Liberal Elites and the Pacification of Workers


By Michael Barker






At the beginning of the twentieth century the United States’ biggest corporations faced two threats to their power, the first being workers, and the other by the growth of business competition. Of course, humans, and their desire to live in harmony with one another, presented a major nuisance to capitalist elites intent on maximizing individual economic utility. On the other hand, laissez-faire capitalism and competition are phenomena which are not usually associated with threats to corporate power in the early twentieth century. In both cases however, the federal government ably intervened – against the interests of the public – to ensure that monopoly capitalism reigned supreme. With regard to the history of the provision of regulatory protection from competition, Gabriel Kolko in his classic book, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916, noted that: “Ironically, contrary to the consensus of historians, it was not the existence of monopoly that caused the federal government to intervene in the economy, but the lack of it.” [1] Unfortunately as Kolko notes, this meant:

Many well-intentioned writers and academicians worked for the same legislative goals as businessmen, but their innocence did not alter the fact that such measures were frequently designed by businessmen to serve business ends, and that business ultimately reaped the harvest of positive results. Such innocence was possible because of a naive, axiomatic view that government economic regulation, per se, was desirable, and also because many ignored crucial business support for such measures by focusing on the less important business opposition that existed. [2]

Understanding the reasons why corporate elites lobbied for legislation to shield them from laissez-faire capitalism is critical if one wants to comprehend how, and why, those same elites were able to simultaneously undercut the threat posed by a politically active public. So it is problematic that during the Progressive Era the labor movement was in the dark about such conservative motivations, and unfortunately, socialists were “the greatest celebrators of the alleged trend toward corporate monopolies.” Arguably this led the labor movement to fall for the “illusion that American industry was centralized and monopolized to such an extent” that federal legislation originated from progressive rather than conservative sources. [3] In turn this left the labor movement susceptible to being penetrated and manipulated by those same farsighted liberal elites (robber barons included) that demanded government protection from the free-market: a process that led to the rise and subsequent dominance of corporate unions. As Stanley Aronowitz wrote in 1973, this has ensured that:

Despite its accomplishments, the American radical movement, like its European counterparts, has helped to consolidate the power of capital over workers in two ways: it assisted in the organization of unions that have increasingly been instruments for the disciplining and control of workers; and it fought for reforms that strengthened the power of the capitalist state to organize and rationalize the most chaotic features of the socioeconomic system and secure the dependency of larger segments of the underlying population on state welfare measures. [4]

By focusing on the individuals and organizations involved in guiding the evolution of corporate unionism to pacify the workforce, it will become clear why their main sponsors, so-called liberal elites, pose just as large a threat to democracy as do ultra-conservative elites. This story has of course been told before, and so this essay only attempts to reiterate and contextualize an important cautionary tale in the light of oft-ignored research.

Banking on Harmony

Much in the same way that the “larger corporations… and the various banks that financed them (particularly the House of Morgan),” profited from increased federal regulation (devised on their terms), they likewise were amongst the leading proponents of the need to undermine class conflict. However, this desire for change was motivated by the need to generate sustainable long-term profits rather than diminishing conflict, and in this way they were able to harness the natural human tendencies for a just and harmonious world, to their bid to undermine both their business competition and labor resistance. The massive power and resources available to such large corporate interests led to the creation of huge philanthropies (most notably that of the Rockefeller family) that were created at the turn of the century to coordinate the intellectual resources that would be needed to rationalize and manage such a farsighted project of capitalist consolidation. This flexibility gave larger corporations a distinct advantage over smaller businessmen who organized within lobby groups like the National Association of Manufacturers. In the case of the latter groups’ “more rigid and uncompromising” relations with their work force, James Weinstein explains:

This was so because their financial positions and profit margins were generally poorer and because their relative provincialism kept many of them from an awareness of the larger problems of interclass harmony and social (as opposed to purely individual) efficiency posed by the growth of the unions, the radical insurgents in both major parties, and by the Socialist Party of America. [5]

Predecessors for such elite social engineering abound, with examples including the settlement houses (most commonly associated with Jane Addams) and a multitude of charity and welfare organizations that were institutionalized in the nineteenth century. Such philanthropic bodies were intended to promote justice within the narrow confines of a capitalist system. For example, as a result of the labor strikes and riots during the violent summer of 1877, liberal elites and middle class reformers considered industrial arbitration tribunals to be the answer to class conflict. But as Laura Nader concludes, this harmonizing solution meant that the tribunals “evaded the basic issues of unequal wealth and power.” [6] Similarly, another important organization that is rarely considered in this reformist philanthropic history is the Women’s Trade Union League, which was supported by elites like Mrs. Franklin Roosevelt and her friend Mrs. Thomas Lamont (wife of a Morgan partner), and whose early vice president was Jane Addams. William Domhoff writes: “If this was not the most important variable in the complicated equation that led to a moderate thrust within the corporate leadership, it was certainly a factor.” [7]

