Protecting Our American System of Freedom


By WILLIAM GREEN, President, American Federation of Labor

Delivered before the War and Reconversion Congress of American Industry, National Association of Manufacturers, New York, December 6, 1944

Vital Speeches of the Day, Vol. XI, pp. 218-219.

I AM confident that those who formulated this interesting luncheon program were inspired by a sincere desire to promote understanding and a spirit of cooperation between management and labor. Even an approximate realization of that objective would be commendable and worthwhile. We can best serve the public interest and maintain our free enterprise system if through frank discussion and sound constructive thinking we eliminate class warfare, reduce industrial strife to a minimum and increase personal and collective efficiency.

Confidence and mutual respect between owners of industry and workers and cooperation and good will between management and labor is the simple rule which should be followed in order to achieve this purpose. It would be very difficult for me, or any one else who never served as an industrial manager, to outline a technical, scientific or managerial plan which should be applied if called upon to serve in such an important position. It would be presumptuous on my part to undertake to pose as an expert on scientific industrial management. Only those who possess the basic qualifications of an industrial manager and who through experience and training acquire an understanding of industrial production problems can speak with authority regarding them. In discussing the question "If I were an industrial manager" I wish to avoid the common mistake made by so many well meaning people who, though void of experience and training, undertake to tell those who are trained and expert in their life work, how to conduct themselves and how to manage their affairs and their business.

But because the human element plays such a large part in the whole field of industrial production I am of the opinion that a representative of labor can quite properly consider and discuss the question, "If I were an industrial manager." Both management and the representatives of labor are called upon in the discharge of their duties and in the performance of their daily tasks to deal with the human relationship in industrial problems.

It is my opinion that those who serve in a managerial capacity should develop a deep consciousness of responsibility. Responsibility to employers, stockholders and employees, a fair and just profit for the owners of industry and the payment of the highest wage which the industry could afford, should be questions of primary importance.

Experience has shown that a complete respect for the rights of both management and labor is fundamental and necessary. Each possesses moral and legal rights that should be religiously respected—the right of management to administer and manage property should be respected, guaranteed and protected and the right of labor to organize into unions of their own choosing should be also respected, guaranteed and protected. These fundamental rights flow out of and emanate from our free enterprise system. We behold evidence of the exercise of these rights on every hand. Industry and industrial production has grown and expanded throughout the nation because under our free enterprise system men of means assume risks through the investment of capital in business enterprises. As a result our productive enterprise system has well been classified as the arsenal of democracy. Our free enterprise system has been subjected to severe tests and exacting demands. As a result many facts have been established and the judgment of those who initiated, formulated and launched our free enterprise system has been thoroughly vindicated. As I interpret it, it means that the owners and management of industry shall be free to invest, risk and manage property and labor shall be free to organize, to act collectively and speak collectively. It all means free industry and free labor. We have proven in this war that we can out-produce government owned industry and slave labor with free industry and free labor.

In my opinion industrial management can contribute very largely to the preservation of our free enterprise system through an extension of the recognition of the rights of labor and management. The right of management to own and manage property and the right of labor to organize and bargain collectively are inseparably associated with our free enterprise system. The lessons we have learned during the war period show that the preservation of our free enterprise system depends very largely, if not altogether, upon a broad recognition and respect for the rights of capital and labor-management and workers. The organization of capital into corporations and into business enterprises has grown and expanded. The right to do so has been publicly recognized subject only to the legal regulations necessary for the protection of the public interest. The organization of capital into corporations represents the pooling of finances and of acquired properties. The organization of labor which has paralleled the formation of corporations represents the mobilization of labor's economic strength and collective power. Unfortunately some owners of industry in days gone by who exercised the right to pool their financial interests challenged and opposed the exercise of the right of labor to organize the only assets which it possessed. Pursuit of this unwise policy on the part of some industrial managers and some corporations was a short-sighted and mistaken policy. Labor was compelled to fight and sacrifice and suffer in order to exercise the simple right which corporations and men of money enjoyed under our free enterprise system. The success of industry, the development of maximum production and the highest degree of efficiency, depends upon the exercise of the right of labor to organize and bargain collectively and the right of management to own and manage property.

Experience during the war has shown that the formation of labor-management committees has contributed toward the success of industrial production. Through the exercise of cooperation of this kind labor has contributed in a very large degree to the success of management. Suggestions and advice have been freely given. Valuable ideas which management found to be of great value have been offered by labor committees. Discussions of the problems of production on the part of labor and management has been productive of most beneficial results. It has been shown that all attempts on the part of management to exploit labor or labor to exploit management, where labor-management committees have been set up, have been discredited. It has served to promote a better and more cooperative human relationship in industry.

In the formation of labor-management committees, however, the line of distinction between the exercise of the rights of labor and of management must be scrupulously observed. The philosophy which some have advanced that labor should [join with management in the actual management of property could not and cannot be accepted. It is contradictory of American traditions and our free enterprise system.

Frankness should prevail between employers and employes. Labor works and produces while employer owns and operates industry. Why should management withhold any information whatever from those who produce—who work and serve? I am of the opinion that the owners of industry and industrial managers should take labor into their confidence and acquaint them with the earnings of industry, the financial success or failure of industry, plans both for the present and for the future. It would be far better for labor to learn of all of this from management rather than to be told about it by outside agencies.

Experience has shown that high wages serve to increase individual and collective efficiency and increase production on the part of the workers. The simple principle that labor should share fully in the earnings of industry ought to be constantly recognized and religiously applied. Furthermore it has been shown and clearly demonstrated that in many instances high wages serve to reduce production costs. I am of the opinion that America can never go back to a low wage standard. The economic and national necessity for the maintenance of a high national income in order to meet our social and national obligations and for the purpose of maintaining equilibrium between production and consuming power, all call for the establishment and maintenance of a high and still higher wage level. The establishment of humane conditions of employment and the promotion of social security are sound means and methods which should be recognized and supported by industrial management.

In addition, it is my opinion that it is the solemn duty of industrial management to maintain a conciliatory attitude in the settlement and adjustment of industrial disputes which arise from time to time. The avoidance of a superior or dictatorial attitude should characterize the conduct of a successful industrial manager. He, along with the representatives of labor, should diligently seek a basis of accommodation when industrial disputes arise and through the exercise of patience, good judgment and tolerance, find a solution for vexing industrial problems. Through collective bargaining and through a frank, open and free discussion during wage negotiations, many unions affiliated with the American Federation of Labor as well as the owners and management of industry where collective bargaining relationships have been established, have set up arbitration tribunals to which disputes are referred for final settlement in the event said disputes cannot be settled through direct negotiations. Thus in many industries interruption in industrial production has been totally avoided because of local strikes for any cause whatsoever. Through pursuit of such a policy our trade unions and management have made a great contribution toward the establishment of sound human relations in industry.

In this short message I have endeavored to present to you a partial answer to the question under discussion.

I am pleased to be with you, to be your guest and to enjoy your hospitality. I welcome this opportunity to make some slight contribution to sound thinking regarding the establishment and maintenance of a cooperative relationship between management and labor.