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THE PERSONAL RELATION IN INDUSTRY
by
JOHN D. ROCKEFELLER, JR.
[Illustration: Logo]
Boni and Liveright
Publishers New York
Copyright, 1923, by
Boni and Liveright, Inc.
Printed in the United States of America
First printing, December, 1923
Second printing, January, 1924
PUBLISHER’S NOTE
The following material by Mr. John D. Rockefeller, Jr., consists, with
one exception, of addresses delivered by him on various occasions and
amidst the demands of many varied interests. These addresses are left
practically as they were delivered, and no effort has been made to
change their form. Slight repetitions of certain points may be noted in
these addresses, a condition which is expected in arguments or subjects
of the character of those contained in this book.
The publishers, in obtaining Mr. Rockefeller’s permission to publish
these addresses, believed that by presenting his views in this form
there would be made a substantial contribution to the ever-important
subject of industrial relationships.
CONTENTS
CHAPTER PAGE
I. COÖPERATION IN INDUSTRY 9
II. LABOR AND CAPITAL--PARTNERS 38
III. THE PERSONAL RELATIONS IN INDUSTRY 63
IV. REPRESENTATION IN INDUSTRY 83
V. TO THE EMPLOYEES 90
VI. TO THE PEOPLE OF COLORADO 107
APPENDIX
I. REPRESENTATION OF EMPLOYEES 123
II. DISTRICT CONFERENCES, JOINT COMMITTEES
AND JOINT MEETINGS 129
III. THE PREVENTION AND ADJUSTMENT
OF INDUSTRIAL DISPUTES 136
IV. SOCIAL AND INDUSTRIAL BETTERMENT 145
THE PERSONAL RELATION IN INDUSTRY
I
COÖPERATION IN INDUSTRY
I
To-day the world is passing through a period of reconstruction.
As we address ourselves to the grave problems which confront us,
problems both national and international, we may look for success in
their solution just in so far as we continue to be animated by the
spirit of coöperation and brotherhood. The hope in the future lies in
the perpetuation of this spirit, and unless increasingly it is made the
foundation of the political, social, and industrial life of the world,
there will not be permanent peace and good will among men, either
nationally or internationally.
In no one of these spheres of human relations is the spirit of
coöperation more essential than in industry, since industry touches
almost every department of life. Moreover, there is no problem
pressing more urgently upon the attention of the world to-day than
the industrial problem, none more important, none more difficult of
solution. There are pessimists who say that there is no solution short
of revolution and the overturn of the existing social order.
Surely the nations which have shown themselves capable of such lofty
sacrifice, which have given themselves so freely, gladly, unreservedly,
during these past years of struggle, will bring to bear in the solution
of this great problem powers of head and heart, not less wise and
unselfish than those exhibited in dealing with the problems of the war;
surely a way out of the impenetrable maze will be found.
Almost countless are the suggested solutions of the industrial problem,
which have been brought forth since industry first began to be a
problem. Most of these are impracticable; some are unjust; some are
selfish and therefore unworthy; some have merit and should be carefully
studied. None can be looked to as a panacea.
There are those who believe that legislation is the cure-all for every
political, social, and industrial ill. Much can be done by legislation
to prevent injustice and encourage right tendencies, but legislation
of itself will never solve the industrial problem. Its solution can
be brought about only by the introduction of a new spirit into the
relationship between the parties to industry--the spirit of coöperation
and brotherhood.
It is this theme, _coöperation in industry_, that I desire to develop.
We must ask ourselves at the outset certain fundamental questions:
First, what is the purpose of industry? Shall we cling to the
conception of industry as an institution, primarily of private
interest, which enables certain individuals to accumulate wealth, too
often irrespective of the well-being, the health, and the happiness of
those engaged in its production? Or shall we adopt the modern viewpoint
and regard industry as being a form of social service, quite as much as
a revenue-producing process?
Is it not true that any industry, to be permanently successful, must
insure to labor adequately remunerative employment under proper
working and living conditions, to capital a fair return upon the money
invested, and to the community a useful service?
The soundest industrial policy is that which has constantly in mind
the welfare of the employees as well as the making of profits, and
which, when human considerations demand it, subordinates profits to
welfare. Industrial relations are essentially human relations. It is
therefore the duty of everyone entrusted with industrial leadership to
do all in his power to improve the conditions under which men work and
live. The day has passed when the conception of industry as chiefly
a revenue-producing process can be maintained. To cling to such a
conception is only to arouse antagonisms and to court trouble. In the
light of the present every thoughtful man must concede that the purpose
of industry is quite as much the advancement of social well-being as
the production of wealth. It remains none the less true, however, that
to be successful, industry must not only serve the community and the
workers adequately, but must also realize a just return on capital
invested.
