Industrial Democracy for the 21st Century

In History and Politics, Politics of Policy, Public Policy, Regulation, Social Democracy, Unions on October 9, 2009 at 4:41 pm


Given the level of inequality in America today, it’s not surprising that the major political battles over the workplace are focusing on economic goods – jobs, wages, benefits, and working conditions.  And yet, even after health care, even after EFCA, even after economic recovery itself, there will still be a critical contest to be fought that goes far beyond the material conditions of working America.

And in that fight, we have more than sixty years of lost progress to make up.

At-Will Employment:

One of the stranger things I have noticed in progressive political discourse is an odd acceptance of at-will employment as normal, natural, and in some way morally beneficial. It often shows itself in debates about school reform and teachers’ unions, but also in debates about public employee unions and public sector budgets. My suspicion is that this idea, that it is good for it to be easier to fire people, comes from a particular subset of the progressive movement that is educated, professional, middle class and successful. As people for whom the meritocratic approach has worked, they tend to accept the idea that at-will employment (a state in which one can be fired for “good cause, or bad cause, or no cause at all,”) produces a competitive atmosphere in which effort and ability are rewarded, the lazy and incompetent are weeded out, and the advantages of productivity and efficiency are spread fairly.

And yet, there is something inherently undemocratic and un-American about at-will employment. Because one can be fired for any reason whatsoever, at-will employment creates a situation in which the worker has no rights. If you can be fired for speaking your mind, you have no freedom of speech. If you can be fired for refusing a cavity search or if your workspace or your locker can be searched without your knowledge or consent, you have no right to privacy. If you can be denied access to a bathroom, or denied breaks to eat or rest during the day, you have no right to be treated with dignity. And if all of this can happen at the arbitrary pleasure of a foreman or superior, with no necessary adherence to any rules, there is no rule of law, no equal protection , and no due process. The truly odd thing is that in a society that claims to be so committed to the idea of individual liberties and equality before the law, in a country where citizens are so fiercely defensive of their rights and interests that they will sue anyone for anything at the drop of a hat, that we so blithely accept the idea that there should be this enormous space in American life where democracy does not apply.

And though we haven’t particularly acknowledged it openly, we no longer truly accept the idea that at-will employment is entirely legal or moral – witness the extension of civil rights law into the workplace, such that at the very least at-will stops at the edge of discrimination based on race, gender, or disability.  The lack of democracy is too great to tolerate. There is a reason why the early American labor movement to see permanent wage labor as “wage slavery,” that Lincoln saw the existence of a class of permanent employees as a danger to the Republic, that the Knights of Labor and the I.W.W that they declared that the entire system of wage labor itself must be abolished. And why, beginning in the late 19th century, a movement began that sought to transform the social relations of industrial employment from the drive system to industrial democracy.

Two Theories of Industrial Democracy:

One of the advantages and disadvantages to the idea of industrial democracy was and remains the extreme malleability of the term. At its heyday, roughly from the turn of the century through the 1940s, it often served as a sort of halfway house between capitalism and socialism, a way to reconcile tensions between the democratic culture of America with the realities of its factories. Roughly speaking, we can understand the two main varieties of industrial democracy thought as industrial constitutionalism and industrial self-government.

Industrial Constitutionalism:

The more conservative of the two visions, industrial constitutionalism sought to combat the total uncertainty of at-will employment – the constant threat of firing behind any order from a superior, the randomness of pay and promotion and the lack of any voice in their making, arbitrary discipline that lacked any basis in a transparent rule set, the enormous potential for corruption – through the establishment of a set of individual rights and shop-floor rules that would establish the rule of law within the factory.

