I should open my remarks by noting that this is not one of those highly monographic papers based on intensive detailed archival research on a highly specialized topic. Instead, what I intend to do is offer a broad-sweep analysis of a hegemonic fashion of thinking among many engineers and financiers in the twentieth century, that of industrial rationalization. My focus will be broadly upon the US and France, with the detailed research focused on France. To enunciate my position, albeit in an overstated fashion: the project of rationalization in the twentieth century was vastly oversold, as reflected in the often dubious results of such efforts. Its introduction in many venues had less to do with the ostensible benefits flowing to the firm or to society at large than with agendas for gaining power within the firm and across the economy by a new social grouping of private sector bureaucrats and modernist engineers.

My point here is not just that in many instances rationalization was a big mistake--not least from labour's perspective, of course--but that the way to understand the course of rationalization is to look as much to cultural and social history conceptions as to traditional economic, business, and technological history approaches. In many instances, talk of rationalization was a rhetoric of power that had as its ostensible objective the betterment of the firm, but subtextually was really about who would have power within the firm. In a broader sense, rationalization was also about redefining specific national identities and cultures in ways that reconfigured the collective memory and vision of many a polity.

Let us first define rationalization. In a narrow sense, the term refers to a process, sharply outlined by Frederick Taylor, Henri Fayol, Frank Gilbreth, and others whose objective was to analyze the production process in a "scientific" fashion in order to reshape production in a more technically (and by implication economically) efficient fashion. In a broader yet perhaps less precise sense, rationalization can also be seen to encompass its historical precedents in the American System [of interchangeable parts] and its successors in systems theory and process control. One of the latest renditions of this rather brutalist approach is high-speed management. Before proceeding further we need to lay open at least two aspects of rationalization in and of itself, the ostensible rationale for it and its "necessary" consequences.

The rationalization movement at the beginning of this century was part of a larger late-Victorian trend to "scientize" society, and it was culturally connected to things like marginalist economics[1] and scientific racism. Implicit in the scientistic ideology was an unquestioned Enlightenment sense that the world was objectively knowable through a detached-observer analysis, and that it rested upon a Darwinian assumption that there was but one great trend line of biological, social, and economic evolution. For these neo-Darwinians, the configuration of the environment external to the entity under examination and control had to be taken as a given, acting through a set of knowable laws upon it. With presumptions of parsimony (one might say, reductionism) and linearity, they argued that there was but one best way to solve any technical problem. In the realm of production, the immutable laws were those of scale economies and, due to problems of complexity, the need for control by experts.

This combination, reiterated incessantly by Alfred Chandler,[2] "demanded" (as it were) a new managerial elite to oversee the evolution of the production process and of the firm itself. When properly managed, bigger was better, and by sheer managerial skill, the new elite could defy Ricardo's dictum of diminishing marginal returns to scale. Efficiency-oriented expertise could discover an efficiency greater than the inefficiency engendered by the new bureaucracy overhanging the production process. In addition, experts would exercise far greater control over an obstreperous labour force.[3] The avatars of rationalization tipped their hats to their soi-disant predecessors of the Industrial Revolution, who, it was assumed, demonstrated the vast societal benefits of huge satanic mills over quaint artisanal workshops.

I shall allege that the analyses offered by the experts were at the least philosophically and historically rife with blind spots, and worse, rather socially and politically tendentious. Post-modernists have borrowed from the Heidiggerian tradition in order to warn us that what is claimed to be "out there" and objectively knowable might well be all in our heads, that the process of framing the issue predetermines its outcome. A much less solipsistic process occurred among the rationalizers, I believe: the laws of economies of scale and science-is-better were demonstrated in a few industries, especially armaments and automobile production, but the ways of perceiving those laws were applied to more operationally subtle arenas, from the back offices of banks and insurance companies to home kitchens. In essence, rationalization became a managerial fashion, a veritable craze.[4]

