chapter  6
19 Pages

Industrialization in the first Western offshoot

A rising empire, and the fact that Britain was the first country to experience an industrial revolution, made it a global leader during most of the 19th century. As we have seen empire and industrial transformation were deeply intertwined phenomena: it is unlikely that Britain would have been a prime industrial mover without its colonies in the 18th century, but it is also clear that its status as the workshop of the world made it possible for Britain to create a mighty colonial empire during the 19th century. Hence power begets wealth as wealth begets power. However, at the end of this century, Britain’s was overtaken as industrial leader, first, by Germany and, second, by the USA. The so called ‘second industrial revolution’, which was initiated in the USA around the turn of the 20th century, stemmed from innovations in technology and production methods, which usually are summed up by the notion of mass production. By founding industrial production on the principle of decreasing costs per unit and long series, an industrial expansion was created during the 20th century, which caused a productivity revolution with such awesome consequences that it can only be compared to that happened when agriculture was introduced 6,000 years ago. The very process of introducing what American economic historian Alfred Chandler has called ‘economies of scope and scale’ made possible the consumer revolution, but also the welfare state.1 From the USA, this industrial model spread successively to a number of countries, at first in the Western hemisphere. Its peak was the ‘golden years’ after the Second World War. As a consequence, the 20th century became the USA’s century as a global

political (albeit sometimes hesitant) leader, as much as the previous century had been dominated by Great Britain. By 1945 the former colony and offshoot had definitively taken over global leadership from Britain, but this was a process which started much earlier. As an economic great power, the USA was ahead of Britain and everybody else already in the 1890s. Its steel mills, chemical industry, textile, food and mechanical engineering industry produced more goods than anywhere else in the world. Moreover the war with Spain in 1898 showed that the USA was also determined to play a geopolitical role, especially with regard to the Pacific and Atlantic oceans. It is often argued that the US today is gradually losing is former leading economic and political

position, not least because of an emerging Asia. Without doubt, ever since 1945, the USA has seen its relative share of the world’s industrial production diminish. In a few decades, it is presumed that China will become the leading industrial manufacturing power. However, still today most of the large multinational corporations’ headquarters are located in the USA – and, surprisingly, many of them have been among the largest ever since the beginning of the 20th century.2 Perhaps even before 1914 the USA took over from Britain the position of financial leader in the world. This leadership was further enforced by the two world wars. After the end of the Second World War, the Bretton Woods Agreement caused the American dollar to succeed the gold standard in international monetary and commodity trading; USA became de facto the ‘lender of the last resort’. Without doubt, this role as the financial leader is today contested by emerging financial centres in Asia, as well as by the City of London, which has returned strongly during the last decades. However, in the late 19th century London’s leading position stemmed from the fact that Albion ruled over a gigantic colonial empire and served as a clearing-house for the resulting flows of capital. The new giant of economic power, the USA, chose a different path. After a short period of colonial expansion – which hit Cuba and the Philippines around the turn of the 20th century – the USA chose instead informal rule. Through its technological, industrial and financial advantages, the USA was able to exert a domineering grip. Until the 1870s Britain had had such an advantage, too. It was when this relative advantage gave way that Britain, too, began to engage in the scramble for formal colonies outside Europe and the establishment of protection for its industries through a system of imperial preference. Hence, the foundations for the position of the USA as an economic and

political (and also military) leader were laid approximately 100 years ago.3

Just before the turn of the 20th century, the experience of the Spanish-American War, especially the military campaign in Cuba and the march into Havana in 1898, overshadowed everything. The American papers – especially the tabloids owned by William Randolph Hearst (the so called ‘yellow press’) – presented their American readers with horrifying stories of Spanish oppression. Public opinion loudly demanded action, but President McKinley hesitated. The traditional American line, rooted in the protest against the British Crown, was not to intervene – and above all not to acquire colonies of its own. At last, war action begun – after the pride of the navy, the warship Maine was blown up and sunk in the harbour at Havana. The American public never questioned that it was an action by Spanish loyalists – but this has never actually been proved. During the victorious campaign in Cuba, the up-coming politician Theodore (Teddy) Roosevelt made his name. As a volunteer, he became the hero of the day and laid the foundation for a brilliant career, which eventually took him all the way to the White House. The United States should not hesitate to take up the white man’s burden, Roosevelt argued. The rapidly growing industrial economy would give the United States a navy that will outshine all others. This was a point of view which was