Domhoff, however, suggests that the “first major institutionalized response of the power elite to labor unrest was the National Civic Federation.” A group which was formed in 1900 and pioneered the promotion of welfare schemes to makes unions redundant, and a well-funded champion of “protective labor legislation and the ‘right’ kind of business regulation.” Here the National Civic Federation can be seen as a successor to the Chicago Civic Federation – which was formed by Chicago’s big businessmen six years earlier – and whose secretary in 1899 was Ralph Easley, a key mover behind the formation of its National progeny. [8] Marcus Hanna served as the National Civic Federation’s founding president and Samuel Gompers, the president of the American Federation of Labor (AFL), acted as its first vice president and remained in this role till his death in 1924.

Others among its early leaders were utilities magnate Samuel Insull, Chicago banker (and later Secretary of the Treasury), Franklin MacVeagh, Charles Francis Adams, Andrew Carnegie [who was "the NCF's biggest contributor" and is best known as the founder of the Carnegie Corporation of New York], Consolidated Gas president George B. Cortelyou, and several partners in J. P. Morgan and Company. … John Mitchell of the United Mine Workers was an active member, co-chairman of the Trade Agreements Department from 1904 to 1908, and its full-time head from 1908 to 1911. The heads of the major railroad brotherhoods and many AFL international unions were also on the executive committee. [9]

Despite the involvement of many union officials, radical union leaders (like those associated with the Industrial Workers of the World) who were more concerned with challenging injustice than with reforming capitalism were strident in their opposition to the Federation. In 1904, Eugene Debs “warned that the NCF professed friendship for labor in order to ‘take it by the hand and guide it into harmless channels’; while United Mine Workers delegate, Duncan McDonald, “argued that the Civic Federation had been conceived to ‘chloroform the labor movement into a more submissive mood.’” [10] Writing in 1967, George Morris notes that the “threadbare idea that capital and labor have a common interest” was not new:

What was new was the idea of establishing such collaboration as a national institution, with the blessings of corporate heads who wouldn’t let union organizers come within shouting distance of their plant gates. It was clearly an attempt to seal a pact for peace at home between business and labor, as the former prepared for imperialist ventures abroad. [11]

Harmonizing labor activism was not however the only function of the Federation, and it was also involved in supporting efforts to “destroy- socialist influence, especially in the mass media and in educational institutions.” [12] For example, in 1912 they began supporting the anti-Socialist group, Militia of Christ (along with help of the AFL and the Catholic Church). “With Gompers’ aid, the Militia furnished weekly newsletters to 300 labor papers and sponsored hundreds of meetings and conferences at which its representatives spoke.” Moreover, to bolster this campaign, the Federation launched their Survey of Social, Civic, and Economic Progress (otherwise known as the National Industrial Survey), which “sought to discover how more effectively to combat the renewed growth of socialism even in the face of the beginnings of reform.” While financial backing for this project spouted forth from the interested elites, “support came from well beyond the business community – Jane Addams, for example, was ‘very much interested in the plan’ and accepted sponsorship of the Survey.” [13]

At the end of the day though, as James Weinstein demonstrates, the Federation failed in its attempt to destroy the Socialist movement: nevertheless their work “did set very definite limits on the potential of revolutionary politics as long as the economy could continue to expand.” That said, Weinstein points out, that by tackling Socialism head on, the Federation “succeeded in educating businessmen to the need for longterm responsibility and to an understanding of the value of co-optation of potential revolutionaries among workers, farmers, and in the middle classes.” [14] Liberal elites thus took the antagonistic forces of capital and labor and manufactured a harmonious facade over their relations, which…

… allowed potential opponents to participate, even if not as equals, in a process of adjustment, concession, and amelioration that seemed to promise a gradual advance toward the good society for all citizens. In a formal democracy, success lay in evolving a social vision that could be shared by most articulate people outside the business community. Corporate liberalism evolved such a vision. More than that, it appealed to leaders of different social groupings and classes by granting them status and influence as spokesmen for their constituents on the condition only that they defend the framework of the existing social order. [15]

