In France, home to economic liberalism, there were fewer reforms and less trade union recognition than in conservative Britain, though there was growing concern for the welfare of the working class. The dominant political factions, grouped under the banner of ‘moderate’ republicanism, initiated limited pro-labour legislation with the Waldeck-Rousseau law of 21 March 1884 (Waldeck-Rousseau was then the Minister of the Interior). This finally gave workers the right to join a trade union (the right to strike had already been established by Napoleon III in 1864), and was perhaps the only significant pro-labour law that Waldeck-Rousseau managed to get through.53 Although Waldeck-Rousseau was a very moderate reformer, he was regarded by respectable liberal publications (L’Économiste français, the Journal des économistes, the Revue des deux mondes, the Journal des débats) as almost a socialist.54 In reality, he was more afraid of social Catholicism than of socialism and fought for social reforms without ever having any real sympathy for those who would benefit from these.55 By 1883 the bourgeois press (such as L’Économiste français) was almost resigned to trade unionism, particularly as Waldeck-Rousseau had obtained the support of the most important employers’ organizations.56
During the 1890s there was a further slide to the left in France: at the municipal elections of 1892 the socialists won a majority in four towns, including cities as important as Marseille and Lille.57 At the 1893 election the Parti ouvrier français and other socialists (French socialists, at the time, were deeply divided) increased their strength to forty-nine seats and a new radical government, supported by some socialists and led by Waldeck-Rousseau, reduced the length of the working day for children and women (though the measure was not properly enforced), and made employers responsible for labour accidents (1898).58
Even so the main trade union confederation, the CGT (Confédération générale du travail), created in 1895, still only had 700,000 members in 1914, fewer than the numbers in the United Kingdom in 1888.59 This was partly in response to the first major wave of industrial conflict (1893) with some 170,000 strikers in that year compared to an average of 47,000 strikers in the period 1871–92.60 Further waves of unrest occurred in 1905–6 and increased enormously in the years leading up to the First World War, of which just over half could be considered successful.61 At that time only 10 per cent of the small factory proletariat in France was unionized, while in Great Britain the number was 26 per cent and in Germany a staggering 63 per cent.62
Nevertheless timid social legislation continued. Alexandre Millerand, Minister of Commerce in the Waldeck-Rousseau government of 1899 to 1902, was regarded as an opportunist by other socialists because he had agreed to enter a ‘bourgeois’ government.63 His achievements were modest: an eleven-hour day leading to a ten-hour day, the enforcement of the law of working time for women and children, the establishment of consultative committees with workers, and a proposal for an old-age pension – all derisory advances compared to Germany or Britain, but not insignificant in the context of French social policy, and employers were alarmed.64 In 1897, Émile Cheysson, a follower of the social Christian conservative thinker Frédéric Le Play, lamented the fact that being a boss (un patron) was an increasingly thankless task since all progress was forcing down prices and lowering profits; he added that ‘Parliament is always on the side of the workers. Every law enacted or proposed adds a burden of inspections, fines, prison, compulsory taxes on industry …’65
Philanthropic paternalism was one classic response to working-class militancy – anything to avoid trade unions. Take Henri Schneider, owner of the Creusot steel works in Burgundy, and son of Eugène, the works’ founder. Henri was interviewed by Jules Huret, author in 1897 of one of the main investigations on the social question in Europe (see Chapter 2), a socialist writing for the conservative Le Figaro. At Le Creusot, Huret explained, workers could obtain a mortgage (at high interest) from the Schneiders to build their homes; there were schools for the children of the workers; when they left school, they were trained in Schneider’s training schools and then given employment at the steel works. If there was an accident there was free medical care; those who were injured were kept on with one-third pay; when they died the widow got a pension.66
It was a welfare state at company level. Le Creusot was a fully fledged company town employing some 16,000 workers. Henri Schneider himself was the mayor of Le Creusot for twelve years and then the local MP for another ten. A worker interviewed by Huret told him that Schneider was elected because the workers were afraid to vote for somebody else, and that workers who went to socialist meetings were dismissed one by one. Schneider’s authoritarian paternalism, it turned out, was paralleled by his utter distaste for state interference, trade unions, and for any kind of labour legislation.67 None of this stopped the strikes of 1899–1900, facilitated in part by an economic conjuncture favourable to the labour movement (the rise in demand for components for the railways and military rearmament) and to the growing power of the trade unions.68 These were not strikes for increases in wages but for trade union rights and the end to the kind of paternalistic regime that had been the hallmark of the reign of the Schneider family.
