managerial capitalism
Chapter 2 The Origins of Management
Industrial capitalism begins when a significant numberofworkers is employed by a single capitalist. At first, the capitalist utilizes labor as it comes to him from prior forms ofproduction, carrying on labor processes as they had been carried on before. The workers are already trained in traditional arts ofindustry previously practiced in feudal and guild handicraft production. Spinners, weavers, glaziers, potters, blacksmiths, tinsmiths, locksmiths, joiners, millers, bakers, etc. continue to exercise in the employ ofthe capitalist the productive crafts they had carried on as guild journeymen and independent artisans. These early workshops were simply agglomerations of smaller units ofproduction, reflecting little change in traditional methods, and the work thus remained under the immediate control of the producers in whom was embodied the traditional knowledge and skills oftheir crafts.
Nevertheless, as soon as the producers were gathered together, the problem ofmanagement arose in rudimentary form. In the first place, functions of management were brought into being by the very practice ofcooperative labor. Even an assemblage of independently practicing artisans requires coordination, ifone considers the need for the provision ofa workplace and the ordering of processes within it, the centralization of the supply of materials, even the most elementary scheduling of priorities and assignments, and the maintenance of records of costs, payrolls, materials, finished products, sales, credit, and the calculation ofprofit and loss. Second, assembly trades like shipbuilding and coach making required the relatively sophisticated meshing ofdifferent kinds oflabor, as did civil engineering works, etc. Again, it was not long before new industries arose which had little prior handicraft background, among them sugar refining, soap boiling, and distilling, while at the same time various primary processes like iron smelting, copper and brass working, and ordnance, paper and powder making, were completely transformed. All ofthese required conceptual and coordination functions which in capitalist industry took the form ofmanagement.
The capitalist assumed these functions as manager by virtue ofhis ownership ofcapital. Under capitalist exchange relations, the time of the workers he hired was as much his own as were the materials he supplied and the products that issued from the shop. That this was not understood from the beginning is attested by the fact that guild and apprenticeship rules and the
41
42 Labor and Monopoly Capital
legal restraints common to feudal and guild modes of production all persisted for a period, and had to be gradually stripped away as the capitalist consolidated his powers in society and demolished the juridical features of pre-capitalist social formations. It was partly for this reason that early manufacturing tended to gravitate to new towns which were free of guild and feudal regulations and traditions. In time, however, law and custom were reshaped to reflect the predominance ofthe "free" contract between buyer and seller under which the capitalist gained the virtually unrestricted power to determine the technical modes of labor.
The early phases ofindustrial capitalism were marked by a sustained effort on the part of the capitalist to disregard the difference between labor power and the labor that can be gotten out ofit, and to buy labor in the same way he bought his raw materials: as a definite quantity of work, completed and embodied in the product. This attempt took the form of a great variety of subcontracting and "putting-out" systems. * In the form of domestic labor, it was to be found in textile, clothing, metal goods (nailing and cutlery), watchmaking, hat, wood and leather industries, where the capitalist distributed materials on a piecework basis to workers for manufacture in their own homes, through the medium of subcontractors and commission agents. But even in industries where work could not be taken home, such as coal, tin, and copper mines, mine workers themselves, working at the face, took contracts singly or in gangs, either directly orthrough the mediation ofthe "butty" or subcontracting employer of mine labor. The system persisted even in the early factories. In cotton mills, skilled spinners were put in charge of machinery and engaged their own help, usually child assistants from among their families and acquaintances. Foremen sometimes added to their direct supervisory function the practice of taking a few machines on their own account and hiring labor to operate them. Pollard identifies practices of this sort not only in mines and textile mills, but also in carpet and lace mills, ironworks, potteries, building and civil engineering projects, transport, and quarrying? In the United States, it has been pointed out, the contract system, in which puddlers and other skilled iron and steel craftsmen were paid by the ton on a sliding scale pegged to market prices, and hired their own help, was characteristic ofthis industry until almost the end of the nineteenth century.3 The following description, by Maurice Dobb, ofthe prevalence of such systems well past the middle of the nineteenth century points to this important fact: that the specifically capitalist mode ofmanagement and thus ofproduction did not become generalized until relatively recent times, that is, within the last hundred years:
* Sidney Pollard, to whose The Genesis ofModern Management I am indebted for materials used in this chapter, calls this effort "if not a method of management, at least a method of evading management."l
The Origins ofManagement 43
As late as 1870 the immediate employer of many workers was not the large capitalist but the intermediate sub-contractor who was both an employee and in tum a small employer of labour. In fact the skilled worker of the middle nineteenth century tended to be in some measure a sub-contractor, and in psychology and outlook bore the marks of this status.