Corporate Liberalism and the Commission on Industrial Relations

One of the most significant acheivements of the corporate liberalism of this era is told by the history of President William Taft’s United States Commission on Industrial Relations. Again, much like the National Civic Federation, the Commission was formed in 1911 to counter the spread of radical politics, and its creation arose as a “direct result” of the “destruction of the Los Angeles Times building by two professional union dynamiters.” [16] However, while Taft’s initial choice of Commission members was considered satisfactory to small businessmen, President Wilson stacked it with a panel more amenable to large corporations, and both Presidents had predominantly selected individuals who were members of the Civic Federation. Initially it was hoped that Louis D. Brandeis, “an ardent advocate of ameliorative social legislation and responsible unionism,” would chair the Commission, but when he rejected the position “Wilson chose Frank P. Walsh, a Kansas City attorney and social worker.” The choice of Walsh turned out to be a stunning propaganda coup, as although he was the only nonmember of the Civic Federation, his radicalism and “genuine hostility to big business, gave the Commission a public image of a liberalism that was anti-business.” [17]

The Commission in its effort to promote corporate social responsibility focused on what is considered to be one of the most blatant abuses of business power, the Colorado coal strike, which began in September 1913 and ended in the “Ludlow Massacre” of April 1914. Here the chief villain, or symbolic scapegoat, was the infamous robber baron, John D. Rockefeller and his Colorado Fuel and Iron Corporation. Indeed, the Commission determined Rockefeller’s direct “complicity in coercing Governor Ammons to rescind his initial decree to the militia not to aid the strikebreakers”; an “order that had led to the worst violence, and to the Ludlow massacre.” “Walsh’s final triumph, proof that ‘industrial feudalism’ led to ‘political feudalism,’ was his revelation that Rockefeller, with the assistance of his new public relations man, Ivy L. Lee, had personally written a letter for Governor Ammons to send to President Wilson” to justify Rockefeller’s violent opposition to unions. [18]

Walsh’s direct attacks on the then infamous Rockefeller family were successful in temporarily highlighting the gross irresponsibility of one corporate behemoth, and so made harmonious business labor relations harder “if not impossible” for workers to stomach. However, by these very actions Walsh catalysed the Civic Federation’s broader agenda by forcing all major business leaders to temper their openly anti-union activism, and to encouraging them to make greater investments in facilitating the rise of corporate unionism. For instance: “After the Ludlow massacre and the storm of indignation against Rockefeller that followed it, Rockefeller had set up his own Industrial Relations Department as a division of the Rockefeller Foundation.” [19] During the Commission, such foundations came under the same kind of critical inquiry as their benefactors, with Walsh referring to such “philanthropic trusts” as a “menace to the welfare of society.” Such much warranted criticisms led to widespread reforms by leading liberal philanthropists, who subsequently strove to distribute their bounty more discretely by creating a series of front-groups, like the Social Science Research Council, which were ostensibly independent from their founders and funders. [20]

Either way, rather than further radicalising workers, the Commission’s findings actually helped bolster their faith in the system:

the key question here, as President Wilson no doubt understood (even if Walsh did not), was who did the exposing. A revelation such as Walsh’s, if made by the Socialists, might indeed be damaging; when made by an official government agency its main effect was the opposite. The Commission hearings had the effect of winning almost unanimous support from labor as well as widespread support from Progressives and admiration from Christian Socialists and even from Eugene V. Debs. The praise went to Walsh, but behind Walsh stood the President. [21]

This success did not prevent major disputes on the Commission. Social engineering specialist and Commission member, John R. Commons, was especially angered by Walsh’s focus on political agitation, and opposed Walsh’s final report, observing that the issue was “whether the labor movement should be directed toward politics or toward collective bargaining.” Like his Civic Federation colleagues Commons was strongly in favour of the latter position, as was Louis D. Brandeis, who “commented in 1905 that collective bargaining was essential to the survival of capitalism.” [22] “Neither perspective directly challenged the domination of the corporations, but Walsh’s approach was inherently more dangerous as long as the Socialists were seriously contesting for the consciousness of the workers.” At the end of the day though, Walsh’s controversial stance paid dividends and apparently “neither labor nor the Socialists noticed” the role his Commission had played in securing corporate hegemony in the United States. [23]

Ironically, considering Walsh’s motives, the main effect of the Commission was to win the support of workers and radicals to the Wilson administration and to the idea that unions and radical intellectuals possessed real power over social policy. The hearings and Walsh’s Final Report, supplemented by the Adamson Act (which established the eight-hour day on the railroads) helped greatly to stop the growth of Socialism between 1912 and 1916. Beyond that, the Commission had set down a range of proposals for a liberal corporate order, almost all of which were adopted when conditions once again made social reform a pressing necessity. [24]

