Chapter I: Preface

In seeking to express and illustrate some of the laws of the structural changes in modern industry, I have chosen a focus of study between the wider philosophic survey of treatises on Social Evolution and the special studies of modern machine-industry contained in such works as Babbage's _Economy of Manufactures_ and Ure's _Philosophy of Manufactures_, or more recently in Professor Schulze-Gaevernitz's careful study of the cotton industry. By using the term "evolution" I have designed to mark the study as one of a subject-matter in process of organic change, and I have sought to trace in it some of those large movements which are characteristic of all natural growth.

The sub-title, _A Study of Machine-Production_, indicates a further narrowing of the investigation. Selecting the operation of modern machinery and motors for special attention, I have sought to enforce a clearer recognition of organic unity, by dwelling upon the more material aspects of industrial change which mark off the last century and a half from all former industrial epochs. The position of central importance thus assigned to machinery as a factor in industrial evolution may be--to some extent must be--deceptive, but in bringing scientific analysis to bear upon phenomena so complex and so imperfectly explored, it is essential to select some single clearly appreciable standpoint, even at the risk of failing to present the full complexity of forces in their just but bewildering interaction.

In tracing through the Business, the Trade, and the Industrial Organism the chief structural and functional changes which accompany machine-development, I have not attempted to follow out the numerous branches of social investigation which diverge from the main line of inquiry. Two studies, however, of "the competitive system" in its modern working are presented; one examining the process of restriction, by which competition of capitals gives way to different forms of combination; the other tracing in periodic Trade Depressions the natural outcome of unrestricted competition in private capitalist production.

In some final chapters I have sought to indicate the chief bearings of the changes of industrial structure upon a few of the deeper issues of social life, in particular upon the problem of the Industrial Town, and the position of woman as an industrial competitor.

A portion of Chapters VIII., IX., and X. have already appeared in the _Contemporary Review_ and in the _Political Science Quarterly Review_, and I am indebted to the courtesy of the editors for permission to use them.

I have also to acknowledge most gratefully the valuable assistance rendered by Dr. William Smart of Glasgow University, who was kind enough to read through the proofs of a large portion of this book, and to make many serviceable corrections and suggestions.

JOHN A. HOBSON.

CONTENTS.

CHAPTER I.

PAGE
INTRODUCTION 1

Section.
1. Industrial Science, its Standpoint and Methods of Advance.
2. Capital as Factor in Modern Industrial Changes.
3. Place of Machinery in Evolution of Capitalism.
4. The Monetary Aspect of Industry.
5. The Literary Presentment of Organic Movement.

CHAPTER II.

THE STRUCTURE OF INDUSTRY BEFORE MACHINERY 10

1. Dimensions of International Commerce in early Eighteenth
Century.
2. Natural Barriers to International Trade.
3. Political, Pseudo-economic, and Economic Barriers--
Protective Theory and Practice.
4. Nature of International Trade.
5. Size, Structure, Relations of the several Industries.
6. Slight Extent of Local Specialisation.
7. Nature and Conditions of Specialised Industry.
8. Structure of the Market.
9. Combined Agriculture and Manufacture.
10. Relations between Processes in a Manufacture.
11. Structure of the Domestic Business: Early Stages of
Transition.
12. Beginnings of Concentrated Industry and the Factory.
13. Limitations in Size and Application of Capital--Merchant
Capitalism.

CHAPTER III.

THE ORDER OF DEVELOPMENT OF MACHINE INDUSTRY 44

1. A Machine differentiated from a Tool.
2. Machinery in Relation to the Character of Human Labour.
3. Contributions of Machinery to Productive Power.
4. Main Factors in Development of Machine Industry.
5. Importance of Cotton-trade in Machine Development.
6. History refutes the "Heroic" Theory of Invention.
7. Application of Machinery to other Textile Work.
8. Reverse order of Development in Iron Trades.
9. Leading Determinants in the General Application of
Machinery and Steam-Motor.
10. Order of Development of modern Industrial Methods in the
several Countries--Natural, Racial, Political, Economic.

CHAPTER IV.

THE STRUCTURE OF MODERN INDUSTRY 88

1. Growing Size of the Business-Unit.
2. Relative Increase of Capital and Labour in the Business.
3. Increased Complexity and Integration of Business
Structure.
4. Structure and Size of the Market for different
Commodities.
5. Machinery a direct Agent in expanding Market Areas.
6. Expanded Time-area of the Market.
7. Interdependency of Markets.
8. Sympathetic and Antagonistic Relations between Trades.
9. National and Local Specialisation in Industry.
10. Influences determining Localisation of Industry under
World-Competition.
11. Impossibility of Final Settlement of Industry.
12. Specialisation in Districts and Towns.
13. Specialisation within the Town.

CHAPTER V.

THE FORMATION OF MONOPOLIES IN CAPITAL 117

1. Productive Economies of the Large Business.
2. Competitive Economies of the Large Business.
3. Intenser Competition of the few Large Businesses.
4. Restraint of Competition and Limited Monopoly.
5. Facilities for maintaining Price-Lists in different
Industries.
6. Logical Outcome of Large-Scale Competition.
7. Different Species of "Combines."
8. Legal and Economic Nature of the "Trust."
9. Origin and _Modus Operandi_ of the Standard Oil Trust.
10. The Economic Strength of other Trusts.
11. Industrial Conditions favourable to "Monopoly"

CHAPTER VI.

ECONOMIC POWERS OF THE TRUST 143

1. Power of a Monopoly over earlier or later Processes in
Production of a Commodity.
2. Power over Actual or Potential Competitors.
3. Power over Employees of a Trust.
4. Power over Consumers.
5. Determinants of a Monopoly Price.
6. The Possibility of low Monopoly Prices.
7. Considerations of Elasticity of Demand limiting Prices.
8. Final Summary of Monopoly Prices.