Paternalistic capitalism developed rapidly in the United States (encountering problems): firms hoped to bribe their workers with company welfare and provided kindergartens, libraries, English lessons, company stores, housing – many businesses could not have attracted workers unless they could house them – and even bowling alleys.69 At Pelzer, a small ‘model’ cotton factory town in South Carolina under the complete control of the Pelzer family, there was a school for the children of construction workers (almost all white and, until the turn of the century, not immigrants); a church shared by Baptists, Methodists, and Presbyterians; a town marshal employed by Pelzer to enforce paternalistic rules (no drunkenness, no dogs). The work contracts required attendance at school by all children until the age of twelve, and they were expected to take jobs in the mill once they had completed their education. At one point the US Steel Corporation owned 28,000 houses in which its employees lived.70 In Pullman, a factory town near Chicago (founded by George Pullman) where the famous railway carriages were manufactured, the workers were provided with libraries, theatres, and churches. The owners controlled all local politics. Paternalistic policies were wound down after the 1894 strike and the subsequent violent repression.71
The richest man in Belgium, Raoul Warocqué, who had inherited the coalmines at Campine, was a philanthropist who distributed soup and bread to the poor, supported the Université Libre de Bruxelles, the École des Mines, an orphanage, a childcare facility, and a maternity hospital; and he was also the local mayor and deputy, a freemason, an anticlerical, an art collector, and a liberal supporting legislation favourable to workers, while opposing the right to strike.
Baron Alphonse de Rothschild, reputedly the richest man in France (banker, art collector, owner of railways, vineyards, racehorses), and who, according to the Jewish Encyclopaedia of 1906, gave large sums to charities committed to improving the conditions of the working class, was against any kind of protection for trade unions or strikers.72 If the government were to protect trade unions and grant the right to strike, he told Jules Huret, ‘in ten years’ time there will be no commerce or industry left in France’. If workers worked only eight hours a day, they would drink or go to the cabaret the rest of the time. The workers who demanded the eight-hour day were the lazy and the incompetent ones.73 Each has the capital he deserves due to his work, energy, and intelligence, declared the Baron, who had inherited all of his wealth.
In Germany, as elsewhere, the most important instances of paternalism were in the coal, iron, and steel industries, where disruption would be particularly costly. In the Saarland, Carl Ferdinand Stumm, a champion of the principle of compulsory insurance (see Chapter 14), ran his steel and mining works on military lines, requiring that workers obtain his permission before they marry, and he forbade the reading of certain newspapers and involvement with trade unions or social demo
cratic politics. In exchange, so to speak, he paid better wages, provided interest-free mortgages as well as schools, nurseries, playgrounds, libraries, sports clubs, and needlework classes. Involvement in forbidden activities would be punished while punctuality and loyalty to the firm would be rewarded.74
Emil Kirdorf, the ‘king of coal and steel’, thought, in 1905, that it was ‘regrettable that our workers are in a position to change their places at any time. I do not demand that legislation come to our assistance, but we must reserve the right to take measures in order to stop this frequent change of employment.’75 In other words, workers should be like serfs, tied to their place of work, but at least serfs were not expected to move at the will of the company, as they often had if they worked for the railways.76 Kirdorf, who lived a long life, was a Nazi supporter in the 1920s and was decorated by Hitler on his 90th birthday in 1937.
When workers went on strikes at Carnegie’s Homestead Steel plant in Pennsylvania in 1892, asking that their union be recognized, Andrew Carnegie, the great philanthropist, along with his associate Henry Clay Frick, union-buster and art patron, broke the strike with the help of the private security firm Pinkerton. Carnegie is now better known for the thousands of public libraries he endowed as well as a whole range of educational institutions he funded. As for Henry Clay Frick, his remarkable, world-famous art collection is now housed in his former residence on New York’s Fifth Avenue.
