Charles R. Morris: An interview by Bob Morris

Posted on: December 17th, 2012 by bobmorris

A lawyer and former investment banker, Charles R. Morris has written twelve books and is a regular contributor to the Los Angeles Times, The Wall Street Journal, and The Atlantic Monthly. His published works include The Sages: Warren Buffett, George Soros, Paul Volcker, and the Maelstrom of Markets, The Trillion Dollar Meltdown, and The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy. His latest book, The Dawn of Innovation: The First American Industrial Revolution, was published by PublicAffairs (October, 2012).

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In recent years, there has been criticism, sometimes severe criticism of M.B.A. programs, even those offered by the most prestigious business schools. In your opinion, in which area is there the greatest need for immediate improvement? Any suggestions?

I’ve been among their critics.  Much of what I’ve seen in business schools is quite non-rigorous.  Anecdotal histories are stretched to illustrate favored slogans.  Evidence of their effectiveness is similarly anecdotal.  Business schools tend to focus on topics that are suitable to blackboards, so they overemphasize organization and finance.  Until very recently, they virtually ignored manufacturing.  I think of lot of the troubles of the 1970s and 1980s, and now more recently the 2000s can be traced pretty directly to the biases of the business schools.

When and why did you decide to write The Dawn of Innovation?

After I finished the Tycoons – on post-Civil War development – I realized how much I didn’t know about the first half of the century, even though there had obviously been an enormous amount of development, so I read about and thought about that for a couple of years before I decided I was ready for a book.

Were there any head-snapping revelations while writing it? Please explain.

Morris: My neck is too arthritic to snap around.  The big shift in my perspective that happened in the writing process, however, was the paramount importance of the “West” epitomized by Cincinnati.  The kind of precision manufacturing epitomized in the armories, while it was important, was only a small share of the economy until quite late in the century.  Large-scale natural resource development and processing was the name of the game.

Why do you frame the narrative as “an implicit competition between America and Great Britain”?  How so “implicit”?

It wasn’t openly talked about very much, in the sense that people said they wanted to beat GB at this or that, but there would however be sidelong comparisons frequently in press commentary.  And it was also pretty quickly obvious that no other countries were developing the kind of technological depth of industry as were the US and the UK.

What were the defining characteristics of the American system of manufacturing during the 1812-1860 period?

The drive to scale in almost every endeavor.  The British went very large scale in ship building and a few other industries.  Their steel plants were bigger and much more advanced than ours after the Civil War, but we had blown past them by the mid-80s.

During the Civil War years, the Republican Congress passed three major acts: Homestead, Land Grant College, and Transcontinental Railroad. Please explain the major significance of each. First, the Homestead Act

For just a few dollars registration, you got temporary possession of a good piece of land.  Live on it for five years, build a house, and farm it, and it was yours.  What a brilliant economic stimulus!

Next, the Land Grant College Act

This is the jewel of Republican reform.  It had not occurred to any other country to educate their farmers and workers.  When the British studied the reasons for American success in 1851, the consensus was that Americans workers were well educated.  So they didn’t oppose progress the way British workers did.

Finally, the Transcontinental Railroad Act

Morris: The first step in creating a continental common market.

In your opinion, why is the War of 1812 perhaps the least remembered of American wars?

Perhaps because it was fought in such a left-handed slapdash manner on both sides.

In fact, what should be remembered about it, given subsequent events?

I think it was the occasion of the final psychological break with Great Britain, in a way that had clearly not happened to that date, especially in New England and to som degree in the South.

Before tracking the path of American socioeconomic development, you examine the then current state in Great Britain, the “hyperpower” at that time and the only nation that that had reached the “heights” to which America aspired. 

For those who have not as yet read your brilliant book, what specifically were those “heights”?

They had developed essentially all of the enabling technologies that powered the 18th century industrial revolution; it was basically a purely British phenomenon for most of that period.

Here’s a follow-up question: In your opinion, why was Great Britain unable to sustain its socioeconomic supremacy?

By 18th century standards, they were the freest, most dynamic, most willing to challenge tradition and authority.  They had the highest wages and highest living standard, and probably the most engagement between the populace and the government of any country.  Then the United States took those same qualities to the nth degree, and the British were suddenly appeared stodgy and tradition-bound.

Given your response to the previous two questions, here’s another: To what extent did military capability play a role as significant developments occurred?

Military power tends to be a function of economic power, and the British Navy was the essential capability for establishing the imperial sway – which was attuned to furnish the raw materials for the British manufacturing ascendance.  So they were mutually reinforcing.

Which lessons can be learned from all this that are most relevant to the second decade of the 21st century? Please explain.

Times are so different. Don’t want to bloviate.  Will pass, though it’s a fair question.

