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Alfred de Grazia:

PUBLIC & REPUBLIC : Political Representation in America


Part  D


Corporatism is integrated pluralism. It is functional representation with responsibilities. It has such diffuse origins -- guild socialism, the medieval economic order of the towns, Fascist theory, and unlabeled ponderings over proper representation -- that any judgment of it would be unfair which does not examine whatever elements of integrated pluralism have come out of the American setting. The basic social fact behind the corporate representative idea is that the vocational association is more meaningful now than it has ever been, and that corporate representation must be recognized in relation to geographical representation as bringing equally valid realities into the sphere of politics. As a mode of representation, it is another way of presenting before the state important facets of modern man's life, in the hope that the reworked presentation will add to the sum of general social satisfaction. Its particular appeal lies in its answer to the problem of business and labor strife, which has been the most constant disrupter of social harmony.

Examples have already been given of the American writers who have contributed to theories of occupational representation. Among those mentioned was Mary P. Follett who, in The New State, devoted considerable attention to the philosophy and sociology of pluralism.[38] At the time she wrote, in 1918, there has been little save speculation on the fitting of interest representation into the political structure. Her interests lay in both the larger political society and the primary community, for which she outlined a plan of neighborhood development through associations beginning at the smallest level and proceeding upward.

Miss Follett's sociology was that of James and Dewey. Her theme was that the solution of the major political problems depended on a reorganization of society to take in all "unifying groups," especially of an economic or neighborhood sort. "We can have no genuine state at all," she writes in The New State," which does not rest on genuine groups." [39] She objected alike to attempts to devise more direct democratic devices (a job she considered limitless and hopeless), to attempts to confine associational power to mere regulations brought on after great abuse, and to proposals to base economic controls on economic representation rather than on vital modes of association.

The job of integration must be complete and must provide for the utmost in affinity among leaders and members of the groups.

"The salient fact... is that neighborhood and occupational groups, either independently or one through the other, must both find representation in the state. But we must remember that it is industry which must be included in the state, not labor, but labor and capital. This war certainly shows us the importance of the great organizations of industry. Let them be integrated openly with the state on the side of their public service, rather than allow a back-stairs connection on the side of their "interests." And let them be integrated in such a manner that labor itself is at last included in our political organization. This will not be easy; as a matter of fact, we have no more difficult problem before us than the relation within the state of one powerful organized body to another and to these bodies to the state. The average American is against the growth of corporate bodies. But this prejudice must go: We need strong corporate bodies not to compete with the state but to minister to the state.... That synthesis [of individualism and concentrated authority] is to be found in the recognition of organized groups, but not, I believe, by taking away power from the state and giving it to the group."[40]

Harmony will come naturally, she believes, if constructive individuality has a chance to work its way out of natural associations. The essence of liberty lies not in the disorganized state but in a state thoroughly and correctly organized. "The state is one of the collective aspects of the individual; the individual is from one point of view the distributive aspect of the state."[41] Criticizing severely the various plans and experiments with cumulative voting, proportional representation, etc., she declares that "... no electoral or merely representative method can save us. Representation is not main fact of political life; the main concern of politics is modes of associations."[42]

Another remarkable feature of Miss Follett's work is that she built a theory of representation strikingly similar to the one proposed by Pope Pius XI in the encyclical "Quadragesimo Anno," issued in 1931.[43] The fundamental object of the encyclical was to "abolish conflict between classes with divergent interests, and thus foster and promote harmony between the various ranks of society." The Pope therefore urged that "vocational bodies" be made the basis of social organization, paying due attention, however, to the necessary hierarchy of the state which is essential for efficiency and unity. Instead of the existing horizontal division between labor and capital, as one commentator in the Catholic World put it, a vertical division on the basis of function was recommended.

Both "free competition" and the historical errors of the"individualistic" school were to be avoided. A true and effective guiding principle which could be used in directing the corporate organizations should be determined by the state. The target of the Papacy, as in the case of Miss Follett and (principally by implication) James and Dewey, was the absolute state, with no bounds to its interventions in all group life, and the theoretically free individual, who, it seemed to all concerned, caused more harm than good by his conception of society, even though he be "enlightened."

Why, we may ask, did not the papal Encyclical add support to the idea of voluntary constituencies which, as we had noticed, ended in a mobile pluralism? The answer would be that of Miss Follett, that voluntary constituencies (by which we means proportional representation), have no effect of a wholesome and enduring nature on the individuals which make them up nor upon the relationships among the constituencies.

Thus far, the bulk of organized business sentiment in America has been opposed to schemes smacking of integral pluralism. Objections have been registered not only against those considerations of such pluralism which work for internal solidarity through labor participation in industrial management but also against those considerations which bring business into the government as a competitor with other groups for fixed representation within the government. Examples of the usual associations attitude are to be found in discussions of the suggestions for a National Economic Council which have been made from time to time between the two World Wars.