Of War and Human Relations

With such formidable intellectual foresight shown by liberal elites in their defense of capitalism, the advent of the Wilson government’s entry into World War I – despite the fact they Wilson was elected on an anti-war platform – helped seal the fate of Socialism in the United States. [25] And while Socialist resistance to the war was literally smashed (and then subsequently divided), Walsh “lent his name and his prestige among radicals” to help the ostensibly independent American Alliance for Labor and Democracy (AALD) which was formed in an “attempt to win labor support for the war”; an Alliance that was secretly controlled by George Creel, who was running the U.S. governments infamous wartime propaganda agency, the Committee on Public Information (which was formed on April 14, 1917). [26] Not surprisingly, it turned out that in early July of 1917, the “original plans” for the Alliance had been “worked out by Samuel Gompers and Ralph Easley.” [27]

With the ensuing collapse of the socialist movement in the United States, liberal social engineers were able to dominate the political arena, and…

… all reformers, no matter how radical they thought themselves to be, could be (and have been) caught up in reform structures whose underlying purpose is to reduce the inharmonics of the existing social system. Either that, or, as has happened to some radicals more recently, they have been forced to abstain from participation in the larger society, to “drop out,” and become truly irrelevant. [28]

Returning to the Rockefeller’s excursions into managing labor relations, Irving Bernstein observes that the “Rockefeller circle” was soon to lead the way was in “launching the university industrial relations institute movement.” Clarence J. Hicks was a key individual in pioneering this movement, and in 1922, with Rockefeller Jr.’s support, “he persuaded Princeton University to establish an industrial relations section as a subdivision of the Department of Economics.” Hicks then went on to help “institutionalize the [McKenzie] King procedure [see footnote #18] with a permanent corps of industrial relations specialists” by serving as the chair of another Rockefeller group which was formed in 1926 and known as Industrial Relations Counselors, Inc. [29] This work in turn led to what is now known as “human relations” approach to labor management which was “carried forward by Elton Mayo and his followers at the Harvard Business School in the thirties and forties.”

The essential ideas, as well as the very name of the movement, were those Rockefeller had laid out in 1915: human understanding, the undesirability and eradicability of conflict, harmony of interests in the shop community, and improved communication. The only basic change was the gradual replacement of Christ by Freud, the sloughing off of the Christian ethic and the substitution for it of a sort of group psychoanalysis. The Rockefeller policies, as they took root in industry, formed a bridge between the warfare of the American Plan and the paternalism of the welfare capitalism that became the dominant feature of employer policy in the late twenties. [30]

Before going on to discuss the relevance of Elton Mayo’s work to industrial relations, it is appropriate to note that new advances in propaganda were key to enforcing these changes on a resistant workforce. Building upon the work of Ivy Lee and George Creel, and bringing Freud into the mix, Edward Bernays – who had previously worked as an evangelist for Creel’s Committee on Public Information – set about refining a propaganda system that could be harnessed to the corporate world’s desire to manufacture consent for capitalism. As Stewart Ewen, suggests:

The political attack on organized labor had effectively quieted much of the resistance of working people, yet the roots of that militancy were in the American industrial process itself. It was within this context that American industry began to produce a cultural apparatus aimed at defusing and neutralizing potential unrest. The move in industrial thought was in the direction of “human management” – a more affirmative approach to discipline. [31]

Bernays work slotted into to such a manipulative management regime, as he “saw the public relations counsel not simply as a person who applied modern scientific know-how to his work, but also as one of the ‘intelligent few’ who must, within democratic society, ‘continuously and systematically’ perform the task of ‘regimenting the public mind.’” [32] His work was thus intimately related to that of industrial psychologists who in the 1920s were set the task of “scientifically managing” the workforce. In 1921, for example, James McKeen Cattell – who worked closely with conservative labor leaders, like Samuel Gompers – set up the Psychological Corporation which “provided a respectable structure through which scientists could be hired as private consultants by industrialists.” According to Alex Carey, the “calculated subservience of social scientists and corporate interests dates at least from 1921,” when this Corporation was formed. [33]

By way of a contrast, instead of working discretely, like Cattell, to manage labor relations, “men like J. H. Willits and Elton Mayo (industrial psychology, University of Pennsylvania) found that owners and managers were easy to convince when it came to the question of whether or not industrial psychology could help increase profits.” [34] Indeed, Industrial psychology provided a potent means by which to pacify workers.