Next we must ask ourselves, who are the parties to industry: The
parties to industry are four in number: capital, management, labor, and
the community.
I am, of course, well aware of the social theories and experiments that
seek to merge capital and labor, either through ownership of capital
by the state or by the workers themselves. But the difficulties that
confront the realization of these plans are vast and the objection to
many of them fundamental.
Under our present system, capital is represented by the stockholders,
and is usually regarded as embracing management. Management is,
however, an entirely separate and distinct party to industry; its
function is essentially administrative. It comprises the executive
officers who bring to industry technical skill and managerial
experience. Labor consists of the employees. Labor, like capital, is an
investor in industry, but labor’s contribution, unlike that of capital,
is not detachable from the one who makes it, since it is in the nature
of physical effort and is a part of the worker’s strength and life.
Here the list usually ends.
The fourth party, namely, the community, whose interest is vital and in
the last analysis controlling, is too often ignored. The community’s
right to representation in the control of industry and in the shaping
of industrial policies is similar to that of the other parties. Were it
not for the community’s contribution, in maintaining law and order, in
providing agencies of transportation and communication, in furnishing
systems of money and credit and in rendering other services, all
involving continuous outlays, the operation of capital, management,
and labor would be enormously hampered, if not rendered wellnigh
impossible. The community, furthermore, is the consumer of the product
of industry, and the money which it pays for the product reimburses
capital for its advances and ultimately provides the wages, salaries,
and profits that are distributed among the other parties.
Finally we must inquire: what are the relations between the parties to
industry? It is frequently maintained that the parties to industry must
necessarily be hostile and antagonistic; that each must arm itself to
wrest from the others its share of the product of their common toil.
This is unthinkable; it is not true; the parties to industry are in
reality not enemies, but partners; they have a common interest; no one
can get on without the others. Labor must look to capital to supply the
tools, machinery, and working capital, without which it cannot make
its vital contribution to industry; and capital is equally powerless
to turn a wheel in industry without labor. Management is essential
to supply the directing force, while without the community as the
consumer, the services of the other three parties would have no outlet.
Just what the relative importance of the contribution made to the
success of industry by the several factors is, and what their relative
rewards should be, are debatable questions.
But, however views may differ on these questions, it is clear that the
common interest cannot be advanced by the effort of any one party to
dominate the others, arbitrarily to dictate the terms on which alone
it will coöperate, or to threaten to withdraw if any attempt is made
to thwart the enforcement of its will. Success is dependent upon the
coöperation of all four. Partnership, not enmity, is the watchword.
II
If coöperation between the parties to industry is sound business
and good social economics, why then is antagonism so often found in
its stead? The answer is revealed in a survey of the development of
industry. In the early days of industry, as we know, the functions
of capital and management were not infrequently combined in the one
individual, who was the employer. He in turn was in constant touch with
his employees. Together they formed a vital part of the community.
Personal relations were frequent and mutual confidence existed. When
differences arose they were quickly adjusted. As industry developed,
aggregations of capital larger than a single individual could provide
were required. In answer to this demand, the corporation with its many
stockholders was evolved. Countless workers took the place of the
handful of employees of earlier days. Plants under a single management
scattered all over the country superseded the single plant in a given
community. Obviously, this development rendered impossible the personal
relations which had existed in industry, and lessened the spirit
of common interest and understanding. Thus the door was opened to
suspicion and distrust; enmity crept in; antagonisms developed. Capital
not infrequently used its power to enforce long hours and low wages;
labor likewise retaliated with such strength as it had, and gradually
the parties to industry came to view each other as enemies instead of
as friends and to think of their interests as antagonistic rather than
common.
Where men are strangers and have no contact, misunderstanding is apt to
arise. On the other hand, where men meet frequently about a table, rub
elbows, exchange views, and discuss matters of common interest, almost
invariably it happens that the vast majority of their differences
quickly disappear and friendly relations are established.
Several years ago I was one of a number of men who were asked two
questions by a Commission appointed by the President of the United
States to deal with certain labor difficulties.
The first was: “What do you regard as the underlying cause of
industrial unrest?” The second: “What remedy do you suggest?”