The bill to establish a National Economic Council, which was introduced into the Senate in 1931 [44] (a year of severe economic depression), recommended the establishment of a council to be composed of fifteen members appointed by the President with the approval of the Senate. The members of the council were to be chosen annually from lists submitted by groups of associations and organizations representing the industrial, financial, agricultural, transportation, and labor interests of the United States, with not more than three members of the council from any single group. The membership would rotate in the manner of that of the Senate; four years, however, would be the term of office . The duties of the council would be to gather information about and make investigations of economic conditions, to formulate proposals for solving such problems as it might discover, and to report such proposals to the Congress.

The many witnesses called before the subcommittee of the Committee of Manufacturers agreed generally that the idea of expert advice, predictions, and warnings was a good one.[45] The crucial point in the discussion of the bill turned on the question of representation in the body to be created. Here the opinions not only of academicians but also and especially of the leaders of American business differed from the provisions of the bill. In essence, their objections were two: they believed that it might not be wise for the government to undertake any operation in what was not its "true province," and they thought that the representatives on the council should not in any case possess responsible constituencies. Both of these objections are fundamental criticisms of integrated pluralism, and are in accordance with the traditional, constitutionally protected pluralism of American industry. The first holds that the management of economic affairs is primarily a problem which business itself must solve. The second objects to the influence of groups other than business being introduced into a structure possessing cognizance of economic matters, and as a final resort destroys the idea of power by depriving the representative of his constituency. The important fact in pluralistic representation, as in all representation, is that a representative derives moral and physical power from a constituency only.

Henry Harriman, representing the U.S. Chamber of Commerce viewpoint before the committee, recommended that, in place of the proposed body, a wholly private body be created to advise on economic affairs. "It will depend for its force and effect entirely upon its standing before the community."[46] Harriman was reluctant to admit any governmental connection with the Council and was opposed to giving any specific constituency to council members.

Furthermore, Harriman took the occasion to put in a plea to allow business greater liberty in making agreements to control production. This was in harmony with the so-called Swore Plan, then widely discussed, which would make the trade association the integrating factor in industrial "self-government." Harriman thought that the antitrust acts were harmful in the depression period and that any danger to the public under such agreements as he proposed might be handled by the Federal trade Commission.[47]

A.P. Sloan, Jr., President of General Motors Corporation, declared himself in favor of the Council plan generally but expressed a desire for industrial leadership of the Council. "I think if you could get a a group of men who were representative of big industry that something would come out of it. On the other hand, if it were composed of men who did not have responsibility, then the result is not going to be so good."[48]

The views of labor are interesting. Sidney Hillman, President of the Amalgamated Clothing Workers of America, declared: "There are different interests, and those interests should be properly represented; and the more the different points of view are brought out publicly, the better it will be possible to judge the point of view of which interest is in the line of the national interest."[49] Yet he expressed fear that if the Council took individual representatives from organized groups, the result would tend towards Fascism.[50]

David B. Robertson, President of the Locomotive, Firemen and Engine-men, proposed that the Council should have powers of coordinating the economy.

"The great need in this country is not so much the control of group interests over other group interests, but the need is that every group of interests may know the relation of other group interests to its interests and to be able to point out the dangers and injustices of policies of far-reaching effect which are promoted only to advance the selfish interests of one group." [51]

One hears the echo here of the Plumb Plan of the days of World War I which was sponsored by the railway brotherhoods. That plan provided for government ownership of all railroads and their operation by a federal corporation with a Board of fifteen, five appointed by the President, five elected by the operating officials, and five elected by the classified railroad employees. At the same time, a plan of the Transportation Conference of the United States Chamber of Commerce had provided for the federal incorporation of railroad companies with minority representation of employees and shippers on their directorates.

On the plan for the Council, it seemed that labor leaders, like business leaders, were not of the same mind. Hillman's views, rejecting a precise representation of vocational constituencies, were probably more popular among the union chiefs than Robertson's views.

The original plan for the National Economic Council was not carried through. The suggestions of the business leaders, however, bore fruit in the National Recovery Administration, which acceded to industry's demand for self-government in the setting of prices and the planning of production.[52] A representative group in each industry was encouraged to adopt a code of fair competition, provided that the code expressed the general desires of the participants and the participants were composed of industry members allowed into the group without discrimination. The contrast and contradiction between the N.I.R.A. and the antitrust activities of the government have been noted in many places. As far as the industries were concerned, the N.I.R.A. was the logical culmination of a historical movement toward control of the functional components of industry by the dominant leaders, directly or through the associations which they dominated.[53] But that the N.I.R.A. was no answer to a demand for integrated pluralism or corporatism is equally clear, for the central controls were weak, and the internal components of each functional element were isolated from the management of the total element.