A mainstay of such psychological pacification was Frederick Winslow Taylor’s theory of Taylorism, which Diana Ralph explains, was “enthusiastically adopted by industries throughout the West and even in the Soviet Union between 1880 and 1920,” enabling the reorganization of work “to give management control over each step of the labor process and how it is performed.” [35] However, as much as managers may have desired to treat their work force like robots, they were not unquestioning automatons, thus in parallel industrial elites developed more individual methods of manipulating human nature using findings that had been promoted by groups like the aforementioned National Civic Federation. Another group that played a critical role in evolving such “human relations” technologies to “prevent industrial unrest” was the National Committee for Mental Hygiene,” a body that “leaped into national prominence” when it started receiving “substantial funding” from “the Rockefeller Foundation and other private philanthropies” during World War I. [36]

This pioneering work by the National Committee and its grantees laid much of the foundation for the philosophy and methods of community psychiatry. It emphasized the need to isolate and treat malcontented or misbehaving workers, to train management in conciliatory skills, and to provide workers with an outlet to talk out their grievances to sympathetic-sounding listeners. [37]

With the arrival of the Depression, increasing levels of labor militancy made it clear that the old methods of industrial psychology (which had not yet picked up on the utility of community psychiatry) were incapable of sufficiently disciplining workforces. “Into this gap stepped Elton Mayo, an Australian industrial psychologist who had been brought to the United States by the Rockefeller Foundation.” Having just published the results of his now famous Hawthorne study, he “argued that management can only hope to counter worker solidarity against management by exploiting this ‘eager human desire for co-operative activity.’” [38] In Mayo’s mind, there was no need to increase wages, instead he said that it was possible to ensure higher worker productivity by simply providing more friendly supervision – the Hawthorne effect.

Since then, owing to major problems in his research approach, Mayo’s so-called Hawthorne effect has been widely dismissed, but this is beside the point, as Mayo’s findings had “provided a ‘scientific’ justification for what had already become general corporate policy.” [39] Furthermore, on top of providing ideological succor for continued worker exploitation, Mayo and his associates had stumbled across the power of the non-directive interview. Under the guise of compassion for a worker’s troubles, Mayo was able to demonstrate that such interviews were able to help diminish worker militancy and cooperation. As Ralph explains:

Although this interviewing technique was labelled “non-directive,” it contained a strong, although covert, directiveness. Interviewers were instructed to concentrate on “each worker’s personal situation” and to “clarify” workers’ complaints in terms which implied that the problem stemmed from the worker’s unique situation rather than from valid grievances which are shared by many workers. By personalizing the worker’s grievances, the “counsellor” effectively isolated the worker’s problem from its class situation, and thereby established a false unity between the worker and management and a false division between the worker and other workers.

Without missing a beat: “The Rockefeller and Ford Foundations enthusiastically picked up the counselling idea and generously funded Carl Rogers to refine the technique of non-directive interviewing for general use in industry.” [40]

From Industrial Psychology to Community Psychiatry (What Next?)

Here it is important to note that elite philanthropists did not, and still do not, have the best interests of workers at the forefront of their minds, and attempts to harmonize labor with the needs of manufacturers have always met with resistance. However, given the lack of public awareness and scrutiny of such issues it should not come as a surprise that corporate elites, while usually acting in a defensive manner, have nevertheless slowly ground down labor militancy and developed ever more effective mechanisms to dissipate worker resistance. One such tool is community psychiatry, a natural successor to industrial psychology. Thus instead of relying upon for-profit corporations to use such psychological weapons against the public, community psychiatry “operating at public expense… has the resources to mass-produce and market industrial psychological techniques and to treat the labor force as a whole.” [41]

It amplifies the effectiveness of traditional industrial psychology techniques, allowing management to speed up production, to “cool-out” protests, and to defuse “trouble-makers.” The easily available mood-altering prescriptions encourage workers to seek individual relief from their family doctors rather than to organize collectively to change their working conditions. [42]

Capitalists have proven to be ruthlessly thoughtful in their ongoing struggle to prop up a blatantly unjust economic system. Likewise, in spite of the ideological sophistication of the ruling classes, workers have time and time again shown their willingness to engage in class warfare to fight for a better more just world. Yet for too long the public have been largely unable to overcome capitalisms co-optive repertoire of labor management because progressive historians and activists have failed to recognize and vocalize the threat posed by liberal foundations.

As James Weinstein wrote in 1968, “the ideal of a liberal corporate social order was formulated and developed under the aegis and supervision of those who then, as now, enjoyed ideological and political hegemony in the United States: the more sophisticated leaders of America’s largest corporations and financial institutions.” However, he continues, middle-class reformers were not simply cynical “lackeys of the capitalist class,” because even though they acted as “defenders of the social system” these reformers did also hope “to improve the human condition.” [43] Anti-capitalist critics must acknowledge the subtlety of this dangerous relationship to effectively challenge its premises. If in the near future we are planning to build a movement for radical change that can build ever widening levels of public support, we need to be sure that such a revolution is not funded by capitalists of any sort or form.