I stated that in my judgment the chief cause of industrial unrest is
that capital does not strive to look at questions at issue from labor’s
point of view, and labor does not seek to get capital’s angle of
vision. My answer to the second question was that when employers put
themselves in the employee’s place and the employees put themselves in
the employer’s place, the remedy for industrial unrest will have been
found. In other words, when the principle adopted by both parties in
interest is: “Do as you would be done by,” there will be no industrial
unrest, no industrial problem.
It is to be regretted that there are capitalists who regard labor as
their legitimate prey, from whom they are justified in getting all
they can for as little as may be. It is equally to be deplored that
on the part of labor there is often a feeling that it is justified in
wresting everything possible from capital. Where such attitudes have
been assumed, a gulf has been opened between capital and labor which
has continually widened. Thus the two forces have come to work against
each other, each seeking solely to promote its own selfish ends. As a
consequence have come all too frequently the strike, the lockout, and
other incidents of industrial warfare.
A man, who recently devoted some months to studying the industrial
problem and who came into contact with thousands in various industries
throughout the United States, has said that it was obvious to him from
the outset that the working men were seeking for something, which at
first he thought to be higher wages. As his touch with them extended,
he came to the conclusion, however, that not higher wages, but
recognition as men, was what they really sought. What joy can there
be in life, what interest can a man take in his work, what enthusiasm
can he be expected to develop on behalf of his employer, when he is
regarded as a number on a pay-roll, a cog in a wheel, a mere “hand”?
Who would not earnestly seek to gain recognition of his manhood and the
right to be heard and treated as a human being, not as a machine?
Then, too, as industry has become increasingly specialized, the workman
of to-day, instead of following the product through from start to
finish and being stimulated by the feeling that he is the sole creator
of a useful article, as was more or less the case in early days, now
devotes his energies for the most part to countless repetitions of a
single act or process, which is but one of perhaps a hundred operations
necessary to transform the raw material into the finished product. Thus
the worker loses sight of the significance of the part he plays in
industry and feels himself to be merely one of many cogs in a wheel.
All the more, therefore, is it necessary that he should have contact
with men engaged in other processes and fulfilling other functions in
industry, that he may still realize he is a part, and a necessary,
though it may be an inconspicuous, part of a great enterprise. In
modern warfare, those who man the large guns find the range, not by
training the gun on the object which they are seeking to reach, but
in obedience to a mechanical formula which is worked out for them.
Stationed behind a hill or mound, they seldom see the object at which
their deadly fire is directed. One can readily imagine the sense of
detachment and ineffectiveness which must come over these men. But
when the airplane, circling overhead, gets into communication with
the gunner beneath and describes the thing to be accomplished and
the effectiveness of the shot, a new meaning comes into his life. In
a second he has become a part of the great struggle. He knows that
his efforts are counting, that he is helping to bring success to his
comrades. There comes to him a new enthusiasm and interest in his
work. The sense of isolation and detachment from the accomplishments
of industry, which too often comes to the workers of to-day, can be
overcome only by contact with the other contributing parties. In
this way only can common purpose be kept alive, individual interests
safeguarded, and the general welfare promoted.
While obviously under present conditions those who invest their
capital in an industry, often numbered by the thousand, cannot have
personal acquaintance with the thousands and tens of thousands of
those who invest their labor, contact between those two parties in
interest can and must be established, if not directly, then through
their respective representatives. The resumption of such personal
relations through frequent conferences and current meetings, held for
the consideration of matters of common interest, such as terms of
employment and working and living conditions, is essential in order
to restore a spirit of mutual confidence, good will, and coöperation.
Personal relations can be revived under modern conditions only through
the adequate representation of the employees. Representation is a
principle which is fundamentally just and vital to the successful
conduct of industry. It means, broadly speaking, democracy through
coöperation, as contrasted with autocracy.
It is not for me or anyone else to undertake to determine for industry
at large what specific form representation shall take. Once having
adopted the principle, it is obviously wise that the method to be
employed should be left, in each specific instance, to be determined by
the parties interested. If there is to be peace and good-will between
the several parties in industry, it will surely not be brought about
by the enforcement upon unwilling groups of a method which in their
judgment is not adapted to their peculiar needs. In this, as in all
else, persuasion is an essential element in bringing about conviction.
With the developments in industry what they are to-day, there is sure
to come a progressive evolution from the autocratic single control,
whether by capital, management, labor, or the community, to some form
of democratic coöperative control participated in by all four. The
whole movement is evolutionary. That which is fundamental is the idea
of coöperation, and that idea must find expression in those forms which
will serve it best, with conditions, forces and times what they are.
