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Technological Divergence in a Continuous Flow Production Industry: American and British Paper Making in the Late Victorian and Edwardian Era
Abstract
For most of the nineteenth century Britain held an undisputed lead in the field of paper-machine technology. By the 1890s this lead had been lost to America. This article argues that Britain's loss of technological preeminence at this time had much more to do with the greater scale of the American market and the willingness of American manufacturers to embrace schemes that enhanced technological accumulation than it did to any protracted adherence to outdated and traditional practices that some British workers might have had. The article also outlines a general framework for the analysis of the rate of innovation achieved through learning.
Leslie Hannah contends that Europe was a more integrated market than the US at the turn of the twentieth century. This article shows lesser integration is part of the explanation for why the US was slower than Europe to standardise technology on the internal combustion engine for the motor car. The remaining contribution is that of US abundant oil deposits and water that encouraged the American development of cheaper first cost steam engines. These used more (liquid) fuel and less capital. In Europe, oil fuel prices relative to skilled labour were less appropriate for steam and European car entrepreneurs therefore focused on internal combustion engines. Distinctive US conditions were much less helpful for innovation and improvement before the continental US market was well established.
Why did subcontracting remain, well until the end of the nineteenth century, a viable way to organize metropolitan manufacturing? This article addresses historically and theoretically the reasons for the permanence of subcontracting as a viable alternative to centralized forms of production in London. It also questions the literature that equates the decline of subcontracting with the rise of sweating and argues for a reinterpretation of traditional explanations that saw the “sweater” as a central figure in the “degeneration” of the metropolitan productive system. The article concludes by proposing a reinterpretation of the “decline of subcontracting” and argues that the logic of flexibility of subcontracting was challenged by the increasing power of London wholesalers and retailers and the demands of fin-de-siècle mass consumption.
This concluding chapter summarizes the findings of the volume, and combines those findings with a comparative life-cycle perspective. We demonstrate how pulp and paper industry companies have emerged and exited in different countries. We highlight technology, raw materials, markets and products as factors explaining changes in industry structure and dominance. We demonstrate that industrial growth and the accumulation of technological knowledge require a certain maturity of political systems, regulation, and organization of research and development. Likewise, similarities between regions that lose their competitive advantage are characterized by saturation of demand, thereby weakening incentives to invest in production capacity, which is subsequently detrimental to the whole value network.
Britain was the first country in the world to enter into the business of mechanised papermaking. It continued in the lead in the field of papermaking until the 1890s, after which the momentum of being the first nation successfully to mechanise the production of paper was gradually lost to some of its major competitors in North America and Continental Europe. The first part of the twentieth century was characterised by industry growth disturbed by the First World War, the economic depression of the early 1930s and the Second World War. The post-Second World War era signified the decline of the role of the Empire as a market and business-making area for British companies and also the decline of the British-owned paper industry itself. British entry into the Common Market in 1973 oriented the British paper industry towards Europe.
Why did subcontracting remain, well until the end of the nineteenth century, a viable way to organize metropolitan manufacturing? This article addresses historically and theoretically the reasons for the permanence of subcontracting as a viable alternative to centralized forms of production in London. It also questions the literature that equates the decline of subcontracting with the rise of sweating and argues for a reinterpretation of traditional explanations that saw the "sweater" as a central figure in the "degeneration" of the metropolitan productive system. The article concludes by proposing a reinterpretation of the "decline of subcontracting" and argues that the logic of flexibility of subcontracting was challenged by the increasing power of London wholesalers and retailers and the demands of fin-de-siècle mass consumption.
The paper surveys the theoretical and empirical literature on the economic effects of profit sharing between workers and firms. It is critical of the case for government subsidization of such sharing schemes. Copyright 1987 by Royal Economic Society.
Profit-sharing and employee share ownership
Saul Estrin, Paul Grout and Sushil Wadhwani
This paper evaluates the likely effects of linking a part of a worker's pay to the employer's profits. It has been suggested, by Weitzman, that this would raise employment by lowering the cost of taking on an extra worker. However, this can only happen if existing workers are willing to let their share of value added fall, and experience of those firms in the UK who already operate profit-sharing schemes suggests that the Weitzman mechanism is not operative.
There is, however, some evidence that profit-related pay does boost productivity; but there are other ways of raising productivity, such as performance-related pay, which may be more effective. Productivity-enhancing effects are likely to be greatest when employees are involved in decision-making as well, but this is likely to undermine the Weitzman case still further.
Even if the argument that profit-sharing raises employment is not compelling, it is sometimes suggested that it can do little harm. However, there is evidence that it may well be inflationary, in which case the government would be advised to proceed cautiously.
We argue that there is very little case for the introduction of a permanent subsidy to encourage increased profit-sharing, although there may be a case for a temporary one to overcome managerial inertia. However, there is a danger that a subsidy will promote ‘cosmetic’ schemes designed to be eligible for the subsidy but which do not reflect any real change in behaviour.
Demonstrates that technical change is attributable to experience. The cumulative production of capital goods is used as the index of experience. New capital goods are assumed to completely embody technical change. The assumption is made that the model will be operating in an environment of full employment although reference is made throughout to the case of capital shortage. The implications of this model on wage earners are discussed, and profits and investments are examined. The rate of return is determined by the expected rate of increase in wages, current labor costs per unit output, and the physical lifetime of the investment. Learning is an act of investment that benefits future investors. Further analysis shows that the socially optimal ratio of gross investment to output is higher than the competitive level. (SRD)
We show that the length of compulsory education has a causal impact on regional labour mobility. The analysis is based on a quasi-exogenous staged Norwegian school reform, and register data on the whole population. Based on the results, we conclude that part of the US-Europe difference, as well as the European North-South difference in labour mobility, is likely to be due to differences in levels of education in the respective regions.