Psychosocial dynamics in industrial relations

(Second of two parts)

Cast in a different mold, the modernizing capitalistic economy (which put the individual on his own feet … so that “his success or failure is dependent upon his own unaided struggle for survival and recognition”) severed the worker from the “guild democracy” and weakened his sense of community—replacing the spirit of cooperation with unrestricted competition as tool to survival.

Divorced from the guild’s social beliefs/moral code, the worker’s personality structure shifted to an individualist outlook—creating a new assumption of man and society, an assumption that built on the western principle of “rugged individualism.”

Survival of the fittest

Rationalized by the period’s Darwinian theory of “survival of the fittest,” “rugged individualism” aligned with the capitalistic doctrine of “free enterprise”—the freedom to attempt and preserve himself. And since “only the fittest survive and the less fit were doomed to perish, the individual must be free to compete and prove his fitness for survival.” Thus, “competition and ceaseless struggle became accepted as the fundamental laws of life.” And the idea of “the price of goods/wages as that determined by the capitalist in a free market” replaced the idea of “just price” originally set by the intrinsic value of the commodity.

This Darwinian theory was thought to scientifically support the maxim that “God helps those who help themselves” coined by the English political theorist Algernon Sidney and popularized by Benjamin Franklin.

Hence, the thinking that “wealth was a sign of Divine approval, and poverty a sin.” And the new industrialist began to look at the poor as being poor by reason of indolence or lack of thrift; that his poverty is not a misfortune to be pitied and relieved, but a moral failing to be condemned; and that wealth is not an object of suspicion (though like other gifts they may be abused) but the blessing which rewards the triumph of energy and will,” continued Dr. Brown. What Darwin’s theory was to the biologist, the doctrine of free enterprise was to the capitalist. Exactly the attribute of the capitalistic concept at purging the system of misfits. i.e., no quarters for the unfit, “giving rise to a new class of businessmen without scruples—free men but lacking in any sense of obligation to their fellowmen.”

Favored by physiocrats, free enterprise and unrestricted competition (driven by the force of self-interest) were thought to lead to maximum gain. As philosopher Jeremy Bentham (1748-1832) puts it and still holds today: “All human actions are ‘self-interested’ and are basically motivated by the desire to obtain the most benefit and avoid pain … i.e., an individual will work and sacrifice only if the reward in terms of wages is sufficiently great or the punishment in terms of poverty sufficiently unpleasant—descriptive of the ‘Carrot and Stick’ principle.” This psychosocial posture “affected the behavior of the worker who now sees his employer with mixed feelings of fear and contempt” … helplessly accepting the worker’s job as the value placed upon it by the capitalist in a free market. He felt that work has become the antithesis of all pleasure and happiness—a necessary evil to endure for the sake of earning money to meet his essential needs.

Battle lines drawn

With this contraposition, battle lines emerged. “People were either workers or employers; and with the realignment came a mutual dislike for each other.” It precipitated the greatest social and economic turbulence in human history.

This contending situation lead to conditions that propagated the worker’s union movement worldwide. Feeling strength in their numbers, workers began to band together to put pressure on management to similarly “get the most for their very least” in a collective bargaining process. And it reached a point where the worker became almost completely passive and the employer at his wit’s end to know what to do. Thus, inflaming labor-management dynamics in the industrial workplace.

Now, we can see more clearly the historical origins of our modern problems. “The capitalist has taught his employees that work is a painful and unpleasant necessity, and now is troubled that they believed him.” He seriously thought that fear of starvation was the compelling incentive to work, therefore draw him over with welfare schemes—flexible work hours, gadgets, holidays with pay, health-care packages, and so on. “We developed the habit of thinking in terms of material well-being—asserting that an infinite supply of material goods will assuredly make everybody infinitely happy. But while they may add to people’s happiness, they are not the foundation of happiness.”

There are certain psychosocial needs to satisfy, other than the obvious material ones, and among the most important is the need for status and function—responsibility, self-respect, pride of craft and sense of social usefulness—that further the ends for which his society exist, observed Dr. Brown.

Adapting to human needs

The solution to such problems lies not in a return to the past, but in the ability to adapt the new technological organization of industry so that it responds more closely to human needs. Be it by accident or design, COVID-19 is radically changing how we work, live and interact; making us realize the inter-dependency among people—that “no man is an island”—we are all part of a global whole. And as the likelihood of a new future shapes up, no one will probably go back to work as they remember it.

This pandemic triggered the greatest workforce transformation in living memory — the “work-from-home” culture of today. By doubling down on technology platforms/tools, it makes work possible not just from home but from anywhere at their own time under a “portable-work-environment” design. And this should point to a new direction in industrial relations.

As humanity moves deep into the digital age, industry leaders will have to play an important role in seeing to it that technology does not harm/enslave but supports/empowers. The Golden Rule is there to light the path: “Do for others what you want them do for you!” (Law of Moses-Matthew 7:12). INQ

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP. The author is management and development finance consultant; former senior executive of Land Bank of the Philippines; past president and advisory council member of the Government Association of CPAs; and past director of PICPA.