Summary of

“Contested Terrain: The transformation of the workplace in the twentieth century”

by Richard Edwards, New York: Basic, 1979

 

Summary

 

This book illustrates the Neo-Marxist perspective on organizations. It fits into the overall typology of organization theory, but it is highly distinctive from all the other theories we have studied. Instead of focusing exclusively on the managers or the capitalists’ points of view about the workplace – and society at large – it views it from the Marxist interpretation of the workers’ interest. As such, it is hardly reconcilable with non-Marxist theories of the organization. It simply lies within an alternative general framework – or philosophy – of History.

 

The main aim of Richard Edwards is to present a highly documented analysis of the development of capitalism – with a focus on the workplace – in the US with a Marxist framework. He aims at giving evidence of the contradictions of capitalism and of its exploitation of the workers. He also aims at explaining the capitalists’ success in preventing the workers to overthrow their system through a continuous improvement of the mechanisms of control within the workplace and through the fundamental division of the working class.

 

The key steps in the arguments are summarized thereafter.

 

Capitalism was made possible when a few men – the capitalists – successfully deprived the majority – the working class – of their means of production. Since then, labor power ceased to belong intrinsically to the workers, it became a commodity. The main problem of the capitalists became to maximize the output of the labor power that they bought in order to increase the production that belonged exclusively to them, and hence, their benefits. In order to maximize the output of the labor power, they needed to enforce their control over workers. This took place essentially at the workplace, although the phenomenon was also extended to society at large. The enforcement of control at the workplace served an additional purpose, that of resolving the inevitable conflict of interests between the aliened workers and the capitalists, in favor of the last ones, of course.

 

Control serves three purposes and hence takes three forms: direction (of the work task), evaluation and discipline. Through its development, capitalism has evolved in three types of control: simple, technical and bureaucratic control (the two last types can be referred to as structural control). These three types have emerged successively in the past century and still exist concomitantly.

The coexistence of these three types of control has contributed to the fragmentation of the working class into three sub-groups, thus preventing it to unite to fight successfully capitalism.

 

In the early stages of capitalism, in the middle of the nineteenth century, companies very relatively small and the unique type of control at the workplace was the simple type. Establishments were small in size (number of employees), in capital and their environment was limited (they were localized for their markets and their resources). Hence, the capitalist was a central and present figure at the workplace. The entrepreneur ran is company in person and supervised directly his entire workforce, establishing personal ties with his employees. He exerted a direct and simple control over his employees. His style of control was not formalized and somewhat arbitrary. He was able to maintain his control thanks to his closeness to his workforce. But he was nonetheless limited by the size of his company and its market and by the genuine competition of other companies.

 

But the logic of capitalism disrupted this early equilibrium. In order to maintain and increase their profits, capitalists ever tried to expand their influence. This could be done by increasing their market shares in a given market or even by conquering new markets. The next phase of capitalism was thus the expansion of internal – or domestic – market. This took the form of an increase in the size of companies enabled by the development of technology and the rise of financial markets in the first part of the twentieth century. But as this happened, two problems arose for capitalists. First, the entrepreneurial form of control was no longer possible with the increase in size of companies. Second, the workers were gathered together and distanced from the direct relationship with capitalists, which gave rise to their class conscience. New forms of control were needed. At first, the new control system was just an expanded form of simple control. A pyramidal hierarchy was built were an army of foremen replaced the direct control of former entrepreneurs. Foremen ran the workplace in the same style as the former entrepreneur. But capitalists had no longer any direct control over their workers. They had handed it to the foremen.

 

It must not be forgotten that alongside with the big emerging companies, there still were a majority of small companies run in the same way as in the early stage of capitalism. But the big corporations had increased their market power and ruled great chunks of markets, undermining the principle of competition. It was the rise of monopolies or oligopolies which determined market prices in order to increase artificially their profits through collusion.

 

However, at this stage of development, capitalists faced two major threats: the workers and the multiclass coalition of small capitalists, farmers and radical forces. The first group directly challenged the capitalists through the emergence of unions, and the socialist party. They organized big strikes and focused on the arbitrary forms of control that were exerted by foremen. The second group challenged the monopolistic position of big firms and threatened them through anti-trust trials. The author documents his arguments with events that occurred in big companies such as US Steel, Pullman, Standard Oil, etc.

 

The action of the multiclass coalition of small capitalists, farmers and radical forces failed as the First World War (IWW) made the government favor inter-industry cooperation. A few big groups – such as Standard Oil – had however been dismantled and big capitalists were aware of a need to take a greater control over the external society, especially the government. But the unrest among the workers was still threatening. Although great strikes had successfully been broken, often with the aid of government, capitalists became increasingly aware that they needed to find new ways of enforcing their control over the workplace.

