Fred Harrison - The Power In The Land

Even less plausible is Halévy’s main explanation, that manufacturers would not invest in the power loom because existing capital equipment had not been exhausted. In fact, it is difficult to understand how he could have advanced this argument at all. After describing how the cotton manufacturers had readily adopted machines for spinning the yarn, he continued:

For the weavers, however, the change involved the complete sacrifice of the old plant, in which much capital had been sunk. It was surely but natural that the forces of resistance should be much stronger in this department and that the critical period of change should be far longer and should entail far greater suffering. 10

This suggests that Halévy did not understand the structure of the cotton industry at that time, yet on the next page he gave an adequate description of it. The yarn was spun in the factories and then bought by merchants who took it to the weavers to turn into cloth at agreed rates; the cloth was then sold back to the manufacturers for finishing (e.g., dyeing). The merchants had no large fixed capital equipment at risk, and there was no question of the weavers themselves having the power to resist technological innovation in order to preserve the capital value of the looms which they owned. Those looms, while precious to the weavers, were not as vulnerable as Halévy suggests; and their owners wielded no influence over the manufacturer, merchant or Parliament such that they could deter new capital formation by fair means or foul. Halévy must have intuitively understood this, for he fell back on the ‘low wages’ thesis which he believed he had rejected. 11 But he reversed the argument; instead of the machines beating down wages, and thereby making fresh capital formation unattractive, he concluded that the weavers anticipated the mechanical threat to their traditional, independent weaving process by accepting lower wages and thereby removing the incentive to use machinery. 12 This assumes that the slum-dwelling weavers had at some early stage enjoyed reasonably high wages which they could then afford to reduce, an untenable hypothesis according to the historical evidence.

The point at which the power loom would have been introduced was in the factory, alongside the established cotton spinning processes. The factory owners had no weaving machines threatened with redundancy; but they did have an incentive to adopt the power loom, to use up some of the surplus yarn which they were now producing. And credit from banks was available for the manufacturers in the biggest growth industry in the leading trade nation in the world.

On top of all this, there was another sound reason for a quick transformation to mechanical weaving. The price of cotton goods slid fast during the first two decades of the 19th century. Profits were squeezed, but could have been raised by the use of the new machines, which would have cut the unit costs of producing the final article. The power loom, as Mr Brougham pointed out, ‘saves three labourers in four’. And inventors like Cartwright were not bashful about publicising the efficiency of their mechanical process compared with the traditional way of doing things by hand. Why, then, was investment in the power loom avoided during the formative decades of an industrial society in which innovation and enterprise constituted the motivating ethos ?

The answers can be found in the evidence left by William Radcliffe, who chronicled the affairs of the cotton industry for the benefit of future historians. Radcliffe presents us with a paradox. He earned a good living out of trading, yet he was the first industrialist in the history of modern society to systematically campaign for restrictions on trade. From 1800 onwards he fought vigorously to turn public sentiment away from free international trade which, due largely to the popularity of The Wealth of Nations, swayed the parliamentarians who formulated national policy. Radcliffe’s campaign was tragic not because he failed, but because it was misconceived. He failed to correctly identify his enemy, the landowner; so much so, that he actually ended up by siding with them and supporting their cause. In doing so, he unwittingly multiplied the problems which confronted the industry to which he devoted a lifetimes’s work.

Radcliffe believed that Britain should stop exporting her surplus yarn to European and North American countries, where weavers turned it into cloth which then competed with British cloth in the world’s markets. 13 Mercilessly he attacked the Lancashire cotton manufacturers who indulged in what he called the ‘vile traffic’ which was — he believed — responsible for impoverishing both employers and workers. Convinced that he had isolated the true cause of the industry’s problems, he roundly attacked ‘the curse of modern political economists, and liberal (meaning retrograde) march of mind’.

So it came about that, by one of those curious twists of history, the first major critique of free international trade came from a man who was a leading capitalist and benefactor of laissez faire ! Radcliffe was not pursuing this policy out of self-interest; he was not attempting to line his pockets with the profits arising from oligopolistic control over markets. He was responding to an industry-wide problem. His misdiagnosis of that problem, and the solution which appeared to commend itself, was to be the first of many more similar errors perpetrated as the industrial system evolved.

William Radcliffe was a substantial entrepreneur in his own right, but he did not fit the stereotyped image beloved by socialist critics of capitalism. He was neither inhumane towards his employees, nor constantly grasping after profits, nor self-centred to the exclusion of the interests of others. He was born on a small farm in Lancashire, where he learnt the cotton weaving trade from his father, who was a small landowner. So industrious was he that he expanded his business to the point where he was employing 1,000 weavers scattered over three counties. In the record he left the industry, he referred to the capital which he had managed to save and he confidently issued a challenge:

I can truly say that it had not been got by ‘grinding the face of the poor;’ for my greatest pride was to see them comfortable; and in every transaction with them, my equals and superiors, ‘I did by each, as I would they should have done to me,’ and I challenge enquiry in the circle I moved in, that no fact can be found to contradict what I have said; and I give the same challenge as to any deviation from this principle to the present day. 14

From his home in the small town of Mellor he undertook public-spirited works, such as improving the roads; his reputation grew and he was appointed to three district commissions and was destined for the magistrate’s bench. But at the age of 40 he uprooted his family and moved to Stockport. The new factory system proved too strong to resist.

Radcliffe quickly established a sound business just 14 miles from Manchester, the mecca of the cotton industry. But he soon realised that cotton spinning was going to pose problems. Rather than export the industry’s surplus yarn, why not develop a new process under one roof which would ensure that the yarn was woven as fast as it was spun ? He talked the problem over with his partner in 1800, but it was not until the following summer that he worked out his finances and decided to act. Risking his own capital, he bought premises from Messrs. Olknow and Arkwright and set about constructing a new system with the aid of a handpicked team of workers. Radcliffe had confidence in his eventual success. He had a wager with his partner that he would prove successful within two years: he won the bet.

Radcliffe built on Cartwright’s power loom inventions, and in 1803-4 he patented a dressing machine. The business soon yielded him a profit of £ 100 a week, and money began to roll in from the licences accorded under his patent rights. But there was no question of his trying to steal a march over his competitors in the industry, for in 1811 he set up a club with the aim of diffusing knowledge about the latest mechanical methods of cloth-making. It was one of his proud boasts that he employed more skilled men than he needed, so that some of them could go off to other factories to help manufacturers to master the latest techniques.