Corporatism in comparative perspective: the impact of the First World War on American and British labor relations.
During the nineteenth century, an "organizational revolution" began in America that ultimately undermined the individualistic basis of American institutions. In the course of the twentieth century the American politic-al economy has come to be characterized by some form ofof "collectivism" in which group organizations, especially among capitalists and workers, and a greatly expanded government play crucial roles. The nature of this collectivism, however, has been a matter of dispute. Historians and soci,al scientists have used a variety of conceptual terms and models to describe the socio-economic system that has supplanted the laissez-faire individualism of the nineteenth century.
According to one school of thought, America has become a "pluralist" society in which the individual competition once characteristic of laissezfaire capitalism has given way to a system of collective competition in which the organization of various groups is sanctioned and even encouraged by government. In the pluralist model, the state plays an active role as a broker between interest groups, but market forces, rather than state direction or control, continue to determine the final distribution of power and wealth. Compromise and collective bargaining are the essence of such a system. The proponents of pluralism claim that such group competition serves to protect the members of each group, as well as the public interest, by creating an effective balance of power in which no one group can dominate at the expense of others.' However, not all scholars who describe America as a pluralist society would accept the validity of the assumption that the competition taking place between organized groups automatically produces an outcome that serves the public interest.'
Other scholars argue that modern America is better understood as a "corporatist" society They claim that pluralists not only distort the true role of the state in twentieth-century America, but also fail to take into account the extent to which competition has given way to cooperation as a guiding principle of the political economy Yet, those who see American history as characterized by an emerging "corporatism" or "corporate liberalism" do not all attach the same meaning to these terms. In the view of one group of historians, the critical feature of the new corporate order has been the legitimization of the power and authority of private business corporations and the use these corporate bodies have made of state power to maintain their control over the political economy' Other analysts question the extent to which business interests have been able unilaterally to dominate and control the apparatus of state power for their own ends, but they still posit the development of a new relationship between government and industry going well beyond the relationship described iii the pluralist model. They contend tliat a diverse body of businesspeople, labor leaders, and public officials in the twentieth century have sought to create a political economy in which the general welfare would be promoted, not by balancing the demands of one group against another, but rather by achieving a true concert or harmony of interests through a system of functional integration. In this corporatist model, an integrated network of interlocking public and private bureaucracies theoretically makes possible more effective planning and coordination than could take place in a political economy whose guiding principles are conflict and compromise.
Scholars use the terms pluralism and corporatism to describe not only the institutional basis of the American socio-economic system, but also the collectivist ideologies that have arisen in conjunction with that system. Even though few Americans in the early decades of the twentieth century would have labeled themselves as either "pluralists" or "Corporatists:' those who actually helped to shape the evolution of the modern American political economy had to explore, both in theory and in practice, the ideas now associated with the models used by academic analysts. Changes in the structure and organization of the American political economy thus went hand in hand with changes in the way Americans thought about the proper organization of industry Such changes in ideology were not simply an after-the-fact rationalization of developing social structures; rather they were dialectically related, as both cause and effect, to the evolution of these structures. Hence, changes in ideology as well as in institutional structures, must be examined in order to understand fully America's emergence as a collectivist society
Although much of what has been written about the development of collectivism in the United States has implicitly assumed the uniqueness of the American experience, few historians have actually analyzed American developments in a comparative framework. Yet, the controversy over the nature of American collectivism is quite similar to the debate now taking place among students of British society regarding the extent to which the modern British political economy ought to be described as corporatist. In this debate, no issue has received more attention from British scholars than industrial relations, especially the role the state has played in mediating relations between capital and labor In contrast, most American historians who have focused on the organizational revolution of the last century have given relatively little attention to the problem of industrial relations.
The present essay seeks to contribute to a better understanding of America's transition from individualism to collectivism by examining in comparative perspective the crucial impact of the First World War on
American and British thinking about the problem of labor relations. The modern American political economy and the collectivist ideologies associated with it evolved over a span of many years, but the First World War and its immediate aftermath proved to be a critical period in this process of evolution. In fact, throughout the industrialized world, the war precipitated what Charles Maier has described as a concerted effort "to construct a suitable post-individualist institutional framework."
THE RISE OF COLLECTIVISM America and Britain both shared a tong-standing faith in the ideals of competitive individualism and limited government, but by the early years of the twentieth century both nations had developed political economies in which there was a significant degree of collective organization and in which the state was beginning to take on new responsibilities. Whereas in America the organization of capital had advanced much more rapidly than the organization of labor, in Britain the situation was to a certain extent reversed. By the eve of the First World War, the United States had pioneered in the development of huge, highly integrated, multi-unit business firms at a time when the British economy was still characterized by competition among relatively small companies. In the words of Alfred D. Chandler, Jr, the "visible hand of management" had already come to play a key role in the American economy before the First World War Specialized organizational structures and complex methods of coordination and rationalization were all more highly developed in American than in British industry at this time. Paradoxically, although the United States had a greater degree of industrial concentration than Britain, America also had a more powerful ideological tradition of opposition to monopolies, so that it was the United States, and not Britain, that in the late nineteenth and early twentieth centuries attempted to stem the growth of trusts by making the common law prohibition on restraints of trade part of the statute law. Both nations, though iii different ways, thus showed their ambivalence toward a growing collectivism in the organization of business enterprise.
On the other hand, organized labor had achieved a far greater degree of legitimacy in Britain than in the United States before the First World War. Whereas only about one in fourteen members of the total labor force in America belonged to unions in 1914, in Britain the figure was close to one in four. Ironically, the antitrust laws in the United States proved to be a far more powerful weapon against labor unions than against organized capital, since they served as a legal basis for injunctions that invariably worked against the interests of organized labor in industrial disputes. Unions were not illegal in prewar America, but they enjoyed virtually no substantive legal protections. In Britain, in contrast, trade unions were legally protected under the Trades Disputes Act of 1906 and had also gained official recognition as an integral part of the new social insurance system created by the government of Herbert Asquith in 1911. While unions were still struggling to gain acceptance in America, they had become securely established in the British political economy.
Relations between organized labor and management in both countries were often characterized by conflict and mutual suspicion, but before the First World War both nations had begun to experiment with efforts to establish a more cooperative approach to industrial relations. In the United States, the National Civic Federation, an organization whose officers included prominent leaders of both business and labor, actively promoted trade agreements between unions and corporate employers by emphasizing the potential harmony of interests between the two sides in industry. Especially in the coal and clothing industries, district-wide agreements between labor and management were generally the product of collaborative efforts to deal with the problems of "destructive competition" that plagued these industries.