 

Scientific management and the welfare capitalism were both attempts to regain the lost control. But they both failed. The first one, because its true manipulative nature was too blatant and the second one, because it didn’t address the problem of control directly. However, their failure provided useful lessons to capitalists. The Second World War (IIWW) gave anew idea two capitalists through the establishment of the War Labor Board (WLB). They tried to retain the idea after the war by creating company unions. However, this third attempt was no more successful than the first two ones and soon disappeared. That was when capitalism got ready for a new successful advance in its development of new types of control: it was the advent of technical control. Technical control was again enabled thanks to new technological advances. The idea was to depersonalize control from the contested image of the foremen by transferring it to the seemingly more objective and less contestable image of machines and technology. Technological control further limited the workers in their movements (by giving them fixed stations of work) and set the speed of work more insidiously. The maintenance of an army of unemployed was an additional mean of enforcement of authority by capitalists. However, the advent of technical control had a pernicious effect. While it contributed to depriving formerly skilled workers from their skills – and hence from their power at the workplace – it also favored the emergence of a more homogenate class of workers, who could challenge more directly capitalists’ power.

 

Hence, capitalists developed further the idea of structural control and invented bureaucratic control. Bureaucratic control had ever more the appearance of rationality and fairness. Control was further depersonalized and workers were further segmented as a class. The author gives a lengthy example of how bureaucratic control works at Polaroid. Bureaucratic control was the ultimate stage of the institutionalization of power, which made corporations look like government agencies and legitimized them.

 

There still was a contradiction in this last development of capitalism: it gave workers the opportunity to contest capitalist power since rules were clearly and rationally defined. It also gave them the taste of participation and of security. The class conflict between workers and capitalists had been displaced to the political scene. The power of capitalists was again threatened.

 

How did capitalists protect them against this?

 

The answer lies in the eternal tactic of dividing to rule. They divided the working class. There are three categories which have their equivalents in the labor market: the secondary market (insecure, low pay, low skill jobs such as waitress), the subordinate primary market (more secure, unionized, higher pay jobs, such as bus driver) and the independent primary market (secure, high paid, technical and educated workers, such as engineers or lawyers).

 

The first category constitutes the greatest part of labor working in simple control companies, the second one that working in the technical control companies, and the third one, that working in the bureaucratic control companies. The working class was further divided by issues such as racism and sexism which were carefully preserved by capitalists in order to prevent workers to gain conscience of their common class interests.

 

Since bureaucratic control is expanding with the effect of transferring class struggle issues on the political scene, it creates an antagonism between democracy and capitalism, which have always been argued by capitalists to be fundamentally linked. However, as democracy becomes a threat to their power, capitalists will ever more have an interest in spoiling it. This is what is happening now, as government gets increasingly ruled by supposedly technically superior technicians (state technocrats sold to capitalists) at the expense of elected rulers.

 

Hence, the only safeguard of democracy lies with socialism, but a socialism that would advocate clearly democratic principles (unlike what happened in USSR). The problem is that communism has been ruined in the US by mistakes and discredit by the capitalists. There is no class conscience of the workers in the US.

 

 

Comments and relation to other texts

 

It is somewhat hard to comment on Marxist texts without falling into a general criticism of Marxism.

 

If I stay inside the Marxist paradigm – trying to make an internal criticism – I must admit that the book is very well written. It is extremely well documented and the examples support very well articulated arguments. Even if I step aside of Marxism, I agree with some of the criticisms that R. Edwards make of the conditions of work in the US. These criticisms are consistent with non-Marxist reflections on power within organizations. Some of the criticisms of the overwhelming power of huge corporations are also valid and have even been admitted within a capitalist framework and were the base of antitrust trials and are still issues within the European Union through the action of the Commission (direction of the concurrence). More generally, countries of the UE differ from the American style capitalism and address some of the issues that Edwards describe. In doing so, they often fight against the position of the US.

 

I have a more radical criticism about the general Marxist framework which leads to biases from the author (as there are also undoubtedly biases among unquestioning organization theory students who deal only with the capitalist interests). I don’t believe for instance in such a conscious and unified action of THE capitalists (as if they were always acting together consciously and premeditatedly) to divide the working class, especially through racism and sexism (which I believe have other natural roots). I also don’t believe that the ‘technocratization’ of the government is the result of a concerted action of capitalists in order to undermine democracy. However, I agree with the author that the workplace lacks fundamental rules of democracy and that it is a problem. But I believe it can be resolved without recurring to Marxism, within a capitalist framework. I believe in the invisible hand of the market and in the good will of managers and in the power of workers (without making a socialist revolution).

 

Still, it is very useful to have an exterior point of view to remind us of important issues which rest unaddressed in organization theory.