The Development of the Assembly Line
Arguably, the assembly line captures the controversy of capitalism writ large. Specifically, the assembly line captures the struggle between management and labor. With regard to management, certain historians emphasize, and often praise, the amount of efficiency management could accomplish with the assembly line—efficiency being a core tenet of capitalism. To be sure, this efficiency allowed vehicles to be rolled off of the assembly line at a price that common people could afford. It would seem that historians such as David E. Nye are inclined to understate the unsavory aspects of management if this assembly line produced vehicles that the general public could afford. The fact that Henry Ford implemented a five-dollar, eight-hour day system for his factory workers also serves to justify this historiographical view, which holds the assembly line as a success story in the history of capitalism.[1]
With regard to labor, however, certain historians such as Craig Heron would remind readers that Henry Ford, his management, and his public relations team would want the public to remember his company and the assembly line for these wage increases and for the affordability of the vehicles produced on the assembly line. Ford would want posterity to hold him in a positive light. Ford would not want people to remember the harsher realities of his assembly line system, which first and foremost sought to exact greater control over the labor force by placing workers in concentrated rolls in the plant, where they served as extensions to the machinery of the assembly line.[2] Thousands of people left the plant within hours or within days of having been hired as they faced the monotonous routines of the assembly line. Fostering a culture of fear within his plant, Ford also depended on his security service to silence those employees who might criticize this alienating system.[3]
Indeed, Karl Marx’s theory of alienation is an important concept to consider as one reflects on the legacy of the assembly line. As workers are placed in separate roles to accomplish minute, exacting tasks, they do not feel connected to the product they have been instrumental in creating, which has the potential to change the world. Marx would argue that assembly line workers, for example, have no creative input in a system that requires these workers to repeat the same action before another employee takes over the process and repeats his action on the line. This lack of creative input alienates the worker from the fruit of his labor. Ultimately, however, because of their surrender to the alienating process of the automobile assembly line, these workers deserved credit for lifting others out of their station in life. The reasonable price of the automobile enabled others to purchase cars and venture beyond their boundaries to seek better employment and thus a higher standard of living.[4] While capitalists benefited from the alienating aspects of the assembly line, the working class arguably benefited in their own right. This synthesis of alienation and social mobility is ultimately the legacy of the assembly line.
The Growth of Monopolies
An irony inheres in the concept of monopoly: businesses that compete in a market, which therefore strive to develop better products, increase profits, expand their markets, and grow in size, tend to monopolize as a natural consequence of this capitalist process.[5] Critics and proponents of capitalism and monopolies alike recognize this fact; the difference lies in the judgment they render as the process unfolds. On one hand, we have neoclassical economists who recognize theoretical problems with monopolies, although these neoclassical economists approach the problem from different political and economic perspectives. Marxist economists, for example, maintain that monopoly represents the final stage of the capitalist process; after monopoly, commercial life is stagnant, and, by implication, so is capitalism. Marxists laud monopolies as integral steps in the dialectic process from capitalism to socialism.[6] More critical of monopolies, non-Marxist neoclassical economists maintain that monopolies are similar to the structures one might see in a command economy, which do not depend on competition and self-correcting mechanisms guaranteed in a free market.[7] Monopolies are intolerable, anti-competitive, inefficient entities, according to these economists.
These criticisms have likely impacted popular concepts of monopoly, which tend to view monopolies as harmful to the core tenets of a market economy, the orthodoxies for which require businesses to compete with each other and therefore lower the prices of goods. Charles Geisst elaborates, detailing how businesses facing competition must adjust their prices in the consumer’s favor and how businesses must continually improve upon their products. Removing competition invariably removes the incentive to innovate. If a business, having removed all competition, having consolidated vertically and/or horizontally, has complete control of the marketing forces, then consumers will quite literally pay the price for items of diminishing quality.
While neoclassical views of monopoly might have shaped popular negative connotations of monopoly, many academics have questioned the orthodoxy that monopolies in general are examples of capitalism run amok. C.W. DeMarco takes a position different from the neoclassical one. DeMarco holds that that monopolies are not “necessarily economically odious.”[8] DeMarco argues that just because monopolies might have the ability to act inefficiently does not necessarily mean that critics can label all monopolies as inefficiencies.[9]
DeMarco’s argument would be more compelling if DeMarco produced examples of monopolistic entities that did not exhibit unethical, anticompetitive, inefficient behavior. DeMarco approaches matters from a theoretical standpoint, but he does not discuss monopolies in practice. Nevertheless, the fact that Standard Oil and American Tobacco were dismantled in 1911, while in 1919 the Supreme Court kept U.S. Steel intact, might indicate that these rules are dependent upon the political landscape of the time, not on a consistent application of antitrust laws.[10] Or, seen differently, these two different verdicts in 1911 and 1919 might indicate the Supreme Court applied logic that DeMarco later would later apply, namely, that not all companies moving toward monopoly are necessarily economically odious and inefficient players in the market.