Itwas not only in trades still at the stage ofoutwork and domestic production that this type of relationship prevailed, with their master gunmakers or nailmasters or saddlers' and coachbuilders' ironmongers, or factors and "foggers" with domestic workers under them. Even in factory trades the system of sub-contracting was commOn: a system with its Opportunities for sordid tyranny and cheating through truck and debt and the payment ofwages in public houses, against which early trade unionism fought a hard and prolonged battle. In blast-furnaces there were the bridge-stockers and the stock-takers, paid by the capitalist according to the tonnage output of the furnace and employing gangs of men. women, boys and horses to charge the furnace or control the
casting. In coal-mines there were the butties who contracted with the management for the working 0 f a stall, and employed their own assistants; some butties having as many as 150 men under them and requiring a special overseer called a "doggie" to superintend the work. In rolling mills there was the ma~ter-roller, in brass-foundries and chainfactories the overhand, who at times employed as many as twenty or thirty; even women workers in button factories employed girl assistants. When factories first came to the Birmingham small metal trades, "the idea that the employer should find, as a matter ofcourse, the work places, plant and materials, and should exercise supervision over the details of the manufacturing processes, did not spring into existence.,,4
While all such systems involved the payment of wages by piece rates, or by subcontract rates, it must not be supposed that this in itself was their essential feature. Piece rates in various forms are common to the present day, and represent the conversion of time wages into a fonn which attempts, with very uneven success, to enlist the worker as a willing accomplice in his or her own exploitation. Today, however, piece rates are combined with the systematic and detailed contro I on the part ofmanagement over the processes ofwork, a control which is sometimes exercised more stringently than where time rates are employed. Rather, the early domestic and subcontracting systems represented a transitional form, a phase during which the capitalist had not yet assumed the essential function ofmanagement in industrial capitalism, control
over the labor process; for this reason it was incompatible with the overall development ofcapitalist production, and survives only in specialized instances.
Such methods of dealing with labor bore the marks of the origins of industrial capitalism in mercantile capitalism, which understood the buying and selling ofcommodities but not their production, and sought to treat labor like all other commodities. It was bound to prove inadequate, and did so very
44 Labor and Monopoly Capital
rapidly, even though its survival was guaranteed for a time by the extreme unevenness ofthe development oftechnology, and by the need for technology to incessantly retrace its own steps and recapitulate, in newer industries, the stages of its historic development. The subcontracting and "putting out" systems were plagued by problems of irregularity of production, loss of materials in transit and through embezzlement, slowness ofmanufacture, lack of uniformity and uncertainty of the quality of the product. But most of they were limited by their inability to change the processes of production.* Based, as Pollard points out, upon a rudimentary division oflabor, the domestic system prevented the further development ofthe division of labor. While the attempt to purchase finished labor, instead of assuming direct control over labor power, relieved the capitalist of the uncertainties ofthe latter system by fixing a definite unit cost, at the same time it placed beyond the reach of the capitalist much ofthe potential ofhuman labor that may be made available by
fixed hours, systematic control, and the reorganization of the labor process. This function, capitalist management soon seized upon with an avidity that was to make up for its earlier timidity.
