Although Dickens is often thought of as a chronicler of the industrial revolution, almost the only factory scene in Dickens is phantasmagorical. The Coketown factory in Hard Times is a Frankenstein, seen only from a distance, that turns men into machines and re-creates the natural and social environment in its own monstrous image; noisy, dirty, monotonous, its air and water poisoned.
It was a town of red brick, or of brick that would have been red if the smoke and ashes had allowed it; but, as matters stood it was a town of unnatural red and black like the painted face of a savage. It was a town of machinery and tall chimneys, out of which interminable serpents of smoke trailed themselves for ever and ever, and never got uncoiled. It had a black canal in it, and a river that ran purple with an ill-smelling dye, and vast piles of building full of windows where there was a rattling and a trembling all day long, and where the piston of the steam-engine worked monotonously up and down, like the head of an elephant in a state of melancholy madness.112
Coketown is inhabited by an army of “people equally like one another, who all went in and out at the same hours, with the same sound upon the same pavements, to do the same work.” Significantly, Dickens imagines that inside the factory they “do the same work” and that “every day was the same as yesterday and to-morrow, and every year the counterpart of the last and the next.” Production, in other words, involves never creating anything new.
Marx’s description of the factory in Das Kapital stresses the same features as Dickens’s but lacks all detail, not surprising given that Marx had never been inside even a single one. Again, men are transformed into a “mere living appendage” of the machine, work becomes “mindless repetition,” and automation “deprives the work of all interest.”113
Marshall’s descriptions of factories and factory life are more specific, nuanced, and varied. He spends hours observing. He records manufacturing techniques and pay scales and layouts. He questions everyone, from the owner to the foremen to the men on the shop floor. When he encounters the same problematic phenomenon as Dickens or Marx—the effects of the assembly line on workers—he doesn’t necessarily draw the same inferences.
The characteristic of the firm is the way in which every operation is broken up into a great number of portions, the work of each individual being confined to a very small portion of the whole operation. Does this prevent the growth of intelligence? I think not . . . If a man has no brains we get rid of him: There is plenty of opportunity for this in consequence of the fluctuations of the market. If a man has some brains, he stays on at his work; but if he has any ambition, he must get to know all that goes on in the shop in which he is working: otherwise he has no chance of becoming foreman of that shop . . . Most improvements in detail are made by the foremen of the several shops: & improvements on a very large scale are made by a man who does nothing else . . . Their improvements were in small details as regards manufacture e.g. numerous contrivances for securing that certain parts should be airtight, that certain others should work easily. The Englishman had invented the harp stop.114
For Dickens and Marx, firms existed to control or exploit the worker. For Mill they existed solely to enrich their owners. For Marshall, the business firm was not a prison. Management wasn’t just about keeping the prisoners in line. Competing for customers (or workers) required more than mindless repetition. Marshall’s business enterprises were forced to evolve in order to survive. Of course, Marshall did not deny that businessmen pursued profits. His point was that to make profits competitive, firms had to generate enough revenue to still have something left over after paying workers, managers, suppliers, landlords, taxes, and so on. To do that, managers had to constantly seek out ways to do a little more with the same or fewer resources. In other words, higher productivity, the long-run determinant of wages, was a by-product of competition.
The British publisher Macmillan & Co. brought out The Economics of Industry in 1879. A slim volume purporting to contain nothing new and written in simple and direct prose suitable for a primer, it contained the essentials of Marshall’s New Economics. Its message was summarized in the following passage:
The chief fault in English economists at the beginning of the century was not that they ignored history and statistics . . . They regarded man as so to speak a constant quantity and gave themselves little trouble to study his variations. They therefore attributed to the forces of supply and demand a much more mechanical and regular action than they actually have; But their most vital fault was that they did not see how liable to change are the habits and institutions of industry.115
Marshall’s obsessive effort to understand how businesses worked led to his most important discovery. The economic function of the business firm in a competitive market was not only or even primarily to produce profits for owners. It was to produce higher living standards for consumers and workers. How did it do this? By producing and distributing more goods and services of better quality and at lower cost with fewer resources. Why? Competition forced owners and managers to constantly make small changes to improve their products, manufacturing techniques, distribution, and marketing. The constant search to find efficiency gains, economize on resources, and do more with less resulted over time in doing more with the same or fewer resources. Multiplied over hundreds of thousands of enterprises throughout the economy, the accumulation of incremental improvements over time raised average productivity and wages. In other words, competition forced businesses to raise productivity in order to stay profitable. Competition forced owners to share the fruits of these efforts with managers and employees, in the form of higher pay, and with customers, in the form of higher quality or lower prices.
The implication that business was the engine that drove wages and living standards higher ran counter to the general condemnation of business by intellectuals. Even Adam Smith, who famously described the benefits of competition in terms of an invisible hand that led producers to serve consumers without their intending to do so, had not suggested that the role of butchers, bakers, and giant joint stock companies was to raise living standards. Although Karl Marx had recognized that business enterprises were engines of technological change and productivity gains, he could not imagine that they might also provide the means by which humanity could escape poverty and take control of its material condition.
A serious crisis followed the publication of the Marshalls’ book. Marshall was diagnosed with a kidney stone in the spring of 1879. Surgery and drugs were not options at that time. His doctor said, “There must be no more long walks, no more games at tennis, and that complete rest offered the only chance of cure,” Mary recalled later. “This advice came as a great shock to one who delighted so in active exercise.”116 The painful, debilitating condition revived Marshall’s old fears of impending annihilation, still lurking from childhood. Only a few weeks earlier, he had spent a vacation hiking alone on the Dartmouth moors. Now he had become a housebound invalid who took up knitting to pass the time. A Bristol acquaintance recalled seeing Marshall and thinking that he must be seventy or so:
He . . . looked to me very old and ill. I was told he had one foot in the grave and I quite believed it. I can see him now, creeping along Apsley Road . . . in a great-coat and soft black hat . . . The next time I saw him was . . . in 1890 . . . I was astonished to find him apparently thirty or forty years younger than I remembered him a dozen years before.117
It made him more dependent on Mary and caused him to cast her ever more into the role of nurse rather than intellectual companion. Illness concentrated his mind. Marshall always had a tendency toward writer’s block. Now he realized he had to focus his energies and get on with his book. His hopes for writing a work that would eclipse Mill’s (and perhaps also Marx’s)—a synthesis of new theory and