Michael Perelman wrote:
I have just finished an interesting new book: Nasaw, David. 2007. Andrew
Carnegie
(New York: Penguin), which caused me a bit of embarrassment.
In Railroading Economics, I emphasized Andrew Carnegie's role in paying careful
attention to the production process of steel in contrast to they banker-like
perspective of the Morgan crew, which took over Carnegie Steel. This Nasaw's
story
is not entirely different, but the emphasis certainly is. Nasaw totally
explains
that Carnegie ignored any concern with the minutia of the production process,
but
merely demanded reductions in cost.
I'm not sure why you think this is an embarrassment. Carnegie Steel had three
basic steel-making plants before 1905, and Carnegie picked the people who ran
those mills. Managers like Charles Schwab and William Jones were technical
people
and they did pay careful attention to the production process. Carnegie looked to
shave the cost of a rail and people like Schwab and Jones found ways to do it.
After the formation of US Steel, shaving cost was not the focus of Judge Gary.
The most important cost for Carnegie was labor. He plowed back about 75% of the
company's earnings into reinvestment, often in labor saving technologies.
The company would install new machines even before the existing machines had
depreciated. But, much of this was in the blast furnace and basic steel segment
of
the business. The Union Iron Mills (where rolling into light shapes happened)
did
not experience the same changes until later--even the union lasted longer at the
Union Mills.
But even
more important was the crushing of labor, especially the Homestead strike, which
allowed him to increase the working day to 12 hours. This victory probably also
greased the skids for the acceptance of new technology.
I have floor plans of the furnace department before and after the strike which
confirm your speculation. But remember, Carnegie purchased the Homestead mill;
he
did not build it as he did the Edgar Thomson Works, in Braddock. And Homestead
was
always an open-hearth mill (rolling plate and beams), and mass-production
technology came to the open-hearth process later than it did to the Bessemer
process (Braddock and Duquesne were Bessemer plants and rolled rails).
A key factor in the history of Homestead is that Carnegie Steel refused to sell
specialized products (which was common in 1890). Instead, Carnegie offered a few
standard beams and told building engineers that they should pick from these
choices (or buy elsewhere). This way the mill did not need to make customized
rolls and change them for each order. Instead they ran the same rolls all day
long.
I have discussed mass-production steel-making in:
"From Batch to Flow: Production Technology and Work-Force Skills in the Steel
Industry, 1880-1920," _Technology_and_Culture_, Vol. 29, No. 4, Special Issue:
Labor History and the History of Technology. (Oct., 1988), pp. 808-838.
The book is a magnificent production. Nasaw had access to material that nobody
else
did.
