Alfred Marshall’s critical analysis of scientific management*
Katia Caldari
The value of a machine to a business can be calculated on the basis of its efficiency for its immediate work.But the value of an employee must be estimated (...)with a view to the probable development of his capacities:and the difficulty of this task is increased by the conditions of modern business.
(Marshall 1919:350)
The dependence of industrial leadership on individuality and creative faculty has not been greatly effected by the predominance of routine in staple manufacture.
(Marshall Library Archive,Red Box 1)
1.Introduction
In 1911,in America,F.W.Taylor published his famous book,Principles of Scientific Management ,in which new principles of industrial organization are suggested and the advantages of an extreme division of labour and mechanization are stressed.
Taylor’s theory of scientific management played a very important role in shaping the early twentieth century factory system,both in America and in *An earlier draft of this paper was presented at the History of Economics Society’s Annual Meeting,4–7July 2003,Duke University,Durham.I would like to thank all the participants to my section for their helpful comments,in particular James Henderson,Mary Morgan,Michel Que ´re ´and Malcolm Rutherford.For further revision of my paper,I wish to acknowledge the valuable suggestions and comments of Giacomo Becattini and Tiziano Raffaelli.Particular thanks to this journal’s anonymous referees for their valuable advice.Any remaining errors of interpretations are,of course,my own responsibility.
Address for correspondence University of Padua,Italy;e-mail:katia.caldari@unipd.it
Euro.J.History of Economic Thought 14:155–78March 2007
The European Journal of the History of Economic Thought
ISSN 0967-2567print/ISSN 1469-5936online Ó2007Taylor &Francis
uk/journals
DOI:10.1080/09672560601168405
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Europe.It produced an efficiency‘mode’,which spread throughout Europe before the First World War.
In England,in1919,Alfred Marshall published Industry and Trade,‘A study of industrial technique and business organization;and of their influences on the conditions of various classes and nations’.In his book,he develops a detailed analysis of scientific management,underlining its unquestionable advantages but also its dangerous limits.
In a recent article on Marshall and Scientific Management,John Whitaker notes that Marshall’s‘evaluation of Taylorism was cautiously approving,if somewhat sceptical and he saw the movement as having the potential to both alleviate and heighten looming problems imperilling Britain’s economy and British society in the post-war era’(Whitaker1999: 255).Marshall’s evaluation seems,indeed,more than sceptical and definitively critical in many passages of Industry and Trade.
The aim of this paper is to follow Marshall’s analysis of scientific management in order to inquire into his attitude towards Taylor’s system and to explain why the author’s opinion is different from Whitaker’s. The structure of the paper is as follows:section2gives a sketch of the atmosphere in which scientific management was born and of how it was received at the time in the USA and Great Britain;s
ection3provides an outline of Marshall’s handling of scientific management and underlines the aspects that are the subject of his main criticism;section4highlights the grounds of his criticism;finally,section5draws some conclusive remarks.
2.The impact of scientific management:a brief comparison
between the United States of America and Great Britain
2.1.Taylor and the American approval
In the1890s American industry and economy entered the stage that characterizes a modern industrial country:the massive expansion of railroad,steamship,telegraph and newspapers favour the formation of an integrated national economy;power largely facilitates production processes in manufacture;plants and workshops grow significantly and thefirst important and potent trusts are created.1Another peculiar aspect of the American economy of the time was the massive availability of labour: millions of immigrants,coming especially from Europe,entered the 1‘The increased importance of large plants,and particularly of large aggregations
of capital,was one of the outstanding features of the period’(Commons1966: 293).
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Critical analysis of scientific management country in the twenty years before the First World War and influence the growing size of industrial plants.
Even though modern plants,with their size and technology,are very different from the traditional handicraft workshops,they still use traditional organization methods:‘internal management[has](...)not improved pari passu with the growth of the industrial unit’(Commons1966: 303).This problem isfirst discussed by the American Society of Mechanical Engineers,of which F.W.Taylor is a member.