Endnotes

1. Gabriel Kolko, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916 (Quadrangle Books, 1967 [1963]), 5.

2. Kolko, The Triumph of Conservatism, 286.

3. Kolko, The Triumph of Conservatism, 16, 4.

4. Stanley Aronowitz, False Promises: The Shaping of American Working Class Consciousness (McGraw-Hill, 1973), 14.

5. James Weinstein, The Corporate Ideal in the Liberal State, 1900-1918 (Beacon Press, 1968), 4. According to Philip Burch “the House of Morgan wielded great influence in American business around the turn of the century. Indeed, the imperious J. P. Morgan (who died in 1913, thus in a sense marking the end of an epoch) was probably the most powerful banker ever to grace the national economic scene. In fact, one authority has, for this reason, referred to this period as the ‘Morgan era.’

“Yet there were also certain potent independent, if not rival, forces at work in the American business community. The most prominent of these was another New York City-based faction which might best be described as the Rockefeller (or Stillman-Rockefeller) complex. The bulk of the money behind this key group came originally from the highly lucrative operations of the mammoth Standard Oil Co. With the gradual retirement of the great John D. Rockefeller from active business during this period, the major leadership in this circle was provided by William Rockefeller, John D.’s brother, who had a wide range of entrepreneurial interests, and James Stillman, who was the longtime head of the big Rockefeller-dominated National City Bank. Indeed, these leaders were bound not only by business ties, but socially by the marriage of Stillman’s two daughters to the two sons of William Rockefeller.” Philip Burch, Elites in American History, Volume 2, The Civil War to the New Deal (Holmes & Meier, 1981), 134-5.

6. Laura Nader, ‘Controlling Processes in the Practice of Law: Hierarchy and Pacification in the Movement to Re-Form Dispute Ideology’, Ohio State Journal on Dispute Resolution, (1993) 9 (1).

7. William Domhoff, The Higher Circles: The Governing Class in America (Random House, 1971), 51-52.

8. Domhoff, The Higher Circles, 224, 164, 165.

9. Weinstein, The Corporate Ideal in the Liberal State, 8, 16. “The Commission on Public Ownership of Public Utilities was created by the NCF in October 1905. For the next two years it conducted investigations of public ownership and operation of public utilities under the leadership of Melville E. Ingalls, chairman of the board of directors of the Big Four Railroad.” Other members of the Commission’s executive committee included John Mitchell, John G. Agar, president of the Reform Club of New York, Louis D. Brandeis, John R. Commons, bankers Isaac N. Seligman and Frank A. Vanderlip, utilities magnate Samuel Insull, journalist Jacob Riis, reformer Frederick C. Howe, and John P. Frey of the Iron Moulders Union. (p.24)

“The Federal Trade Commission Act of 1914 is most often thought of as a Wilsonian reform embodying a bias against ‘big business.’ In fact, the principles underlying the FTC were enunciated by corporation leaders and their lawyers consistently throughout the Progressive Era in response to a series of legislative and judicial actions stretching over some seventeen years.” (p.62)

10. Weinstein, The Corporate Ideal in the Liberal State, 22.

11. George Morris, CIA and American Labor: The Subversion of the AFL-CIO’s Foreign Policy (International Publishers, 1967), 47.

12. Weinstein, The Corporate Ideal in the Liberal State, 128. This hard attack on Socialist principles stands in contrast to their soft approach which, in the Civic Federation’s own words, “should not violently attack socialism and anarchism as such,” and instead should be “patient and persuasive” in their defence of “(1) individual liberty; (2) private property; and (3) inviolability of contract.” (p.129)

13. Weinstein, The Corporate Ideal in the Liberal State, 122-127.

14. Weinstein, The Corporate Ideal in the Liberal State, 136-7. “By the 1920′s, in more sophisticated form, paternalistic labor relations undermined union strength and successfully forestalled the organization of new unions.” (p.20)

15. Weinstein, The Corporate Ideal in the Liberal State, xiv.

16. Weinstein, The Corporate Ideal in the Liberal State, 173.

17. Weinstein, The Corporate Ideal in the Liberal State, 185. “Walsh shared Brandeis’ views on social reform, but was less committed to rationalizing and stabilizing the corporate system and more concerned with simple social justice.” (p.185) Instead of seeking the “removal of issues from politics” or attempting to resolve problems discretely behind closed doors, “Walsh sought to strengthen the hand of reformers in the political arena by exposing the immorality and hidden power of such men as John D. Rockefeller over public officials.” (p.189) ” As his actions and his Final Report showed, Walsh was pro-labor and not at all hesitant to attack and expose the brutality and social irresponsibility of even the biggest of big businessmen; yet Walsh was not anti-capitalist; nor did his framework of thought on social matters conflict fundamentally with that of the NCF.” (p.191)

