Work by Bruce Pietrykowski

Author:Bruce Pietrykowski [Pietrykowski, Bruce]
Language: eng
Format: epub
ISBN: 9781509530830
Publisher: Wiley
Published: 2019-05-27T00:00:00+00:00

From Low-Road to High-Road Strategies

If the low-road strategy sees wages as a cost of production, the high-road strategy focuses on the wage as a source of consumer demand. This corresponds more closely to the Keynesian and Post-Keynesian perspectives within political economy. One of Keynes’ major contributions to modern economics was to single out the role of demand in maintaining employment and economic growth. Demand comes from businesses, government, foreign countries and consumers. The focus of the high-road strategy identifies consumer demand resulting from workers’ wage income as a key determinant of employment growth. This strategy also reflects a strand of Marxist economics that draws attention to the need for capitalism to avoid economic crises by ensuring sufficient demand to purchase the goods and services generated by capitalist producers. Inadequate levels of demand mean that goods are unsold so prices must be slashed, thereby reducing revenue and profits for employers. In Marxist terms, this illustrates a problem of underconsumption which leads to a crisis of realization, meaning that capitalist producers are unable to sell their products and therefore fail to realize or recover the full value of the products that they put up for sale. But the high road involves more than high and growing wages.

Glimpses of the high-road strategy can be seen in early twentieth-century attempts by capitalists to improve the working conditions and standard of living of their own employees. It was thought that a healthy and contented working class would also be more productive and less conflict-prone. Several employers, such as retailer Edward Filene in Boston, camera and optical equipment manufacturer George Eastman in Rochester, New York, and the Cadbury brothers’ chocolate factories in Britain adopted this paternalistic approach toward managing their workforce (Nelson 1982; Dellheim 1987; Jacoby 1997). Their company policies included paying a living wage with health benefits, an on-site infirmary, and educational and cultural opportunities. The ideas and policies put in place acknowledged a relationship between a worker's experience of work and their willingness to work hard for the benefit of the company. It was intended to create loyalty by making workers feel they were valued members of the company family. Loyal workers were more likely to adopt company goals and comply with the company policies. They were also less likely to complain and less inclined to unionize. These paternalistic employers publicly announced concern for their workers’ welfare. Their approach came to be known as welfare capitalism. Employers adopted this set of labor management practices at about the same time as other companies were using the drive system to squeeze more work out of their workforce via authority, strict discipline and fear. This pre-dated the rise of the welfare state. In fact, these employers believed that if all capitalists provided for the economic and social well-being of their workers, there might not be a need for government programs to raise worker standards of living and provide for their economic security.

One employer who combined elements of the drive system with a paternalistic approach toward the workforce was the Ford Motor Company.

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