Note: A shortened version of this blog appeared in the Buffalo News “Another Voice” section on November 8, 2015
In one of those strange ironies of history, the automobile arrived as a response to an environmental issue of the time. In 1900, there were more than 100,000 horses in New York City and Brooklyn, creating about 4000 tons of manure and urine daily that had to be removed. Hundreds, if not thousands, of workers toiled daily to cart off that mess. Horse manure had become a significant health hazard for urban dwellers. There were even reports of a haze of manure and urine in the air in poor neighborhoods where the cleanup was not as effective.
A Rich Man’s Toy
Some saw the automobile as a potential solution to this problem. However, this was a time when automobiles were still in their infancy and could only be afforded by the wealthy. I bet those workers who mopped those city streets, along with buggy and buggy-whip makers, led those who derided these newfangled toys, with shouts of, “Get a horse!” when an early automobile drove by. Yet there was enough interest in the nascent automobile industry to spawn hundreds of automobile companies, each trying to build a better car and create a new market. Most of those companies came and went as they failed to find the magic elixir to excite the public. This is often the case with the introduction of new technologies. Witness what happened in the dot com mania of the nineteen-nineties when many of the companies touting a new business paradigm failed to succeed and create that paradigm. I bet the owners of the buggy whip makers probably pointed to failing early automobile companies as showing the folly of automobiles, just as the owners of brick and mortar establishments did during the rise of the Internet, and just as the fossil fuel companies and other opponents of global warming are pointing to the failure of solar energy companies like Solyandra as proof that renewable energy is doomed. In the first decade of the last century, the automobile seemed relegated as a toy, a plaything of the rich, much as the Tesla electric car is considered by some today.
Henry Ford: Game Changer
Then, in 1909, along came Henry Ford with his Model T automobile and everything changed. Ford touted the Model T as the “every man’s” automobile, while paying the highest wages to enable his workers to afford their own car. Sure, at the time, the Model T was probably more expensive to purchase than a horse, but what you could do with it! Suddenly the average worker could afford cars and the horse manure problem was solved. The automobile took off and became a huge industry employing thousands.
And what do you think happened to those workers who cleaned the manure off city streets when there was no more manure to remove? They probably ended up paving those streets for automobiles or they became automobile mechanics and gas station attendants. What about those workers at the buggy whip makers who lost their jobs? They found higher paying ones in automobile factories.
One man’s risk is another’s opportunity. Economists and historians have a term for this process of new industries and technologies replacing older ones: creative destruction. It’s happened time and time again in history. Prime examples include the supplanting of 19th century individual artisans with corporations driven by the Industrial Revolution-developed machinery and the aforementioned development of the Internet. In such instances there were winner and loser companies, but the winners always drove the economies to greater heights.
I’m reminded of that wonderful diatribe by Danny DeVito in the movie “Other People’s Money” (https://www.youtube.com/watch?v=62kxPyNZF3Q) where he played a 1980s style corporate raider, Larry the Liquidator, trying to take over a family-run wire-making manufacturing firm in New England. In his diatribe he talks about buggy whip makers. “You know, at one time there must’ve been dozens of companies makin’ buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw.” Then came the zinger. “Now how would you have liked to have been a stockholder in that company?” Isn’t it time to replace the 20th century source of energy with a 21st century source?
Do You Want to Own a 21st Century Buggy Whip Company?
Yes, there will be some disruption as we switch to renewable energy and sustainable manufacturing. However, in the long run, new industries will be created along with new jobs, and the economy will grow based on those new industries. Germany already gets about forty per cent of its electricity from solar and other renewable sources, and still remains a competitive world industrial power. Today’s fossil fuel companies are the buggy whip makers of the 21st century.
And, yes, the automobile ultimately played a significant role in another environmental problem, but along the way it contributed to a huge leap in prosperity, helping to create the richest country in history. So now we’ll use technology to solve the problem created by automobiles and fossil fuel electricity generation. Along the way we’ll spawn whole new industries with new opportunities. That’s just how the world works. The whole arrow of human history points that way. Who knows if Solar City, Elon Musk’s and other’s bet on solar energy, is the next Ford Motor Company? Only time will tell, but it’s a step in the right direction.
More importantly, by adopting renewable energy, we may save the world for our children and grandchildren, but that’s a subject for another day.
The process of creative destruction is often ignored in the debate about global warming, climate change, or whatever people decide to call it, Opponents focus on the costs of making changes as we convert to renewable energy and the reduction in our carbon footprint. They claim these technology changes will damage the economy while insisting the supposed high costs of renewable energy and sustainable manufacturing will cost the United States millions of jobs and weaken our economy. To that I say balderdash.
The introduction of new technologies is accompanied by something called creative destruction when leading companies, or even industries, apparently successful at the time of the introduction, disappear. For example, the arrival of the industrial revolution brought about an end to those magnificent artisans of the pre-industrial economies. e.g., the blacksmith, the shoemaker, the weaver, etc. While those old jobs disappeared and were replaced, instead, by factory and white collar positions. We moved from a rural society to an urban society.
Along with that change came a new set of issues. In 1900 there were 100,000 or more horses in New York City, creating thousands of pounds of manure that had to removed. Hundreds if not thousands of workers toiled daily to clean up that mess. When it was introduced, the automobile was touted as a means of cleaning up the cities (among other things). I bet t the workers who cleaned those city streets along with buggy whip makers were among those who derided these new fangled toys, and probably shouted, “Get a horse!” With the introduction of the car came hundreds of companies trying to make them and capture the market. The manure workers and buggy whip makers probably also pointed to the failing early automobile companies as showing the folly of this technology. (Just like the opponents of global warming are decrying the failure of companies like Solyandra). And true to form most of these companies went out of business or were bought out. The car seemed to be a toy, a plaything of the rich, much as the Tesla electric car is today.
Then along came Henry Ford and the Model “T” automobile and everything changed. He made the Model “T” “everyman’s” car while paying the highest wages in the industry to enable his workers to afford to own their own car. Sure, at the time, it was probably still more expensive to purchase than a horse, but what you could do with it! Now the average worker could afford cars.
What do you think happened to those workers who cleaned the manure off city streets? They probably ended up with jobs paving them. And those who worked for the buggy whip makers? They found higher paying jobs in automobile factories. One man’s risk is another’s opportunity.
I’m reminded of that wonderful diatribe by Danny DeVito in the movie “Other People’s Money” where he played a 1980s style corporate raider, Larry the Liquidator, trying to take over a family-run wire-making manufacturing firm in New England. In his diatribe he talks about buggy whip makers. “You know, at one time there must’ve been dozens of companies makin’ buggy whips.And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw.” Then the zinger. “Now how would you have liked to have been a stockholder in that company?”
Yes, there will be disruption as we switch to renewable energy and sustainable manufacturing. But in the long run, new industries will be created and the economy will grow based on those new industries. That’s just the way the world works. And, better yet, we may have saved the world for our children and grandchildren, but that’s a subject for another day.