Another example of the Civic Federation’s depoliticization of labor issues is workers compensation. In the United States this paternalistic idea was first promoted in 1898 by the Social Reform Club of New York, however, such moves were generally opposed by the labor movement who were agitated for employer liability laws instead. Such changes were more affordable to large corporations and the National Association of Manufacturers was initially hostile to such impositions. By 1911 though, smaller businesses had joined the Civic Federation’s calls for compensation, and “labor had been induced to change its mind on compensation.”As Weinstein continues: “In part, this was the result of agitation, starting in 1907, by the American Association for Labor Legislation (AALL), an organization of middle class reformers financed by such men as John D. Rockefeller, Elbert H. Gary, and V. Everitt Macy. But trade unionists had little use for the AALL. Much more important in winning their support was the work of the National Civic Federation, which after 1908 threw its whole weight into the fight for compensation legislation.” (p.43, p.47, p.48)

18. Weinstein, The Corporate Ideal in the Liberal State, 196-197.

19. Weinstein, The Corporate Ideal in the Liberal State, 203. Rockefeller’s Industrial Relations Department was headed by the Canadian, William Lyon McKenzie King, who testified before the Walsh Commission as to his service to Rockefeller in the aftermath of the Colorado bloodbath. As Weinstein notes: “The result was King’s suggestion that Rockefeller need not greatly modify his ‘arbitrary- and undemocratic’ policies ‘because unemployment and distress resulting from the European war would weaken the power of labor and force labor to take about what the employer cared to give it.’” (pp.205-6)

King came into Rockefeller’s service upon the recommendation of Harvard University’s president, Charles W. Eliot. Prior to joining Rockefeller circle, King had been a Canadian labor minister who “became famous for compulsory investigation, a scheme that defused labor’s strike weapon.” Edward Silva and Sheila Slaughter, Serving Power: The Making of the Academic Social Science Expert (Greenwood Press, 1984), 259.

20. Weinstein, The Corporate Ideal in the Liberal State, 205. “The setting up of scientific or social work foundations, Walsh warned, must lead to a condition of ‘loyalty and subserviency’ to men of wealth and their ‘interests from the whole profession of scientists, social workers and economists.’ Already there were ‘thousands of men in these professions receiving subsidies, either directly or indirectly, from the Rockefeller Estate.’ These men were in a position where to ‘take any step toward effective economic, social and industrial reform’ would bring them ‘directly counter to the interests of their benefactor.’ No sensible man can believe, Walsh insisted, ‘that research workers, publicists and teachers can be subsidized with money obtained from the exploitation of workers without being profoundly influenced in their points of view and in the energy and enthusiasm with which they might otherwise attack economic abuses.’” (p.205)

As Sheila Slaughter and Edward Silva observed the Walsh Commission noted that that “mixing funding with direct project management automatically invalidated results” of academic research, which in turn led the big foundations to begin funneling their monies through academic holding companies such as the Social Science Research Council and the American Council of Learned Societies (which were formed in 1919 and 1923 respectively). Sheila Slaughter and Edward Silva, ‘Looking Backwards: How Foundations Formulated Ideology in the Progressive Period’, in Philanthropy and Cultural Imperialism, 74-5.

21. Weinstein, The Corporate Ideal in the Liberal State, 199.

22. Weinstein, The Corporate Ideal in the Liberal State, 202, 17. Another Commission member who, like Commons, was strongly in favor of the social engineering approach aligned with industrial democracy was Charles V. McCarthy, who had been especially recruited to the Commission “only under tremendous pressure from the President himself.” Demand for McCarthy, who was deemed to provide a useful “buffer” between capital and labor, came about as a result of the Colorado strike. This being so “perhaps because McCarthy had been a classmate and friend of Rockefeller’s at Brown University, and had remained on good terms with him in later years.” (p.203) Later when Walsh became aware of the ongoing correspondence between McCarthy and Rockefeller during the Commission – as a result of documents subpoenaed by the Commission from Rockefeller – Walsh described “this ‘cooperation’ with Rockefeller ‘extremely repugnant’ and viewed McCarthy’s activity as ‘a plan little short of espionage over [the Commission's] work by representatives of those forces in the country which the great majority of workers, at least, believe to be the principle despoilers of their rights and the most notorious exploiters of their kind.’” (p.204)

23. Weinstein, The Corporate Ideal in the Liberal State, 203, 212.

24. Weinstein, The Corporate Ideal in the Liberal State, 213.

25. Weinstein, The Decline of Socialism in America, 1912-1925 (Monthly Review Press, 1967).

26. Weinstein, The Corporate Ideal in the Liberal State, 243, 240.

27. Weinstein, The Corporate Ideal in the Liberal State, 241.

28. Weinstein, The Corporate Ideal in the Liberal State, 254. “The welfare institutions that became the salve for the wounds inflicted by a rapacious capitalist order were the creation, in part, of the liberal intellectuals who collaborated with enlightened members of the corporate bourgeoisie to convince the state that such reforms were necessary if the social order was to survive.” Aronowitz, False Promises, 281.

