“Just and peaceful labor relations”: Why the U.S. government supported collective bargaining

“Just and peaceful labor relations”: Why the U.S. government supported collective bargaining

This post gives a brief account of some of the history of the capitalist state’s sponsorship of contracts for unions in the United States, with an emphasis on the reasoning that politicians and judges gave for their support of collective bargaining. The piece argues that what the U.S. government wanted out of introducing state support for collective bargaining was, in the words of the National Labor Relations Act, to ‘Promote the flow of commerce’ through ‘friendly adjustment of industrial disputes.’

The U.S. government increasingly promoted collective bargaining in the early part of the 20th century. To take one important example: In 1919, economically disruptive disputes escalated between the International Ladies Garment Workers Union (ILGWU) and capitalists in the textile industry. In response, the New York governor appointed a state commission aimed at preventing “industrial war” which created “distrust and hostility” between classes. This commission recommended collective bargaining in order to reconcile the union and the employers. As the commission wrote, a “collective bargaining agreement calls for the utmost good faith on both sides to perform (…) every term and condition thereof; whether it refers to shop strikes on the part of the worker, lock-outs on the part of the employers, or the maintenance of its terms as to wages and hours. This Board desires to emphasize this point as fundamental in any contractual relationship.” Contracts require such good faith and, from the point of view of the capitalist state, contracts helped create such good faith.

With state help, the ILGWU won an industry-wide collective bargaining agreement, which the industry association soon violated in 1921. The ILGWU sued and won an injunction against the employers. The New York Supreme Court said it issued this injunction to prevent “the continuance of an industrial impasse.” The Court said that no matter who won the dispute, “such industrial struggles lead to lockouts, strikes and acts of violence” and in the end “the employer and employee, instead of co-operating to promote the success of the industry, become permanently divided into hostile groups, each resentful and suspicious of the other.” Therefore, “it is the duty of the court to (…) compel both parties to await an orderly judicial determination of the controversy.” In other words, the capitalist state began to believe that promoting collective bargaining agreements would help create industrial peace. The role of law is not simply to protect individual capitalists but to bring greater stability to the capitalist system as a whole. (On this point, I encourage fellow workers to read the discussion of the English Factory Acts in chapter 10 of Karl Marx’s “Capital.”)

The state’s role and strategy of promoting stability in the capitalist system by promoting collective bargaining explains U.S. labor legislation created in the 1930s. The 1933 National Industrial Recovery Act (hereafter, “Recovery Act”) said “disorganization of industry (…) burdens interstate and foreign commerce, affects the public welfare, and undermines the standards of living of the American people.” The Act argued that one key tool for more efficiently organizing industry under capitalism was to promote collective bargaining agreements. Thus Congress should “remove obstructions to the free flow of interstate and foreign commerce” by “induc[ing] and maintain[ing] united action of labor and management under adequate governmental sanctions and supervision.” The Recovery Act added that contracts would raise wages for workers, “increas[ing] the consumption of industrial and agricultural products by increasing purchasing power” of workers. More money in the pockets of more workers would help stabilize the American economy by providing a larger base of consumers.

The National Labor Relations Act (or the “Wagner Act” named after its sponsor, New York Senator Robert F. Wagner) took up the labor relations provisions of the Recovery Act, adding little except for extra enforcement. Senator Wagner argued before Congress that the Wagner Act was “novel neither in philosophy nor in content. It creates no new substantive rights,” and went on to list various prior examples of workers’ legal right to collective bargaining. The real change with the Wagner Act, he argued, was greater enforcement of rights that the state already recognized workers as having. By providing better enforcement for workers’ right to collective bargaining, he said, the Wagner Act would be more conducive to industrial recovery than the Recovery Act. Wagner said that lack of adequate enforcement in the Recovery Act brought “results equally disastrous to industry and to labor. Last summer it led to a procession of bloody and costly strikes, which in some cases swelled almost to the magnitude of national emergencies.” That is, Wagner argued, it was precisely the lack of collective bargaining that led to the strike wave of 1934.

Wagner identified a second consequence to the lack of enforcement provisions in the Recovery Act. Without collective bargaining, he said, workers “cannot exercise a restraining influence upon the wayward members of their own groups, and they cannot participate in our national endeavor to coordinate production and purchasing power.” Wagner argued that Congress should pass the Wagner Act in order to “stabilize and improve business by laying the foundations for the amity and fair dealing upon which permanent progress must rest.” If Congress didn’t pass the Wagner Act, Wagner predicted that “the whole country will suffer from a new economic decline.”

The Wagner Act’s full title was “An act to diminish the causes of labor disputes burdening or obstructing interstate and foreign commerce, to create a National Labor Relations Board, and for other purposes.” Like the Recovery Act, the Wagner Act’s first priority was to keep the economy flowing as smoothly as possible by reducing labor disputes. The Wagner Act said “denial by employers of the right of employees to organize and the refusal by employers to accept (…) collective bargaining lead[s] to strikes and other forms of industrial strife or unrest.” Furthermore, “inequality of bargaining power between employees (…) and employers (…) substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry.”

The U.S. government backed contracts because they believed this would make the capitalist system more stable and resilient. As the Wagner Act said, “protection by law of the right of employees to organize and bargain collectively safeguards commerce from injury (…) and promotes the flow of commerce.” Furthermore, the Act added, collective bargaining would encourage “practices fundamental to the friendly adjustment of industrial disputes.” U.S. Congress passed the Wagner Act in 1935. When President Roosevelt signed it, he declared that the Wagner Act was “an important step toward the achievement of just and peaceful labor relations in industry.”

