

Today it still makes thousands of cars — but it makes them for BMW.

It’s a similar story at Crewe, the home of another great British icon, Bentley – which actually belongs to Volkswagen.

Half a century ago, let alone when Morris was at his peak, this would have seemed unimaginable. But the sad truth is that Britain’s car firms only have themselves to blame.

Seventy years ago, at the end of World War II, Germany was on its knees. After the fall of Hitler’s empire, its car industry lay in ruins.

In August 1945 the British Army sent a major called Ivan Hirst to take control of the giant Volkswagen plant in Wolfsburg, which had been built under the Nazis to produce ‘people’s cars’ for the German masses.

Ignoring his sceptical superiors, Hirst could see the potential amid the shattered debris of the Wolfsburg factory.

Rebuilding Volkswagen, he thought, would be a step towards rehabilitating Germany as a prosperous, peaceful European ally. And of course he was right.

In the next few years, Hirst restarted production of a car we know today as the Beetle. And from then on, VW was flying.

July 27, 2013

Jiangsu might as well be the Chinese name for Detroit

Filed under: China, Economics — Tags: , , , , — Nicholas @ 11:02

The South China Morning Post on the economic troubles of the provincial, municipal and local authorities in Jiangsu:

The nightmare scenario for China’s leaders as they try to wean the country off a diet of easy credit and breakneck expansion is a local government buckling under the weight of its own debt. Few provinces fit that bill quite like Jiangsu, home to China’s most indebted local government.

Hefty borrowings through banks, investment trusts and the bond market by Jiangsu’s provincial, city and county governments have saddled the province north of Shanghai with debt far higher than its peers, public records show.

Many of the province’s mainstay industries, including shipbuilding and the manufacturer of solar panels, are drowning in overcapacity. Profits are dwindling, and the government’s tax growth is braking hard.

[…]

Little public information is available on the total debt of Chinese local governments. Indeed, earlier this month China’s Vice-Finance Minister Zhu Guangyao said Beijing did not know the precise level of their debts either.

But from what ratings agencies and think-tanks can piece together, Jiangsu may be the standout debt risk among China’s 31 provinces.

Looking at bank loan books, they can see that China’s eastern provinces including Jiangsu have the highest concentration of government debt. Jiangsu then looms large because of its reliance on costlier and alternative forms of financing, which they said suggested that cheaper bank loans and land sales are not giving the authorities the funding they need.

The risk that Jiangsu might pose to the Chinese economy in a crisis is clear. On its own, the province would be a top 20 global economy with GDP greater than G20 member Turkey. Its 79 million population tops that of most European countries.

July 17, 2013

Matchbox cars at 60

Filed under: Britain, Business — Tags: , , , — Nicholas @ 10:08

While my childhood toys revolved more around Airfix 1/72nd scale soldiers and Lego blocks (to provide the necessary terrain for the soldiers to fight over), I had a modest collection of Matchbox cars. After reading this article, I realize that if I’d only had the foresight to keep them in their original packaging and never actually playing with them I’d have the core of an expensive collection on my hands (I’d also have completely missed the whole notion of “fun”, but that’s a separate issue):

The concept of these tiny die-cast models was the response of a father, Jack Odell, to a rule at his daughter’s school stating that pupils were only allowed to bring in toys that would fit inside a matchbox. Odell, a school dropout who later joined the Royal Army Service Corps, was by this time working for a die-casting company, Lesney Products (itself set up by two British ex-servicemen, Leslie Smith and Rodney Smith in 1947). Working out of a bombed-out Tottenham pub called The Rifleman, Lesney spent the early Fifties moving away from producing small products for industrial use towards making die-cast toys. Believing this direction to be a lost cause, Rodney Smith quit the company in 1951, leaving it in the hands of Leslie Smith and Odell, who was by then a partner.

A year later Odell had his brainwave, creating a scaled-down version of an existing Lesney toy, the model road roller, packaging it in a matchbox and sending it with his daughter to school. It was an instant hit: with his little toys, Odell was on to something big.