Yet as students of the history of fashion have told us, sartorial choices and controls are not mere fluff, lacking any deeper significance.[5] The new managers and their engineering allies supported the rationalization craze within industry because it clearly gave them an upper hand over their more traditional rivals, the craftspeople and the owners. For example, in an French engineering journal's how-to discussion of rationalization techniques on the shop floor, a caption below a workflow diagram read, "With the use of this method, the managerial power of foremen and craftsmen is reduced to zero."[6] Given the deference of the new managers toward their superiors, evidence of their targeting of owners as a class enemy is less clear, though sometimes visible.[7]

As the capitalization of enterprises mushroomed during the second industrial revolution (the period from 1875 to 1914, characterized by the emergence of large, capital-intensive and science-based industries) a quiet yet trenchant struggle for power thus commenced. The new industrial elite, supported in the US by Progressive ideology, promised order, efficiency, and progress in return for concessions of power from the owners. labour was offered a cut of the action, a share of the benefits of greater efficiency expressed in wide access to the world of consumer goods via better pay and lower prices.[8] Indeed, contrary to claims by Coriat, Noble, and Braverman, among others, labour was more often rhetorically seduced into consent than beaten or rationalized into submission.[9]

labour did resist on occasion, but partners or private owners of firms who brought in the new managers often did so at about the time they "went public," reaping massive windfalls from initial public offerings and quietly retiring to sedate luxury or philanthropy.[10] But why would such large groups of possible opponents to the modernists' agenda present so little resistance? The answer partly lies in the prospective narratives offered by the modernizers. They offered a plausible story about a glittery future and the means to get there, a credible combination of ends and means. Rhetorically speaking, the future-history offered by the modernists squared nicely with the heroic-story structure that had been implicit in western tales for centuries, from eschatological deontology to Marxism. It was linear, progress-centered, and redemptive, fitting nicely with both millennial visions and Darwinian theories of evolution--Pilgrim's Progress meets "The Tortoise and the Hare." Better still, it rested not overtly on fiction or myth, but on the cultural predisposition toward "objective" science. Against the rhetorical onslaught from modernizers and a panoply of pundits (at least in the US--the talking heads in France were far more divided), skilled craftspeople and owners usually only offered nostalgic nostrums about the values of tradition or class solidarity. Interestingly, only a few of them managed to use the analytical tools of the modernists to develop a critique of the emerging hegemony. As we shall see below, the contrarians who did not rest their case on tradition, sound eerily like contemporary critics of megafirms and industrial rigidities. But first, we need to look at the popularized interpretation of history supporting the modernist agenda, a framework that posited rationalization as another quantum leap in human progress, the obvious and necessary successor to the Industrial Revolution.

For this facet of my presentation I rest in particular on the invaluable work of Jonathan Zeitlin and Maxine Berg, with a tip of the hat to Judith McGaw.[11] Contrary to the magisterial pronouncements of David Landes,[12] industrialization in the North Atlantic basin was far from promethean or heroic. On the contrary, the economic benefits of a shift of production to centralized, capital- and technology-intensive facilities were far from obvious in the two decades on either side of 1810. (Outside of the US and Britain, I should add, the social advantages of wealth were less obvious as well: the new fortune holders, les nouveaux riches, only served to demonstrate that being bourgeois didn't mean one had "class"[13]). According to Berg, the real industrial revolution occured not in the massive mills and factories--which, like steam power, were more an anomaly than the norm--but in thousands of small shops adopting small-scale hand technologies.[14] The jigs and gauges Hounshell discusses come to mind here.[15] Dickens focused upon the belching powerhouses of the textile plants, but he didn't often see (as Zola sometimes did) the hand-operated punch-press used to stamp out belt buckles or the simple new blacksmithing technologies for nailmaking.[16] In addition, the makers of the real industrial revolution were not the plucky mechanics so adored in many museum displays, but a motley basket of skilled craftsmen and overworked woman and children. The added economic efficiency evidenced in the Industrial Revolution was quite often the result of a better organizing of production executed by dismally-paid workers.