In the United States, the coöperation in war service of labor, capital,
management, and Government afforded a striking and most gratifying
illustration of this tendency.
After all, the basic principles governing the relations between the
parties to industry are as applicable in the successful conduct of
industry to-day as in earlier times. The question which now confronts
us is how to reëstablish personal relations and coöperation in spite
of changed conditions. The answer is not doubtful or questionable,
but absolutely clear and unmistakable: it is, through adequate
representation of the four parties in the councils of industry.
III
Various methods of representation in industry have been developed,
conspicuous among which are those of labor unions and employers’
associations. As regards the organization of labor, it is just as
proper and advantageous for labor to associate itself into organized
groups for the advancement of its legitimate interests as for capital
to combine for the same object.
Such associations of labor manifest themselves in collective
bargaining, in an effort to secure better working and living
conditions, in providing machinery whereby grievances may easily and
without prejudice to the individual be taken up with the management.
Sometimes they provide benefit features, sometimes they seek to
increase wages, but whatever their specific purpose, so long as it
is to promote the well-being of the employees, having always due
regard for the just interests of the employer and the public, leaving
every worker free to associate himself with such groups or to work
independently, as he may choose, they are to be encouraged.
But organization is not without its dangers. Organized capital
sometimes conducts itself in an unworthy manner, contrary to law
and in disregard of the interest of both labor and the public. Such
organizations cannot be too strongly condemned or too vigorously dealt
with. Although they are the exception, such publicity is generally
given to their unsocial acts that all organizations of capital, however
rightly managed or broadly beneficent, are thereby brought under
suspicion.
Likewise it sometimes happens that organizations of labor are
conducted without just regard for the rights of the employer or of
the public; methods and practices are adopted which, because unworthy
or unlawful, are deserving of public censure. Such organizations
of labor bring discredit and suspicion upon other organizations
which are legitimate and useful, just as is the case with improper
organizations of capital, and they should be similarly dealt with. We
ought not, however, to allow the occasional failure in the working of
the principle of the organization of labor to prejudice us against the
principle itself, for the principle is fundamentally sound.
In the further development of the organization of labor and of large
business, the public interest as well as the interest of labor and of
capital will be furthest advanced by whatever stimulates every man to
do the best work of which he is capable and to render useful service,
by a fuller recognition of the common interests of employers and
employed, and by an earnest effort to dispel distrust and hatred and to
promote good-will.
Labor unions have secured for labor in general many advantages
in hours, wages, and standards of working conditions. A large
proportion of the workers of the world, however, are outside of these
organizations, and unless somehow represented are not in a position
to bargain collectively. Therefore, representation of labor to be
adequate must be more comprehensive and all inclusive than anything
thus far attained.
Representation on the employers’ side has been developed through
the establishment of trade associations, the purpose of which is to
discuss matters of common interest and to act, in so far as is legally
permissible and to the common advantage, along lines that are generally
similar. But here also representation is inadequate. Many employers do
not belong to employers’ associations.
In the United States during the war, the representation of both labor
and capital in common councils was brought about through the War Labor
Board, composed equally of men from the ranks of labor and capital,
together with representatives of the public. When differences arose in
industries where there was no machinery to deal with such matters, the
War Labor Board stepped in and made its findings and recommendations.
In this way, relatively continuous operation was made possible and the
resort to the strike and lockout was less frequent.
In England there have been made during the past years various important
Government investigations and reports, looking toward a more complete
program of representation and coöperation on the part of labor
and capital. One is the well-known Whitley Report, which owes its
distinction to a single outstanding feature, namely, that it applies
to the whole of industry, the principle of representative government.
The Whitley Plan seeks to unite the organizations of labor and capital
by a bond of common interest in a common venture; it changes at a
single stroke the attitude of these powerful aggregations of class
interest from one of militancy to one of social service; it establishes
a new relation in industry.
“Problems old and new,” says the report, “will find their solution in a
frank partnership of knowledge, experience, and good-will.”
Another investigation and report was made by a Commission on Industrial
Unrest, appointed by the Prime Minister. This Commission made, among
others, the following interesting recommendations:--
(1) that the principle of the Whitley Report as regards industrial
councils be adopted;
(2) that each trade should have a constitution;
(3) that labor should take part in the affairs of industry as partners
rather than as employees in the narrow sense of the term;
(4) that closer contact should be set up between employers and employed.
A third report was prepared by the Ministry of Labor. This report deals
with the constitution and operation of works committees in a number of
industries. It is a valuable treatise on the objects, functions, and
methods of procedure of joint committees.
