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Modern Manors: Welfare Capitalism since the New Deal. By Sanford M. Jacoby Princeton, N.J.: Princeton University Press, 1997. xii + 345 pp. Tables, notes, and index. Cloth, $35.00. ISBN 0691015708.
Sanford Jacoby has written a terrific book. Modern Manors: Welfare Capitalism Since the New Deal is a tour de force, talking readers on a journey through the largely unexplored universe of labor relations in non-union companies from the 1920s to the 1950s. The book sparkles with insights, not only on its main subject, but also on twentieth century labor history, on the emergence of the New Deal welfare state, and the rise of the New Right. It is business history at its best, firmly rooting the analysis of company policies in discussions of the macroeconomic environment, the history of labor and its institutions, and employers' collective action and politics. If the book has a fault, it is the author's reluctance to fully embrace his own analysis. But more about this later.
Jacoby's study investigates the history of welfare capitalism from the 1920s through the 1950s. He argues that during these years welfare capitalism was transformed in important ways, and as a result remained a viable part of the landscape of labor relations in the post-war era. Rebuking the traditional view that industrial unionism replaced welfare capitalism during the Depression, Jacoby asserts that it only "went underground" during the 1930s, to reemerge in an invigorated form by the 1940s. Welfare capitalism survived, ultimately providing a set of practices that helped business to check labor's growth in the postwar decades.
The core of the book is an exploration of three companies that embraced welfare capitalism in its crisis years: Kodak, Sears, and Thompson Products. These firms, according to Jacoby, shared a number of characteristics: they were large, had relatively low labor costs, sported "enlightened" owners, and were highly profitable (even during the 1930s). As a result, these companies were able to avert the extreme upheaval characterizing other businesses during the Depression, which allowed them to maintain the goodwill of their employees. In order to do so, however, they did more than just hold on to the old style 1920s welfare capitalism; they adapted to changing circumstances. To summarize a complex argument briefly: Kodak, with a long history...