Centralized collective bargaining was far more advanced in Britain than in the United States. In fact, since the 1890s there had been serious and ongoing discussions about giving legal force to the voluntary agreements arrived at by organized employers and organized labor, and in 1912 Ramsay MacDonald incorporated this idea into a bill he introduced in Parliament." A wave of labor militancy in the years immediately before the First World War brought the possibility of labormanagement collaboration into question, but it also produced a variety of demands for a collectivist restructuring of industrial relations along syndicalist or guild socialist lines. By 1914 the concept of laissez-faire that had dominated thinking in the nineteenth century was clearly becoming obsolete as a model for labor-management relations, However, as was the case in America, no new consensus based either on the ideal of group competition or on the ideal of group collaboration had yet developed.
For both America and Britain, the requirements of national mobilization during the First World War greatly accelerated prewar trends toward collective organization and centralized economic planning and coordination. Although the governments of both nations increased the scope of their activities in virtually -all aspects of life to an unprecedented degree, neither country carried out its war mobilization entirely or even primarily, through schemes of outright nationalization or by the establishment of coercive government bureaucracies. Lacking the tradition of centralized state authority characteristic of the other major belligerents, and being dependent on the virtual monopoly of industrial expertise possessed by their nations' private sectors, the governments of both America and Britain had to pursue the economic objectives of war mobilization largely by fostering a system of voluntarism that was often described a"self-government in industry."
In both nations this meant government cooperation with, and, in some caseSS, promotion of, trade associations and peak, organizations representing employer groups from a variety of industries. In the United States, the principal government agency responsible for industrial mobilization, the War Industries Board (WIB), worked closely with existing trade associations so that rationalization and planning might be undertaken primarily on a voluntary basis. In those industries that did not have such organizations before the war, the WIB actively encouraged the recently formed United States Chamber of Commerce to sponsor their creation. In Britain, too, the war spurred the growth of trade associations and also led to the formation of the nationwide Federation of British Industries (FBI). As in America, a pattern of government-business collaboration unlike any previously contemplated had emerged by war's end.
An efficient mobilization of national resources also required the cooperation of labor. The British and American governments both came to the realization that the effective implementation of a rational and systematic labor policy required dealing directly with responsible organizations of workers. The demands of war thus contributed to the adoption of government policies that gave added legitimacy to organized labor. This was especially important for unions in the United States. Even before the United States entered the First World War, Woodrow Wilson had established a more prolabor record than any previous president, but it was not until the creation of the National War Labor Board (NWLB) that the government explicitly affirmed "the right of workers to organize in trade-unions, and to bargain collectively through chosen representatives." The NWLB also proclaimed the principle that this right "not be denied, abridged, or interfered with by the employers in any manner whatsoever."" In largepart as a result of government policy, union membership in the United States increased by 85 percent between 1913 and 1920. In Britain, too, the government's need for the cooperation of organized Labor, as well as the existence of tight labor markets, contributed to a doubling in union membership in the same period.
INDUSTRIAL DEMOCRACY AND WORKSHOP ORGANIZATION
By helping to give added legitimacy to Labor organization, the war to "make the world safe for democracy" raised certain fundamental questions about the role of workers in the conduct of industry President Wilson's Mediation Commission in 1917 voiced a widespread concern that there was too often "a glaring inconsistency between our democratic purposes in this war abroad and the autocratic conduct of some of those guiding industry at home." Although the phrase "industrial democracy" antedated the war and clearly meant different things to different people, it is nevertheless significant that the concept first began to gain wide currency among Labor leaders, social scientists, government officials, ministers, and even businessmen during the war years." Virtually all tbose who acknowledged the need to democratize industry recognized that some form of collective organization among workers would be necessary to realize this objective.
The secretary of the NWLB, W Jett Lauck, noted that the wartime emphasis on democracy had greatly stimulated workers' demands "for a greater measure of control" in industry' In fact, during the war years a surge of strike activity focusing on issues of workers' control occurred that was unprecedented in American history. Woodrow Wilson himself proclaimed shortly after the war ended that it would be necessary to establish "a new relation between capital and Labor" in order to achieve "the genuine democratization of industry based upon a full recognition" of the right of workers "in whatever rank, to participate in some organic way in every decision which directly affects their welfare'"
Steve Fraser has correctly obsen,ed that "workers' control" and "industrial democracy" wer "two enormously evocative and equally imprecise formulations" tbat aptly expressed "the era's sense of possibility and uncertainty and its attempt to domesticate the energies released as the old order disintegrated." The establishment of shop committees, or works councils, open to all grades of workers emerged as one response to the demands of workers for a greater voice in industry Such committees, according to David Montgomery, were "basically an innovation of the war years." Employers sometimes organized shop committees as a means of avoiding unionization, but more often works councils were created at the instigation of the NWLB, which saw these new institutions as a first step toward effective worker representation, and not as a device to prevent the establishment of independent unions. In some instances, moreover, workers themselves initiated the organization of shop committees. Even though skilled craftsmen were generally in the forefront of the movement for workers' control, at least some of these skilled workers saw shop committees as a promising tool for challenging not only the authority of autocratic management, but also the narrow sectionalism of the American Federation of Labor's (AFL) traditional craft unionism.
In Britain, too, contemporary observers such as R. H. Tawney and Elie Halevy noted that the war brought the hitherto largely ignored issue of workers' control to the forefront. A movement for workers' control erupted in Britain during the war that paralleled, in many ways, the movement taking place in the United States. The British movement, however, was far more powerful and was led by an insurgent group of shop stewards whose ideological perspective was much more clearly developed than that of their American counterparts.