I commend you on the exquisite eloquence of your chapter titles. Please explain the meaning and significance of Chapter Three’s, “The Giant as Adolescent” 

It came instantly to mind.  We were suddenly getting big, with burgeoning capabilities on all sides, but very clumsy, knew we were on some kind of ride, and things changing fast, but with very little idea of what was going on.

In Chapter Four, you discuss several major figures during the process by which the industrialization of arms developed: Eli Whitney (1765-1825), Simeon North (1765-1862), Thomas Blanchard, (1788-1864) and John Hall (1781-1841). In your opinion, which of their contributions proved most valuable during “the first American industrial revolution”? Please explain.

Whitney proved to be a competent manufacturer, but wasn’t an original inventor to any important degree.  Thomas Blanchard was a true genius: his stock making machine was the daddy of all the industrial profiling machinery, like the 1870s universal milling machine, that was the especial American contribution to machining technology.  By that time, the British conceded that machinery innovation had shifted to America.

In truth, we don’t know a whole lot of what Simeon North did.  He did manage to match John Hall’s ability to make interchangeable parts, but it’s not clear how much of that came from Hall and how much was original with North.  It’s clear that North took some original steps in that direction, but Hall probably had the most complete approach and should get the most credit.  But for Hall, unfortunately, the data are all impressionistic – what people said.  None of his machinery survived.  His patents were all lost in the Patent Office fire.

But his rifles were the first to be made interchangeably, and his approach to measurement, and gauging, and standard setting were fundamental to later directions in precision manufacturing.  He was not a genius, like Blanchard, but he was thorough and patient and appears to have created essential manufacturing disciplines.

What is Frances Trollope’s specific significance?
I find her simply delightful, even in her prejudices and cantankerousness.  It is a gift to an author to find a funny, wry, perceptive contemporary observer to whom the subject matter seems almost as different and alien, and requiring as much struggling to understand, as it did to me.

For those who have not as yet read The Dawn of Innovation, you devote Chapter Five to “The Rise of the West.” In your opinion, what were the major drivers of that ascendancy?

The paradigm of the development of natural resource-based industry – meatpacking, lard, timber, iron and coal, grain.  Cincinnati’s lard processing plants looked a lot like JDR’s oil refineries thirty years later.

Briefly, how did America become the second most powerful nation by the mid-19th century so quickly, especially given the fact that it had not achieved its independence until 1776 and ratified its constitution until 1789?

It may not be replicable:  One of the hardest transition that a developing country can make is the transition to middle-class status.  Governments have to let go, people start insisting on following their own lights, etc.  But America was middle-class for the very start – the people who came first were hyper-strivers from England.  There were no vested interests, no ranks, no classes, it was very lightly populated, there were unlimited natural resources – for free essentially – if you failed, you could always start over.

In your opinion, how specifically can an emerging nation most effectively and efficiently evolve from local to regional and finally to national and perhaps even international networks?

I don’t know the answer to that, of course.  But I would speculate that a critical mass of the population has to internalize a middle class outlook first.  International aid experience has demonstrated many times that just building railroads doesn’t get you there.  You need people ready to sue them.

In your opinion, during the years 1776-1860, what was the single most important innovation? Please explain.

No specific technology.  My guess is that it was the instinct always to go to maximum scale.  Great Britain kept much more of a small shop mindset well into the twentieth century, for instance.

What is the “main stage” to which the title of Chapter Seven refers? Please explain.

Simply that the world had discovered us, and were beginning to understand what was going on.

In your opinion, what was “the secret of the American surge in per capita growth”? Please explain. 

It would the sum of all of the above.

What was John D. Rockefeller’s special significance during America’s emergence to be “the world’s newest superpower”?

He was certainly the first to create a consumer product that was sold literally throughout the entire world.  Those blue 5-gallon cans showed up in some of the remotest parts of the world.

Throughout the 1812-1860 period, was there also an American industrial evolution? Please explain.

Yes.  The evolution was always to greater scale and speed.  Other countries did that here and there – GB in textiles, Germany in steel – but we went in that direction almost across the board.

In the final chapter, you discuss the process by which China is “catching up to the current superpower,” the United States. What advantages does China have today that no nation had 150 years ago?

I’ve been in China enough to know that you shouldn’t opine on it unless you speak Chinese and have lived there for twenty years.  I wasn’t pretending to be a China expert in that final chapter.  I was just pointing, first to the parallels between Chinese behavior toward us and ours toward GB when we were at the same stage of development, and secondly to how much harder their development path is than ours was.  We demonstrated what you could do when a band of entrepreneurs settles an empty country with vast resources.  The Chinese have a billion people and are running out of water.  Tougher problem for sure.

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Charles cordially invites you to check out the resources at these websites:

Amazon  page

Huffington Post articles

Commonweal website

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