Where Have All the Capitalists Gone?

Where Have All the Capitalists Gone?

I have been reading through primary sources at the University of Akron’s Archive for a research paper that I am writing, and I have come across some interesting documents. Below is an essay written in 1937 for the Chamber of Commerce by the CEO of Goodyear, Paul Litchfield. Based upon his latter writings, such as this one, he has what contemporary business people might consider to be an outright liberal attitude. It is likely that his views were shaped by the post-depression unionism movement as well as the rise of communism and fascism.

In the first four sections he discusses the labor laws and customs of Great Brittan, Canada, Australia, and the US (specifically with rail roads). The transcription begins at section five. The emphasis is mine.

APRIL 28, 1937


(A Suggested Course)

Turning now from this summary review of the past and some of the attempts already made both here and abroad to handle labor disputes, what suggestions can be advanced in the interest of a definite program that will enlist the support of capital, labor, and management?

The high principles of democracy have brought to our nation a splendid patrimony of peace and progress. These same principles offer similarly bountiful rewards if they can be woven into the pattern of industrial and business policy.

Fair and equitable representation for all component parts of the state is the essence of democracy in government. Carry that fundamental into business and it insures fair consideration for the three basic elements of business -- the workers, the stockholders, and the consumers.

With any deviation form such a concept of equity, we find ourselves in the realm of autocracy where a dominating group gains disproportionately through the exploitation of the remaining groups. It would seem to me, therefore, that in the interest of peaceful progress in business, the highest function of management should be to strive for the establishment of a democratic basis of operations. Management's success in this direction may very well determine the future course of our nation because it does not seem likely that democracy could endure in government should any form of despotism prevail in business. There can be no assurance of economic stability under conditions approximating a labor dictatorship nor can we achieve progress with the working man oppressed by autocratic capital. These paths lead to communism or facism, both of which are alien to the ideals of a nation of free men. These paths lead to strife, whereas democracies do not war on each other, but only when they are defending themselves against the aggression of autocracies.

And so I counsel moderation -- moderation on the part of labor in its new found strength, and moderation on the part of capital in the exercise of its property rights. I the principles of fairness and equity can be made the controlling forces of business management and labor management, the brilliance of our past accomplishments will find full reflection in what is yet to come.

Peace and progress depends upon those who put service before selfishness. Both employers and employees should at all times realize that service to the public must be the controlling objective of industry, as public opinion in the long run will be the decisive factor in the fate of their combined efforts.

In the first place I think we all agree that there must be an end to direct action and the illegal use of force. There must be a return to the orderly processes of government and the re-establishment of law and order. All the lessons of history teach that where property rights become impaired and ignored, human rights soon after are obliterated. The same leaders who expropriated the wealth of others in the early days of the Russian revolution have had their own lives expropriated as the pendulum has turned and others have come into the seats of power. Labor, above every other group in the community, has the most to fear and the least to gain from the whims and caprices of those who hold themselves above the law.

On the other hand, we must recognize labor's right to bargain collectively for satisfactory working conditions and for fair rewards for services rendered. We must recognize and defend also labor's right to strike as a weapon of last resort, although due account should also be taken of the rights of others and the interests of the public welfare. The protection of this public interest is paramount and must be protected by law.

When individual businesses developed into corporations and these corporations grew more far-reaching and more powerful, the effects of their decisions were magnified in the way they affected the public interest. It therefore became necessary through legislation and governmental administration to establish both their privilege, and their duties and responsibilities.

Following out the same line of reasoning, as labor organizations grow in numbers, and power and influence, it is equally essential that responsibility be fixed and curbs be provided against the arbitrary use of that power in ways that are inimical to the general welfare. Also, now that the right to collective bargaining is incorporated in our statutes, it must take place between responsible parties and be so limited that the public interest is protected, and that the inherent and constitutional rights of minorities are also protected. We must see to it that the right to work is as fully safeguarded as the right to strike. This is fundamental in the American for of government.