Paternalistic capitalism failed almost everywhere. The only possible exception was in Japan, where in the first decade of the twentieth century large companies, it was believed, should be loyal to loyal employees and guarantee them lifetime employment (shūshin koyō) and not get rid of them during an economic downturn. The paternalism of Japanese employers had traditional (feudal) roots, as explained in their daily paper, the Economic Journal, of 22 August 1891:
In Japan relations between employer and employee are regulated by time-honored customs and moral principles. These are like relations between father and son, lord and vassal, or teacher and disciple. They should not be regarded in the same light as employment relations in the West.77
This system survived the interwar years and the Second World War. It developed substantially in the decades after 1945. As the long post-war Japanese boom subsided, the so-called lifetime employment began to break down. In the period we are examining there was no strong trade union movement and a Japanese socialist movement barely existed. Industrial conflicts were limited. Then, just as the Meiji elites sent missions to Europe and the United States to learn how to organize a modern society, so did those who sought to establish a modern labour movement. The Shokko Giyukai (Knights of Labor), a society aimed at promoting trade unions, sent representatives to the USA (the largest American trade union of the 1880s was called the Knights of Labor). On their return in 1896, they launched a ‘Call to the Workers’. They warned that foreign capitalists, attracted by low Japanese wages, would come to exploit workers, and ‘if you workers do not prepare to meet this challenge you will follow the same sad deplorable fate of European and American workers’.78 In the same year the government established a commission to carry out an inquiry into the conditions of the working class.79 What worried the Japanese authorities was that overworked workers might not be fit to be soldiers and meet the Meiji objective of fukoku kyōhei (‘enrich the country; strengthen the army’). Although business leaders opposed intervention, the government was unusually firm. In 1911 it introduced norms for the protection of women and children and set up a factory inspectorate. Workers’ welfare, however, was left to the discretion of employers.80
Even in Italy the state was abandoning its role as a minimalist Nacht-wächterstaat (‘Nightwatchman state’, an expression coined by the socialist leader Ferdinand Lassalle in 1862) in favour of liberal interventionism.81 The great liberal leader Giovanni Giolitti, in an attempt to push the country’s economic elites into the twentieth century, accused the outgoing government of treating all workers’ associations as dangerous, even though this was no longer how such things were viewed in ‘civilized countries’ – by which he meant Great Britain and France, liberal Italy’s main models. Giolitti believed that socialism was best fought by improving the welfare of the poorer strata and encouraging small private property.82 He wanted a capitalist society where the working classes would have a stake. Giolitti accepted the existence of trade unions, their value, and their right to be represented politically and exercise influence, as long as they did not exercise power. He hoped that the bourgeoisie would rule in perpetuity, but he knew it would be able to do so only if it became an ‘enlightened’ bourgeoisie.83 The state should remain impartial in the conflict between capital and labour; each should have their own representation and be equal before the law. Trade unions reacted towards the government in a hostile way because of the hostility exhibited by successive governments. But, Giolitti went on to argue, unions were the legitimate representatives of the working classes. Political institutions should fear disorganized crowds, not organized workers. There was no reason why the state should object if workers were able to obtain higher pay thanks to their unions. It was not the business of the state to defend the entrepreneurial classes. After all, it would be wrong to depress salaries below their economically ‘fair’ level since countries where workers were well paid were in the vanguard of economic progress.84 The formation of trade unions was part of the progress of civilizations, Giolitti explained in a famous speech on 4 February 1901.85 Shown a cable in which a senator lamented that ‘Today I, a senator of the Kingdom of Italy, had to use the plough myself because my workers, for centuries loyal to my family, are on strike with the assent of the government,’ Giolitti replied: ‘May I encourage you to continue to do so. You will thus be able to realize how fatiguing it must be and you will pay your workers better.’86
A renewed wave of labour unrest strong enough to worry the bourgeoisie had encouraged the development of Giolitti’s policies. The unrest had been the result of laws restricting strikes and press freedoms promulgated in February 1899 and the subsequent decision of the Constitutional Court (Corte di Cassazione) to declare these laws unconstitutional. In 1900 a huge dock strike in Genoa led to the fall of the government and the beginning of a new phase in which the more moderate exponents of Italian liberalism, such as Giolitti, acquired influence and power.87 The subsequent elections (June 1900) strengthened the Socialists, who obtained 13 per cent of the vote, 10 per cent more than previously. A month later, in July, King Umberto I was killed by an anarchist. A new reformist government led by Giuseppe Zanardelli was installed and Giolitti was appointed Interior Minister. He turned out to be the real architect of Italy’s social policy.