The wartime shop stewards' movement, which flourished mainly in Britain's engineering industry, was largely inspired by the doctrines of industrial unionism, revolutionary syndicalism, and guild socialism. In spite of important differences among these three doctrines, one of which, the industrial unionism of Daniel De Leon, was American in origin, all three shared the common goal of creating a nonbureaucratic system of socialized industry based on actual workers' control rather than state ownership and operation. Before 1910 none of these doctrines had had much appeal in Britain. Even after 1914 the highly sectarian political groups explicitly advocating these ideologies never attracted large memberships. Wartime conditions, however, made it possible for a radical conception of workers' control to have an important impact on British Labor
The decline of wage differentials between skilled and unskilled workers, the constant pressure on workers' purchasing power resulting from inflation, and crowded and inadequate housing in Britain's industrial areas all contributed to Labor unrest during the wan Moreover, the need for increased production in war industries, combined with a growing shortage of skilled Labor, caused the government of David Lloyd George to press for what came to be known as "dilution:' that is, the use of unskilled or semi-skilled workers in jobs formerly reserved for trained craftsmen holding union cards. A more thoroughgoing use of scientific management techniques was an essential aspect of dilution, since increased mechanization and standardization were necessary to enable less skilled workers to maintain, or even increase, prewar levels of productivity Throughout the industrialized world, a deskilling process that undermined the distinctions between skilled and semi-skilled Labor had long been at work, but the war greatly accelerated this process in all the major belligerent nations. In no country, however, was dilution a more contentious issue than in Great Britain. The controversy over dilution was not the only factor in the emergence in Britain of a militant and highly visible shop stewards' movement espousing the ideal of workers' control, but the dilution issue was of particular importance because it raised crucial questions both about the extent to which management would extend its control over the shop floor and about relations among the various grades of workers in industry.
Historians have sharply disagreed about the nature and objectives of the shop stewards' movement, with much of the debate focusing on whether the movement was truly revolutionary in nature. A number of scholars have argued that the shop stewards' movement was largely a product of the essentially conservative desire of skilled craftsmen to maintain their privileged position. These historians claim that the movement did not actually challenge the basic authority of the state, of management, or of the established trade union leadership, and that it in no way posed a serious threat to the continued existence of British capitalism.
Although Britain was not actually on the verge of revolution in this period, the shop stewards' movement represented more than a backwardlooking defense of the purely selfish and materialistic interests of a privileged segment of the Labor force. The movement arose not only as a response to the efforts of management and government to rationalize production in ways that seemed threatening to the engineers' interests, but also because of rank-and-file discontent with the policies and methods of organization of the established craft unions. In Britain, as in America, the national leadership of the official trade union movement actively cooperated with the government in the war mobilization effort. Such cooperation may have helped further to legitimize organized Labor, but it seriously inhibited trade union officials from supporting militant job actions that would have interfered with war production. The creation of workshop organizations open to all workers and headed, in many cases, by shop stewards who enjoyed a degree of independence from the official trade-union organizations represented a significant effort to broaden the scope and purposes of Labor organization.
Just as Montgomery has argued that the struggles of skilled craftsmen in America in this period led to a radical "transformation of consciousness," so, too, in Britain, according to James Hinton, "the subversive potential that had always been locked within the craft tradition was . . . released into fruitful interaction with" the doctrines of syndicalism, thereby unleashing, if only temporarily, the tradition'"revolutionary possibilities'"30 The movement for workers' control may have originated among skilled engineers, but it served as a vehicle for the organization of what James Cronin refers to as the "emergent" sections of the working class "that had yet to be absorbed by the old union structures and that were best served by organization on the shop floor itself.""
One of the leading figures in the shop stewards' movement, William Gallacher, proclaimed that the movement's "ultimate aim" was to create "one powerful organization that will place the workers in complete control of the industry.' As an intermediate step on the way to complete control, industrial unionists such as Gallacher, syndicalists such as Tom Mann, and guild socialists such as G. D. H. Cole all advocated the introduction of the "collective contract." This proposal entailed the signing of an agreement between officially recognized representatives of a works committee and company officers calling for the production of a specified ]utput for a designated contract price, but giving the works committee full discretion over the way in which production would be carried out and over the way in which the money paid for the final product would be distributed among the workers in the plant.
In seeking to establish as much worker autonomy as possible, the radical leaders of the shop stewards' movement rejected the notion that the collectivism of the future ought to be based on a cooperative partnership between Labor and capital. As Gallacher and John Paton argued:
A share in control does not imply that the workers should enter, into partnership or any sort of alliance with the employer, or incur joint responsibility with him, or be identified with him in any way All forms of co-partnership-collective or individual-are based on the theory, that the interests of the exploiter and exploited are identical, whereas they are, in fact, multually antagonistic and irreconcilable."
Although repudiating the idea of cooperation between Labor and capital, the leaders of the shop stewards' movement sought to achieve a new level of cooperation among all grades of workers in order to pave the way for a system of workers' control based oil a form of industrial unionism that theoretically would have avoided excessive centralization and bureaucratization. Such an approach to industrial organization clearly rejected the individualist assumptions of nineteenth-century laissez-faire ideology at the same time that it denied the possibility of reestablishing effective and fair competition by balancing organized capital with a more thoroughly organized Labor force. In this sense, the shop stewards' movement put forward a )eftist or radical version of cot-poratism in which a conflict-free system of industrial relations was to be achieved by greatly expanding the role and scope of Labor organization and eventually eliminating altogether the functions of capital.
Although the idea of outright workers' control gained a following among certain segments of the British Labor movement during the First World War, the less radical concept of joint Labor-management control had a considerably broader appeal. The Lloyd George government itself contributed to the legitimization of the idea of joint control by virtue of the work of the Whitley Committee. The establishment of this subcommittee of the Cabinet Committee on Reconstruction in 1916 was in good part a response to the growth of the shop stewards' movement and the increasing demands for workers' control. The committee's charge was to make recommendations on ways of achieving an improvement in industrial relations after the wan J. H. Whitley, a Liberal member of Parliament who later became speaker of the House of Commons, beaded the committee, which also included four representatives of largescale industry, four trade unionists, and four economists and social work activists. The Whitley Committee issued a series of five highly publicized reports in 1917 and 1918."
The committee's recommendations were the centerpiece of the government's initial plans for the postwar reconstruction of British industry and were quite clearly based on corporatist assumptions that, by the end of the war, at least, were accepted as virtual truisms in most public discussions of industrial relations, 36 The committee argued that adequate organisation on the part of both employers and workpeople" was an absolutely "essential condition of securing a permanent improvement" in industrial relations, and that effective joint Labor-management institutions could be created to produce "industrial harmony and efficiency." Specifically, the committee called for the establishment, on an industry-by-industry basis, of a three-tiered system of joint councils. In those industries where workers and employers had already established broadly representative organizations, national, district, and works councils were to be formed, all of which were to consist of representatives chosen by the existing associations of workpeople and employers. The so-called Whitley Councils system was envisioned as a means of working out agreements on wages, working conditions, adjustment of grievances, and all other matters of concern to industry Those involved in reconstruction planning saw the councils as an essential means of achieving their main postwar objectives: the twin goals of industrial peace and increased output.