In the masterful article, "Historical Alternatives to Mass Production...,"[17] Zeitlin and Charles Sabel point out that the predominance of small-scale, rudimentary technology firms persevered neither by chance nor by a traditional allegiance to the small artisanal enterprise. With an overt eye to the contemporary crisis of production, Zeitlin and Sabel note that the perils of a shift toward centralized production were considerable: the immobilization of large blocks of capital (with the requisite interest expenses), the necessity to conquer and maintain large markets, organizational inflexibility and bureaucratization, and the problems associated with a large, rooted labour force in one location.[18] Most importantly, the downside risks faced by a large facility were disproportionately larger than those faced by a more "federated" or out-sourced, low-tech structure. In the unstable markets of the nineteenth century, a minor crisis could destroy myriad colossi, while smaller, less centralized and lower-tech firms had less financial exposure and could spread risks among all participants in a sector. We should also note that all of these problems blossomed with the second industrial revolution and the rationalization movement, exacerbated by the consummate inability of time-and-motion experts to perceive the more subtle aspects of skill.[19] On the other side, the adaptive flexibility of small enterprises--not least of which included the peasantry--eluded the gaze of experts and policymakers alike.[20]

The misperceptions of the public largely abetted the modernists' juggernaut in the second and third decade of this century. In the perception of many, the First World War was won by "technology," that is, by the rationalized and highly mobilized industrial apparatus of the victor nations. Few were willing to admit that nobody, and certainly not some reified technology, won the war: the Germans lost simply because they ran out of young men first. The industrial technologies deployed by the belligerants only levelled the killing field and assured a more prolific production of corpses on all sides. Yet the accurate reports of vastly productive armaments plants operated by unskilled workers (in France, about one-third women and one-third colonial people) briefly served to galvanize public and expert opinion that rationalization was the wave of the future.[21]

The massive military manufactories were, however, uniquely suited to rationalization. They had to produce hundreds of millions of identical rifle cartridges, hundreds of millions of identical artillery shells, and tens of millions of uniforms, cartridge belts, canteens, and all of the assorted paraphernalia of mass warfare. Special-purpose machine tools were deployed to turn the heads of artillery shells, punch out the casings, and the like, and they were particularly cost-effective, it appears, as were their analogues in other war industries.[22] There could have been no better activity than war production to demonstrate the peculiar advantages of rationalization techniques.

Not insignificantly, various governments gave what they called "inducements" for entrepreneurs to enter into rationalized war production.[23] They usually offered at the minimum guaranteed demand, loan guarantees for start-up money, and technical assistance. The govenments often paid cash up front for private individuals to build plants to manufacture under contract for the military. Indeed, in France the shortage of 75mm artillery shells in the winter of 1914-15 was considered so grave that it is safe to say that virtually any metalworking job shop could then get an arms contract, and at least one young man in his 20s had a major production facility built for him at the government's expense on the strength of his running both a marginal automobile shop and a machine-tool facility--along with holding a degree from the Ecole Polytechnique. The man was André Citroën, and the facility became the usine Javel, the core plant in his postwar firm. Suffice it to say, rationalization was a promising endeavour when the government covered the expenses and the downside risks, and assured labour discipline.[24] Whether business' enthusiasm for rationalization would outlast the conflict was another issue.

Yet the widely-praised success of rationalization during the Great War is not so impressive upon a closer look. Taylorism assured that the actual production tasks were completed very rapidly, yet material tended to move in very stopgap fashion through the plants. On the shop floor, veritable model workers produced frantically, ensconced among large bins of pre-processed and finished parts. Conveyors attached to machines moved sub-assemblies into the bins and armies of third-world workers were employed endlessly pushing around wheeled bins of semi-finished goods.[25] Mastering the complicated flows in a plant was simply too daunting a task and as a consequence, expenses for goods-in-production and manual labour skyrocketed. Entrepreneurs had neither an accurate analysis of per-unit production costs, nor did they care particularly, given the contractual terms with the state. On the positive side, the goods themselves seem to have been of consistent--which is not to say, superb--quality, and the reject rate was not unduly high, with a few notable exceptions.[26]