[…]

Matchbox, along with Corgi and Dinky, turned Britain into the dominant force in die-cast models. In the Sixties, Lesney would become the fourth largest toy company in Europe, with 14 factories in and around London producing more than 250,000 models a week. By the end of the decade Matchbox was the biggest-selling brand of small die-cast models in the world.

To date, there have been more than 12,000 individual model lines, and total production exceeds three billion. If placed bumper-to-bumper they would circle the Earth more than six times — assuming they could be prized from the possessive fingers of their owners.

H/T to Blazing Cat Fur for the link.

June 19, 2013

Even the Chinese statistics office couldn’t accept these numbers

Filed under: Bureaucracy, China, Economics, Government — Tags: , , — Nicholas @ 07:57

In the Wall Street Journal‘s ChinaRealtime section, an amusing story about a local Chinese government whose official statistics were so unrealistic that the central statistics office called them out on it:

It’s typically advisable not to accept Chinese economic data at face value – as even the country’s own premier will tell you. Figures on everything from inflation and industrial output to energy consumption and international trade often don’t seem to gel with observation and sometimes struggle to stack up when compared with other indicators.

How the figures are massaged and by whom is as much a secret as the real data itself. But in an unusual move, the National Bureau of Statistics – clearly frustrated with the lies, damn lies – has recently outed a local government it says was involved in a particularly egregious case of number fudging, providing rare insight into just how we’re being deceived.

According to a statement on the statistics bureau’s website dated June 14 (in Chinese), the economic development and technology information bureau of Henglan, a town in southern China’s Guangdong province, massively overstated the gross industrial output of large firms in the area.

[. . .]

The statistics bureau doesn’t say why Henglan inflated its industrial output numbers. But indications that a local economy is sagging could reflect poorly on the prospects for promotion of local officials, and China’s southern provinces have been particularly hard hit by the global slowdown in demand for the country’s exports. Factories have closed, moving inland and overseas in search of cheaper labor, denting local government revenues.

“When governments are looking to burnish their track record, that can put the local statistics departments in a very awkward situation,” said a commentary piece that ran Tuesday in the Economic Daily (in Chinese), a newspaper under the control of the State Council, China’s cabinet. The article said that one of the biggest obstacles to ensuring accurate data is that the agencies responsible for crunching the numbers aren’t independent from local authorities. Moreover, it argues that penalties for producing fake data were too mild to act as a deterrent.

May 15, 2013

Google UK marks the 150th birthday of Frank Hornby

Filed under: Britain, Business, History, Railways — Tags: , , , , — Nicholas @ 08:09

If you go to https://www.google.co.uk/ today, you’ll see the Google doodle has a distinct toy train motif:

Google UK doodle for Frank Hornby

At The Independent, Matilda Battersby tells the story:

The search engine Google is celebrating the 150th birthday of visionary toy maker Frank Hornby, whose model railways, Meccano sets and Dinky toys are still being played with by children today.

Born in Liverpool on 15 May 1863, Hornby was behind three of the most popular toy lines of the 20th century despite having no formal engineering training.

[. . .]

Meccano’s turnover for the 1910 financial year was £12,000. His son Roland joined the business, and when the operation began exporting to Europe, he opened Meccano France Ltd in Paris. Two offices in Germany soon followed.

Having dabbled in politics in later life, Hornby died of a heart condition and diabetes in Maghull, near Liverpool, on 21 September 1936. Two years previously he had set up Dinky Toys to manufacture miniature model cars and trucks.

In 1938 his son Roland launched the Hornby Dublo model railway system — a posthumous honour to his father.

Enthusiasts around the world still collect Hornby train sets, Dinky Toys and Meccano models. The modern business also make Scalextric cars and Airfix kits.

H/T to Roger Henry for the link.