Light has been thrown on the general questions treated by these
inquiries in an able report by the Garton Foundation on _The Industrial
Situation after the War_. This report is a study of the more permanent
causes of industrial friction and inefficiency, and of the means by
which they may be removed or their action circumscribed.
Mention of these several reports, taken at random, is made simply as
indicative of the extent and variety of the study which has been given
to the great problem of industrial reconstruction in England. All point
toward the need of more adequate representation of labor in the conduct
of industry and the importance of closer relations between labor and
capital.
IV
A method of representation similar to the Whitley Plan, though less
comprehensive, and which is constructed from the bottom up, has been
in operation for varying periods of time in an ever increasing number
of industries in the United States. This plan of representation
is worthy of serious consideration. It begins with the election
of representatives in a single plant and is capable of indefinite
development, to meet the complex needs of any industry, and of wide
extension, so as to include all industries. Equally applicable in
industries where union or non-union labor or both are employed, it
seeks to provide full and fair representation to labor, capital, and
management, also taking cognizance of the community. Thus far it has
developed a spirit of coöperation and goodwill which commends it to
both employer and employee.
The outstanding features of this plan of industrial representation,
varied to meet the special needs of each plant or company in which it
has been adopted, are as follows:
Representatives chosen by the employees in proportion to their number,
from their fellow workers in each plant, form the basis of the plan.
Joint committees, composed of equal numbers of employees or their
representatives and of officers of the company, are found in each plant
or district.
These committees deal with all matters pertaining to employment and
working and living conditions, including questions of coöperation and
conciliation, safety and accident, sanitation, health and housing,
recreation and education. Joint conferences of representatives of
employees and officers of the company are held in the various districts
several times each year.
There is also an annual joint conference, at which reports from all
districts are received and considered.
Another important feature of the plan is an officer known as the
President’s Industrial Representative, whose duty it is to visit the
plants currently and confer with the employees’ representatives, as
well as to be available always for conference at the request of the
representatives.
Thus the employees, through their representatives chosen from among
themselves, are in constant touch and conference with management and
representatives of the stockholders in regard to matters pertaining to
their common interest.
The employees’ right of appeal is the third outstanding feature of the
plan.
Any employee with a grievance, real or imaginary, may go with it at
once to his representative. The representatives not infrequently find
there is no ground for the grievance and are able so to convince the
employee.
But if a grievance does exist, or dissatisfaction on the part of the
employee continues, the matter is carried to the local boss, foreman,
or superintendent, with whom in the majority of cases it is amicably
and satisfactorily settled. Further appeal is open to the aggrieved
employee, either in person or through his representative, to the higher
officers and to the president.
If satisfaction is not to be had from the company, the court of last
appeal may be the Industrial Commission of the State, the State Labor
Board, or a committee of arbitration.
Experience shows that the vast majority of difficulties which occur in
an industry arise between the workmen and the foremen who are in daily
contact with them. Foremen are sometimes arbitrary, and it is by their
attitude and action that the higher officers and the stockholders are
judged. Obviously the right of appeal from the decisions of foremen and
superintendents is important, even if seldom availed of, because it
tends of itself to modify their attitude.
A further feature of the plan is what may be termed the employee’s Bill
of Rights.
This covers such matters as the right to caution and suspension before
discharge, except for such serious offenses as are posted; the right to
hold meetings at appropriate places outside of working hours; the right
without discrimination to membership or non-membership in any society,
fraternity, or union; and the right of appeal.
Where this plan has been in operation for a considerable length of
time, some of the results obtained are:--
First, more continuous operation of the plants and less interruption
in the employment of the workers, resulting in larger returns for both
capital and labor;
Second, improved working and living conditions;
Third, frequent and close contact between employees and officers;
Fourth, the elimination of grievances as disturbing factors;
Fifth, goodwill developed to a high degree;
Sixth, the creation of a community spirit.
Furthermore, the plan has proved an effective means of enlisting the
interest of all parties to industry, of reproducing the contacts
of earlier days between employer and employee, of lessening
misunderstanding, distrust, and enmity, and securing coöperation in
the spirit of brotherhood. Under its operation, the participants in
industry are being convinced of the soundness of the proposition that
they are fundamentally friends and not enemies, that their interests
are common, not opposed. Based as the plan is upon principles of
justice to all, its success can be counted on so long as it is carried
out in a spirit of sincerity and fair play.
Here, then, would seem to be a method of providing representation
which is just, which is effective, which is applicable to all
employees whether organized or unorganized, to all employers whether
in associations or not, which does not interfere with existing
organizations or associations, and which, while developed in a single
industrial corporation as a unit, may be expanded to include all
corporations in the same industry and ultimately all industries.