French entrepreneurs were aware of the realities behind the "success" of war production and in the '20s they proved to be reluctant to pursue rationalization on their own. In addition, those who did rationalize usually did it using a weak rather than a strong programme. Aimée Moutet has written of a rationalisation à la française to describe an odd mix of craft activity next to assembly lines, and that nicely describes Renault, a highly successful firm in the interwar years.[27] The two firms I know best that adopted the strong program, Thomson and Citroën, had very divergent experiences: Thomson remained patent and process-design dependent upon General Electric and enjoyed exclusive production rights and markets in parts of Europe, so it prospered, while Citroën went bust in 1935, selling out to Michelin. Below his public rhetoric about being the French counterpart to Henry Ford, André Citroën just wasn't getting it right.[28] In a parallel fashion, the massive runs of Model Ts deceptively "proved" the efficacy of Ford's approach itself. As Hounshell notes, the very rigidity of specialized mass production, uniquely adapted to long runs of standardized products, made incremental change impossible. Ford teetered on the brink in its changeover in the late 1920s; Citroën folded with its shift in the mid-1930s. These disasters foreshadowed those in the global steel, electronics, and heavy equipment industries in the 1980s.

André Siegfried, France's pre-eminent pundit in the middle decades of this century, perhaps best expressed the sources of entrepreneurial reluctance in the interwar years.[29] His second thoughts about the applicability of rationalization in France prefigure the analysis of Zeitlin about the Industrial Revolution. After a tour in the US in mid-1929, Siegfried noted that French businessmen were reluctant to cede power to professional managers, that mass production evoked fears of inventory overhangs, and that French workers would resist. He also pointed out that (as Hounshell noted with the crisis at Ford) highly rationalized industry was also quite fragile and brittle, rather, I would say, more the affair of gamblers than that of careful entrepreneurs. Finally, he sang the chorus of the French public writ large in expressing his view that quality goods could simply not be mass produced. Outside of the specialized press tai(y?)lored for experts, and especially in the more populist or conservative dailies, these concerns were often echoed, usually with a sneer toward the ranks of an upstart nouveau riche.

I believe, however, that the different experiences of rationalization in the US and France go deeper than those noted by Siegfried. Mass production and mass consumption in the US, replete with the consequent mass culture, were forces that served to unify a nation of white immigrants--assuming, of course, the exclusion of people of colour from the polity. Purchasing a bar of Ivory soap made a Serbian wife an American, while working in a highly productive mill in Pittsburgh did the same for her Croat husband.[30] Fordism was indeed a new form of Americanism, culturally appropriate for a diverse polity in a centralized capitalist economy. Rationalizing industrialists could easily be lionized in newsreels as the makers of a shiny, new nation. Only a wilful exile like F. Scott Fitzgerald could gloat at seeing the mighty fall.

By contrast, in France, explicit arguments of why not to rationalize needn't have rested solely on analysis of the economic drawbacks or of perceptions of consumer tastes. (I say perceptions of tastes because most family incomes were too low to buy very much). Under reactionary-sounding rhetoric of a "balanced economy" made up of enterprises of all sizes and shapes, France's economy enjoyed considerable growth and resilience in the 1920s. Risks were indeed implicitly pooled through complicated social and business subcontractual relations. Repression and paternalist control over a fragmented working class was more effective in small firms. Better still, "traditional" firms would not have to face the high expenses and extended plant down-times associated with a shift to the new methods.[31] Finally, social relations within firms would not be destabilized by the introduction of an entirely new (and aggressive) social stratum.

Yet above it all, rationalization meant Americanization, and merci, one was perfectly happy to be French and le citoyen could easily point to the virtues of his choices. After inflation subsided in 1920-21, the economy grew robustly to a very great extent without resorting to new production methods. The standard of living did rise a bit, and the public infrastructure grew before the eyes of the citizenry. Despite a demographic hole of close to one-quarter of all men in the 20- to 30-year age bracket, growth came from a brace of industries largely by introducing modern methods here and there, and by doing what had long been done, better. In the end and as I shall argue below, it is ironic that the solutions offered by the present prophets of production eerily echo the French practices of the 1920s.

