Origins of Industry
Origins of industry in Albion may be found in local, family owned and operated businesses that provided basic goods and services, like agricultural processing, building materials, blacksmiths, etc. Accumulation of wealth through these subsistence functions, allowed investment in capital intensive machines and building – the technological innovations of the time.
These innovations at times allowed the promise for rapidly accumulating more capital – but were also suspect to failure. Latest technology at the time of implementation lost competitiveness over time and became obsolete. Unless owners of capital invested in innovation, they lost competitiveness, profit, and also became obsolete.
Concentration of capital and technological innovation were only two requisites for competitiveness of industry – once a winning formula could be found, repetition of the most competitive processes through mass production, allowed for even greater accumulation of capital, that could then be invested in the process of technological innovation, mass production, and most importantly mass consumption.
Emergence of a consumer class – new markets of both companies and individual consumers, emerged to consume the products that industry created. Mass production allowed to produce goods and services at lower and lower prices making them available to a broader audience. Essential functions as described above, were joined by other products of production that made life cleaner, safer, more convenient, and easier – defining features of the emergent consumer class.
Industrial Adaptation and the Business Cycle
This process of industrial change and adaptation continued, occasionally facing failure and reorganization. Recession and depression in the 1870’s and 1893, while stifling, prefigured the Great Depression starting in 1929 to the mid 1930s. What emerged from the Great Depression was more active involvement of the public sector in regulating affairs of industry and the private sector. Reforms in banking, of publicly traded stock, fundamentally altered the relationship between investors and capital, and both of these with consumers.
Armament production during World War II brought vitality to industry, suffering from effects of the Great Depression. While defense industry production continued after the second World War, concentration of this industry shifted to the West Coast – in California.
Still, with a reinvigorated consumer sector, and with America as the leading industrial producer in the world, the period after World War II, resulted in unprecedented growth and prosperity.
Deindustrialization, An Old and Repeated Pattern
When this growth and prosperity began to give way in the 1960s, people did not look to the traditional elements of industrial production – like a readily available supply of accumulated capital to invest in capital intensive machines and building, technological innovations over time, innovation by owners of capital, creation of new markets, and through mass production and mass consumption. Neither did they look at the influence of governmental regulation of banking and investment on the production process, or of the competitive advantage and disadvantage that federal investment in various sectors (most prominently the defense sector) provided an unfair competitive advantage of certain areas of the country over others.
Alternative explanations to explain this process include deindustrialization – suggesting that industrial production in America was declining, and that production was moving to other countries. While this is true of many labor intensive manufacturing activities, the deindustrialization theory did not provide adequate attention to movement of industry from one region to another in America, nor the development of more complex and capital intensive manufacturing processes in this country. Instead of being deindustrialization, America was experiencing a more advanced stage of production continuing from before World War II, and extending today.
Deindustrialization, instead, indicated a movement of work away from the place of consumption. One of the greatest ironies of this time, is that while jobs disappeared from certain cities and regions, those who remained in those regions continued to consume as before, with modification based on income. It therefore was not uncommon to find K-Mart or McDonald’s in a city considered post-industrial, while these institutions continued many of the features of industrialization – including mass production and lower prices making goods and services cheaply available to consumers.
Loss of Local Control
While roots of industry can be found in local capital and labor, trends have been at work for decades to undermine this local control. Banks – holder of capital – have been out of local ownership in Albion since 1974. Declining employment and population, further undermined the supply of local labor.
To understand how we got to the current state of affairs, it is important to understand where we have come from.
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