The control oflarge bodies ofworkers long antedates the bourgeois epoch. The Pyramids, the Great Wall of China, extensive networks of roads, aqueducts, and irrigation canals, the large buildings, arenas, monuments, cathedrals, etc., dating from antiquity and medieval times all testify to this. We find an elementary division of labor in the workshops which produced weapons for the Roman armies, and the armies of pre-capitalist times exhibit primitive forms oflater capitalist practices. ** Roman workshops for metalwork, pottery, leather, glassblowing, brickmaking, and textiles, as well as large agricultural
7
estates, broughttogether scores ofworkers under a single management. These predecessors, however, were undertaken under conditions of slave or other unfree forms of labor, stagnant technology, and the absence of the driving capitalist need to expand each unit of capital employed, and so differed markedly from capitalist management. The Pyramids were built with the
* On this, David Landes writes: " ... the manufacturer who wanted to increase output had to get more work out ofthe labour already engaged. Here, however, he again ran into the internal contradictions of the system. He had no way of compelling his workers to do a given number of hours of labour; the domestic weaver or craftsman was master ofhis time, starting and stopping when he desired. And while the employer could raise the piece rates with a view to encouraging diligence, he usually found that this actually reduced output." Landes also summarizes othcr "internal contradictions" ofthis mode of industrial organization.s
** "In general," Marx wrote in a letter to Engels, "the army is important for economic development. For instance, it was in the army that the ancients first fully developed a wage system .... The division oflabour within one branch was also first
carried out in the armies.,,6
The Origins o/Management 45
surplus labor of an enslaved popUlation, with no end in view but the greater glory of the pharaohs here and in the hereafter. Roads, aqueducts, and canals were built for their military or civilian usefulness, and not generally on a profit-making basis. State-subsidized manufactories produced arms or luxury goods and enjoyed an actual or legal monopoly and large orders from noncommercial buyers, courts, or armies.8 The management required in such situations remained elementary, and this was all the more true when the labor was that ofslaves, and sometimes supervised by slaves as well. The capitalist, however, working with hired labor, which represents a cost for every nonproducing hour, in a setting of rapidly revolutionizing technology to which his own efforts perforce contributed, and goaded by the need to show a surplus and accumulate capital, brought into being a wholly new art ofmanagement, which even in its early manifestations was far more complete, self-conscious, painstaking, and calculating than anything that had gone before.
There were more immediate precedents for the early industrial capitalist to draw upon, in the form of mercantile enterprises, plantations,and agricultural estates. Merchant capitalism invented the Italian system ofbookkeeping, with its internal checks and controls; and from merchant capital the industrial capitalist also took over the structure ofbranch organization subdivided among responsible managers. Agricultural estates and colonial plantations offered the experience of a well-developed supervisory routine, particularly since much early mining (and the construction works that attended it) was carried out on the Ilgricultural estates ofGreat Britain under the supervision ofestate agents.
Control without centralization of employment was, if not impossible, certainly very difficult, and so the precondition for management was the gathering of workers under a single roof. The first effect of such a move was to enforce upon the workers regular hours ofwork, in contrast to the self-imposed pace which included many interruptions, short days and holidays, and in general prevented a prolongation of the working day for the purpose of producing a surplus under then-existing technical conditions. Thus Gras writes in his Industrial Evolution:
It was purely for purposes ofdiscipline, so that the workers could be effectively controlled under the supervision of foremen, Under one roof, or within a narrow compass, they could be started to work at sunrise and kept going till sunset, barring periods for rest and refreshment. And under penalty ofloss of all employment they could be kept going almost all throughout the year.9
Within the workshops, early management assumed a variety ofharsh and despotic forms, since the creation of a "free labor force" required coercive methods to habituate the workers to their tasks and keep them working throughout the day and the year. Pollard notes that "there were few areas of the country in which modem industries, particularly the textiles, ifcarried on in large buildings, were not associated with prisons, workhouses, and orphanages.