Just what part labor organizations and employers’ associations can best
take in such a plan remains to be worked out, but certain it is that
some method should be devised which will profit to the fullest extent
by the experience, the strength, and the leadership of these groups.
While, doubtless, defects will appear in this plan and other methods
more successfully accomplishing the same end may be developed, at least
it is proving that in unity there is strength and that coöperation in
industry is not only idealistically right, but practically workable.
If the points which I have endeavored to make are sound, might not the
four parties to industry subscribe to an Industrial Creed somewhat as
follows:--
(1) I believe that labor and capital are partners, not enemies; and
that their interests are common, not opposed; and that neither can
attain the fullest measure of prosperity at the expense of the other,
but only in association with the other.
(2) I believe that the community is an essential party to industry and
that it should have adequate representation with the other parties.
(3) I believe that the purpose of industry is quite as much to advance
social well-being as material prosperity; that in the pursuit of that
purpose, the interests of the community should be carefully considered,
the well-being of employees fully guarded, management adequately
recognized, and capital justly compensated, and that failure in any of
these particulars means loss to all four parties.
(4) I believe that every man is entitled to an opportunity to earn a
living, to fair wages, to reasonable hours of work and proper working
conditions, to a decent home, to the opportunity to play, to learn, to
worship and to love, as well as to toil, and that the responsibility
rests as heavily upon industry as upon government or society, to see
that these conditions and opportunities prevail.
(5) I believe that diligence, initiative, and efficiency, wherever
found, should be encouraged and adequately rewarded; that indolence,
indifference, and restriction of production should be discountenanced;
and that service is the only justification for the possession of power.
(6) I believe that the provision of adequate means of uncovering
grievances and promptly adjusting them is of fundamental importance to
the successful conduct of industry.
(7) I believe that the most potent measure in bringing about industrial
harmony and prosperity is adequate representation of the parties in
interest; that existing forms of representation should be carefully
studied and availed of, in so far as they may be found to have merit
and are adaptable to conditions peculiar to the various industries.
(8) I believe that the most effective structure of representation is
that which is built from the bottom up, which includes all employees,
which starts with the election of representatives and the formation of
joint committees in each industrial plant, proceeds to the formation
of joint district councils and annual joint conferences in a single
industrial corporation, and admits of extension to all corporations in
the same industry, as well as to all industries in a community, in a
nation, and in the various nations.
(9) I believe that to “do unto others as you would that they should
do unto you” is as sound business as it is good religion; that the
application of right principles never fails to effect right relations;
that “the letter killeth, but the spirit giveth life”; that forms are
wholly secondary, while attitude and spirit are all important; and that
only as the parties in industry are animated by the spirit of fair
play, justice to all, and brotherhood, will any plan which they may
mutually work out succeed.
(10) I believe that that man renders the greatest social service who so
coöperates in the organization of industry as to afford to the largest
number of men the greatest opportunity for self-development and the
enjoyment of those benefits which their united efforts add to the
wealth of civilization.
V
In these days the selfish pursuit of personal ends at the expense
of the group can and will no longer be tolerated. The reign of
autocracy has passed. Men are rapidly coming to see that human life
is of infinitely greater value than material wealth; that the health,
happiness, and well-being of the individual, however humble, is not
to be sacrificed to the selfish aggrandizement of the more fortunate
or more powerful. Modern thought is placing less emphasis on material
considerations. It is recognizing that the basis of national progress,
whether industrial or social, is the health, efficiency, and spiritual
development of the people. Never was there a more profound belief in
human life than to-day. Whether men work with brain or brawn, they are
human beings, and are much alike in their cravings, their aspirations,
their hatreds, and their capacity for suffering and for enjoyment.
What is the attitude of the leaders in industry as they face this
critical period of reconstruction? Is it that of the standpatters, who
ignore the extraordinary changes which have come over the face of the
civilized world and have taken place in the minds of men; who, arming
themselves to the teeth, attempt stubbornly to resist the inevitable
and invite open warfare with the other parties in industry, and who say:
“What has been and is, must continue to be; with our backs to the wall
we will fight it out along the old lines or go down in defeat!”
Those who take such an attitude are wilfully heedless of the fact that
its certain outcome will be financial loss, general inconvenience
and suffering, the development of bitterness and hatred, and in the
end submission to far more drastic and radical conditions imposed by
legislation, if not by force, than could now be amicably arrived at
through mutual concession in friendly conference.
