Modern Manors

Modern Manors: Welfare Capitalism since the New Deal

Sanford M. Jacoby
Copyright Date: 1997
Pages: 360
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  • Book Info
    Modern Manors
    Book Description:

    In light of recent trends of corporate downsizing and debates over corporate responsibility, Sanford Jacoby offers a timely, comprehensive history of twentieth-century welfare capitalism, that is, the history of nonunion corporations that looked after the economic security of employees. Building on three fascinating case studies of "modern manors" (Eastman Kodak, Sears, and TRW), Jacoby argues that welfare capitalism did not expire during the Depression, as traditionally thought. Rather it adapted to the challenges of the 1930s and became a powerful, though overlooked, factor in the history of the welfare state, the labor movement, and the corporation. "Fringe" benefits, new forms of employee participation, and sophisticated anti-union policies are just some of the outgrowths of welfare capitalism that provided a model for contemporary employers seeking to create productive nonunion workplaces.

    Although employer paternalism has faltered in recent years, many Americans still look to corporations, rather than to unions or government, to meet their needs. Jacoby explains why there remains widespread support for the notion that corporations should be the keystone of economic security in American society and offers a perspective on recent business trends. Based on extensive research,Modern Manorsgreatly advances the study of corporate and union power in the twentieth century.

    eISBN: 978-1-4008-2239-3
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Acknowledgments
    (pp. ix-x)
  4. Abbreviations
    (pp. xi-2)
  5. Introduction
    (pp. 3-10)

    During the early twentieth century, one of America’s leading employers was S. C. Johnson & Son of Racine, Wisconsin, makers of floor wax and other household products. Samuel C. Johnson, who founded the company in 1886, plied his employees with recreational facilities, a profit sharing plan, paid vacations, group life insurance, and myriad other benefits. Samuel’s son, Herbert, followed in his father’s footsteps. During the First World War, he stabilized the company’s erratic employment levels by hiring more full-time workers and then training them to perform several jobs, so they could be rotated around the company. Then, in 1922, he started...

  6. One The Coming of Welfare Capitalism
    (pp. 11-34)

    At the beginning of the twentieth century huge corporations dotted America. Inside them, workers labored under the “drive system,” which economist Sumner H. Slichter described as “the policy of obtaining efficiency not by rewarding merit, not by seeking to interest men in their work … but by putting pressure on them to turn out a large output.” The system depended on fear of job loss to ensure obedience, and employers did not hesitate to fireworkers. Those who were dissatisfied had few alternatives other than to seek their fortunes on the open market. High quit rates contributed to the overall instability...

  7. Two Modernizing Welfare Capitalism
    (pp. 35-56)

    The 1930s marked a time of rapid growth for the American labor movement and an unprecedented threat to the practice of welfare capitalism. Welfare capitalism faced challenges not only from militant labor but from a ravaged depression economy and a vastly expanded federal government. This baptism of fire, embodied in the experience of three firms—Kodak, Thompson, and Sears—provided the setting for the modern manors that would emerge strengthened after the war.

    Union membership rose from less than three million in 1933 to almost fifteen million in 1945. After the Second World War, membership increased more slowly, to a...

  8. Three Preserving the Past: Eastman Kodak
    (pp. 57-94)

    “Big Yellow,” as Kodak employees called their company, referred to its colorful filmcartons and generous benefits. A pioneer in the employee welfare movement, by the 1920s Kodak was a prominent member of welfare capitalism’s vanguard. Along with company housing and health insurance programs, it had an elaborate production planning system to minimize layoffs. Once hired into the “clan,” employees often remained with Kodak their entire working lives. Profit sharing kept wages up and, if there were layoffs, Kodak paid jobless benefits out of its own private fund. Here was proof of the corporatist credo that the business enterprise should be...

  9. Four Changing Styles: Sears Roebuck
    (pp. 95-142)

    A magazine article once asked, “Which company do you think has the most stores, the most customers, the most sales, the most profits—and at the same time is the most loved, the most far-flung, the mostAmericaninstitution ever to charge two bucks for a bottle of snake oil?” The answer, of course, was Sears Roebuck.¹

    Sears Roebuck had its start in 1886, when a Minnesota railway agent named Richard W. Sears began selling pocket watches and trinkets to other station agents and then to local farmers through the mail. A year later Sears moved to Chicago, joined up...

  10. Five Recasting Company Unions: Thompson Products
    (pp. 143-192)

    In 1929, on the eve of the Depression, Thompson Products appeared ill equipped to cope with the events that lay ahead. It employed more than two thousand people but lacked most of the features characteristic of progressive management in the 1920s. It had no personnel department, few welfare benefits, and nothing so sophisticated as an employee representation plan. Although several Cleveland manufacturers, including General Electric and White Motors, were part of welfare capitalism’s vanguard, Thompson Products was not among them. Thompson’s managers could be kind, even generous, but their paternalism was old-fashioned and provincial. In this respect Thompson resembled other...

  11. Six Beyond the Manor: Politics and Public Opinion
    (pp. 193-235)

    Welfare capitalism broadened its ambit after 1933 to include the world beyond the workplace. What had once been private, solitary, and somewhat amateurish now depended as never before on political engagement, interemployer cooperation, and professional expertise. Sears Roebuck, for example, ran its welfare plans in the 1920s with minimal attention to external considerations. However, Sears had come to believe that the success of its personnel activities required “effective personal contact with individuals and groups likely to prove useful in future contingencies [including] key individuals in government, industry, and university groups who have firsthand experience in industrial relations.”¹

    One reason for...

  12. Seven The Cold War of Industrial Relations: WELFARE CAPITALISM AND UNIONISM IN THE 1950s AND AFTER
    (pp. 236-262)

    By the 1950s, industrial unionism and modern welfare capitalism had gelled into separate but overlapping employment systems. The union approach embodied the dynamics of labor-management conflict, emphasizing legality and industrial solidarity, while welfare capitalism accented the the cooperative side of the workplace and was psychological in nature and enterprise-oriented. In many respects the two systems boiled down to classic organizational types—the mechanistic and the organic—though they regularly borrowed bits and pieces from each other. Unionized firms experimented with modernized welfare programs, whereas large nonunion firms acknowledged the post-Wagner revolution in employee rights.

    The formation of a distinctive nonunion...

  13. Postscript
    (pp. 263-266)

    In may 1996, the White House held a conference on corporate responsibility attended by the heads of the largest and most progressive companies in the United States. Said President Bill Clinton: “The most fundamental responsibility of any business in a free-enterprise system is to make a profit.… But we must recognize that there are other responsibilities as well.” The conference took place amid rising public anxiety about corporate downsizing and job cuts. Patrick J. Buchanan, who had stunned the Republican party a few months earlier by winning the New Hampshire primary on a platform of vilifying corporate America, had aimed...

  14. Notes
    (pp. 267-332)
  15. Index
    (pp. 333-345)