Paper industry charts US riseReview: Productivity and Performance in the Paper Industry: Labour, Capital and Technology in Britain and America, 1860-1914 GARY BRYAN MAGEE Paper surrounds us pervasively, it is so cheap that we hardly notice its cost, yet it is a miracle of technology. The product itself, originally squeezed from a pulp of boiled-down rags, is pre-industrial. But cheap, machine-made, ubiquitous paper is a product of entrepreneurial ingenuity and tenacity. The term miracle is used advisedly, since the process of entrepreneurship - of coming up with something new be it a new product, process, raw material or market - is something which economists, after many decades of trying, still do not understand. It is an inexplicable outburst of creativity which seems unbound by calculations and expectations. In this masterly book, Gary Magee tests economic theories of innovation against archival and quantitative evidence of the practice of experiment and innovation, with an economist's rigour, but also an historian's care. An abiding puzzle in Victorian economic history is the gradual loss of British pre-eminence, despite an early start, and the great lead in productivity set by the United States in the 19th century, which still holds today. The paper industry was no exception, but Magee shows that the reasons often put forward to explain it do not quite apply here. Despite the American knack for tinkering, it was British factories that adopted the right machinery first, and which continued to run it more efficiently almost to the end of the 19th century. A story often told is that British industrialists lacked the curiosity and capacity for technological exploration, and yet when rags, their main raw material, became too expensive, they searched hard and long for a suitable supplement, which they found in esparto, a grass growing wild in North Africa and Spain. What is it then that made American industry more productive? Indirectly, it was the bounty of nature - the vastness of the country and its natural resource. When American industrialists looked for something to supplement and replace rags as their raw material, they turned to wood, not esparto. It turned out that wood required much less work to prepare for the machine than rags or esparto, and the Americans inadvertently gained a great advantage in labour costs. Here is the final secret of American productivity: in the late 19th century, when their machines finally overtook British ones in speed and width, their population was growing rapidly, attracting millions of immigrants to a country rich in natural wealth. With demand shooting upwards, American factories acquired newer machines, which embodied the most recent innovations, and worked on the largest efficient scale, while British manufacturers, exposed to free trade, had to surrender a share of their own domestic market to foreign competition, while remaining locked out of many export markets. The paper industry was a microcosm of technological change and progress - Gary Magee has written its definitive history in Victorian times. No stone has been left unturned, yet it is a compelling read: personalities and processes are described vividly, but are also probed (coherently and clearly) with the tools of quantitative analysis. Avner Offer | |