Or is their attitude one in which I myself profoundly believe, which
takes cognizance of the inherent right and justice of the coöperative
principle underlying the new order, which recognizes that mighty
changes are inevitable, many of them desirable, and which does not
wait until forced to adopt new methods, but takes the lead in calling
together the parties to industry for a round-table conference to be
held in a spirit of justice, fair play, and brotherhood, with a view to
working out some plan of coöperation, which will insure to all those
concerned adequate representation, will afford to labor a voice in
the forming of industrial policy, and an opportunity to earn a fair
wage under such conditions as shall leave time, not alone for food and
sleep, but also for recreation and the development of the higher things
of life?
Never was there such an opportunity as exists to-day for the industrial
leader with clear vision and broad sympathy permanently to bridge the
chasm that is daily gaping wider between the parties to industry, and
to establish a solid foundation for industrial prosperity, social
improvement, and national solidarity. Future generations will rise up
and call those men blessed who have the courage of their convictions,
a proper appreciation of the value of human life as contrasted with
material gain, and who, imbued with the spirit of coöperation, will
lay hold of the great opportunity for leadership which is open to them
to-day.
In conclusion, let it be said that upon the heads of those leaders--it
matters not to which of the four parties they belong--who refuse to
reorganize their industrial households in the light of the modern
spirit, will rest the responsibility for such radical and drastic
measures as may later be forced upon industry, if the highest interests
of all are not shortly considered and dealt with in a spirit of
fairness.
Who, then, will dare to block the wheels of progress and to let pass
the present opportunity of helping to usher in a new era of peace and
prosperity throughout the world, brought about through coöperation in
industry?
II
LABOR AND CAPITAL--PARTNERS[1]
I
Labor and Capital are rather abstract words with which to describe
those vital forces which working together become productively useful
to mankind. Reduced to their simplest terms, Labor and Capital are men
with muscle and men with money--human beings, imbued with the same
weaknesses and virtues, the same cravings and aspirations.
It follows, therefore, that the relations of men engaged in industry
are human relations. Men do not live merely to toil; they also live to
play, to mingle with their fellows, to love, to worship. The test of
the success of our social organization is the extent to which every
man is free to realize his highest and best self; and in considering
any economic or political problem, that fundamental fact should be
recognized.
If in the conduct of industry, therefore, the manager ever keeps in
mind that in dealing with employees he is dealing with human beings,
with flesh and blood, with hearts and souls; and if, likewise, the
workmen realize that managers and investors are themselves also human
beings, how much bitterness will be avoided!
Are the interests of these human beings with labor to sell and with
capital to employ necessarily antagonistic or necessarily mutual? Must
the advance of one retard the progress of the other? Should their
attitude toward each other be that of enemies or of partners? The
answer one makes to these fundamental questions must constitute the
basis for any consideration of the relationship of Labor and Capital.
Our difficulty in dealing with the industrial problem is due too often
to a failure to understand the true interests of Labor and Capital.
And I suspect this lack of understanding is just as prevalent among
representatives of Capital as among representatives of Labor. In
any event the conception one has of the fundamental nature of these
interests will naturally determine one’s attitude toward every phase of
their relationship.
Much of the reasoning on this subject proceeds upon the theory that the
wealth of the world is absolutely limited, and that if one man gets
more, another necessarily gets less. Hence there are those who hold
that if Labor’s wages are increased or its working conditions improved,
Capital suffers because it must deprive itself of the money needed
to pay the bill. Some employers go so far as to justify themselves in
appropriating from the product of industry all that remains after Labor
has received the smallest amount which it can be induced or forced to
accept; while on the other hand there are men who hold that Labor is
the producer of all wealth, hence is entitled to the entire product,
and that whatever is taken by Capital is stolen from Labor.
If this theory is sound, it might be maintained that the relation
between Labor and Capital is fundamentally one of antagonism, and that
each should consolidate and arm its forces, dividing the products of
industry between them in proportion as their selfishness is enforced by
their power.
But all such counsel loses sight of the fact that the riches available
to man are practically without limit, that the world’s wealth is
constantly being developed and undergoing mutation, and that to promote
this process both Labor and Capital are indispensable. If these great
forces coöperate, the products of industry are steadily increased;
whereas, if they fight, the production of wealth is certain to be
either retarded or stopped altogether, and the well-springs of material
progress choked.