It is not for us here today to work out the details of any program for establishing and maintaining industrial peace. What we can do is to set out certain principles which can form the basis of a national policy. Such a policy, to be effective, must have the support of both responsible labor and responsible management. Moreover, it cannot succeed unless it has the sanction of public opinion.

If we are going to have industrial peace, and certainly that is fundamental to continuing economic progress, it must rest upon a foundation of confidence: Confidence on the part of labor and management in each other's desire to be fair, and confidence on the part of the public that, given a workable basis, the principles adopted will be fairly applied.

I would like to suggest the basis of what I consider a workable plan to be:

1. Law and Order. What this entails I have already indicated. It is futile to attempt to set up any industrial relations program unless and until all of those concerned -- labor, management, the public authorities, and the public itself -- respect the law of the land and act accordingly.

2. Responsibility. Labor leaders who have accomplished most for labor in this country have been those who have regarded their engagements with management with the same sense of responsibility that honorable people have towards private contracts. Just as management of a large corporation is responsible for the acts of its agents, so must labor leaders accept responsibility for the acts of their agents. This calls for discipline among the ranks of labor commensurate with the new and larger responsibilities which labor has assumed and which the law has given labor.

3. Understanding. It is up to both labor and management to see to it in more effective ways than have already been adopted that the respective contributions which labor and capital and management make to a business are understood and recognized. Business cannot exist without labor, labor cannot have jobs without business. It is the duty of management to organize and co-ordinate the reciprocal services which both capital and labor contribute to business enterprise, and there is a wide field and a great opportunity here for management and labor to progress through enlightenment and understanding of the respective duties and obligations incumbent upon both capital and labor.

4. Mediation. here thousands of men are engaged in industrial operations, differences of opinion are inevitable. What we need is a disposition on the part of the industry and labor to see the other fellow's point of view, to welcome the services of competent, impartial mediators in helping to bring that about.

There is an opportunity here for government to perform an important function in industrial relations. In this sense there is need for an approach to this problem on the part of government in a wholly unbiased frame of mind, with the public interest as the paramount consideration and not the cause of either party to a dispute as the determining factor. I think we have to revise somewhat the traditional government attitude and machinery in mediating labor disputes. Mediation, in my judgment, calls for the highest type of unbiased and public-spirited service.

5. Fact Finding. People in this country can be trusted to arrive at sound conclusions when they know the facts. In setting up some such plan as we are considering, it must be recognized that, even granting good intentions on the part of the disputing parties, mediation and conciliation will not always succeed. There is experience, however, which justifies our belief in the ability of properly-constituted authorities to establish what are the facts concerning a particular controversy. Let us have an arrangement whereby a fact-finding agency may be called into a dispute, be competent to arrive at the facts, be impartial in the presentation of these facts to the public, and then let us have what I would call a cooling-off period, during which the public can make up its mind and the disputing parties can perhaps gain a calmer view of their difficulties.

These simple principles, it seems to me, are thoroughly practicable. I am optimist enough to believe, too, that with such a statesmanlike approach to industrial relations, much of our difficulty will disappear. After all, the employee by and large is an honest man. What he wants, as I see it, is, first, permanency of occupation, second, the right to have a say regarding conditions under which he works, third, payment of a proper reward for the service he renders, and, fourth, the opportunity through thrift to set aside a part of what he earns for his future security and that of his family. To the extent that he has saved part of his earnings, he wishes security for his investments and a fair return for the services which these investments will render when loaned for the use others who labor.

As a consumer he desires at all times to get the greatest value and the highest standard of living possible in exchange for his labor.

Most of my life, as I have said, has been devoted to dealing with men. Notwithstanding the troublesomeness of the times through which we have been passing, I look for good to come out of it all. I think today we are on the way to a clearer understanding than we have ever had before of what is necessary to bring about industrial peace. That desired end, however, will not be achieve unless those of us who are responsible for the livelihood of tens of thousands and even hundreds of thousands of employees are willing to cooperate among ourselves and with the government and its legislators, first, in devising a workable plan and, second, in doing our part to put it into effect.

Published: 2011-10-13
BloggerPrimary SourceChamber of CommercePoliticsLabor1930sHistory