29. Irving Bernstein, The Lean Years: A History of the American Worker, 1920-1933 (Houghton Mifflinm 1983), 169, 168. John D. Rockefeller III went on to serve as a trustee of Industrial Relations Counselors, Inc. (IRC), and went on to become a prominent supporter of the population control movement: a movement that like the industrial relations field proved a suitable means of undermining anti-capitalist organizing all over world. For more on the social control aspect of the population issue, see Eric Ross, The Malthus Factor: Population, Poverty, and Politics in Capitalist Development (Zed Books, 1999).

In 1953, ORC Worldwide “was spun out of IRC as a for-profit consulting firm” and since it “has served to assist clients, primarily Fortune 500 firms, with specialized knowledge and advice about human resources management.”

30. Berstein, The Lean Years, 169.

31. Stewart Ewen, Captains of Consciousness: Advertising and the Social Roots of Consumer Culture (Mc-Graw-Hill, 1976), 12.

32. Stewart Ewen, PR!: A Social History of Spin (Basic Books, 1996), 166.

33. Alex Carey, Taking the Risk out of Democracy: Propaganda in the US and Australia (University of New South Wales Press, 1995), 146. Carey continues: “From 1937 the Psychological Corporation began a systematic and continuous monitoring of public opinion on all questions of political importance to business and corporations. Over the next fourteen years the results of many of these surveys were published in the Journal of Applied Psychology.” (p.147)

34. Donald Fisher, ‘A Matter of Trust: Rockefeller Philanthropy and the Creation of the Social Science Research Councils in the United States and Canada’, in Theresa Richardson and Donald Fisher, eds., The Development of the Social Sciences in the United States and Canada: The Role of Philanthropy (Ablex Publishing, 1999), 84.

35. Diana Ralph, Work and Madness: The Rise of Community Psychiatry (Black Rose Books, 1983), 64, 63.

36. Ralph, Work and Madness, 68-9. Ralph notes: “Originally a minor, low-budget lobby group for preventive psychiatry and reform of insane asylums, the National Committee had little money or influence” prior to World War I. (p.68)

37. Ralph, Work and Madness, 69.

38. Ralph, Work and Madness, 75.

39. Ralph, Work and Madness, 77. For detailed criticisms of Mayo’s work, see Alex Carey, Taking the Risk out of Democracy, 153-92. Carey writes: “In the United States theory and research about worker motivation and behavior has, from the 1940s to the 1970s, been dominated by one broad school of thought and practice. This movement was known until about 1955 as the ‘human relations’ school. In its earlier phases it was particularly associated with the Hawthorne studies, Elton Mayo, George Homans, and Roethlisberger and Dickson; in its later phases it was associated with Kurt Lewin and his students.” (p.143)

Interestingly, Carey notes that C.W. Mills “was one of the very few who recognized the ‘human relations’ developments of the late 1940s for the propagandist exercise they are. In 1948 he described the recent, much-publicized industrial interest in ‘democracy’ and ‘human relations’ as illustrative of a new ‘sophisticated conservatism’ whose distinguishing feature was its ‘stealing of liberal symbols for conservative purposes’”. (p.151) For further details, see C.W. Mills, ‘The Contribution of Sociology to Studies in Industrial Relations’, Proceedings of First Annual Meeting of Industrial Relations Research Association, December 29-31, 1948, 199-209. (Incidentally, C.W. Mills had been cut off from foundation funding in 1953 after writing The Power Elite.)

40. Ralph, Work and Madness, 79-80.

41. Ralph, Work and Madness, 47. “The entire humanistic wing of clinical psychology closely resembles Mayo’s approach, particularly in its emphasis on feelings to the exclusion of practical changes, on its pseudo-equality between therapist and client, and on its concept of positive mental self-actualization as opposed to curing mental illness. Non-directive interviewing by non-psychiatrists has been institutionalized as a major counselling technique in public community psychiatry programmes.” (p.81)

42. Ralph, Work and Madness, 136.

43. Weinstein, The Corporate Ideal in the Liberal State, ix. “Of course some middle-class reformers, like New Republic editor Herbert Croly, understood that progressive democracy was ‘designed to serve as a counterpoise to the threat of working class revolution.’ But even for them the promotion of reform was not an act of cynicism: they simply sought a way to be immediately effective, to have real influence. Their purpose was not only to serve as defenders of the social system, but also to improve the human condition. In the most profound sense they failed, and badly; yet they were a good deal more than simply lackeys of the capitalist class.” (p.xi)











Michael Barker is a doctoral candidate at Griffith University, Australia. He can be reached at: mbarker@riseup.net




























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