Quakers & Capitalism — Quaker Contributions to the Emergence and Growth of Industrial Capitalism
January 28, 2011 § 2 Comments
Now we come to the material that never fails to blow Friends’ minds when I do presentations on the history of Quaker economics. When Friends hear the scale of these contributions, when they recognize the significance of some of these contributions, not only for capitalism but for modern civilization itself, they inevitably ask, why have we never heard this before? For the sheer length and scope of this list is astounding, and the impact of these developments could hardly be exaggerated.
Friends were, to a greater or lesser degree, directly responsible for the five developments that made a broad-scale economy based on industrial production possible:
- Industrial tooling materials. Quakers developed new, improved techniques for casting iron and, more importantly, invented a method for casting steel. These technologies made durable, mass-producible machine parts possible. Without them, the industrial revolution would have been more of a series of occasional local uprisings. Machines made it possible to mass produce goods for the first time in history, and cast iron made machinery possible. Cast steel made it possible to mass produce durable machines. This development exponentially accelerated the industrialization of the economy. It’s impossible to overstate the importance of these breakthroughs.
- Industrial strength transport. Friends built the first railroad in England and developed the technologies essential for its expansion: iron bridges, iron rails, steam locomotion. Horse-drawn locomotion on normal roadbeds, especially those outside of major cities, constrained the transport of everything: raw materials, prepared materials, supplies, parts, fuel, products, people, money—all moved in small quantities at a snail’s pace, when it moved at all. The problem was especially acute in the case of industrial metals like iron and steel, zinc and lead. (Quakers invented the passenger train, as well.)
- Finance. Friends formed many of the first private banks in England. Several of these banks soon became some of the largest private financial institutions in the world. The Bank of Norwich (the Gurneys) was for a long time second only to the Bank of England in its holdings. Lloyds was the first bank to diversify its holdings and invest in more than one industry. The other name in banking that everyone knows is Barclay’s, but there were other major Quaker banks, as well.
- Energy. It was shortage of fuel (wood) that had stalled the British iron industry in the seventeenth century. British Quaker iron magnates invented rotated crop coppice farming to solve this problem of dwindling virgin timber supplies for fuel. But their real breakthrough was coke, a refinement of coal, a fuel that burned hot enough to make quality steel possible. They also invented the match—for the first time in history, you could afford to let your fire go out because you could restart it easily any time you wanted. This significantly released the tremendous burden on fuel supplies.
- The industrial business model. New materials, especially cast steel, made a new kind of production possible. Friends were among the very first to develop a production model that capitalized on this material potential. The interchangeable parts plow developed by Robert Ransome in the 1720s represents the very beginning of mass industrialization. Also, Quakers created the first conglomerate, breaking out of the single family–single site business to create larger associations of many small business units in a variety of industries. Friends also played a key role in developing business associations. Finally, John Joseph Rowntree is the first person known to have engaged in industrial espionage, stealing trade secrets from his (mostly Quaker) competitors in chocolate production while interviewing them for potential jobs; he hired some of these people but he picked the brains of all.
So Friends came up with key technological innovations in such key areas as industrial materials, industrial processes, transport, energy and organization. They also built key industries and, of course, businesses in those industries. They created industries that had never existed before or introduced them to England for the first time. Here’s a partial list of the industries in whose development Friends played a significant, if not essential, role:
- coke smelting
- iron casting
- steel casting
- brass and zinc production
- lead mining
- silver mining and refining
- safety matches
- coffee houses
- English cutlery
In the next post we’ll look at Quaker contributions in venture capital and the role of Quakers in creating the consumer economy itself, including the famous invention of the price tag.
Meanwhile, clicking here: Quaker Contributions to Industrial Capitalism—will open a document that concisely summaries some of these contributions. It’s also available on the Quakers & Capitalism—The Book page.