2 of 3 people found the following review helpful:
4.0 out of 5 stars
Useful Insights on the Rise and Fall of Corporate Paternalism, October 18, 2009
This review is from: Building the Workingman's Paradise: The Design of American Company Towns (Haymarket) (Paperback)
What inspired employers to provide for all their employees' wants via company towns? What forces closed the era of welfare capitalism so completely in the 1930s? These were the questions I had in mind at the start. Though the book is primarily about design, it answers them decisively.
In the mid 19th century, power was scarce. If you wanted to run a mill, you needed to locate along an unclaimed river, often in a remote, isolated area. There were no cars, or even bicycles. Commuting any distance for work was unheard of. People lived close to where they worked, by necessity. There was no interstate trucking to bring groceries from afar; food was local too. The 30-year low-interest home mortgage did not exist. Business titans were still religious: they feared accountability to God more than to short-term shareholders. It was a very different era that gave birth to the company town.
Towards the late 19th century, organized labor disputes began to impinge on the peace. The book speaks at length of Pullman: a town planned meticulously by the sleeper-car baron to be the workingman's paradise. Prolonged labor strikes came nevertheless. The book cites period congressional testimony to the effect that unions hated company towns, so capitalists had to love them. Companies were not at war with their employees -- only with the agitators who may in fact have been demagogues implanting false notions into the easily manipulated masses. In a company town, interests of labor and employer were aligned. Unions divorced them. Incredibly, the pro-union Wagner Act even outlawed company social and recreational clubs!
The enemies of welfare capitalism were diverse and telling. Taylorism, the scientific management movement much admired by Bolsheviks and capitalists alike, was opposed. Taylor himself called it a joke. Indeed. And treating a man as if he were a machine: what's that called? -inhuman. FDR's New Deal mounted an attack: "There is something feudal and repugnant to American principles in the practice of employer ownership of employee homes." Perhaps one might recall how little financial acumen the common laborer had, or has even now; absolving him of the administrative burden of home ownership is arguably an act of mercy. A third enemy of the company town was a chimera: the artificial prosperity of the 1920s. When the ephemeral tide that lifted all boats crashed in 1929, it dashed the hopes of countless laborers who thought they could do better on their own than in a company town. And the financial crisis forced employers to slash their welfare programs just to stay afloat.
It was especially shocking for me to learn that home mortgages were, until 1934, quite different: 50% down payments, repayable within only 3-5 years at high interest. With the advent of 30-year FHA loans, easy leverage inflated home prices but made home ownership seem affordable. Arguably, it meant paying $300k over the life of a loan on a $100k house that would only have cost $20k if mortgages were as rare and expensive as they once were. The implications for company towns were grim: why pay rent to the boss when you could own an "investment" instead?
Of course, not all company towns were headed by a benevolent Charlemagne. Many used ruthless tactics to permanently indenture the workers, with overpriced company stores and extortion-level rents. But on the whole, this is a debatable chapter of history. It's just possible that industry was headed in the right direction when it attempted to care holistically for its many dependent employees. We don't give our children money and expect them to care for themselves; perhaps it's time employers resumed caring for their employees in like manner. Too many feel they can pay too little, since food stamps and other public assistance programs can fill the gap in employee pocketbooks. It's not right. Companies should take full responsibility for the maintenance of their labor force.
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0 of 18 people found the following review helpful:
4.0 out of 5 stars
This Book Was Very Self Explanatory, June 30, 1999
By A Customer
This review is from: Building the Workingman's Paradise: The Design of American Company Towns (Haymarket) (Paperback)
It Was An easy to read book
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