April 2, 2013

Revisiting the revisionist view of the “Satanic mills” of the British industrial revolution

Filed under: Britain, Economics, History — Tags: , , , , — Nicholas @ 08:55

Rather in keeping with the sentiments expressed in today’s Quote of the Day post, Emma Griffin explains why the workers generally thought of the industrial revolution as a very good thing indeed:

Writers and academics often show an interesting ambivalence about industrialization. Today, they regard it as a blessing, the single-most-effective way to lift people out of poverty. But in thinking about Britain’s Industrial Revolution, they have tended to reach the opposite conclusion: The rise of the factory, they argue, caused the end of more “natural” working hours, introduced more exploitative employment patterns and dehumanized the experience of labor. It robbed workers of their autonomy and dignity.

Yet if we turn to the writing of laborers themselves, we find that they didn’t share the historians’ gloomy assessment. Starting in the early 19th century, working people in Britain began to write autobiographies and memoirs in ever greater numbers. Men (and occasionally women) who worked in factories and mines, as shoemakers and carpenters, and on the land, penned their stories, and inevitably touched on the large part of their life devoted to labor. In the process, they produced a remarkable account of the Industrial Revolution from the perspective of those who felt its effects firsthand — one that looks very different from the standard historical narrative.

[. . .]

Higher levels of employment also helped change the balance of power between master and laborer. So long as jobs remained scarce, workers, by necessity, obeyed their employers. The price of dissent or disobedience was unemployment. With more jobs, such subservience became less and less necessary. In the booming new industrial towns, workers could, and did, walk out on employers over relatively minor matters, confident that finding more work wouldn’t be difficult. One autobiographer left his position simply because he “grew sick” of the work; another because he didn’t want to “beg pardon” after a falling out with his master; another objected to wasting his precious Sunday mornings at his master’s religious services; and another quit when his master refused to let him take his tea breaks off the premises. All working relationships are defined by a disparity in power between master and servant. But that inequality is rendered more palatable if we’re well remunerated for our services and can leave at will.

The way in which working people described the upheavals of this period provides us with a powerful reminder of the transformative effect of industrialization and of its capacity to improve living standards, even for the poor. Generations of historians have dwelled on the loss of old working patterns and presumed that the introduction of more intensive ones was detrimental to workers’ welfare. But these developments weren’t viewed in such a sinister light at the time. Industrialization promised full employment, and for those used to scraping together a living from the land, this was very good news indeed.

QotD: In praise of cheap, gimcrack, run-of-the-mill manufacturing

Filed under: Britain, France, History, Liberty, Quotations — Tags: , , , , — Nicholas @ 00:01

For the first time ever, labourers were able to purchase cheap goods for themselves. The first factories focused on mass production of cheap goods for the poor. Shoes, for example, were produced for the proletariat — the rich bought made-to-measure shoes. This was different from France, where the government’s mercantilist product standards, designed to uphold quality, ensured that nothing was produced for the poor at all. In France, mercantilism continued to be state policy for much longer than in England. This is the reason why industrialisation took fifty more years to arrive on France’s shores.

J.P. Floru, Heavens on Earth: How To Create Mass Prosperity, quoted by Brian Micklethwait at Samizdata, 2013-03-29.

March 30, 2013

All those manufacturing jobs are never coming back

Filed under: Britain, Business, China, Economics, USA — Tags: , — Nicholas @ 08:37

Tim Worstall explains why this is at the Adam Smith Institute blog:

I’m always rather puzzled by those who shout that we’ve got to bring manufacturing back to the UK. Apparently this will solve all our problems over what to do with dim Northern lads or something. Once they’re all hammering out whippet flanges then we just won’t have a problem with unemployment ever again. The problem with this idea is that modern manufacturing simply doesn’t provide many jobs. And if it were to provide mass employment it would be very badly paid employment too:

    Americans working to produce traded goods and services earn, roughly, according to their productivity. If low-skill workers in America aren’t much more productive in manufacture of traded goods and services than low-skill workers in China, then they can’t earn much more than workers in China while being employed in manufacture of traded goods and services. They can earn a rich-world wage in production of non-traded goods and services, like sandwiches and haircuts, so long as there is sufficient local demand. In other words, the only way to get less-skilled Americans a good wage in a manufacturing industry is to significantly raise their skill and productivity level. If that can’t be accomplished, they can only hope to find good wages in non-traded industries. At least, that is, until wages of less-skilled workers across the developing world come much closer to converging with those in America.