Taylor,engineer and manager,2publishes important works on what he thinks should become organization and management in modern enter-prises.The chief problem in applying traditional organization to modern plants is related to the labour side of businesses.Each foreman is still the supreme authority over all the processes and men,the organization is hierarchic and organized on a military model.But with an extremely large size of plant this kind of organization turns out to be quite inefficient:all orders have to go from the(top)manager down to superintendents and foremen and through them to the workmen.Taylor proposes a‘functional’scheme in order to improve plant management:the traditional work of foremen is divided into eight different functions:
Each workman,instead of coming in direct contact with the management at one point only,namely,through the gang boss,receives his daily orders and help directly from eight different bosses,each of whom performs his own particular function.
(Taylor1903:99) According to Taylor,another reason for inefficiency in traditional organized businesses is the way individual tasks are performed:he proposes an accurate time study to discover the‘one best way’of executing each motion and to distinguish the best conditions,machines,tools and so on. Thefirst article published by Taylor is:‘A Piece Rate System,Being a Step Toward the Partial Solution of the Labour Problem’(1896),followed by ‘On the Art of Cutting Metals’(1907).Taylor’s main work,however,is Principles of Scientific Management(1911),a book translated into Chinese, Dutch,French,German,Italian,Japanese,Russian,Swedish and Spanish before the First World War.
The essence of Taylor system is minute division of labour,repetition of simple movement,predetermined methods of work,minimum training requested,incentive of a merely monetary nature and time optimization for each operation.3The new system should produce high wages,high profits and,consequently,harmony between employers and employees.
2See Nelson(1992).
3For further details,see Kendall(1913).
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The debate on scientific management becomes very animated in America after the Eastern Rate Case(1910–11).4Scientific management meets with widespread support,but also hasfierce opponents.Among the supporters onefinds,obviously,Taylor’s collaborators or those who took inspiration from his work,such as Henry L.Gantt,Morris L.Cooke, Samuel Emerson and Lilian and Frank Gilbreth.But there are also a number of politicians5and economists who warmly welcome the new system of organization.An economist who enthuses about Taylor’s principles is Thornstein Veblen.In dealing with the development and functioning offirms(Rutherford2003),Veblen greatly appreciates the suggested scientific organization of labour and workshops,since it looks capable of increasing technical and general efficiency.6In1913, Amasa Walker,another economist,suggests the application of scientific management,not only to productive processes but also to commercial activities of business:
in the belief that goods made under scientific management can and should be sold by scientific manag
ement,I venture to offer my views on the subject,fully realizing that mine may be a lone cry,but in the hope that whatever truth there is in the appeal,if any,may survive.
(Walker1913:388–9) John Maurice Clark considers scientific management as a natural outlet of the progress of science since,he notes:‘[s]cience is continually increasing the amount of standardization and scientific management in an attempt to introduce it in place of the more elusive craftsmanship and rule of thumb’(Clark1918:147).Irving Fisher goes even further in appraising Taylor’s worth:
Frederick W.Taylor has made a unique place for himself in history as one who bridged the gap between science and industry,between theory and practice.The world owes him at least undying fame for his accomplishment in replacing guesswork by science and thereby adding immensely to the wealth and welfare of all mankind.
Some day even labor may canonize him as a patron saint.
(Fisher1925:61)
4In1910,the railroads of the eastern part of the United States asked the Interstate Commerce Commission for an increase in freight rates,since they claimed their costs were enormously raised.On t
hat occasion Louis Brandeis publicly opposed and proposed scientific management principles,through which it would be possible to diminish costs without increasing prices.For further details,see Dunn(1915).
5See Nelson(1998,1999).
6On this topic,see Knoedler(1997).
