Labor problems

Preface

The relations between labor and capital, or between men and management, are changing in the United States with bewildering rapidity. As in the earlier volume entitled History and Problems of Organized Labor , it is the purpose of the writer to present to the student of industrial relations and to the general reader^a straight¬ forward study of the forces involved in what are commonly called labor problems.) The aim is not to justify or to condemn the prac¬ tices and ideals of organized labor, of shop committees, or of employers and employers’ associations; (it is to analyze the phe¬ nomena of which the practices and ideals are the visible mani¬ festations. J Labor organizations, employers’ associations, strikes, boycotts, the demand for the closed shop, restriction of output, and the ideals and point of view of organized labor or of organized capital are evolved through the play of social forces working within the economic field. The modern labor problem cannot be understood, and certainly cannot be solved, until the underlying causative forces, old and new, physical and social, are laid bare.

Cleveland, Ohio September, 1932

F. T. C.

CHAPTER

Preface . .

Contents

PAGE

iii

I. The Scientific Method Applied to Industrial

Chapter I The Scientific Method Applied To Industrial Relations

SOCIAL MECHANICS

For indefinite centuries men have been seeking for the solution of various problems relating to the toilers, or, in present-day terminology, relating to industrial relations. Students of ancient history have disclosed the struggles of the plebeian or slave class against the patrician or ruling class, centuries before the Christian era. The labor problem is a problem of all nations, all peoples, and all centuries. The factors in the equation change but the problem remains. History is in reality a story of the struggle of the masses upward; worthwhile history is a chronicle of the rela¬ tions of man to man in the fierce struggle for existence and for dominance over natural forces. Migrations, wars, changes of dynasties, new social and political alignments are but the outward and visible signs of adjustments of man to his physical and social environment. Our labor problems, past and present, are the growing pains of human society. Social adaptation does not move smoothly in well lubricated grooves. Friction is very apparent in the form of social inertia, custom, laws, and class interests. Slavery and serfdom have disappeared; but traces of these older forms may readily be discovered. The arrogance of employers and of the wealthy and powerful is a survival of what was a much-lauded virtue in the feudal and military age. The docility and unquestioning obedience so frequently expected of workers are the ancient virtues of the slave and serf clothed in the costume of a nominally free wage worker.

Social and political changes are intimately connected with modi¬ fications in the methods of doing the world’s work. In the last century and a fraction numerous industrial changes have taken place. As a direct consequence problems have arisen which were unknown and unimagined a few generations ago. The problems which we are to study have developed out of the changes which have followed what is commonly called the Industrial Revolution. This industrial revolution is not the only one in the world’s history. The use of bronze or iron tools, for example, precipitated an indus¬ trial revolution. The development of agriculture constituted an¬ other such revolution. In the eighteenth century the invention of the steam engine marked the opening of a rapid and important transformation in social, political, and industrial affairs. Through¬ out the history of mankind discoveries, inventions in the ways of getting a living, and new modes of traveling and communi¬ cating have ever caused cataclysmic changes in human society. The discovery of the use of fire and of the smelting of metals, the invention of gunpowder, of the mariner’s compass, and of the steam engine, each preceded and caused sweeping social and political changes. More recently the steel rail, the copper wire, the electric dynamo, the daily paper, the automobile, the radio, and aircraft have aided in ushering in a new social and industrial era. In order to settle the disturbed human cauldron a new alignment of individuals and of associations of individuals is necessary. Not one of the great reform or progressive movements of history can be adequately explained or clearly understood without turning the attention to the industrial evolution or revolution which pre¬ ceded it and ushered it upon the spectacular stage of political history.