The Preamble to our Constitution states that the IWW’s goal is help our class advance the historic mission of abolishing the wage system and declares that the working class and the employing class have nothing in common. We should hesitate, then, before pursuing strategies which U.S. presidents and senators deliberately encouraged in order to achieve industrial peace within the capitalist system.

This is an edited version of an article that originally appeared in the December 2011 issue of the Industrial Worker newspaper and at libcom.org as part of a debate on a discussion paper called “Direct Unionism.” The original title of this piece was “A debate on collective bargaining and the IWW.”

Originally posted: August 11, 2012 at Recomposition

Posted By

Aug 11 2012 06:53


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Jacob Richter
Aug 12 2012 19:20

What should be pursued by the left is the wholesale absorption of all private-sector collective bargaining representation into free and universal legal services by independent government agencies acting in good faith (and subjecting their employees to full-time compensation being at or slightly lower than the median equivalent for professional and other skilled workers).

Aug 14 2012 16:41

That's basically what U.S. legislators and the Roosevelt administration wanted to accomplish via New Deal industrial relations policy and isn't all that different from what the official labor relations institutions in the U.S. are like today.

Jacob Richter
Aug 16 2012 03:13

It never got done. What my suggestion achieves is all the benefits of "universal unionization" without the more libertarian complaints of "forced/compulsory association." Not even the European social democracies achieved this.

I also put this forward because more independent unions should focus on things other than collective bargaining.

Juan Conatz
Aug 16 2012 03:16

Sounds like a bizarre in between European social democracy and the Soviet bloc plan. Also not sure how in anyway it is desirable.

Jacob Richter
Aug 16 2012 14:31

Like the article said, the very nature of collective bargaining representation is nothing less than mediation, to borrow a legal term, between two sides. Left soc-dems wanted "universal unionization" that was almost but not achieved in the likes of Sweden, but then there's the "forced/compulsory association" problem. Soviet bloc-style unionization (which I didn't consider when writing a larger article on this subject) should only be considered because of the welfare services the unions provided, and nothing more.

Aug 16 2012 16:00
Jacob Richter wrote:
It never got done.

You're misinformed, at least with regard to the United States. It did, in fact, happen. I don't know about how this stuff has worked elsewhere.

Jacob Richter wrote:
Left soc-dems wanted "universal unionization"

Your initial comment was about the agencies and personnel that administer or ought to administer collective bargaining and labor relations. That's different from rates of unionization, though the form of industrial relations administration is probably factor in unionization rates. The kind of administration of collective bargaining that you want to see happen did happen in the U.S. but it did not lead to universal unionization. Unionization in the U.S. peaked at about 1/3 of the non-farm workforce (about 1/4 of the total workforce).

In any case, more importantly, you're advocating the same views as the U.S. government and some business owners in the 1930s, as I think the piece say, and apparently for similar reasons. This fits with your being a social democrat. Often social democrats have played important roles in helping the state figure out how to fix problems and to implement those fixes. Currently most social democrats appear to be unable to imagine a political future other than a return to a prior moment - high unionization rates etc - though in some cases, as with your comment, this is treated like it's a new thing. Like Juan said, I don't see why this is desirable.

Jacob Richter
Aug 17 2012 01:31

"You're misinformed, at least with regard to the United States. It did, in fact, happen. I don't know about how this stuff has worked elsewhere."

How? I don't see any literature here mentioning that all private-sector workers throughout the United States had access to collective bargaining services provided by some federal agency, much like everyone supposedly has the right to free legal service more generally.

"Your initial comment was about the agencies and personnel that administer or ought to administer collective bargaining and labor relations. That's different from rates of unionization"

If my public policy "proposal"/demand had already been implemented, we'd see Wal-Mart employees being paid higher wages, among other things.

You're confusing what I'm proposing with the much more limited functions of the National Labor Relations Board or of the "labour courts" in Europe. They don't mediate between "organized" employees and their employers. If they had the functions I wrote of, labour's bargaining power all across the board would be much, much stronger today, and less, less "precarious."

Remember: I wrote of a monopoly on all private-sector collective bargaining representation by an independent government agency, not just a mere government service competing with business unionism.

"This fits with your being a social democrat."

Soc-dems are fine and dandy with business unionism. My proposal would eliminate or gut this s*** to life-support status, because the government would and should absorb its bread and butter for the betterment of labour bargaining power. I'm not a soc-dem by any stretch, but I see value in real, radical, substantive, pro-labour reform, not least of which to avoid the caught-with-your-pants-down problem with r-r-r-r-revolutionaries you mentioned in your own article on reforms. That's one of the subtleties of subscribing to a maximum-minimum program.

Aug 17 2012 04:59

I don't see much difference between what you're proposing and the prevailing system for administering labor law, or between what you're proposing and a social democratic position. I also don't think the primary missing ingredient in low unionization rates in the US is some administrative re-arrangment. I'm not going to argue the points further though.

The gist of the piece is meant to be as follows: in the formative moment of what is still the heart of US industrial relations law, collective bargaining was advocated by progressive capitalists and their political representatives. In my view supports communists' skepticism of efforts to achieve radical change via collective bargaining, either as currently constituted or via some legislative re-enlivening of the state institutions that help regulate collective bargaining.