In what was clearly an attempt to respond to issues raised by the shop stewards' movement, the Whitley Committee put particular emphasis on the importance of works committees, referring to them as a cornerstone "of the industrial structure which we have recommended." While acknowledging that issues such as wages and hours were normally best settled by district or national agreements, the Whitley Committee asserted that many questions were "peculiar to the individual workshop or factory" and thus ought to be dealt with by works councils.
The Whitley Committee made it clear that the system of joint council s it was recommending was to be based on the complete cooperation of existing organizations of workers and employers and that Whitley Councils "should be composed only of representatives of Trade Unions and Employers' Associations [emphasis added]" already in existence. The committee was especially concerned with countering suggestions that joint works councils were in any way intended as an alternative to trade union organization, stating that "the setting up of works committees without the cooperation of the trade-unions" would, in fact, "stand in the way of the improved industrial relationships" the Whitley scheme was designed to foster Works councils, the committee contended, would be valuable precisely because they would help make possible the "complete and coherent organization of the trade on both sides" of industry that the committee described as its ultimate goal.
Although the Whitley Committee called for the government actively to encourage the formation of joint councils, it still implicitly acknowledged the state's institutional weakness and strongly reaffirmed the principles of voluntarism that had remained the basis of Britain's wartime approach to industrial mobilization. When Minister of Labour G. H. Roberts circulated the Whitley Reports to employers' associations and trade unions in 1917, he argued that, if properly implemented, the Whitley scheme would prove "how greatly the task of the State can be alleviated by a self-governing body capable of taking charge of the interests" of an entire industry State intervention, in the words of the Whitley Committee, "should vary inversely with the degree of organisation in industries'" Only in industries in which unions and employers' associations were insufficiently developed might it be necessary for the state to become directly involved in resolving issues of controversy normally settled by collective bargaining. 40
Precedent for direct government involvement in the setting of wages in certain unorganized industries actually predated the wan The Trade Boards Act of 1909, introduced into Parliament by Winston Churchill, enabled the government to establish trade boards having the power to fix legal minimum wage rates for industries in sweating" was a serious problem. At the time the Whitley Reports came out, four trade boards existed. Representatives of the workers and employers of the industries in question sat on each board, but "public" representatives appointed by the government held the balance of power The Whitley Committee recommended that the trade boards approach be extended to all unorganized industries and that the trade boards thus created be utilized, at least temporarily, "as a means of supplying a regular machinery for negotiation and decision" on a wide variety of questions, not just wage rates.
Trade boards, however, according to J. H. Whitley, were to serve primarily "as a stepping-stone to higher things, namely responsible selfgovernment within the industries themselves' Once an industry with a trade board achieved an effective organization of both its workers and employers, the trade board could give way to a Whitley Council free of direct government involvement. Most members of Parliament shared this view of the purpose of trade boards and supported legislation in 1918 that adopted the Whitley Committee's recommendation on this particular issue. Conservative MP Waldorf Astor, for example, praised the trade boards bill because it was based on "the principle of selfgovernment by the industry concerned;' rather than on the idea that industry should "be interfered with or governed by any bureaucracy or by Parliament.
The Whitley Committee saw no need for the passage of legislation to give force to its main recommendations, since the joint industrial councils it proposed did not require the use of government coercion or sanctions. The committee did, however, harken back to the proposals for legalizing trade agreements often discussed before the war by noting that it might "desirable at some later stage for the State to give the sanction of law to agreements made by the Councils:' but only if "the initiative in this direction" came from "the Councils themselves' Such sanctions would have been intended to prevent a small but recalcitrant minority in an industry from frustrating the effective implementation of an agreement arrived at by the voluntary efforts of a majority of both workers and employers.
The Whitley Councils scheme attracted a good deal of attention in the United States. Articles about the plan appeared soon after the war in such periodicals as The Nation, The New Republic, Survey, The Dial, and The Atlantic Monthly, and the Washington-based Bureau of Industrial Research published a book in 1919 .containing all the Whitley Reports, as well as certain related documents. 46 The practice of establishing joint councils was much more advanced in Britain, but in the years immediately before the war, efforts had been made in the American garment industry to establish joint works and district committees that were similar to the councils advocated by the Whitley Committee.
Although the system developed in the American needle trades put more emphasis on dispute settlement than did the Whitley Councils scheme and, consequently, utilized full-time, salaried, impartial experts to chair the joint conferences that were set up, it too was predicated on a "positive-sum vision of collective bargaining" in which rationalized production techniques were to go hand-in-hand with more stable wages and profits. In fact, in 1919 the impartial chair of the New York conference explicitly called for the creation of a "National joint Council . . . along lines similar to the Whitley Councils in England'" Subsequently, an inform-although short-lived, national council was established in the clothing industry 48
EMPLOYEE REPRESENTATION PLANS
Whereas unions and employers had acted as equals in setting up joint conference boards in the clothing industry, another approach to joint works councils, in which independent unions played little part, had begun to gain greater prominence in the United States in this period. So-called employee representation plans, or company unions, took various forms, including the Leitch plan, which entailed the establishment of a cumbersome system of worker representation modeled on the United States Constitution, and the more influential Rockefeller plan, which called for less formal joint Labor-management committees to facilitate communication between workers and management. Most, though not all, employee representation plans excluded official union involvement and left no question that the ultimate "management of the properties, and the direction of the working forces, shall be vested exclusively in the company." Company unions had been virtually nonexistent in American industry before the turn of the century, and as late as 1917 only twelve companies reported having such plans in operation. Two years later, the number of companies with employee representation plans had increased more than tenfold.