Human society in recent decades has presented to the student of sociology and of history a bewildering moving picture. It has seemed that nothing is stable or sacred, that everything is under¬ going modification, upheaval, or rejection. The typical man or woman is often tempted to cry out passionately against the new and to cling tightly to the old because it is old and familiar. Meth¬ ods of doing the world’s work and of controlling the world’s wealth have been changing since the turn of the century with unprece¬ dented rapidity, and, consequently, social, political, legal, and religious readjustments are imperative but also are unfortunately difficult of orderly attainment. A fragile article, subjected to sudden and unusual stresses and strains, is likely to crack; human society subjected to rapid industrial modifications is in imminent danger of an upheaval unless wise and progressive leadership eases the strain by adapting the political, social, educational, and religious institutions to the new situation. To preserve the status quo is impossible; the alternatives are chaos or progress along many lines.

Organizations of wage workers and associations of employers are among the instrumentalities which have arisen out of the com¬ plexity and confusion incidental to the industrial changes of the last century. The study of the problems relating to labor organiza¬ tions and industrial relations should be primarily concerned with causes; it may logically be called a branch of social physics or social mechanics. Thoughtful men and women are beginning to see that the complex of problems which is called “labor problems” or “the labor problem” is something to be carefully re-studied. It is an engineering problem, a problem in human engineering. Perhaps, in due time, a Bureau of Human Standards may be established. The labor problem should not be considered as a matter chiefly for the emotions. A labor problem should be analyzed as one would analyze a problem in mechanics. The human engineer should know how “to organize human labor systematically.”

Forces as positive and potent as those disclosed in the mechanical world are acting and reacting in the industrial relations between men and management. These forces are many and varied; they are elusive. Less is known about them than is known about physical forces; but there is gradually emerging a scientific study of human behavior, a study of the ways of man. The road to industrial peace and goodwill, the road to efficiency in industry, must first be paved with the bricks of sympathetic understanding of the desires and longings of men, and of their interests. Unions, shop committees, employers’ associations, strikes, boycotts, arbitra¬ tion hearings, restriction of output, the ideals and points of view of workers and of management, are evolved by the play of forces working within the economic field. Industrial relations today and tomorrow cannot be intelligently studied and directed until the underlying causative forces, old and new, physical, social, and psychological, are laid bare.

INDUSTRIAL COMPLEXITY

The present age is distinctly one of technology. It is an era of industry and social complexity. Feudalism and pioneer society were comparatively simple. Since the Industrial Revolution, and especially since the turn of the century, economic and business relationships are characterized by interdependence; the pioneer period was one of independence. In pioneer America and in feudal Europe the practical problem of getting an adequate supply of food and fuel was in the main one for the family to solve. Today, in crowded cities and in typical specialized activities, the mass of mankind has been divorced from the direct production of the commodities they consume. Each worker literally produces for the multitude, and each worker, idler, or youth in preparation for future activities, utilizes the joint product of many cooperating individuals widely scattered in time or place.

Modern specialized and interdependent industrial society can only be kept going smoothly while all types of worker — farmer, miner, railway-man, truck-driver, clerk, manager, technical expert, and others — do their parts in an efficient manner and on time. The industry affected with public interest is a product of recent decades. Man in an industrial society is no longer an independent economic unit. The transformation of pioneer society into an industrial and exchange economy spells not only startling changes in methods of getting a living but also in social relationships and the concepts of individual rights and attitudes toward fellowmen. Today’s demand is indeed for technical competence; but there are important social and political heritages from the past, hangovers from a simple, rural, and agricultural civilization, that cannot be neglected.

Thanks to science and power, the world has been growing smaller relatively. Persons and goods are transported regularly to and from distant parts of the globe. The telegraph, the cable, the telephone, and radio transmit news around the world almost instantaneously. International trade and world markets are fa¬ miliar to vast multitudes of people. Local markets, local govern¬ ments, and local fashions are affected by distant producers and distant purchasers. No dark, unknown continents remain on the business map of today; the world is becoming one vast neigh¬ borhood. Nevertheless, business and financial methods have as yet been unable to divest themselves of local and pioneering habits. Business ideas, slogans, and methods, like governmental units, come down to us from the wagon-road era, from the period of localism in markets and communications. Habit, social inertia, the folkways of our fathers, are difficult to change. The student of economics who points out that a new industrial and scientific world demands new political, social, and economic programs and formulas is called a dreamer or he is labeled as a dangerous and radical innovator. Few, if any, private industries in actual practice have attained the social or community point of view. Indeed, our economic system is based on “principles that emphasize indi¬ vidual ownership and aggrandizement and that seldom correlate with national and international aims.” The planlessness and the serious maladjustments in complex industry are not due to a lack of ability to develop a reasonably-well coordinated industrial mechanism, but to the lack of any potent motive to do so and to social inertia.