46 Labor and Monopoly Capital
This connection is usually underrated, particularly by those historians who asswne that the new works recruited free labour only." So widespread does he find this and other systems of coercion that he concludes that "the modern industrial proletariat was introduced to its role not so much by attraction or monetary reward, but by compulsion, force and fear."lo
Legal compulsions and a paralegal structure ofpunishment within factories were often enlarged into an entire social system covering whole townships. Pollard gives the example ofthe enterprise ofAmbrose Crowley, a large mixed ironworks which carried on both primary processes of iron production and fabricating. In the second quarter ofthe eighteenth century this firm employed more than I ,000 workers, scattered over its central works, warehouses, and company ships. An extraordinary Book of Laws has survived from this
enterprise:
The finn provided a doctor, a clergyman, three schoolmasters and a poor relief,
pension and funeral scheme, and by his instructions and exhortations Crowley
attempted to dominate the spiritual life of his flock, and to make them into
willing and obedient cogs in his machine. Itwas his express intention that their
whole life, including even their sparse spare time (the nonnal working week
being of eighty hours) should revolve around the task of making the works
profitable.I I
In this method of total economic, spiritual, moral, and physical domination, buttressed by the legal and police constraints of a servile administration ofjustice in a segregated industrial area, we see the forerunner ofthe company town familiar in the United States in the recent past as one ofthe most widely used systems of total control before the rise ofindustrial unionism.
In all these early efforts, the capitalists were groping toward a theory and practice of management. Having created new social relations of production, and having begun to transform the mode ofproduction, they found themselves confronted by problems ofmanagement which were different not only in scope but also in kind from those characteristic ofearlier production processes. Under the special and new relations of capitalism, which presupposed a "free labor contract," they had to extract from their employees that daily conduct which would best serve their interests, to impose their will upon their workers while
operating a labor process on a voluntary contractual basis. This enterprise shared from the first the characterization which Clausewitz assigned to war; it is movement in a resistant medium because it involves the control ofrefractory
masses. The verb to manage, from manus, the Latin for hand, originally meant to train a horse in his paces, to cause him to do the exercises ofthe manege. As capitalism creates a society in which no one is presumed to consult anything but self-interest, and as the employment contract between parties sharing nothing but the inability to avoid each other becomes prevalent, management
The Origins ofManagement 47
becomes a more perfected and subtle instrument. Tradition, sentiment, and pride in workmanship play an ever weaker and more erratic role, and are regarded on both sides as manifestations of a better nature which it would be folly to accommodate. Like a rider who uses reins, bridle, spurs, carrot, whip, and training from birth to impose his will, the capitalist strives, through management, to control. And control is indeed the central concept of aU management systems, as has been recognized implicitly or explicitly by all theoreticians ofmanagement.*Lyndall Urwick, the rhapsodic historian ofthe scientific management movement and himself a management consultant for many decades, understood the historical nature ofthe problem clearly:
In the workshops of the Medieval "master," control was based on the obedience which the customs ofthe age required the apprentices and journeymen to give to the man whom they had contracted to serve. But in the later phase ofdomestic economy the industrial family unit was controlled by the clothier only in so far as it had to complete a given quantity of cloth according to a certain pattern. With the advent ofthe modem industrial group in large factories in urban areas, the whole process ofcontrol underwent a fundamental revolution. It was now the owner or manager ofa factory, i.e., the "employer" as he came to be called, who had to secure or exact from his "employees" a level ofobedience and/or co-operation which would enable him to exercise control. There was no individual interest in the success ofthe enterprise other than the extent to which it provided a livelihood. 13
It was not that the new arrangement was "modem," or "large," or "urban" which created the new situation, but rather the new social relations which now frame the production process, and the antagonism between those who carry on the process and those for whose benefit it is carried on, those who manage and those who execute, those who bring to the factory their labor power, and those who undertake to extract from this labor power the maximwn advantage for the capitalist.