He had explained his long-term vision to the electors of Caraglio, his Piedmontese constituency, in the following terms: at home, politics should maximize the welfare of the greatest number of citizens, encourage public education, industry, and agriculture, reduce public spending, help ‘the toiling classes’, and guarantee freedom. Abroad, Italy should pursue a policy of peace. Italy had no choice but to follow this ‘democratic’ course and reject what Giolitti called the ‘imperial course’.88
Giolitti was five times Prime Minister in Italy’s numerous pre-war coalition governments: 1892–3, 1903–5, 1906–9, 1911–14 (when universal manhood suffrage was introduced), and finally, after the war, in 1920–21. His most important parliamentary speech, however, was probably the one he gave when he became Minister of the Interior, in February 1901. In it he warned:
We are at the beginning of a new historical period. One must be blind not to see it. New popular strata are entering our political life; every day there are new problems, and new forces arise with which any government must deal. The confusions in today’s parliamentary groups show that what divides us now is no longer what used to divide us.89
A few months later he explained that the rapidly developing labour movement required the introduction of social legislation. The most ‘serious error of the bourgeo
isie’, he told his parliamentary colleagues, would be to fail to understand that they must improve the conditions of the working classes, and show them that they have more to gain from the establishment than from ‘those who want to use them for their own political ends’.90
Giolitti was a far-seeing and enlightened bourgeois (a rare case in Italy), who defended the state and the values of the Risorgimento, and who denounced – not for the first time – the numerous indirect taxes (on bread and salt, for instance) that hit the poor disproportionately. In the years leading up to the First World War, Italy began to develop the kind of social legislation that was already entrenched elsewhere: laws protecting working women and children (1902); compensation for workers’ injuries (1904); public health legislation (1907); the establishment of Cassa di maternità (1910) for the protection of mothers; and the setting up of a Labour Inspectorate (1912) to ensure that labour legislation was enforced.91 Social reforms, Giolitti claimed, with considerable sagacity, were perfectly compatible with capitalism. This is why, decades later, he received a positive encomium from an unusual source: Palmiro Togliatti, leader of the Italian Communist Party, who, in a speech in 1950, said that Giolitti was, of the men of his epoch, the one who had understood better which way Italian society should proceed.92 Giolitti was not alone in his battle to improve conditions. Francesco Saverio Nitti, a leading meridionalista (a loose group of Southern intellectuals), had already complained that Italian social legislation was the worst in Europe – an exaggeration, but then Nitti’s models were Great Britain, France, and Germany, not Bulgaria and Spain.93 His journal, La Riforma sociale, became the stronghold of liberal economists amenable to listening to the growing voice of the labour movement.94 The Pope, with the encyclical Rerum Novarum of 1891, had also joined the reformist camp in competition with the Socialists. The defenders of the non-interventionist state were, increasingly, in a minority. These included people such as the liberal economist Luigi Einaudi (who became President of the Republic in 1948, though he had voted for the monarchy in the referendum of 1946); he dogmatically repeated the truisms of a previous era, attacking the corrupting aspects of state intervention and celebrating the hegemonic role of the entrepreneurial classes.95 The Milan daily the Corriere della Sera, Italy’s main newspaper and the de facto organ of the bourgeoisie, equally opposed Giolitti. The Corriere wanted a strong state hostile to the labour movement. As for the industrialists, they simply regarded Giolitti as a dupe or a servant of the Socialists.96
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