If you watched Season 2 of the Wire, there was a brief scene in Episode 4 (Hard Cases) in which Detectives “Bunk” Morleand and Lester Freamon go down to the docks to interview a dock worker known as Horseface; when Horseface is less than forthcoming, the detectives order him into the car, and the stevedore refuses. Used to the unchallenged power of a police officer in West Baltimore, the two detectives are stunned when Horseface refuses to go with them unless arrested, and demands the presence of a union steward or lawyer. What you see there  is the cultural legacy of industrial constitutionalism – if nothing else, a union worker is willing to challenge authority on the basis of a common set of rules and procedures, and that fundamentally threatens the idea that management’s prerogatives will always be respected and that, in a corporate workforce, power will flow from the top of the hierarchy downwards. All of this was essentially constructed by the AFL in the late 19th century: the emergence of the contract as a written form of union recognition, the establishment of grievance systems and arbitration hearings as internal judiciary, the establishment of set, negotiated pay scales and promotion systems, and union stewards (or business agents) and union counsel as representatives with a right to be present at any disciplinary meeting (Weingarten rights paralleling the 6th Amendment right to counsel). The ultimate aim of this system was not a revolutionary one, the total upending of management rule, but rather an evolutionary one, to make the workplace a more predictable and rational place.

Re-Establishing Industrial Constitutionalism:

As I have suggested before, one of the steps that will need to be taken regardless of the passage of the Employee Free Choice Act is the passage of laws reversing fifty years of bad labor law. However, one of the lessons that labor history teachers us is that formal legal rights are sometimes less valuable . To that end, we should understand something like the Norris-LaGuardia Act of 1932 less as a formal statement that yellow-dog contracts were prohibited and that Federal courts could no longer issue injunctions in labor disputes and more as a signal that workers were now had the freedom of conscience on whether or not to join the union, and that, despite the best efforts of the American legal profession, it was now no longer illegal to strike.

To that end, there are two steps necessary to begin to re-establish “industrial” constitutionalism in the 21st century workplace. The first would be a statute establishing once and for all the right to free speech in the workplace – this includes extending whistle-blower protections, and banning discrimination or discipline on the basis of speech outside of work (including, for example, private blogs). While practically this law would have all the force of a gentle breeze, the cultural impact of the president of the United States signing a law, a short one that you could keep in your wallet, that says that you get to speak your mind to your boss without fear of retaliation – the very idea that the word insubordination, which only belongs in a world divided into masters and slaves, should be banished from the lives of free workers – would have a much greater impact than any practical regulation.

More concretely, we need to move to a system that establishes a basic just cause standard for all employees – not just employees under a union contract. While perhaps not as extensive as the Daugherty standard, it should at least be established that employers should have to give some valid reason (not showing up to work, poor quality of work, mass layoffs, etc.) to terminate someone. And while it has been argued that this would make the American labor market less efficient, I would argue that at-will employment has not produced much in the way of economic results lately – being able to downsize quickly has in fact accelerated the recession with months of 700,000+ layoffs that made already weak consumer spending even worse, spreading the downturn further into the retail, transport, and manufacturing sectors. By contrast, a system that encouraged employers to hang onto their workers might be less flexible, but it would probably experience much shallower and shorter recessions.

Industrial Self-Government:

Industrial constitutionalism never challenged the fundamental assumptions of 20th century capitalism – workers would remain workers, management would still give the orders. Yet the idea of industrial democracy in the minds of the United Mine Workers (UMW) and the United Auto Workers (UAW) went further than merely insisting on some sort of rationalization of the status quo. Rather, they pushed the idea to encompass the extension of workers’ voices into the sacrosanct realm of “management prerogatives.” Leveraging their unions, workers could  collectively shape the physical and social organization of the factory, influence research and design through their knowledge of the production process, and exercise their own policies on production levels and prices as well as on wages and benefits. In this vision of the world, workers themselves would tame capitalism, pushing corporations to abandon a ruinous competition of prices and wages which only lead to corporations going bust in recurring crises of overproduction and workers suffering from stagnant wages and unstable employment. In its place, workers would erect a new, high-wage, high-price economic order where competition was waged over quality and innovation and robust wage-driven demand kept the economy humming.