The American nation with approximately 125,000,000 men, women, and children equipped with needs and desires for neces¬ sities, comforts, and luxuries of a bewildering variety, may well be considered to constitute a great market. The forty million plus gainfully employed, together with the housewives of the nation, are the working force for this vast array of consuming human beings. The American business world with its machinery and equipment may be considered as the productive plant for the people of the United States. It is a gigantic plant with a raw materials, a manufacturing, a transportation, and a sales depart¬ ment. It is augumented by a large number of professional workers, personal servants, and governmental employees. The income of the nation is the product of the combined efforts of the gainfully employed. 1

Critics have asserted that Americans only become alert and wide¬ awake in an emergency — a war, a catastrophe, or a depression. This country was settled, our cities built, and our industries de¬ veloped without a definite plan or program. Americans have been opportunists. The departments of this giant plant, the United States, incorporated, have been allowed to evolve in a haphazard, or unplanned, way. Individual interest in profits was supposed to bring about harmony and balance between and within depart¬ ments. As industry has passed out of the pioneer stage, as ma¬ turity has come, serious wastes and maladjustments are becoming 1 Carlton, F. T., Economics, p. 67.

so evident that even the ultra-optimists and the super-individualists are occasionally suffering misgivings. Industry after industry — soft coal, farming, automobile, shoe, sugar, rubber — has been over-expanded and suffers from the disease of “excess plant capac¬ ity” as the result of optimism born of lack of knowledge and absence of social vision. Anarchy in modern business is becoming as dangerous as it would be in the government of a highly devel¬ oped industrial nation. Every well-managed plant carefully coor¬ dinates the work and the output of the several departments within the organization. Not so to date in industry. We have, however, done something along this line in the case of railways. For ex¬ ample, a new road may not be built without the consent of the Interstate Commerce Commission — a sort of railway planning and coordinating commission. Coordination, rather than ruthless competition and unplanned expansion, is the watchword in the railway world. But as yet no general plan for coordinating railway transportation with water, truck, pipe line, or other means of trans¬ portation, has been developed. Industry as it becomes mature, interdependent, and far-flung, needs the same economic states¬ manship which has been applied in the mechanical field. And, unless this need is supplied, more and more serious maladjustments and depressions may safely be forecast by unemotional students of economics. Unless industry is looked at from the community point of view — national or even world point of view — coordina¬ tion seems impracticable.

In the words of Glenn Frank, “the modern business man is a pioneer.” He is too often dominated by the ruthlessness, the individualism, and the wastefulness of the pioneer. As the frontier passed into history, the call for the pathfinder, the scout, and the man with the hoe became weaker and weaker. The agricultural expert, the scientist, and the engineer are needed. Likewise, in business, the coordinators, the men who can get along with others, the industrial statesmen, are today the men who should be placed in control — if we would avoid waste, industrial strife, and political cataclysms. One observer has remarked that “earlier civilizations did not survive their coming-of-age.” 1

The American nation developed out of “a loose collection of isolated provincial communities.” Our business traditions and 1 Flanders, R. E., in Beard, C. A., Toward Civilization, p. 33.

practices, our conceptions of individual and social “rights” have been stamped with the crude coloring of the isolated frontier com¬ munity familiar only with small-scale business. We are so steeped in the ethics of little industry that great groups of the American people look upon the “right” to strike, to discharge employees arbitrarily, to close down a business in order to bring employees to terms, or to practice sabotage as “fundamental and inalienable.” But in these days of big business, wide markets, unions, and em¬ ployers’ associations, is not the right to demand that business function uninterruptedly and efficiently as fundamental as any of the time-honored rights? Let us recall, moreover, that the “funda¬ mental right” to avenge fancied or real insults by means of the feud and the duel has been definitely discarded; and now the fundamental rights of small-scale business are being repeatedly questioned. It seems probable that these are actually in the diffi¬ cult process of being discarded. The new “right” of consumers to demand uninterrupted and efficient functioning of key or socially important industries is appearing above the ethical and legal horizon. Its appearance tends to dim the glory of the “right” of the individual, employer or employee, to throw a monkey-wrench into the industrial machine every time he becomes disgruntled or wishes to gain concessions.