Although conservative employers in the United States often utilized employee representation schemes as a means of countering efforts to establish independent unions, the initiation of workshop organizations cannot be understood simply as a hypocritical technique of unionbusting. As noted earlier, the NWLB had done much during the war to encourage the creation of works committees, without intending them to serve as obstacles to the ultimate spread of unions. Moreover, as a result of America's war experience, many of the leading industrial relations experts associated with the scientific management movement had begun to tout the advantages of both workshop organization and effective, well-disciplined unions. In Britain, where employer-initiated shop committees were less prominent than in America, the most vocal proponents of this form of organization were not anti-union conservatives, but rather liberal-minded Quaker employers such as Seebohm Rowntree.
Clarence Hicks, one of the pioneers in the company union movement, correctly claimed that employee representation plans helped to fill the void left by the AFL's traditional reluctance to organize across craft lines or among the unskilled and semi-skilled." In this sense, the American company union movement and the radical British shop stewards' movement were both, in part, responses to shortcomings in the craft union tradition. The British radicals who advocated the idea of workshop organization envisioned such organization within the context of a strong and independent union movement and had, as their ultimate goal, com plete workers' control of industry; most American employers, on the other hand, envisioned the incorporation of organized-though nonunionized-Labor into a corporate structure in which management's ultimate decision-making authority would remain unquestioned. In both America and Britain, the various proposals for joint workshop committees or councils all clearly reflected a heightened recognition of the desirability of creating, at the grass-roots level, broadly based workers' organizations that would become an integral part of a new, less conflictprone, system of industrial relations.
POSTWAR NATIONALIZATION PROPOSALS
The recommendations of the Whitley Committee won a good deal of acclaim in the British press, as well as the support of the FBI and of many prominent business and Labor leaders. In practice, though, effective implementation of the Whitley scheme proved extremely difficult, since few employers or trade union officials were yet ready to act on the assumption that capital and Labor in each industry shared a common interest. In three of Britain's most important industries, coal, railways, and transport, no Whitley Councils were even established. Instead, as the First World War came to an end, the powerful unions in these industries, which together made up the Triple Alliance, pressed for the implementation of a more radical, explicitly socialist, version of collectivism entailing nationalization of their respective industries.
In the months immediately following the Armistice, the miners seemed close to realizing their goal of having the government nationalize the coal mines. One student of British industrial relations considers the miners' proposal for nationalizing the coal industry "the most important document produced by the British workers in their struggle for workers' control." Miners' Federation Secretary Frank Hodges described the union's proposal as a means of achieving "self-government" in the coal industry The plan called for a nationalized industry to be operated under a system of joint control between the workers and the government, with national and district councils composed equally of union and government representatives exercising managerial authority In addition, men chosen by miners on the spot, and technical experts selected by the district council, were to sit on pit councils.
Robert Currie argues that the miners' support for nationalization stemmed almost solely from their belief in the likely "cash rewards" of public ownership. In Currie's view, the real aim of the miners was higher wages, not actual workers' control of the industry The miners' demand for nationalization was inextricably linked to their insistence on the establishment of a national wage standard. However, their specific proposal for restructuring the coal industry would have influenced all aspects of industrial) relations, not just the determination of wages. In fact, G. D. H. Cole, Britain's leading guild socialist, helped the miners develop their plan for nationalization, believing that it might serve as a pragmatic first step in a broader campaign to implement the corporatist ideals of guild socialism .
The Lloyd George government responded to the workers' proposal and to the threat of a nationwide coal strike in early 1919 by calling on Parliament to create a special commission to make recommendations about the future of the British coal industry The Sankey Commission, as it came to be known, was headed by Sir John Sankey, a judge of the King's Bench. The remaining positions on the commission were divided equally between supporters of the miners and supporters of the mine owners. Among the Labor sympathizers on the commission were socialist economists Sidney Webb and R. H. Tawney. Although the miners were unable to persuade a majority of the Sankey Commission to support the union's original scheme of workers' control, they were able to win justice Sankey's support for a watered-down form of nationalization that would have allotted to the miners one-third of the seats on the governing board of a nationalized coal industry. The remaining seats would have been equally divided between representatives of the consumers of coal and representatives of technical and commercial experts from the industry The commission members sympathetic to the operators refused to consider any socialist version of corporatism, but tbey did support the creation of a three-tiered system of national, district, and pit councils similar to the Whitley scheme. The Sankey plan of nationalization went beyond the type of joint control of industry envisioned in the Whitley Committee's recommendations. Yet, both bodies implicitly rejected individualist and laissez-faire assumptions and proposed new institutional mechanisms that were intended to make cooperation and harmony, rather than competition and conflict, the guiding principles of Britain's political economy
In the United States at the end of the First World War, a proposal closely paralleling the Sankey Commission's recommended system of tripartite control, but applying to railroads rather than to coal, also gained a good deal of attention. Because of a near collapse in service, the government had taken over the railroads during the last year of the war As was the case with the British coal industry, the American railroad system was in poor shape economically, with many weak companies acting as a burden on the entire industry, so that full and immediate decontrol seemed unattractive to almost all concerned. In 1919 the railway unions stood united in support of a plan of permanent nationalization developed by their counsel, Glenn Plumb. The Plumb Plan called for the creation of a public corporation whose board of directors would have had one-third of its members appointed by the president of the United States, one-third chosen by the technical and administrative staff of the railroads, and one-third selected by the employees. Any excess profits earned by the railroads were to be divided equally between the employees, including the managerial staff, and the government.
Plumb explained to the House Committee on Interstate Commerce that he had devised his plan in order to put an end to the "industrial warfare" resulting from a system in which capital, Labor, and the consuming public each had "on guard to protect its own [interest] without regard to the interests of others."
The continuance of such a system can be based only upon a government which can provide the might to enforce the demands of that interest which at the time controls the government. A democratic government instead of controlling such an industrial situation is controlled by one or the other of these warring fundamental interests and so can no longer function as true democracy in government.
The establishment of his proposed tripartite system of joint control in
the railroad industry, Plumb claimed, would result in a collaborative effort by all those involved in the industry to serve the public interest. The entire function of Labor organization would be transformed, since men under the new system would join Labor unions, not simply to gain higher wages at the expense of the employer's profits-, but in order to be part of "the machinery" necessary for achieving "industrial democracy."