Labor was still organized horizontally in its unions, and the corporate code idea of the N.I.R.A. was contradicted by Section 7a, which guaranteed labor the right to organize and bargain collectively. The N.I.R.A. set up the labor unions as a collective element and prescribed for the unions a traditional, simple representative structure based on the majority vote. The majority could bargain for the whole and had to be recognized as the sole bargaining agency of the workers. But the relationship between the labor and capital plural elements was left to the traditional methods of economic bargaining and trade unionism. The corporatism was one of capital alone.

Beset by this internal inconsistency, damaged in court actions, and lacking the weapons to penalize dissenters within the ranks of employers themselves, N.I.R.A. fell to pieces amidst general abuse.

The N.I.R.A. brought out many of the difficulties inherent in corporate proposals affecting large-scale industry. Meanwhile, however, experiments in a new kind of representation were going on in agriculture. The Bankhead Cotton Control Act of 1934 and the Kerrsmith Tobacco Control Act of the same year introduced for the first time the use of referenda by cotton and tobacco producers for the purpose of controlling the production of commodities which had become chronically unstable in their pricing and marketing. The constituencies in both cases were those engaged in the production of the commodities; their powers were not to elect representatives, but to vote for or against participation in a nation-wide crop-control program set up by Congress and administered by the Department of Agriculture. Producers were organized for the referenda on the basis of geography, as under the ordinary electoral system. A two-thirds vote was required to force dissenters into the control program.

The Agricultural Adjustment Act of 1938 incorporated most of these arrangements for the control of other crops as well. The use of referenda and penalties for nonconformance, it is interesting to note, was urged by farm organizations and many individual farmers, especially the larger ones, all of whom had found the contractual arrangement of the 1935 A.A.A. unsatisfactory. It was felt, however, that the compulsion to control production must depend on some voluntary basis of public opinion if criticism against be government was to be held in check. Therefore the referenda were devised.

Robert Martin, who made an intensive study of two southern counties, where a racial problem added significance to the process, has shown that a much higher participation accompanied the referenda than was found in political elections in the same period, that there was general acceptance of Negro voting, and that, while a considerable amount of pressure was placed on many tenants by their landlords, by far the largest part of both Negro and white producers regarded the referenda as important to their well-being and sense of status.[55] Henry, Wallace wrote in 1943 that the A.A.A. referenda had started us "on our way toward a true economic democracy, designed to rescue our political democracy from the danger of becoming a hollow mockery."[56]

Part of the success attributed to the experiments of the A.A.A. and other agricultural experiments with interest representation may doubtlessly be ascribed to the unity of interest found among the producers, Where a balancing of interests is sought on a more complex level of commerce and industry, new and weighty problems arise which require more complicated arrangements. Even on the relatively simple level of these agricultural referenda, differences in property relationships have played a part. Under the Bankhead Act, it was observed that the administration of the referenda fell to local bankers and merchants. This suggests comparison with the way in which control over local election machinery in England devolved to the English county squires before the great electoral reforms.

Also, the issue was the simple one of participation versus nonparticipation in the program, and the national government tipped the scales toward participation by offering financial inducements. Sweeping modifications would have to be introduced before the referenda could approach the important criteria of economic representation. If representatives were to be elected, for example, a new stage altogether would be reached. Nonetheless, as Mr. Martin has pointed out, the sense of satisfaction found among so many farmers would be a credit to any system of representation.

The N.I.R.A.'s unhappy demise put a definitive end to experiments in the larger pluralism. It postponed the use of corporate experimentation during World War II, which, if the experience of World War I had been the exclusive source of precedent, might well have turned out a number of most significant examples of delegations of authority to private bodies. Instead, increasing reliance was placed on the type of delegation which had escaped legal and popular attack during the New Deal -- the delegation of quasi-legislative powers to administrative agencies, assisted by interested groups. The creation of the President's Council of Economic Advisors by the Full Employment Act of 1946 was a weak revival in certain respects of the old idea of the Economic Council.[57]

It is still to be expected, however, that any signs of economic difficulties or foreign crisis will bring new calls for some form of corporatism. Moreover, it may be expected that both business and labor interests, among others, will have a hand in such proposals. One need only examine the intermittent appeals of Walter Reuther of the United Automobile Workers, C.I.O., to realize that a powerful voice is demanding general overall planning of industrial production by a tripartite group composed of government, labor, and management interests.[58] It seems likely that the more highly organized industrial unions will produce programs going far beyond the early ideas of collective bargaining over wages, union activities and working conditions, and that such programs will attempt to force entrance into the realm of joint planning of production, pricing, and profit distribution. If, as seems likely, such voices increase in number and intensity throughout the solidifying industrial structure of the United States, the question will no longer be whether interests should be represented but how they should be represented and how much power the various representatives should be given.

Meanwhile, if we turn to the less publicized field of administration, we find a large variety of developments that tend in the same direction. The developments are ordinarily referred to as "the representation of interests in administration," but here they will be called "administrative pluralism."

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