Business is rapidly becoming a public function; it is no longer to be considered solely a private matter. Americans, and Europeans in a larger degree, are accepting the idea that the owner of a business can no longer operate it exactly as he pleases. Private property rights are being narrowed in several directions. The right of the investor to act as the sole director of industry is being questioned. The workers, technical, skilled, and unskilled, are demanding with increasing vigor a voice in industrial management. The age of isolation, localism, and group independence is now a matter of history in a great industrial country such as the United States. Centuries ago, the feud and the duel began seriously to interfere with the welfare and business affairs of persons and groups not concerned in those quarrels. Presently, public opinion began to deprecate the resort to such crude and violent methods of settling disputes. As a last resort for those who were unable or unwilling amicably to settle their own disputes, the law courts were invented and disputants were forced under coercion to have their quarrels

IO adjudicated by the court instead of resorting to the ancient practice of private warfare. Likewise, may we hope, industrial warfare is now on the threshold of a new epoch in human history; it may be passing off the stage. 1

Modern complex industrial society may logically be compared to a delicate and intricate animal organism. To stop the function¬ ing of a key industry may entail disastrous results similar to those of cutting an artery in a human body. Wars, international or industrial, may easily ruin modern industrial civilization and usher in a new dark age. Civilization is a guarded area of relative peace in which teamwork is essential. If industrial friction, sabotage, mutual suspicion in industry, autocratic and arbitrary methods on the part of employers, and increasing emphasis upon class con¬ sciousness, continue and develop in intensity and scope, a social and industrial breakdown is ahead. If the United States is to avoid a catastrophe in the not distant future, steps must be taken to reduce industrial friction and to enlarge the field of common interests in industry. Men must learn to live and work together peacefully or civilization will inevitably revert to savagery. In a highly developed industrial nation such as the United States or Great Britain, utilizing technology and science, revolutionary pro¬ cedure, either in the political or the industrial field, with the in¬ evitable sequence of stopping the wheels of industry and clogging the flow of necessary commodities to the great centers of popula¬ tion, would lead to incalculable suffering, sickness, poverty, death, and degeneracy. The disaster would fall upon all alike — rich and poor, privileged and unblessed. A society dependent upon technology can be easily disrupted by war and by internal friction.

Unfortunately, the lot of the average worker, even in this country, is not particularly enjoyable. He has a routine job with little chance for advancement; his wages are barely sufficient to afford a comfortable standard of living for his family. In too many instances, he is not well fitted to his job; his working con¬ ditions are not comfortable; his job is insecure; his home environ¬ ment is not attractive; he is often reprimanded and made to feel by his foreman and others that he is of little account; and his working and leisure life is dull. It is in such an unattractive or forbidding atmosphere that unrest, radical propaganda, anti-social 1 See Carlton, F. T., Economics, pp. 12 ff.

ii conduct, and antagonism are bred. Industrial inefficiency and nagging foremen contribute largely to emotional strains and stresses which make for bad industrial relations. Put a man in the right job, enable him to do it fairly effectively, give him credit for what he accomplishes, give him a sense of job security ■— and a peaceful industrial world may be reached in the near future.

THE ERA OF TECHNOLOGY

It has been suggested that instead of dividing the history of mankind into such artificial epochs as primitive, ancient, medieval, and modern, only two epochs should be noted — before the ma¬ chine, and after the invention of power-driven machinery. The machine age should, however, be subdivided into two periods *— infancy, extending in this country and in a few other industrially advanced nations to about 1914, and maturity. The character¬ istics and problems of the maturity of the machine age, or of the new age of technology and automatic machinery, form the subject matter of the remainder of this chapter.