The contrast between the rationalization experiences in the two countries was most obvious with the onset of the Depression. As the US economy with its small number of industrial behemoths took off in the 'teens and shattered like glass in 1930, the French economy expanded less robustly but steadily after WW1 and slowly fell into malaise, sliding to its nadir in 1934. The latter's ability to withstand the early years of the crisis was often cited as a virtue of not having rationalized, as rationalization was cited as a cause of the crisis.

But the rhetoric of blame should alert us that something else was afoot; as Madeleine Akrich has noted, following the arrows of blame tells more about the accuser than the purported culprit.[32] In the US, crusty old plutocrats and opponents of modernization were targeted by New Dealers as the source of economic ills, while in France, Socialists, progressive Catholics, and the traditional Right accused industrial rationalizers.[33] If we reverse the arrows of blame we find that in one locale the Depression was caused by too little rationalization, in the other, by too much. Significantly, when the Left came to power in 1936 in France, its agenda, unlike that of the New Deal, eschewed most efforts at facilitating rationalization either at the level of the firm or across the economy as a whole.

Yet by 1938, the din of accusations and of affirmations of France's industrial virtues took on the obstreperous tone that only comes from those trying to convince themselves of their own veracity. Due in part to facing an aggressive, dangerous neighbour and in part to recognizing that an industrial system that was slow to decline was painfully slow to recover, many industrial workers frantically supported increased production and productivity.[34] Technocrats were quietly welcomed into technical and industrial ministries even while the press concerned itself more with their party affiliation than their industrial perspectives. Finally, the disaster of June 1940 delivered a coup de grâce to an eroding identity. Traditional France with its prediliction for balanced growth and an appropriate, paced introduction of new technology, was dead. If a new France were to arise, it would be technocratic and hyper-rationalized, going the Americans one better at rationalizing not only the micro-level of the firm, but at the macro-level of the national economy as well.

France industrially "americanized" in the decades after the Second World War (albeit with its own style of state intervention in the economy) and with the US and the rest of G7 it shared in the massive economic boom. The wisdom of industrial rationalization seemed to be conclusively proven by 1970. Economies expanded, cities burgeoned, corporate offices oversaw vast, centralized firms, and a proud professional class moved to the suburbs.[35] The hub-and-spoke configuration of residences and workplaces defined an industrial order based on vertically-integrated, capital-intensive industrial firms. The industrial world took on a sameness that seemed to be imposed by industrial technology itself, not the specific approach to industry that was the legacy of an earlier generation.

The rationalized, centralized system creaked into a near-zero growth rate after 1970, with incomes stagnating for most citizens after 1975. Blaming Arabs for high energy costs failed in the 1980s and Detroit, the proud citadel of rationalized industry, became a hulk of Art Deco office buildings with old newspapers blowing through them.[36] Unable to turn mid-century technologies--those with the tastes for centralization and strict hierarchy inscribed into their very designs--into reusable assets, industrial societies simply abandoned them, along with the infrastructures of schools, homes, and entire cities were. The age of rationalized industry in the 1920s sense was over, replaced (if we believe today's talking heads) by horizontal economic relationships, outsourcing, flexibility, and electronic cottage industry. The commandist, military model of rationalized management was supplanted by the coordinative role of therapists and networkers. King of Prussia, Orange County, and Tyson's Corners supplanted Detroit, Duluth, and Dubuque, Lawrence, Lackawanna, and Ludington.

In the end rationalization and modernization were other names for the building of national cultures under the rubric of technical prowess and material plenty. It is perhaps not coincidental that in the US, where we recognize that the rationalization epoch is over, we face a crisis of collective identity, whereas in France, where the cult of things nuclear and rational is still waxing, national identity remains strong.[37] As the modernist nation-state declines, so does the predominance of the industrially-based notion of rationalization. The engineers were major proponents and beneficiaries of rationalization, but their preoccupation with framing questions in technical ways left the path to power open to the deal-makers and financiers, to global taking heads, and to the networkers. Occasionally windows will open for the dinosaurs of centralized production and the Bill Gateses will enter,[38] but they too will soon slam shut. As we enter a new age of decentralized industry, one can only hope that we not insist, yet again, that there is but one way to configure contemporary culture.

Endnotes.