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We should celebrate the decline of large scale manufacturing

One of the most important and unremarked effects of the revolution in information technology is not to do with information services at all. It is the transformation of manufacturing. After a period of two or three hundred years in which manufacturing consolidated into larger and larger enterprises, technology is restoring opportunities for the lone craftsman making things at home.

Before powered machinery, few enterprises achieved much scale. Those that did were often owned by local rulers like the Ptolemies’ perfume factories or Roman aristocrats wanting to put their slaves to use by making pottery out of the clay on their estates. To build a large business as a private entrepreneur was much harder. In the freest market of all in ancient times, Athens between 500 and 300 BC, there were only a few ways you could do it.

One was to be first in to a restricted site; tanneries were only allowed to operate in certain districts and the people who first took up sites in the permitted districts could expand without fear of competitors entering. Tannery owners had large workplaces and made a lot of money. You could achieve the same thing by being first to set up an ore processing facility near a mining site or an oil press near a group of farms. As long as your prices were reasonable, no one would try to challenge you.

Without these preemptive opportunities, to build a large business you have to win more volume than your competitors; this means having an advantage they cannot match, otherwise they can stop you gaining market share. For a competitive advantage to be of value, it must be manifested in one of the elements of return on capital: revenues (price), costs, or capital employed. With no industrial machinery, and relying on for much of the work on slaves whose capital cost reflected their skills, it was not possible to get an advantage in costs or in capital utilization. To compete successfully, you had to differentiate your product. In some products this was impossible: no one really cared about the quality of basic cooking pots and kitchen plates. In others, like customized jewellery, you might make the best product in Athens but if your customers associated the work with you as an individual, you could make a lot of money but could not expand your business by using other fabricators. To grow, it was necessary to have a product whose quality mattered but had to be made by a team of people so the market could not point to individual craftsmen as being the ones to buy from. Shields are a fine example; each required a team of eight to manufacture and Athens’ largest manufacturing operation was a shield factory with 120 slaves.

Greece-0103 by Dennis Jarvis. CC BY-SA 2.0. via Flickr

The existence of this and several other large factories in classical Athens did not mean that most manufacturing was done there. For a huge range of other products, which made up most of consumption like clothes, shoes, simple metalwork and carpentry, there was no basis for differentiation. Almost all Athenian citizen households would have made their own clothes and many would have made simple wooden, ceramic or metal objects for their own use and sometimes to exchange with neighbours and sell in the Agora. Some would develop a high degree of skill making complex products but most made simple undifferentiated items. Using their own hands (and a slave or two) and with no competitors advantaged over any others, they could work or not as they pleased, confident of receiving the standard (not very high) price for their wares whenever it suited them to produce something. They had a rich and varied life; by reducing their expenditure and bringing in some income through making simple household products, they found the time to attend religious festivals and plays, serve in the army or navy at short notice if there was a war on, and (with some compensation for loss of earnings), get involved in civic affairs like attending the democratic assembly and serving on juries. The flexibility offered by casual manufacturing underpinned the practice of democracy and Athens’ wonderful achievements in architecture, drama, art, and philosophy.

The Industrial Revolution changed all this by creating new forms of advantage based upon operating costs and capital investment. Starting in the eighteenth century, the lower costs offered by mechanization, mass production and shared information have driven production into fewer and larger units and the amateur craftsman in the family workshop has been squeezed almost out of existence.

Pottery is an excellent example. Most potteries in Athens were small; one potter could shape enough pieces to fill a kiln in a day and only needed two or three people to help prepare the clay and manage the firing. No one seems to have had two kilns; the risks were too great. If the first kiln was successful in making highly decorated vases that sold on the basis of the artist’s skills, you couldn’t assume that an additional artist would be equally in demand. And if the product was basic kitchenware, a new kiln would have to cut price to win business and competitors were sure to retaliate. Pottery was a naturally fragmented industry until powered machinery, vastly improved temperature control and new glazing and drying technologies enabled high quality pieces to be mass produced at cost much lower than could be achieved without significant capital investment and scale. Craft potters continue to exist, though few make much of a living from their work, and the vast majority of the business became controlled by major companies operating large factories. Similar changes consolidated industries ranging from shoe-making to metal work and furniture.

From a social point of view, manufacturing had ceased to be an opportunity for modestly skilled craftsmen to supplement their living through casual engagement, mixing it with a range of other useful or interesting activities. By the twentieth century, pretty much the only way to make a living manufacturing things was in full-time employment, and those involved had little time for any other activities, let alone the sort of things that made Athens great.

But a remarkable thing seems to be happening! Just as technology transformed the economics of manufacturing in a way that encouraged consolidation, so new technology is making fragmented manufacturing viable again by removing or minimizing the benefits of scale. There is no need for in-house knowledge or apprenticeships: online courses range from a few hours to many months in any handicraft you can name. Programmable micro controllers, desktop CNC milling and routing and 3D printing make it easier and cheaper to make things to your own designs. Raw materials, even specialized ones, can be sourced on the internet, and to any required degree of pre-processing. Crowdfunding sites like Indiegogo and Kickstarter can help with finance. Makers’ Row, Ali Baba, and similar ventures enable makers to find customers without heavy advertising expenditure. Consumer preferences for non-mass produced goods and the maker’s satisfaction from autonomy and the productive exercise of skills reinforce the trend. Hence the increasing popularity of ever more sophisticated forms of DIY and of the maker movement: MAKE magazine has a paid circulation of over 100,000 growing fast and 120,000 people attended the “Maker Faire” in California in 2012.

Competitive equality between the home craftsman and the large factory is being restored. Can we use the opportunities it offers to create a great society in the way the Athenians did?

Featured Image: Sarcophagus. By dynamosquito. CC BY-SA 2.0. via Flickr.

Recent Comments

  1. Jeff Moad

    Interesting narrative. Unfortunately, the last bit isn’t true. There is no proof that the DIY/Maker movements in any way substitute for or threaten high-volume industrial manufacturing output. (The number of people attending trade shows proves nothing.) New CNC and 3D technologies certainly play into a trend toward distributed production (along with the recognition of supply chain risk and rising customer expectations.) But competition from the DIY/Maker movement plays no role in this today, nor will it in the near future, This is a pretty story. But it is a fantasy.

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