CHARLES MORRIS, an American lawyer and business writer, has written 12 books on subjects ranging from financial crises to the future of Western technology and tycoons, such as J.P. Morgan, Warren Buffett, and John Rockefeller. His notable books include “The Trillion Dollar Meltdown” (2008) and “The Coming Global Boom” (1990). His latest book, “The Dawn of Innovation”, is about America's first industrial revolution. He is also a fellow of the Century Foundation, a public-policy think tank.



What lessons can America take from its first industrial revolution?



I thought I knew about the American industrial revolution until I started researching it. The emphasis had always been on machine technology, particularly gun manufacturing.



In 1851, the Great Exhibition was held in Britain, where it was found that we could mass-produce guns. The small-arms industry had previously worked with 48 different skilled trades making a gun. The military would put out orders to each of those trades and they would take all the parts to a fitter. It was felt that it wasn’t possible to mass-produce lock parts. But the American armouries proved you could do it. In 1763 the French gave America 30,000 muskets based on the Charleville pattern and that was the gun we used in the revolutionary war and the war of 1812. It then became the 1795 Springfield rifle. The gun that the Unionists used in the civil war was the same. The military made one gun for a century—they got good at it.



The mass-produced interchangeable part became part of American legend. In part this was because people, like the inventor Eli Whitney, claimed it was what they had done. But they really hadn’t—they’d finished a lot of them by hand. That didn’t become clear until the 1970s. Bob Gordon, who used to be head of metallurgy at Yale, took microscopes to all those machine parts and saw they were made by hand. You could see the file marks. They were hand-finished.



So gun production, in fact, didn’t herald the start of the industrial revolution?



The process did give rise to some important technology, but in terms of impact on the growth of the economy it was tiny. The real secret of American growth was its mass-produced natural goods such as meat, grain, oil and timber. We had portable steam-turbine sawmills that could saw logs into rough planks as the trees came down. Everything that we did became mass-produced.



Suggested reading: “The Domestic Manners of the Americans” by Frances Trollope (1832)



Similar to Britain?



Britain had one marvellous industry: cotton and textiles. But in Britain, cotton spinning and weaving were entirely separate. In America, Francis Lowell introduced a single flow between the looms and the spinning machines. Previously, you had to load each individual thread on to the loom to weave the cotton, but Lowell invented a machine that did that without human intervention. Even though we had stolen most of the British technology, we had more of a mass-production, flow-through concept. This was then applied to everything else.



Suggested reading: “A Revolution in Time” by David Landes (1983)



For example?



A lot of the natural-resource growth took place in and around Cincinnati, because of the pork industry where the ship cargo assembly line was developed. Procter & Gamble was founded there in the 1840s as a lard processor, mass-producing soap, tallow and candles, all through a mechanised system.



The economy grew as infrastructure enabled larger networks. By the time of the revolutionary war and the war of 1812 the advanced economies were an eastern seaboard phenomenon. Growth got to the centre of Massachusetts because we had excellent river systems. In 1820, Cornelius Vanderbilt had a fleet of over twenty 30ft (9 metre)-long sailboats and could fill his boats with shad to sell in New York.



Things radically changed for New England when the Erie canal opened in 1825—all of a sudden Massachusetts farmers couldn’t sell grain because New York farmers sold it more cheaply. They had to look for other high value things they could sell, such as hogs and hay. Then, by 1830, New York farmers were put in jeopardy by farms in Ohio and Illinois. So the Erie and other copycat canals created a big jump in economic activity.



On the other side of the Appalachian mountains the most important innovation was the steam boat. The western steam boat had to be flat and light, to run on shallow waters, and be able to carry a lot of freight. By 1840 all the cities on rivers had become knitted into a large integrated economy.



So steam was driving this new economy?



Yes. They had not only the steam boat, but they had large foundries for engine-making and these were using high-pressured steam engines. These were the engines they used for the portable sawmills. The only problem was that they frequently exploded. But they felt this was a small enough price to pay for rapid progress. We still sort of think that way.



Suggested reading: “A History of Industrial Power in the United States: 1780-1930” by Louis Hunter (1979)



But now, something has gone horribly wrong, has it not?



Growth followed infrastructure and we’ve certainly let our infrastructure lapse, but America is now on the edge of a major energy-producing boom and it is right where the industry that drove growth in the 19th century was: the Midwest. We are now producing shale gas. The output, in terms of energy, will soon be as great as Saudi Arabia’s oil output is right now. In the 2020s all of North America will be energy independent and America will probably be a net exporter. We are seeing steel and chemical companies moving back from overseas. It’s going to be very interesting.



A new industrial revolution based on a similar model?



I think so. There are things we have to do to make sure it’s managed right. All the environmental stuff is eminently manageable. But modern economies flourish with good infrastructure. You impose a hobble on growth if you let it lag, and we’ve let it lag.



It’s not going to happen overnight but one reasonable forecast shows a million manufacturing-related jobs out of the gas boom by 2017. That’s $350 billion of economic activity driven by this, a 2% addition to annual GDP. I think there’s a good case for optimism.



“The Dawn of Innovation: The First American Industrial Revolution”. By Charles Morris. PublicAffairs; 384 pages; $28.99 and £19.99