Such language clearly reflected corporatist assumptions about the possibility of creating a new industrial system based on the principles of cooperation and functional integration. Although the supporters of the Plumb Plan usually defended the plan in corporatist terms, they were not always consistent, in this regard, nor were they as self-consciously radical in their conception of nationalization as were the guild socialists and industrial unionists who occupied important positions of leadership in the British Labor movement. Plumb himself at times justified his plan by emphasizing the way in which it would prevent Labor and capital from uniting at the expense of consumers, since the latter group would also be represented on the proposed railroad corporation's board of directors in order to guard against excessive rates and excessive Labor costs. In using this rationale for his plan, Plumb was expressing a pluralist conception of industrial organization that contradicted his frequent claims about the possibility of establishing a true harmony of interests based on a shared devotion to the ideal of service.
Whereas an ideological commitment to the idea of workers' control was important in the development of the British miners' proposal for nationalization, such a commitment was less of a factor in the traditionally conservative railway unions support for the Plumb Plan. A.B. Garretson, president of the Order of Railway Conductors and spokesman for all the brotherhoods, said virtually nothing about the workers' control aspects of the Plumb Plan in his testimony before the Senate Interstate Commerce Committee. Rather, he praised the plan as "tbe first legitimate profit-sharing scheme that has been presented in a public utility in this country," claiming that it provided for "an equitable division of the profit from an enterprise between all who were parties to
. it'" It would thus be more true of American than of British Labor that its seeming radicalism in supporting nationalization reflected not so much a "class-conscious" commitment to the ideals of socialism and workers' control aage-conscious" outlook .
In spite of these qualifications, the campaign for the Plumb Plan was but one manifestation of a growing interest in corporatist ideas in America. In 1919, the convention of the United Mine Workers of America adopted a resolution calling for a similar program of nationalization for the coat industry, and in the following year, against the opposition of Samuel Gompers, the AFL convention voted in support of government ownership of the railroads. Sidney and Beatrice Webb, the prime movers behind Fabian socialism in Britain, cited the Plumb Plan as a constructive approach to the problem of creating a new institutional framework to make the conduct of industry more efficient. The railroad unions' willingness to accept scientific management as an integral part of their plan must have been particularly appealing to the Webbs.
Even critics of the Plumb Plan, such as former Interstate Commerce Commissioner George Anderson, acknowledged that no proposal for the reorganization of the nation's railroad system could have "any reasonable prospect of success" unless it recognized "the fundamental need of a radically changed status of Labor" and a new system of organization that would facilitate cooperation, rather than "economic warfare:' between Labor and management. Thus'Anderson declared that "the men who contribute faithful, efficient and long-continued service in the transportation industry are as much entitled to representation in the management thereof, and must be held as responsible for the wise exercise of managerial powers as are the contributors of capital used to pay for the railroad facilities.
THE FAILURE OF POSTWAR RECONSTRUCTION
The year following the end of the First World War witnessed intense Labor turmoil and a major public debate over the future of industrial organization and Labor-management relations in both America and Britain. In fact, the United States in 1919 experienced more extensive strike activity than in any other year in the nation's history, with over 20 percent of all employed workers involved at one time or another in work stoppages. Strike activity in Great Britain in 1919 did not occur at such unprecedented levels, but the number of working days lost was more than three times greater than that of 1913 or of a typical year in the decade to follow. 66 In response to this postwar crisis in industrial relations, Woodrow Wilson and David Lloyd George each called National Industrial Conferences, to which representatives of management, Labor, and the public were invited to develop a consensus as to the best means of achieving more harmonious Labor relations. An examination of these conferences will provide a fitting conclusion to the present discussion.
When the National Industrial Conference of Great Britain first convened in late February 1919, nationwide strikes in both the coal and railway industries seemed imminent. Although Lloyd George may well have used the conference as part of a strategy of delay to undercut support for the Triple Alliance, many of those involved in reconstruction planning were hopeful that this gathering of representatives of organized Labor and organized capital would be able to pave the way for a new, more cooperative, approach to industrial relations. It was a reflection of the enhanced legitimacy of collective organization that the government invited the Trades Union Congress (TUC) and the FBI to select the nearly one thousand individuals who would actually attend the conference.
The Labor and employer delegations chose representatives to serve on a joint committee created to make specific recommendations to the conference. This committee subsequently issued a report reiterating the widely held belief that comprehensive worker and employer organization was desirable and that the concept of joint councils put forth by the WhitleyCommittee would contribute to better relations between Labor and management. The select committee, moreover, went a step further It recommended the establishment of a permanent National Industrial Council (NIC) whose members would be elected by the existing employee and employer organizations. The NIC was to be officially recognized by the government as the representative voice of industry and was to be consulted on -all issues of relevance to industry as a whole. Such an organization would, in essence, serve as the culmination of the Whitley Council scheme which was then in an early stage of development. So widespread was the popular appeal of Whitleyism at this time that even Allan Smith, the strongly antilabor head of the Engineering Employers' Federation who served as chair of the employers' group on the joint committee, felt compelled publicly to support the Whitley Councils approach, even though he privately opposed such cooperation.
In the United States in October 1919, President Wilson summoned representatives of Labor, capital, and the public to meet in a National Industrial Conference, which convened just as the country was experiencing its first nationwide steel strike. The AFL and the nation's railway brotherhoods chose the Labor delegation, which was headed by Samuel Gompers. Since no single employer organization could speak authoritatively on behalf of capital, Wilson asked several employer organizations, including the National Industrial Conference Board and the United States Chamber of Commerce, to send representatives to the conference. Among the individuals Wilson selected to represent the "public" were former WIB chairman Bernard Baruch, John D. Rockefeller, Jr, and Elbert Gary of United States Steel. At the outset, the delegates agreed that a majority within each of the three groups would have to approve any resolution before it could be adopted by the conference. 69 Group identities were thus recognized as crucial, with each group being given a veto over the conference's proceedings. The requirement of a majority vote within each group, however, also stemmed from the fact that American employers were even less unified and less effectively organized on a national basis than their British counterparts. Still, the method of convening both the British and American industrial conferences of 1919 reflected a clear recognition of the principle of functional representation and the importance of group organization.
In contrast to the relative harmony of the conference that had taken place several months earlier in London, the delegates to the Washington conference proved unable to reach consensus. All three groups expressed support for the general principle of worker organization, with the public and Labor groups jointly offering a resolution affirming "the right of wage earners to organize in trade and Labor unions, to bargain collectively," an "to be represented by representatives of their own choosing." John D. Rockefeller, Jr, defended this resolution with a
general line of argument that had become quite familiar during the war:
Representation is a principle which is fundamentally just and vital to the suc
cessful conduct of industry This is the principle upon which the democratic government of our country is founded. On the battle fields of France this nation poured out its blood freely iii order that democracy might be maintained at home and tbat its beneficent institutions might become available in other lands as well. Surely it is not consistent for us as Americans to demand democracy in government and practice autocracy in industry."