Among the most noteworthy of the characteristics of the present age of technology or of the maturity of the machine, the following may be listed: —

Great and increasing per capita productivity Interdependence of individuals and groups Specialization of occupations Multiplication of wants Large-scale business units

Improvement in the ease and rapidity of transportation and com¬ munication

Growing importance of cities

Slowing-up of the rate of increase in population

Falling birth-rate

Lengthening of the average span of human life Increase of leisure for all Emphasis upon research

United States no longer a land of opportunity for the immigrant Use of propaganda

The ages-old quest for food took on new aspects after the Indus¬ trial Revolution. The heavenly dream of a sufficiency of food for mankind gave promise of fulfillment. The potential pro¬ ductivity of the American nation has increased to such an extent that it seems possible to banish poverty from the land. Today, we can produce enough — an abundance — of food; the difficulty confronting the nation is that connected with getting purchasing power into the hands of those who need what is produced. We watch the over-development of certain industries under the control of optimistic competing managements, and we talk about the “menace of plenty.” Our primitive and pioneer ancestors never dreamed of a danger from over-production. Primitive, ancient, and pioneer peoples feared a shortage of food. In the maturity of the power-driven machine age, Americans fear a shortage of jobs and of the counters with which purchases are made. Curiously enough, the primitive man would think, we fear want in the presence of plenty. The age of technology and of automatic machinery has pushed aside the direct quest for bread and butter. It is now a job which gives access to bread and to jam on the bread. The quest for food has become an indirect and round-about process.

While engineering, invention, science, scientific management, natural resources, the use of power, and the like have made possible great per capita productivity in the United States, one should not be unmindful of the role played by a stable government which protects property rights and forces the fulfillment of contracts, and by a credit and banking system. Well-organized financial institutions and stable governments are as essential to productive efficiency as science and engineering. The United States is also a nation peopled by a relatively scanty population. The density of population is much less than that of many other nations. A large influx of immigrants or a high birth-rate, or both, would sooner or later lead to reduced per capita production. In a race between science and technology, and increasing population, the latter will finally win.

Historically and geologically speaking, an old age is ever coming to an end and a new epoch is always in the making; but the un¬ usual elements in today’s shifting scene are the extraordinary rapidity of the change, and the fundamental nature of certain changes which science and the machine have wrought in the working and living conditions of mankind. Science and engineering have been so successful in recent years that our main problems are no longer in the field of productive activity. The baffling questions are now in the realm of distribution, in the field of the social sciences, in applied economics. America is out of the scarcity period; but maladjustments are transforming Professor Patten’s “pleasure economy” into a new and unexpected form of “pain economy,” with poverty, unemployment, insecurity, and suffering walking beside science, power, and great productive ca¬ pacity. Evidently, the power-driven machine, like politics, “makes strange bed-fellows.” Einstein, when in California, is reported to have asked: “Why does this magnificent applied science which saves work and makes life easier, bring us so little happiness? In war it serves that we may poison and mutilate each other. In peace it has made our lives hurried and uncertain.” This, indeed, is a fascinating problem for a school of applied science. How may the forces set in motion by science and technology be so directed as to make for a reduction of poverty and of unemploy¬ ment, and for the advancement of culture and of the appreciation of art and literature?