The problem of promoting the coöperation of Labor and Capital may
well be regarded, therefore, as the most vital problem of modern
civilization. Peace may be established among the nations of the world;
but if the underlying factors of material growth within each nation are
themselves at war, the foundations of all progress are undermined.
II
Capital cannot move a wheel without Labor, nor Labor advance beyond a
mere primitive existence without Capital. But with Labor and Capital
as partners, wealth is created and ever greater productivity made
possible. In the development of this partnership, the greatest social
service is rendered by that man who so coöperates in the organization
of industry as to afford to the largest number of men the greatest
opportunity for self-development, and the enjoyment by every man of
those benefits which his own work adds to the wealth of civilization.
This is better than charity or philanthropy; it helps men to help
themselves and widens the horizon of life.
Through such a process the laborer is constantly becoming the
capitalist, and the accumulated fruits of present industry are made the
basis of further progress. The world puts its richest prizes at the
feet of great organizing ability, enterprise, and foresight, because
such qualities are rare and yet indispensable to the development of
the vast natural resources which otherwise would lie useless on the
earth’s surface or in its hidden depths.
It is one of the noteworthy facts of industrial history that the
most successful enterprises have been those which have been so well
organized and so efficient in eliminating waste, that the laborers were
paid high wages, the consuming public--upon whose patronage the success
of every enterprise depends--enjoyed declining prices, and the owners
realized large profits.
The development of industry on a large scale brought the corporation
into being, a natural outgrowth of which has been the further
development of organized Labor in its various forms. The right of
men to associate themselves together for their mutual advancement is
incontestable; and under our modern conditions, the organization of
Labor is necessary just as is the organization of Capital; both should
make their contribution toward the creation of wealth and the promotion
of human welfare.
The labor union, among its other achievements, has undoubtedly forced
public attention upon wrongs which employers of to-day would blush
to practice. But employers as well as workers are more and more
appreciating the human equation, and realizing that mutual respect
and fairness produce larger and better results than suspicion and
selfishness.
We are all coming to see that there should be no stifling of Labor by
Capital, or of Capital by Labor; and also that there should be no
stifling of Labor by Labor, or of Capital by Capital.
While it is true that the organization of Labor has quite as important
a function to perform as the organization of Capital, it cannot be
gainsaid that evils are liable to develop in either of these forms of
association.
Because evils have developed and may develop as a result of these
increasing complexities in industrial conditions, shall we deny
ourselves the maximum benefit which may be derived from using the new
devices of progress? We cannot give up the corporation and industry on
a large scale; no more can we give up the organization of labor; human
progress depends too much upon them. Surely there must be some avenue
of approach to the solution of a problem on the ultimate working out of
which depends the very existence of industrial society.
To say that there is no way out except through constant warfare between
Labor and Capital is an unthinkable counsel of despair; to say that
progress lies in eventual surrender of everything by one factor or the
other, is contrary, not only to the teachings of economic history, but
also to our knowledge of human nature.
III
Most of the misunderstanding between men is due to a lack of knowledge
of each other. When men get together and talk over their differences
candidly, much of the ground for dispute vanishes.
In the days when industry was on a small scale, the employer came
into direct contact with his employees, and the personal sympathy and
understanding which grew out of that contact made the rough places
smooth.
However, the use of steam and electricity, resulting in the development
of large-scale industry with its attendant economies and benefits, has
of necessity erected barriers to personal contact between employers and
men, thus making it more difficult for them to understand each other.
In spite of the modern development of Big Business, human nature has
remained the same, with all its cravings, and all its tendencies toward
sympathy when it has knowledge and toward prejudice when it does not
understand. The fact is that the growth of the organization of industry
has proceeded faster than the adjustment of the interrelations of men
engaged in industry.
Must it not be, then, that an age which can bridge the Atlantic with
the wireless telephone, can devise some sort of social X-ray which
shall enable the vision of men to penetrate the barriers which have
grown up between men in our machine-burdened civilization?
IV
Assuming that Labor and Capital are partners, and that the fruits
of industry are their joint product, to be divided fairly, there
remains the question: What is a fair division? The answer is not
simple--the division can never be absolutely just; and if it were
just to-day, changed conditions would make it unjust to-morrow; but
certain it is that the injustice of that division will always be
greater in proportion as it is made in a spirit of selfishness and
shortsightedness.
Indeed, because of the kaleidoscopic changes which the factors entering
into the production of wealth are always undergoing, it is unlikely
that any final solution of the problem of the fair distribution of
wealth will ever be reached. But the effort to devise a continually
more perfect medium of approach toward an ever fairer distribution must
be no less energetic and unceasing.