Psychosocial dynamics in industrial relations

(First of two parts)

Still a significant perplexity of our time is the desire of so many people “to get the very most for their very least.” And when motivated by envy, greed or fear of deprivation, poses a hindrance “to integrity, fair dealing and/or rational thinking.” Question: Could this mindset have aggravated the panic that strained the industry supply chain at the onset of the pandemic?

This perplexity is not uncommon in the industrial workplace where the industrialist seeks the highest return for the least investment; and labor seeks the maximum compensation for the minimum of effort. A contraposition which is not of recent origin, but goes back to the times that predate today’s modern capitalism.

Scientific attention to industrial productivity and efficiency came alongside the great European-industrial-awakening to tackle the attitude of both the industrial elite and the working underclass relative to increasing “production and profitability” on one hand, and improving ‘employee well-being’ on the other. Efficiency experts generally admit that “early researchers took a too crabby view of socio-industrial issues … stressing the factor of functional efficiency too exclusively mechanistic, thus alienating many of the workers who looked upon the new devices merely as mechanisms of industrialists to get more work done at less cost to themselves.” To appreciate “how modern industry’s assumptions relating to human nature arose; how things came to be as they are in recent times,” is to take a glimpse at the major phases of the machine civilization (from manual-mechanical to assembly-line and automation, to digital system) concomitant to technology transition (from the early wood-water power and coal-iron complex, to electric power and computer technology, to the internet of things) that justified their own social organization and redefined socioeconomic life.

Historical throwback

In the early industry period, humanity thrived generally on wood-water power complex, progressing toward the coal and iron/alloy technology that propelled the mid-18th to 19th century industrial revolution. Life then was based on the “concept of family” that developed into communities “characteristic of estates (or manorial villages) dominated and protected by feudal lords” (the likes of our local landlords once-upon-a-time—long before their excesses that inspired the celebrated oratorical piece, “Land of Bondage, Land of the Free” and the watershed “Emancipation Decree of 1972”).

To paraphrase author Dr. James Brown MD, there was at best an affectionate and obedient attitude, not only toward the real family, but toward the father-figure right up the hierarchy: the feudal lord (looked up to by the peasants); the master of guilds (protective of craftsmen); and finally, the benevolent authority of the Church” (guardian of the rules of morality). “It was an ideal psychological constellation of adulthood—of being loved, taught, protected; and in return being grateful, loving and responsive to the protection of the father-figure—aligned with the standard of instinctual drives.”

The craft-guilds were successful instruments in the maintenance of economic justice. They work in their own homes (almost like the resurging “work-from-home” culture of today’s “gig economy”); took pride in their work … adapted to the need of the customer. Often working long hours and takes rest when they felt the need.

“Traders and craftsmen received what will sustain them in their calling, and no more! There was palpable harmony between the practice of religion and the business of everyday life. And this perspective led to two basic assumptions upon which early economic thought was based: 1. That all economic interests are subordinate to the real business of life which is salvation and service to others; and 2. that in economics, as in personal conduct, the rules of morality are binding. Usury was taboo (money was more a measure of value) and profits were not to exceed the wages of the crafsman’s labor.”

“The concept of ‘just price’ was based on the intrinsic value of the commodity, divorced from such factors as material scarcity or individual preference”—giving no quarters for unconscionable opportunistic profiteering. “Price controls” found no application. Thus, anxiety and sense of insecurity, (concomitant to a competitive mobile society) were avoided, writes Dr. Brown.

Obviously, the early innovators/producers of goods who propelled the industrial revolution “depended as much on idealism, pride of craft, honor and patriotism as they did on the desire to make money”—a sense of “enlightened self-interest”—reflective of the rigid value system of the Church which embodies the social concept of family and stewardship.

The factory system

But with the growing economy and shift of population, new industrial civilization evolved. Large cities replaced the small villages; huge factories/supermarkets eased out the micro/small home industry; unskilled and “uprooted-laborers” displaced skilled craftsmen.

The domestic system of production gave way to modern manufacturing processes employing new technology—making possible mass-production technique—requiring larger supplies of capital and labor. It created: 1. Large industrial enterprises with new ways of marshalling resources and organizing work; and 2. large number of workers (recruited from villages all over the country) to work with others in factories situated in areas where manufacturing needs were easily available.

Thereupon, the means of satisfying the new and growing demands efficiently and most gainfully, broke the ideas of “just price” and “social justice” resulting in: 1. Workplaces with no regard for human needs (workers laboring for long hours of tedious and often dangerous work at subsistence wages); and 2. shanty towns characteristic of urban slums where housing and sanitation were at an appallingly low level.

Growth at what price?

The expanding organization and mobility threatened the concept of family—disturbed the natural bond of affection and friendship between one another. Work was torn out of its social context, putting the worker almost entirely on his own. And “it became the fiction of the time that the employer had not bought the worker, but merely his labor, hence the worker’s welfare or living condition was not the employer’s concern.” Estranged from his customary environment, “the worker plunged into anxiety and insecurity, adds Dr. Brown, which explains the problems of industrial unrest, increasing neurosis and crime, and the pervading hopelessness and lack of meaning in the lives of many people.”

However, to the efficiency experts, functional efficiency and growth as determined by the capitalist in a free market—“getting the very most for the very least”—was all that matters. But writer Peter Drucker contends: “[M]ere functional efficiency or material wealth counts for nothing unless we know the answer to the question: efficiency to what purpose and at what price?” For efficiency and growth per se is empty and ill-spent.

As Edward Abbey, essayist/environmental activist, puts it: “Growth for growth’s sake is the ideology of the cancer cell.” It grows and grows to destroy the good.

By-and-large, though the early domestic economy was thought to suffer from rigidity and lack of enterprise, it was nonetheless said to operate under an ordered, transparent, social system—able to nurture emotional security and comradeship—that sees the worker as also human. INQ

(To be continued)

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.