In the eyes of American managers, this quasi-Germanic call for cooperation and class harmony was nothing less than socialist revolution. It was this vision of industrial democracy they feared the most, and it was the number one target in the post-war anti-union offensives following both World War I and World War II. Both times, corporate executives and their allies compares shop floor committees to worker’s soviets and union stewards to commissars.

The irony of the situation was that the two places where industrial self-government came closest to fruition would likely have saved American industrialists from their own folly. John L. Lewis of the United Mineworkers was much more prescient than the American coal industry in perceiving that the unending price and wage wars in the American coalfields, where each small operator sought to pull down its rivals by slashing prices to the bone and trying to make ends meet by cutting wages (and skimping on maintenance and mine safety), were creating too much instability in the industry. Twice in his career, and both times during world wars, Lewis was able to use the near-100% unionization rate of the coalfields as a way to plan the industry from within – the UMW would establish standard wage and price scales (which the heavily competitive industry, split between hundreds of firms, could not do), stabilizing the industry and allowing them to refocus their efforts towards modernizing their plant.

Similarly, Walter Reuther attempted to restructure an automobile industry that was notoriously unstable even in the good years of the 1940s, 50s, and 60s. While we think of the Big Three as only recently becoming dysfunctional, the fact is that the Big Three never could solve the problem of the extreme demand fluctuations in the industry, which lead companies like G.M and Ford to routinely lay off a third to a half of their workforce during slack times. In the pivotal 1948 contract fight, Walter Reuther called for a wage increase without a price increase, calling upon the Big Three to “open the books” to the UAW and allow the union to bargain over auto prices and production levels, in effect negotiating over the division of profits between management and labor. At the same time, Walter Reuther called for a universal single-payer health care system and threw his political support behind Harry Truman’s Fair Deal proposal. The so-called Treaty of Detroit that followed after two years of industrial strife represented an historically crucial setbacks: in return for wage hikes and a private system of pensions and health care, the UAW agreed to drop the issue of prices. The irony that no UAW critic has ever grappled with is that, had Reuther succeeded in keeping the price of domestic automobiles down, the Big Three would not have lost ground to cheaper foreign imports thirty and forty years later; had Reuther prevailed on health care, the Big Three would never have run up the insurmountable medical debts that eventually crippled them.

Establishing Industrial Self-Government:

The sad truth of it is that, even though the UAW now owns Chrysler and jointly with the U.S government owns G.M, industrial self-government is an impossibility…at least in the current balance of power between capital and labor. However, given that The Realignment Project is ultimately devoted to expanding the furthest horizons of political possibilities, I’d urge you to try the following thought experiment.

Imagine that when you go into work tomorrow, that you elected the CEO and the Board of Directors, and you find campaign flyers in your mailbox, because it’s election season. At your morning meeting, you discuss the company’s proposed expansion plan, and it passes 54% to 46%. Later in the day, a dispute between R&D and Accounting is dealt with by a neutral arbitrator.

If this sounds fantastical to you, consider that it’s not that different from how cooperatives work, and there are thirty thousand of them in the United States, employing 856,000 people, and earning about a half-trillion in revenues (or about 3-4% of GDP).


It’s no accident that right after asking someone’s name, one of the first questions people ask is “so what do you do?” Work is, and has always been, more than just a way to earn a living; given how much of our lives we spent traveling to and from and at work, it’s impossible that it wouldn’t gain some kind of social meaning.

And yet that meaning is endlessly flexible. We think of a factory job as a good job because it pays high wages and good benefits, and we often look down on retail or service work as unskilled, low wage, no benefit, and demeaning. Yet before the advent of industrial unionism in the 1930s, industrial employment was seen then as we think of service work today – wages were low, benefits non-existent, and the repetitive unskilled labor was thought to drive people mad.

The meaning of our work is still something we can choose.

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