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Critical analysis of scientific management The same level of enthusiasm is not shared by the institutionalist John Commons,who,on the contrary,emphasizes the dangerous and proble-matic aspects connected with the new system.Although he is not in opposition to any essential element of Taylor’s ideas,he thinks that the new system,due to the extreme standardization of processes,would increase the conflicts between employees and employers.7Moreover,according to Commons,the more important question is this:‘can scientific management deal scientifically with organizations as well as individuals?’(Commons 1911:464).
Labour relations are of no concern in the individualistic point of view of engineers,but,definitely,they ha
ve a fundamental role in industrial systems.This is well known and deeply explored by Robert Hoxie.He is particularly interested in comprehending the reasons why‘organized labor’opposes scientific management(Hoxie1916a)and in which measure scientific management participates in‘labor welfare’(Hoxie1916b). Hoxie points out‘time and motion study’as the essence of scientific management and recognizes in its extension the most serious menace to the workers.8
The defects of scientific management are not hidden but are generally considered transitory.In Great Britain,scientific management was received in a very different way.
2.2.Technical or social considerations?Scientific management in Britain
By1914in Great Britain,numerous engineers were already familiar with scientific management‘by either reading about the new system(...),or by visiting American workshopsfirsthand’(Kreis1990:41).In the years between the1890s and the1900s,in fact,the debate on the changeover of British workshops is very strong and a very large number of articles on scientific management,efficiency and workshop methods are pub-lished.9
7See Frey(1913).
8‘The scientific management based upon it[time and motion study]is conceived to be a perpetual attempt to discover and put into operation the new and continuously developing technical,organic,and human arrangements,meth-ods,and relationships constantly revealed by it to be more efficient and more equitable.That this broader conception of time and motion study as the essential basis of scientific managements exists,not as a mere dream,but as a practical ideal striven for with the confident hope of realization,the writer can attest from his experiences in the best class of scientific management shops’(Hoxie1916b:842–3).
9See Whitston(1997).
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These articles appear mainly in technical magazines such as Engineering, The Electrical Review,The Engineer,Engineering Production,Cassiers Magazine and Engineering and Industrial Management but also in less specialized journals such as The Spectator,Round Table,Nature and The Economic Journal. Scientific management receives a fair deal of attention and many positive comments:the articles in Cassiers,for instance,are enthusiastic, while Machinery calls scientific management‘the appli
appreciatescation of common sense’.The only magazine completely hostile to Taylor’s system is the Engineer,which,in1911,declared that the new system is unfair and inhuman.The aspect most often criticized is the extreme division of labour and the necessity of the separation of thought from action10for the working of the system.The economist Dennis Robertson is very critical of this point:
everything is to be settled by the stopwatch and the instruction card:the distinction between planning and execution,the division between the brain users and the muscle users,becomes complete.But even where such thorough-going methods are not in force,the general effect of the progress of industrial technique seems to be to accentuate the divorce of thought from toil at the very time when such divorce has become,from the broader and political point of view,most resented and perhaps most dangerous.
(Robertson1923:97) Robertson has been much affected by Marshall’s teaching and,therefore, this reason of criticism,as will be seen,is also traceable in Marshall’s writings.But there were other reasons of complaint.
The most visible aspect of scientific management that emerges in England before the First World War is the so-called‘Premium Bonus System’,through which a fundamental incentive is given to each worke
r in order to maximize his/her productivity.All the other important and peculiar features of scientific management are basically neglected. Premium bonus schemes are the product of a wide interpretation of Taylor’s principles and are very common in British workshops.This aspect is mainly criticized by the unions.In the Trades Union Congress Report, published in1910,one is told that the premium bonus system‘was a bad system for the workers,its chief feature being that it created a strong anti-social feeling amongst shopmates.It was a scientific method of squeezing the last ounce of blood from men’(p.28).The bonus system is 10We are told:‘Taylor had made a central office,the route-ing office,do all the
thinking and he endeavoured as far as possible to make the men machines’(‘Taylorsim’The Engineer111,19May1911:520–1).
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