Industrial capitalism begins when a significant numberofworkers is employed by a single capitalist. At first, the capitalist utilizes labor as it comes to him from prior forms ofproduction, carrying on labor processes as they had been carried on before. The workers are already trained in traditional arts ofindustry previously practiced in feudal and guild handicraft production. Spinners, weavers, glaziers, potters, blacksmiths, tinsmiths, locksmiths, joiners, millers, bakers, etc. continue to exercise in the employ ofthe capitalist the productive crafts they had carried on as guild journeymen and independent artisans. These early workshops were simply agglomerations of smaller units ofproduction, reflecting little change in traditional methods, and the work thus remained under the immediate control of the producers in whom was embodied the traditional knowledge and skills oftheir crafts.
Nevertheless, as soon as the producers were gathered together, the problem ofmanagement arose in rudimentary form. In the first place, functions of management were brought into being by the very practice ofcooperative labor. Even an assemblage of independently practicing artisans requires coordination, ifone considers the need for the provision ofa workplace and the ordering of processes within it, the centralization of the supply of materials, even the most elementary scheduling of priorities and assignments, and the maintenance of records of costs, payrolls, materials, finished products, sales, credit, and the calculation ofprofit and loss. Second, assembly trades like shipbuilding and coach making required the relatively sophisticated meshing ofdifferent kinds oflabor, as did civil engineering works, etc. Again, it was not long before new industries arose which had little prior handicraft background, among them sugar refining, soap boiling, and distilling, while at the same time various primary processes like iron smelting, copper and brass working, and ordnance, paper and powder making, were completely transformed. All ofthese required conceptual and coordination functions which in capitalist industry took the form ofmanagement.
The capitalist assumed these functions as manager by virtue ofhis ownership ofcapital. Under capitalist exchange relations, the time of the workers he hired was as much his own as were the materials he supplied and the products that issued from the shop. That this was not understood from the beginning is attested by the fact that guild and apprenticeship rules and the
41
42 Labor and Monopoly Capital
legal restraints common to feudal and guild modes of production all persisted for a period, and had to be gradually stripped away as the capitalist consolidated his powers in society and demolished the juridical features of pre-capitalist social formations. It was partly for this reason that early manufacturing tended to gravitate to new towns which were free of guild and feudal regulations and traditions. In time, however, law and custom were reshaped to reflect the predominance ofthe "free" contract between buyer and seller under which the capitalist gained the virtually unrestricted power to determine the technical modes of labor.
The early phases ofindustrial capitalism were marked by a sustained effort on the part of the capitalist to disregard the difference between labor power and the labor that can be gotten out ofit, and to buy labor in the same way he bought his raw materials: as a definite quantity of work, completed and embodied in the product. This attempt took the form of a great variety of subcontracting and "putting-out" systems. * In the form of domestic labor, it was to be found in textile, clothing, metal goods (nailing and cutlery), watchmaking, hat, wood and leather industries, where the capitalist distributed materials on a piecework basis to workers for manufacture in their own homes, through the medium of subcontractors and commission agents. But even in industries where work could not be taken home, such as coal, tin, and copper mines, mine workers themselves, working at the face, took contracts singly or in gangs, either directly orthrough the mediation ofthe "butty" or subcontracting employer of mine labor. The system persisted even in the early factories. In cotton mills, skilled spinners were put in charge of machinery and engaged their own help, usually child assistants from among their families and acquaintances. Foremen sometimes added to their direct supervisory function the practice of taking a few machines on their own account and hiring labor to operate them. Pollard identifies practices of this sort not only in mines and textile mills, but also in carpet and lace mills, ironworks, potteries, building and civil engineering projects, transport, and quarrying? In the United States, it has been pointed out, the contract system, in which puddlers and other skilled iron and steel craftsmen were paid by the ton on a sliding scale pegged to market prices, and hired their own help, was characteristic ofthis industry until almost the end of the nineteenth century.3 The following description, by Maurice Dobb, ofthe prevalence of such systems well past the middle of the nineteenth century points to this important fact: that the specifically capitalist mode ofmanagement and thus ofproduction did not become generalized until relatively recent times, that is, within the last hundred years:
* Sidney Pollard, to whose The Genesis ofModern Management I am indebted for materials used in this chapter, calls this effort "if not a method of management, at least a method of evading management."l
The Origins ofManagement 43
As late as 1870 the immediate employer of many workers was not the large capitalist but the intermediate sub-contractor who was both an employee and in tum a small employer of labour. In fact the skilled worker of the middle nineteenth century tended to be in some measure a sub-contractor, and in psychology and outlook bore the marks of this status.