If Americans insist upon having a market economy, which implies competition, which further implies that the forces of competition will invariably choose a winner among companies, then Americans should accept with less judgment that monopolies result from this competition. Americans are right to be skeptical of monopolies and their power, but this skepticism should not preclude monopolies from existing, especially when, as Geisst demonstrates, these monopolies have been sources of efficiency. Geisst specifically cites the railroad as an example of an efficient monopoly. Stretching from coast to coast, railroads facilitated westward expansion. Without these railroads, farmers could not have delivered their produce to the growing populations, while oil and steel would not have been distributed with such efficiency to provide infrastructure.[11]
Development of Labor Unions
Scholars have long posed a question on how labor unions should be defined: Are labor unions no different from monopolies and cartels, labels conventionally extended only to businesses? Albert Rees highlights the difficulties of maintaining this equivalency between labor unions and monopolies/cartels because, one, a union’s makeup extends beyond its economic character, as this makeup includes political and social characteristics; and, two, all of the gains a union makes are redistributed among its workers in the form of wages, meaning that the union itself does not collect these gains.[12] Responding to Rees’s difficulties, Morgan O. Reynolds argues that labor unions “behave in labor markets as conventional monopoly theory predicts”[13] as they attempt to capture as much wealth as possible for their members.[14] That members, not the organization itself, receive those gains ultimately should not factor into the negation of the equivalency, according to Reynolds.
Charles Baird accepts the equivalence between monopoly/cartels and labor unions, taking the issue to its next logical step: Why have labor unions been exempt from the Sherman Antitrust Act of 1890?[15] Baird wants readers to understand that if General Motors, DaimlerChrysler, and Ford were to make an agreement that eliminated competition among themselves and were to be prosecuted accordingly under antitrust provisions, then employees coming together across these companies, organizing a labor union to fix wages and demarcate labor, should likewise be subject to antitrust legislation.[16]
The United States Congress, passing the Clayton Act in 1914, tended to disagree that unions had equal footing with firms subject to antitrust legislation. The Clayton Act was predicated on the notion that the “labor of a human being is not a commodity or article of commerce.”[17] As such, any attempt among workers to organize should be exempt from antitrust legislation because such legislation concerns the conspiracy to manipulate articles of commerce. Baird categorically disagrees with the Clayton Act’s premise, recognizing that labor is a commodity because people sell their labor services to employers (i.e., buyers).[18] Laborers who unionize manipulate the articles of commerce because adjusting wages in their favor impacts the price consumers pay for goods—the very stuff of commerce.
Although Baird’s logic is compelling, and while on many accounts unions meet the criteria that define either monopolies or cartels, one criterion seems to complicate the equivalence. If, for example, General Motors, DaimlerChrysler, and Ford were to conspire to eliminate competition, they would be doing so ultimately with the intention to increase their profits. However, if employees among these companies were to conspire to raise wages and demarcate labor, they would be doing so with the intent to tap into the profits of the companies that employ them. But tapping into profits, and recovering money for those who face exploitation and unsafe working conditions, is not the same as generating profits.
[1]. Craig Heron, review of America’s Assembly Line, by David E. Nye, Labour/LeTravail no. 75 (Spring 2005): 288.
[2]. Heron, review of America’s Assembly Line, 287.
[3]. Heron, 288.
[4]. Charles W. Baird, “Unions and Antitrust,” Journal of Labor Research 21, no. 4 (Fall 2000): 593.
[5]. Charles Geisst, Monopolies in America: Empire Builders and Their Enemies from Jay Gould to Bill Gates (New York: Oxford University Press, 2000): 12; C.W. DeMarco, “Knee Deep in Technique: The Ethics of Monopoly Capital,” Journal of Business Ethics 32, no. 2 (May 2001): 158.
[6]. Geisst, Monopolies in America, 12; DeMarco, “Knee Deep in Technique,” 159.
[7]. DeMarco, 152.
[8]. DeMarco, 152.
[9]. DeMarco, 153.
[10]. Geisst, Monopolies in America, 11.
[11]. Geisst, 16.
[12]. Morgan O. Reynolds, “Whatever Happened to the Monopoly Theory of Labor Unions?” Journal of Labor Research 2, no. 1 (Spring 1981): 163.
[13]. Reynolds, “Whatever Happened,” 171.
[14]. Reynolds, 164.
[15]. Baird, “Unions and Antitrust,” 585.
[16]. Baird, 586.
[17]. Baird, 594.
[18]. Baird, 592.
Bibliography
Baird, Charles W. “Unions and Antitrust.” Journal of Labor Research 21, no. 4 (Fall 2000): 585-600.
DeMarco, C.W. “Knee Deep in Technique: The Ethics of Monopoly Capital.” Journal of Business Ethics 32, no. 2 (May 2001): 151-164.
Geisst, Charles. Monopolies in America: Empire Builders and Their Enemies from Jay Gould to Bill Gates. New York: Oxford University Press, 2000.
Heron, Craig. Review of America’s Assembly Line, by David E. Nye. Labour/LeTravail no. 75 (Spring 2005): 286-289.
Reynolds, Morgan O. “Whatever Happened to the Monopoly Theory of Labor Unions?” Journal of Labor Research 2, no. 1 (Spring 1981): 163-173.
Goodbye To All That 