In a depression, the great productive capacity of the nation is held in check, men and machines are idle while men, women, and children are cold, poorly fed, and inadequately clothed and housed. The disease of the machine age, called the business cycle in its periods of chill, paralyzes industry. To cure this disastrous illness of the industrial order, we do not so much need more of machinery or of physical science as we need brain power applied to the economic and business problem of keeping the productive ma¬ chinery of the United States operating, and the flood of goods flowing to the families of all who are able and willing to work. The problem is to balance specialization with coordination, and to temper interdependence with cooperation and long-time national and international planning. A popular writer paints the picture in this vivid fashion: “Actually we need less industrial and farm labor, and it’s up to us to figure out some ingenious and moral way of letting a few farmers feed us and a few mechanicians push buttons and pull levers for us, while we make the country over into a place fit for human beings to live, love, drink, and die in.” 1

1 Franklin, J., The Forum, Aug., 1931, p. 69.

Critics of the machine age have pointed to the decline in crafts¬ manship and to an increase in routine and monotonous work. In industries in which machinery is generally used, the great majority of workers are machine tenders and feeders. The worker, it is asserted, has become an auxiliary to the machine. The machine is becoming “paramount; the worker incidental.” As industry approaches the maturity of the machine age, the pessimistic view in regard to the direct effect upon the workers requires certain qualifying statements.

Men and women are inclined when looking back upon past epochs to focus the attention upon the good traits and neglect to dwell upon less desirable relationships. The craftsman of the ancient and medieval periods was not the typical worker of those eras. Too frequently, the slave, the serf, the peasant, and the unskilled worker are overlooked. Were the working and living conditions which the workers of the distant past experienced attractive? Long hours, low pay, low standards of living, insanitary surround¬ ings, hard and monotonous work were unattractive features of the life of the typical worker of the pre-industrial Revolution epochs. The major part of the history of labor is a story of distasteful jobs reluctantly performed. Manual workers have ever disliked their jobs. Indeed, the glorification of work is practically a new phenomenon. The dislike of work and loafing on the job are not new industrial problems. They are as old as regular industry. The form of routine and monotonous work is different in today’s mass-production workshop from what it was when the pyramids were erected, but it is not something new under the light of the sun. Furthermore, the rank and file of workers of earlier days did not have opportunity to develop initiative. The overseer in the gang system was the unscientific forerunner of the planning room. The serf was caught in a stereotyped program which forced the individual worker into the customary groove. The student of today should compare the unskilled worker, the serf, and the slave of the past with the routine worker of the present; he should not compare today’s common laborer with the medieval craftsman. And when unskilled are contrasted with unskilled, those who are not dazzled by the fictitious glamour of a “golden past” will find that modern workers are not worse off than those of preceding epochs.

As the machine age approaches maturity, heavy manual labor and purely routine work are being taken off the shoulders of the worker. Mechanical handling, conveyor systems, automatic ma¬ chinery, “electric eyes,” adding machines, push-buttons, and a multitude of ingenious contrivances are taking away from men and women much of the back-breaking and monotonous drudgery of the earlier years of the machine age and of preceding genera¬ tions. In many an industrial plant the machine has displaced handwork, the worker is now a repairman or a supervisor. The intricate machines, moreover, require much skilled work to pro¬ duce; and the repair, oiling, and care in case of breakdown will require the services of many workers. Many forms of creative and skilled work are outside, and bid fair to remain outside, the “Em¬ pire of the Machine.” The worker in the age of automatic ma¬ chinery, or in the period of maturity, no longer performs the routine work of being the personal servant of the machine. He is being freed for less machine-like work and for greater leisure. Management is beginning to think of the worker in mass pro¬ duction as a “measure of defect in the complete automaticity of machines.” 1

The machine has been and is a competitor of man. It has dis¬ placed men and it continues to do so. The machine “ saves labor ”; but it shoulders the worker temporarily or permanently out of industry. It is causing technological unemployment — a new name for an older process. In the last two decades, the exceedingly rapid displacement of men and women by power-driven machinery has produced a fairly continuous grist of displaced and unadjusted workers. The machine is increasing productivity; but it demands consumers (purchasers) of its output. On the contrary, technologi¬ cal unemployment means reduced consumption. Here is the great paradox of modern industry. In mass production the machine has become the central figure; but, for successful operation, mass production must be balanced by consumption by the masses. Will the machine relieve man “of drudgery and abasement, or will it plunge him into futility and extermination” ? 2 The problem is that of making power-driven machinery the tool of men, giving increased productivity and leisure without the pitiful process of