Itwas not only in trades still at the stage ofoutwork and domestic production that this type of relationship prevailed, with their master gunmakers or nailmasters or saddlers' and coachbuilders' ironmongers, or factors and "foggers" with domestic workers under them. Even in factory trades the system of sub-contracting was commOn: a system with its Opportunities for sordid tyranny and cheating through truck and debt and the payment ofwages in public houses, against which early trade unionism fought a hard and prolonged battle. In blast-furnaces there were the bridge-stockers and the stock-takers, paid by the capitalist according to the tonnage output of the furnace and employing gangs of men. women, boys and horses to charge the furnace or control the
casting. In coal-mines there were the butties who contracted with the management for the working 0 f a stall, and employed their own assistants; some butties having as many as 150 men under them and requiring a special overseer called a "doggie" to superintend the work. In rolling mills there was the ma~ter-roller, in brass-foundries and chainfactories the overhand, who at times employed as many as twenty or thirty; even women workers in button factories employed girl assistants. When factories first came to the Birmingham small metal trades, "the idea that the employer should find, as a matter ofcourse, the work places, plant and materials, and should exercise supervision over the details of the manufacturing processes, did not spring into existence.,,4
While all such systems involved the payment of wages by piece rates, or by subcontract rates, it must not be supposed that this in itself was their essential feature. Piece rates in various forms are common to the present day, and represent the conversion of time wages into a fonn which attempts, with very uneven success, to enlist the worker as a willing accomplice in his or her own exploitation. Today, however, piece rates are combined with the systematic and detailed contro I on the part ofmanagement over the processes ofwork, a control which is sometimes exercised more stringently than where time rates are employed. Rather, the early domestic and subcontracting systems represented a transitional form, a phase during which the capitalist had not yet assumed the essential function ofmanagement in industrial capitalism, control
over the labor process; for this reason it was incompatible with the overall development ofcapitalist production, and survives only in specialized instances.
Such methods of dealing with labor bore the marks of the origins of industrial capitalism in mercantile capitalism, which understood the buying and selling ofcommodities but not their production, and sought to treat labor like all other commodities. It was bound to prove inadequate, and did so very
44 Labor and Monopoly Capital
rapidly, even though its survival was guaranteed for a time by the extreme unevenness ofthe development oftechnology, and by the need for technology to incessantly retrace its own steps and recapitulate, in newer industries, the stages of its historic development. The subcontracting and "putting out" systems were plagued by problems of irregularity of production, loss of materials in transit and through embezzlement, slowness ofmanufacture, lack of uniformity and uncertainty of the quality of the product. But most of they were limited by their inability to change the processes of production.* Based, as Pollard points out, upon a rudimentary division oflabor, the domestic system prevented the further development ofthe division of labor. While the attempt to purchase finished labor, instead of assuming direct control over labor power, relieved the capitalist of the uncertainties ofthe latter system by fixing a definite unit cost, at the same time it placed beyond the reach of the capitalist much ofthe potential ofhuman labor that may be made available by
fixed hours, systematic control, and the reorganization of the labor process. This function, capitalist management soon seized upon with an avidity that was to make up for its earlier timidity.
