The Irony of State Intervention: American Industrial Relations Policy in Comparative Perspective, 1914-1939 (review)

This is a most interesting comparative study of labor relations in the United States and Britain across the divide of World War I and encompassing the whole of the interwar period. A concluding chapter provides retrospective insights derived from post-1945 experience in both countries. The author's central concern is to resolve the paradox of the long-established American commitment to small government ("antistatism") in relation to increasingly intrusive federal involvement in capital-labor relations in the first four decades of the twentieth century. In this respect, the author argues that comparison with the British experience is especially apt in light of an equally entrenched tradition of minimalist government. Moreover, it was the British "model" of labor relations that provided an early source of inspiration for the development of America's unique legal and trade union traditions.

The author's key insight is that Anglo-American differences in labor relations can be explained not so much by ideological or cultural concerns but by substantially divergent trajectories in relation to business organization. While public policy debates in both countries were informed by "collective laissez-faire," contributing to a "pluralistic" view of labor relations, the status of unions, as indicated by membership trends and raw bargaining power, differed significantly.

A key issue here is the timing of industrialization. In the latter half of the nineteenth century, a labor relations tradition was established in Britain in the context of liberal capitalism and within an industrial structure dominated by family firms and partnerships. But although the business structure was fragmented, employers were obliged to deal with highly organized groups of skilled workers with increasingly strong trade union traditions. By 1900, the conduct of labor relations was rooted in a broadly consensual framework in which small-scale firms came together in the form of trade federations in order to negotiate with organized labor. The prevailing ethos was that an accommodation with labor helped preserve industrial peace, and within a fragmented industrial structure trade unions had an important role to play in regulating the labor market. It is also significant in the British context that in the final quarter of the nineteenth century both Liberal and Conservative governments legislated in favor of the labor interest by endowing trade unions with powerful legal privileges and immunities from prosecution.

The situation in the United States hardly could have been more different. Students of business history have long drawn attention to the merger wave of the 1890s, which followed on federal legislation outlawing collusion in favor of the market force of competition. Mergers were the key factor in the rapid emergence of a corporate industrial sector characterized by large-scale bureaucratic organizations managed by salaried professionals differentiated by specialist function. In this context—and in a situation of relative capital intensity as the age of mass production was inaugurated—corporate managers had little need to rely on skilled labor unions in the organization of the shop floor. As the author demonstrates, these developments cast a long shadow forward into the twentieth century. In the American case, the most significant departures from the prevailing ethos of anti-unionism were registered during World War I and in the New Deal via the Wagner-inspired National Labor Relations Act, which proclaimed the virtues of collective bargaining as the defining characteristic of federal labor relations policy. But even here, the historical record demonstrates that, notwithstanding the state's intermittent support for collective bargaining, American labor relations continued to be characterized by decentralization in the context of corporate capitalism.

This is a well-written study based on a firm command of the literature in both countries. The generalizations are well founded, and the Anglo-American comparison enhances historical understanding of American industrial relations policy. The book can be read with intellectual profit by historians of American and British labor relations.