In a proposal resembling the British Whitley Councils plan, the AFLdominated Labor delegation called for each of the nation's industries to create a "national conference board" on which "the organized workers and associated employers" would be equally represented.
The employer group, however, refused to accept an unqualified endorsement of collective bargaining. The employers argued that shop organization was preferable to the industry-wide scale of organization associated with trade unionism and that shop councils would be more effective in reestablishing the sense of intimacy between Labor and management that had once characterized industry The employers claimed that it would be counterproductive to have workers choose as their bargaining agents individuals who were not fellow employees and who, therefore, might actually be representing "outside influences" that threatened to undermine "harmonious relations" within the shop. 7 3 The three delegations at the conference were thus unable to reach agreement, and the conference ended in deadlock.
The collapse of the First Industrial Conference led Woodrow Wilson to issue a call for another conference to be organized on a different basis. This time, seventeen individuals representing the public interest were invited to seek agreement on a set of recommendations to improve labormanagement relations in the United States. The two key figures in this second conference were William B. Wilson, then secretary of Labor, and Herbert Hoover, also formerly a member of Woodrow Wilson's war administration. Other participants included two former attorneys general, Thomas Gregory and George Wickersham, and prominent businessmen Owen Young of General Electric and Julius Rosenwald of Sears, Roebuck. The Second Industrial Conference began its deliberations in December 1919 and issued its final report the following March. In addition to recommending the creation of a National lndustrial Board and a system of regional adjustment conferences to assist in the voluntary arbitration of labor disputes, the report also came out strongly in favor of the principle of employee representation in the form of shop organization. In contrast to the position taken by the employer group at the First Industrial Conference, the participants in the Second Industrial Conference made clear their belief that the relation between unions and shop committees ought to be "a complementary, and not a mutually exclusive one'" Any effort by employers to utilize employee representation as a means "to undermine the unions:' they declared, would prove an obstacle to any hopes of creating "a lasting agency of industrial peace'" The conference report also expressed approval for attempts to extend "the principles of employee representation beyond the individual plant" and described the "voluntary joint councils" already established in the clothing and printing industries fruitful experiments in industrial organization, "74
The recommendations of the Second Industrial Conference had little impact. Congress basically ignored the conference's report, and many of the nation's leading employers began the 1920s by embarking on a campaign to guarantee the open shop throughout American industry The Plumb Plan also won little support in Congress, which returned the railroads to private ownership. Although the Esch-Cummins Act of 1920 did establish a Railroad Labor Board to assist in the settling of labor disputes in the industry, this board was appointed by the president, rather than chosen by the railway unions and employer organizations, and its powers were limited to investigation and mediation . The advent of a sharp recession in 1921, moreover, undermined the entire position of organized labor in America. Union membership, which had reached a peak in 1920, subsequently declined by 32 percent over the following ten years. 7 6
In Britain, too, expectations of a new era in industrial relations went unfulfilled. Efforts to form Whitley Councils proved to be disappointing, as most industries, including mining and engineering, failed to establish any joint councils at all. In those industries that succeeded in organizing on a nationwide basis, few works-level councils were created. The NIC proposed by the Industrial Conference of 1919 never really got off the ground either, and Lloyd George ignored the Sankey Commission's recommendations for nationalizing the coal mines. In retrospect, it was clear that Lloyd George had in the end used government-sponsored conferences, committees, and commissions as delaying tactics to defuse the strength of labor militancy in tile immediate postwar period. In Britain, as in the United States, not only did the government become increasingly hostile to the interests of organized labor, but the onset of deflation and unemployment also served further to weaken the position of trade unions. As a result, the decade following the end of the First World War proved to be a very difficult period for British trade unions. In fact, although British unions remained much more powerful than unions in America, they actually experienced a steeper percentage drop in membership than did American unions in this period.
It would be incorrect,, however, to view the developments of the war years as only a temporary aberration in the evolution of industrial relations in America and Britain. Although the focus of the present article is limited to the First World War it is possible to offer some tentative closing remarks about the subsequent development of corporatist and pluralist thinking in America and Britain. The experiences of both nations between 1914 and 1919 had helped to challenge the remaining vestiges of laissez-faire individualism and to prompt an ongoing reevaluation of the problem of how best to organize the political economy that continued into and beyond the era of "normalcy." Even the decline in strength of independent unions in America in the 1920s and the setbacks to the British labor movement occurring in the wake of the abortive general strike of 1926 cannot properly be understood if they are viewed simply as part of a revival of prewar conceptions of industrial relations.
Many historians would now agree with Ellis Hawley that the American political economy of the 1920s increasingly came to be characterized by "a form of American corporatism" based on an "associational ideology" emphasizing the need fo"stability, planning, and orderly growth. Although the government was not as directly or extensively involved in industrial relations during these years as it )lad been during the war, the associationalism of the postwar decade continued to be based on a conception of political economy that stressed the importance of group organization and functional integration and that assumed the possibility of a harmony of interests between labor and management. In his capacity as secretary of commerce, Herbert Hoover was perhaps the country's most influential advocate of this ideology
The spread of company unions and welfare capitalism in the 1920s was thus directly related to the wartime development of corporatist thinking. Such thinking, moreover, was not restricted during this period to anti-union employers. Many professionals in the recently developed discipline of industrial relations had become sympathetic to unions, and they emerged as influential voices in favor of integrating organized labor into a more stable and cooperative system of labor relations. In addition, the ongoing efforts of the Amalgamated Clothing Workers to collaborate with management in implementing what Fraser has described as "a variety of corporatist syndicalism" and the cooperative program adopted by the railroad shopcrafts and the Baltimore and Ohio Railroad were examples of attempts by certain segments of organized labor to build on the corporatist models developed during the war" The railway brotherhoods' support for the Railway Labor Act of 1926 also reflected labor's continuing interest in corporatism, with one spokesman for the unions hailing the act as an important step toward establishing a system of "self-government in industry" in which Labor-management cooperation would make possible better service, as well as higher profits and wages. In the Portland manifesto of 1923, the AFL leadership itself proclaimed its belief in the possibility of establishing cooperative mechanisms to enable the representatives of all "organic groupings" involved in industry "to come together and legislate in peace" on behalf of the common good." Labor remained more militant in Britain than in the United States during the 1920s, but even the general strike could not permanently halt the continuing development of what Keith Middlemas has referred to as the "corporatist bias" of the British political economy 84 Throughout the postwar decade, both Conservative and Labour governments continued to consult with the national organizations of workers and employers on all key questions relating to industry and through the Mond-Turner talks, officials of the TUC and the National Confederation of Employers' Organisations explored the possibility of establishing a bilateral mechanism of communication to foster a collaborative spirit in industry Although such efforts were disappointing in their results and certainly did not eliminate conflict between the parties involved in industry, the experience of the First World War continued during the 1920s to influence Britain's experiments with a "gingerly and sensitive corporatism.