Of course, that’s all about America but the same logic pertains here as well. Chinese manufacturing wages are around $6,000 a year at present. Meaning that if we had mass employment in manufacturing, as they do, then wages would need to be around that level. Or, alternatively, UK based manufacturing would have to be much more productive to support higher wages. And “more productive” is the same as saying “uses less labour”. Thus you can have few well paid jobs (in the Rolls Royces etc of this world) or you can have many badly paid jobs (Shenzen). It isn’t actually possible to mix and match between the two.

March 19, 2013

Sifting through the 3D printing hype

Filed under: Economics, Media, Technology — Tags: , , , — Nicholas @ 09:06

At The Register, Professor James Woudhuysen looks at the gap between the breathless hype about 3D printing and the current and near-term technological, political, and legal limitations:

3D printing, otherwise known as additive manufacturing, is a subject that pumps out enthusiasts faster than any real-life 3D printer can churn out products.

In conventional machining, computer-aided design and computer-aided manufacturing (CADCAM) combine to make products or parts of products by cutting away at, drilling and otherwise manhandling materials. With 3D printing, CADCAM works with product scanners, other bits of IT and special plastics and metals to build products up, whether through the squirts of an inkjet-like device or the sintering of metal powder by lasers or electron beams.

Rather in the same way, America’s somewhat self-conscious Maker Movement — several thousand DIY fans out to revive manufacturing through the web and from the privacy of their own garages — promotes 3D printing with layer upon layer of hype.

It’s true that 3D printing has its good points. Without having to engage in expensive retooling, a 3D printer can easily be reprogrammed to make variations on a basic product — good for dental crowns, for example. 3D printing can also make intricate products with designs that cannot be emulated by conventional, “subtractive” techniques.

[. . .]

Despite all this, those who blithely proclaim that 3D printing brings a revolution to manufacturing make a mistake. 3D printing does not represent a pervasive, durable and penetrating transformation of the dynamics and status of manufacturing. Nor, as The Economist newspaper has proposed, is its emergence akin to the birth of the printing press (1450), the steam engine (1750) or the transistor (1950). There is much to celebrate about 3D printing, and even its too-fervent advocates at least represent a reasonable desire to produce new kinds of things in new kinds of ways. Yet what characterises 3D printing is how, as with other powerful technologies today, it need only barely arrive on the world economic stage for zealots to overrate it, and for others to turn it into an object of fear.

February 22, 2013

Ford’s wage-doubling myth

Filed under: Business, History, USA — Tags: , , , — Nicholas @ 00:02

In the Financial Post, Philip Cross explains the myth and reality of Ford’s famous wage-doubling ploy:

Start with the premise that Ford raised wages to increase purchasing power. As the Fortune article documents, before raising wages, Ford already had doubled output of the Model T with his innovative use of the moving assembly line, without adding to employment. The moving assembly line is what Ford deserves accolades for. To get an idea of how revolutionary it was, Ford built just over a quarter of a million cars in 1914, as much as the rest of the industry combined, but with 80% fewer workers. In other words, productivity already had doubled, allowing Ford to double wages without increasing labour costs.

And he needed to raise wages. Employee turnover at the Highland Park Model T assembly plant hit 370% in the year before the wage increase, clearly symptomatic of a dysfunctional internal labour market. That means Ford incurred the cost of hiring 52,000 people in 1913 to fill 14,000 jobs. The real reason Ford hiked wages was to reduce the cost of this turnover, not a soft-hearted desire to transfer purchasing power from management Scrooges to the Cratchits of the world.