The control oflarge bodies ofworkers long antedates the bourgeois epoch. The Pyramids, the Great Wall of China, extensive networks of roads, aqueducts, and irrigation canals, the large buildings, arenas, monuments, cathedrals, etc., dating from antiquity and medieval times all testify to this. We find an elementary division of labor in the workshops which produced weapons for the Roman armies, and the armies of pre-capitalist times exhibit primitive forms oflater capitalist practices. ** Roman workshops for metalwork, pottery, leather, glassblowing, brickmaking, and textiles, as well as large agricultural
7
estates, broughttogether scores ofworkers under a single management. These predecessors, however, were undertaken under conditions of slave or other unfree forms of labor, stagnant technology, and the absence of the driving capitalist need to expand each unit of capital employed, and so differed markedly from capitalist management. The Pyramids were built with the
* On this, David Landes writes: " ... the manufacturer who wanted to increase output had to get more work out ofthe labour already engaged. Here, however, he again ran into the internal contradictions of the system. He had no way of compelling his workers to do a given number of hours of labour; the domestic weaver or craftsman was master ofhis time, starting and stopping when he desired. And while the employer could raise the piece rates with a view to encouraging diligence, he usually found that this actually reduced output." Landes also summarizes othcr "internal contradictions" ofthis mode of industrial organization.s
** "In general," Marx wrote in a letter to Engels, "the army is important for economic development. For instance, it was in the army that the ancients first fully developed a wage system .... The division oflabour within one branch was also first
carried out in the armies.,,6
The Origins o/Management 45
surplus labor of an enslaved popUlation, with no end in view but the greater glory of the pharaohs here and in the hereafter. Roads, aqueducts, and canals were built for their military or civilian usefulness, and not generally on a profit-making basis. State-subsidized manufactories produced arms or luxury goods and enjoyed an actual or legal monopoly and large orders from noncommercial buyers, courts, or armies.8 The management required in such situations remained elementary, and this was all the more true when the labor was that ofslaves, and sometimes supervised by slaves as well. The capitalist, however, working with hired labor, which represents a cost for every nonproducing hour, in a setting of rapidly revolutionizing technology to which his own efforts perforce contributed, and goaded by the need to show a surplus and accumulate capital, brought into being a wholly new art ofmanagement, which even in its early manifestations was far more complete, self-conscious, painstaking, and calculating than anything that had gone before.
There were more immediate precedents for the early industrial capitalist to draw upon, in the form of mercantile enterprises, plantations,and agricultural estates. Merchant capitalism invented the Italian system ofbookkeeping, with its internal checks and controls; and from merchant capital the industrial capitalist also took over the structure ofbranch organization subdivided among responsible managers. Agricultural estates and colonial plantations offered the experience of a well-developed supervisory routine, particularly since much early mining (and the construction works that attended it) was carried out on the Ilgricultural estates ofGreat Britain under the supervision ofestate agents.
Control without centralization of employment was, if not impossible, certainly very difficult, and so the precondition for management was the gathering of workers under a single roof. The first effect of such a move was to enforce upon the workers regular hours ofwork, in contrast to the self-imposed pace which included many interruptions, short days and holidays, and in general prevented a prolongation of the working day for the purpose of producing a surplus under then-existing technical conditions. Thus Gras writes in his Industrial Evolution:
It was purely for purposes ofdiscipline, so that the workers could be effectively controlled under the supervision of foremen, Under one roof, or within a narrow compass, they could be started to work at sunrise and kept going till sunset, barring periods for rest and refreshment. And under penalty ofloss of all employment they could be kept going almost all throughout the year.9
Within the workshops, early management assumed a variety ofharsh and despotic forms, since the creation of a "free labor force" required coercive methods to habituate the workers to their tasks and keep them working throughout the day and the year. Pollard notes that "there were few areas of the country in which modem industries, particularly the textiles, ifcarried on in large buildings, were not associated with prisons, workhouses, and orphanages.