This survey of war-related developments in America and Britain has shown that by 1919 there was a clear pattern of convergence in both economic structure and ideologv between the two nations. Not only had organizations of employers and workers become more prominent, but corporatist ideas had also gained a wide following in both countries. Although neither country had yet established the institutional foundation or ideological consensus required for the development of a fully worked out corporatist system, corporatist conceptions of industrial relations had achieved a broader appeal on both sides of the Atlantic at this time than had pluralist models of Labor-management relations.
Corporatism, however, could take a variety of forms, ranging from the guild socialism of a G. D. H. Cole to the anti-union doctrines of open shop employers in the United States. Carter Goodrich was essentially correct when he observed that there was "no break in the long series from Syndicalism to Whitleyism:' nor, he might have added, from Whitleyism to company unionism. All these approaches to industrial organization shared with pluralism a rejection of nineteenth-century individu-alism and an emphasis on group organization. Thus, corporatism and pluralism were by no means polar opposites, since both ideologies were still in a formative state of development as they emerged as parallel responses to the same set of problems. But all the corporatist models discussed here differed from a pluralist, collective-bargaining model of political economy by virtue of their common assumption that the organization of industry could ultimately be based on the principles of harmony and cooperation, rather than on conflict and compromise.
For the radicals in the British Labor movement, harmony and cooperation were to be achieved by creating a new industrial structure in which private capital would play no role at all. On the other hand, many of America's largest employers sought to achieve harmonious relations in industry by forestalling the development of an independent Labor movement, even as they recognized the need to organize the work force in some other way. Advocates of both extremes, though in different ways and for different reasons, rejected the controlled conflict model that was at the heart of a pluralist conception of political economy But so, too, did many of the more moderate supporters of such schemes as the Whitley Councils or the Plumb Plan, for they also envisioned the development of a political economy characterized by institutions that would foster cooperation through functional integration.
Some analysts today argue diat what actually distinguishes corporatism from pluralism is that the state exercises greater power and may enjoy more autonomy in a corporatist system, Corporatism, taken to the extreme, can lead to fascism. As it developed in the liberal capitalist democracies of America and Britain, however, corporatism was not a statist ideology For the most part, the varieties of corporatism that emerged in both countries during the war years were based on a continuing commitment to volutitarism. Neither the guild socialists, nor the supporters of Whitleyism, nor the advocates of employee representation plans favored an intrusive role for government in the conduct of industrial relations. Although the reconstituted Labour Party of Britain in 1918 officially proclaimed its support for the nationalization of basic industries, many Labourites supported nationalization because they viewed such a step as a necessary precondition for the reorganization of industry according to the principles of industrial unionism or guild socialism. Suspicion of the state was as much a factor in the thinking of most socialists espousing the cause of workers' control as it was a factor in the thinking of American businessmen calling for "selfgovernment in industry." Corporatism was an attractive ideology, to many Americans and Britons at this time precisely because it held out the hope that forms of collective organization at the workshop or industrywide level could be developed that would foster greater coordination and planning without requiring the state to take on a dominating role.
Ironically, it was often the advocates of a more strictly pluralist conception of political economy, rather than corporatists, who called on the state to play a more interventionist role in industrial relations. Particularly in the United States, where the disparity in power between organized Labor and organized capital was clearly greater than in Britain, and where the lack of organization among consumers was also quite apparent, some people who might properly be described as pluralists concluded that the state might have to serve as a "third party" at the bargaining table in order to guarantee the fairness and equity of the decisions reached through collective bargaining. Proposals for compulsory arbitration or for tripartite boards with government representation were thus more common in America than in Britain, in spite of the fact that on most other issues, especially those involving social welfare, Americans were generally more antistatist than Britons. In neither country, though, did pluralist-grounded proposals for government intervention in industrial relations enjoy widespread support during the 1920s.
In the United States, at least, it was not until the 1930s that pluralism became a widely accepted rationale for government involvement as a "broker" in the field of industrial relations. As David Brody has argued, it took the Great Depression to undermine the popular appeal of the harmony of interests ideology that management had used quite successfully in the 1920s to justify welfare capitalism. The failure of Hoover's associationalism to halt the deepening depression also contributed to the discrediting of a strictly voluntaristic version of corporatism. Even as late as 1933, however Franklin D. Roosevelt still believed that the corporatist-inspired National Recovery Administration (NRA) could serve as the key instrument in reestablishing the health of the economy and in restoring peace and stability to Labor-management relations. Ultimately, it was the collapse of the NRA that finally paved the way for a more specifically pluralist vision of political economy to become dominant in the United States.
In Britain during the 1930s, no such comprehensive attempt to implement a corporatist order as the NRA took place, although corporatist schemes were introduced in a number of individual industries, and the triangular system of government-labor-management consultation that emerged after the First World War became an even more prominent feature of the British political economy Whereas the NRA experience ultimately discredited corporatism in America, in Britain a more piecemeal approach to utilizing corporatist mechanisms to fight the depression retained fairly widespread support, so tha"corporate bias" of the Britisb economy was left intact.
The American and British political economies were never identical in structure or in ideological underpinnings. The similarities in their evolution during the period of the First World War demonstrates, however, not only that the American experience may not be as exceptional as some historians have claimed, but also that the pluralist ideology that many analysts have identified as quintessentially American did not immediately win favor in the United States over corporatist visions of bow best to organize the political economy.
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|Author:||Gerber, Larry G.|
|Publication:||Business History Review|
|Date:||Mar 22, 1988|
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