The plan worked like a charm, as turnover plunged to 16% after wages were doubled, reducing labour costs despite the wage hike. Saying he did it to raise purchasing power was just good public relations. Who wants to advertise that their workplace was so disagreeable they could not keep workers for more than a few weeks at a time?

[. . .]

Ford is still reaping good publicity from the notion its founder spread joy and good cheer in the workplace by raising wages. Its website marvels that “newspapers from all the world reported the story as an extraordinary gesture of goodwill.” The universal appeal of this fable, repeated today by gullible journalists like those at Fortune, is probably because it feeds everyone’s fantasy that one day you’ll show up at work and get that long overdue raise, without your firm compromising its competitive position.

December 7, 2012

No, we’re not running out of phosphorus (phosphate) and potassium (potash)

Filed under: Economics, Environment, Media — Tags: , , , — Nicholas @ 09:58

The most recent outbreak of the-sky-is-falling, we’re-at-peak-whatever panic mongering is debunked by Vaclav Smil:

Jeremy Grantham, a well-known presence in the financial world, recently published a World View column in the journal Nature in which he concludes that, “simply, we are running out” of almost all commodities whose consumption sustains modern civilization. There is nothing new about such claims, and since the emergence of a vocal global peak oil movement during the late 1990s, many other minerals have been added to the endangered list. Indeed, there is now a book called Peak Everything. What makes Grantham’s column – published under the alarmist headline “Be Persuasive. Be Brave. Be Arrested (If Necessary)” – worth noticing, and deconstructing, is that he puts his claims in terms more suitable for tabloids than for one of the world’s oldest and most prestigious scientific weekly magazines.

His direst example is “the impending shortage of two fertilizers: phosphorus (phosphate) and potassium (potash). These two elements cannot be made, cannot be substituted, are necessary to grow all life forms, and are mined and depleted. It’s a scary set of statements…. What happens when these fertilizers run out is a question I can’t get satisfactorily answered and, believe me, I have tried.” Well, he could have tried just a bit harder: an Internet search would have led him, in mere seconds, to “World Phosphate Rock Reserves and Resources,” a study published in 2010 by the International Fertilizer Development Center (IFDC) and funded by the U.S. Agency for International Development.

This detailed assessment of the world’s phosphate reserves (that are the part of a wider category of resources that is recoverable with existing techniques and at acceptable cost) concluded that they are adequate to produce fertilizer for the next 300 to 400 years. As with all mineral resource appraisals (be they of crude oil or rare earths), the study’s conclusions can be criticized and questioned, and the statement by the Global Phosphorus Research Initiative is perhaps the best document of that kind. But even the most conservative interpretation of IFDC’s assessment shows that phosphates have a reserve/production ratio well in excess of 100 years, higher than that of many other critical mineral resources.

November 17, 2012

“3D printing will be bigger than the web”

Filed under: Business, Technology — Tags: , , , , — Nicholas @ 12:46

While I’m not quite willing to go as far as Chris Anderson (quoted above), I do think 3D printing is going to be a fantastic development in our very-near future:

Chris Anderson has exited one of the top jobs in publishing — Editor-in-Chief of Wired magazine — to pursue the life of an entrepreneur, making a big bet that 3D printers represent a massive new phase of the industrial revolution.

He spoke at a Wired “Culturazzi” event, at the Marriott Union Square and to sign copies of his latest book: Makers: The New Industrial Revolution.

Mr Anderson is always an excellent speaker and his talk covered the beginnings of the Industrial Revolution, which he picked out as the invention of the Spinning Jenny in 1764 — a hand powered machine for spinning yarn.

I’d have pinned the start of the Industrial Revolution to the invention of the steam engine and its ability to power large numbers of machines thus enabling the first factories — which represented aggregated labor energy. Scale makes factories viable.

But I can see why Mr Anderson would favor the Spinning Jenny as it was a high-tech machine that was kept in a home — just as 3D printers are home based, completing a neat cycle of history.

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