formulated, not least in a very influential book of that time, The Influence of Sea Power upon History (1890), written by navy officer Alfred Thayer Mahan.4 But, if nothing else, the outbreak of the First World War put an end to this kind of imperialistic development in the United States. Instead, the USA went back to its traditional ‘open door policy’. This has not hindered intervention in other countries, as is well known from 20th-century Latin American and Asian history, but the direct colonial acquisition of foreign territory has been the exception. The US has been a reluctant imperialist, but has shown its muscles when its leading position has been threatened. Back home, at lot happened in the year of 1898. In the remote Bear Lake

in Minnesota, a late Native American revolt broke out. The fact that US soldiers became the victims of Indian snipers made the American public shiver. At the same time, in Omaha, a large exhibition was held to show off the rapid technological, industrial and civil advancements of the United States. In front of a large audience, several Native American nations made their appearance. The daily paper, the Omaha Bee, was able to report that when President McKinley visited the exhibition, the old and dying civilization – represented by 1,000 Indians – paraded in an exhibition that was otherwise devoted to the advancement of the new American civilization.5 In general, the years around 1900 were characterized by rapid economic and technological development. Thomas Alva Edison, Henry Ford and Frederick Winslow Taylor were just a few of the modern American heroes about to enter the limelight. We can also add names such as George Pullman (Pullman cars), George Westinghouse (hydraulic brakes) and Graham Bell (telephones) to further illustrate the innovative climate of the time. The new era of mass production was coming. Science and industry were joining forces in a powerful combination. For observers such as Thorstein Veblen, the particular contribution of America to ‘the industrial age’ was machine technology. More than perhaps anyone else he emphasized that machinery (and the engineer) was the platform for future civilization. In the competition for more civilization, America would be a leader and serve as an example to the world. After describing the situation in US industry he wrote in his seminal Absentee Ownership (1923): ‘And what is true of America will hold true with an inconsequential change of words for the industrial system more at large, to include the civilised nations in about the same measure in which they are civilised … ’.6 Politicians such as Teddy Roosevelt understood the tremendous powers which lay hidden in the new industrialism, and the advantages of being a first mover. Thus there are two main aspects of 1898 which point to the future 20th-

century American history. First, there is the Spanish-American conflict as a prototype for American foreign policy during the century. During this the entire century, the USA – unlike the empires of previous centuries – has been an ambivalent international leader. Certainly, the USA has mostly been convinced of its own supremacy. But, at the same time, interventions to protect American interests have mostly been undertaken at the request of others –

whether these requests were serious or invented. Or they have had to be hidden behind more or less pompous moral principles and the appeal for a special civilizing role for America. In principle, the open door policy has been a guideline. Every step away from it has had to be motivated by humanitarian and moral reasons. The Spanish-American war for Cuba shows this in a nutshell. The mixture of brutal buccaneer and self-sacrificing hero acting for the sake of humanity, represented by Teddy Roosevelt, gives an almost frighteningly accurate premonition of America’s history during the 20th century. Theodore Roosevelt is also an interesting figure from another perspective.

The republican McKinley is the last president of the kind characteristic of the 19th century: a weak leader, but deeply rooted in traditional American party politics. Instead, from Roosevelt onwards, a new type of strong president makes advances at the expense of the old parties, the Senate and the House of Representatives. This is a president who prefers to turn straight to the people, who uses the media as a tool for enforcing his position, and who sees himself as a man with the right to start wars and make peace following his own judgment. Before the Cuba campaign, Roosevelt had been a rather anonymous politician, who had run for Mayor of New York – but failed. From the Cuban War onwards, he was destined for success. In other words, we can recognize much in the politics of 1898 in the United States of today.