46 Labor and Monopoly Capital
This connection is usually underrated, particularly by those historians who asswne that the new works recruited free labour only." So widespread does he find this and other systems of coercion that he concludes that "the modern industrial proletariat was introduced to its role not so much by attraction or monetary reward, but by compulsion, force and fear."lo
Legal compulsions and a paralegal structure ofpunishment within factories were often enlarged into an entire social system covering whole townships. Pollard gives the example ofthe enterprise ofAmbrose Crowley, a large mixed ironworks which carried on both primary processes of iron production and fabricating. In the second quarter ofthe eighteenth century this firm employed more than I ,000 workers, scattered over its central works, warehouses, and company ships. An extraordinary Book of Laws has survived from this
enterprise:
The finn provided a doctor, a clergyman, three schoolmasters and a poor relief,
pension and funeral scheme, and by his instructions and exhortations Crowley
attempted to dominate the spiritual life of his flock, and to make them into
willing and obedient cogs in his machine. Itwas his express intention that their
whole life, including even their sparse spare time (the nonnal working week
being of eighty hours) should revolve around the task of making the works
profitable.I I
In this method of total economic, spiritual, moral, and physical domination, buttressed by the legal and police constraints of a servile administration ofjustice in a segregated industrial area, we see the forerunner ofthe company town familiar in the United States in the recent past as one ofthe most widely used systems of total control before the rise ofindustrial unionism.
In all these early efforts, the capitalists were groping toward a theory and practice of management. Having created new social relations of production, and having begun to transform the mode ofproduction, they found themselves confronted by problems ofmanagement which were different not only in scope but also in kind from those characteristic ofearlier production processes. Under the special and new relations of capitalism, which presupposed a "free labor contract," they had to extract from their employees that daily conduct which would best serve their interests, to impose their will upon their workers while
operating a labor process on a voluntary contractual basis. This enterprise shared from the first the characterization which Clausewitz assigned to war; it is movement in a resistant medium because it involves the control ofrefractory
masses. The verb to manage, from manus, the Latin for hand, originally meant to train a horse in his paces, to cause him to do the exercises ofthe manege. As capitalism creates a society in which no one is presumed to consult anything but self-interest, and as the employment contract between parties sharing nothing but the inability to avoid each other becomes prevalent, management
The Origins ofManagement 47
becomes a more perfected and subtle instrument. Tradition, sentiment, and pride in workmanship play an ever weaker and more erratic role, and are regarded on both sides as manifestations of a better nature which it would be folly to accommodate. Like a rider who uses reins, bridle, spurs, carrot, whip, and training from birth to impose his will, the capitalist strives, through management, to control. And control is indeed the central concept of aU management systems, as has been recognized implicitly or explicitly by all theoreticians ofmanagement.*Lyndall Urwick, the rhapsodic historian ofthe scientific management movement and himself a management consultant for many decades, understood the historical nature ofthe problem clearly:
In the workshops of the Medieval "master," control was based on the obedience which the customs ofthe age required the apprentices and journeymen to give to the man whom they had contracted to serve. But in the later phase ofdomestic economy the industrial family unit was controlled by the clothier only in so far as it had to complete a given quantity of cloth according to a certain pattern. With the advent ofthe modem industrial group in large factories in urban areas, the whole process ofcontrol underwent a fundamental revolution. It was now the owner or manager ofa factory, i.e., the "employer" as he came to be called, who had to secure or exact from his "employees" a level ofobedience and/or co-operation which would enable him to exercise control. There was no individual interest in the success ofthe enterprise other than the extent to which it provided a livelihood. 13
It was not that the new arrangement was "modem," or "large," or "urban" which created the new situation, but rather the new social relations which now frame the production process, and the antagonism between those who carry on the process and those for whose benefit it is carried on, those who manage and those who execute, those who bring to the factory their labor power, and those who undertake to extract from this labor power the maximwn advantage for the capitalist.
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