All Commentary
Thursday, February 1, 1962

A Reviewer’s Notebook – 1962/2

In the twenties, Thomas Edison, Henry Ford, and Harvey Firestone made an annual event of a jaunt around the country, usually in the company of John Burroughs, the naturalist. The trips were publi­cized beyond the wildest dreams of Madison Avenue, but nobody felt inclined to be satirical at the expense of the demigods at play. For Edison and Ford were then riding high in the pantheon of folk heroes, and if they could man­age to get a little advertising along with their fun, it was per­fectly all right with a grateful population. Inventors and indus­trialists were considered benefac­tors in those distant days, not mulctors and monopolists, and peo­ple liked to share vicariously in the folk heroes’ pleasures.

In the thirties, of course, all that was changed. The various “Edison” companies, the big cen­tral stations which had grown up to supply electricity for Edison‘s lamp, were the “power trust.” As for Henry Ford, he was the man who tried to hold out against such things as the NRA and the Wagner Labor Relations Act. Men like Edison and Ford were considered by the newer brand of historians to be part of the “old order,” which had, so it was asserted, plunged the country into deep trouble because of its unimagina­tive approach to things.

The popular historians are still peddling that line; indeed, John Kenneth Galbraith wrote an essay not so long ago designed to prove that Henry Ford, the folk hero, was a creation of the myth mak­ers. Many of the things which Ford claimed to have done for the nation and the automobile in­dustry, so Galbraith said, were in reality the work of other men. In denigrating Ford, however, Galbraith made a left-handed ad­mission that the “old order” was actually pretty fecund. For obvi­ously Henry Ford could not have stolen credit for accomplishments that did not exist.

Just how lavishly creative the old order was, both in the work that Ford did and in the work that was done around him by other men and other companies, is apparent in a remarkable book,

American Automobile Manufac­turers: The First Forty Years, by Professor John B. Rae of the Massachusetts Institute of Tech­nology (Chilton, $6). If Professor Rae tells the story with less atten­tion to its philosophical implica­tions than may be found in Dean Russell’s excellent Men, Motors, and Markets, he brings to it an ability to marshal an inordinately complicated mass of material into clear sequences. And his summa­tion, “If this be Capitalism, make the most of it,” a delightful para­phrase of Patrick Henry, contains in essence what Dean Russell had previously spelled out in detailed logic.

Among the Innovators

Professor Rae agrees with Gal­braith that Ford did not “invent” mass production. Rae’s account, which goes back to the origins of the automobile industry in the bicycle shop and the carriage fac­tory, is a densely woven chronicle of “firsts.” Hayden Eames at the Pope Manufacturing Company in Hartford, Connecticut, was years ahead of Ford in organizing work gangs “each of whose members did a specific job on each car.” Both R. E. Olds of Oldsmobile and William C. Durant of the early Buick company carried the assembly of parts from outside supplier firms a long way at the very dawn of the automobile in­dustry in Michigan. As for the imposition “on the industry of rigorous standards of precision and accuracy,” that was the work of Henry M. Leland of Cadillac. In the Ford factory itself, Walter E. Flanders did the pioneering in applying Frederick W. Taylor’s principles of systematic layout of plant and tools. The moving as­sembly line carried Flanders‘ ideas to their ultimate conclusion, but whether the credit for its in­troduction at the Ford Highland Park plant in 1913 belongs to Sorensen, Clarence Avery, or Ford himself is still debatable.

So what, after all, did Ford do? It cannot be said that he was the first to mass produce a cheap car, for Olds, with the famous “curved-dash Oldsmobile,” had pioneered in this direction as early as 1901, when he made 600 cars of a single model to sell in the $600-$700 range. (This was the original “Merry Oldsmobile” of the popu­lar song.) But where the curved-dash Oldsmobile disappeared be­cause of flimsy construction, Ford had a persistence that exceeded that of Ransom Olds: he wanted to make a lot of cars that would be both sturdy enough to stand the rutted roads of the early nine­teen hundreds and cheap enough to sell to every farmer and mechanic in the country. The com­bination seemed an unlikely one, but Ford stayed with his dream until he managed to find a strong alloy (vanadium steel) which would take a lot of buffeting. And his incessant demand that his men find ways to knock pennies, dimes, and dollars off the cost of produc­tion literally forced the Sorensons, Averys, and Flanderses to make their discoveries in the techniques of mass manufacture.

Thus, despite Galbraith, there is plenty of credit for all the pioneers of mass production, Henry Ford included.

Ways To Succeed

Professor Rae brings out the curious fact that there are two roads to success in the automobile industry. One road is to stick to a single popular idea; the other is to blanket the field with a full line of models. The Ford Com­pany in the long reign of the Model T was a “one-idea” organi­zation; so, today, is George Rom­ney’s American Motors Company, evangel of the “compact.” At the other extreme is General Motors, which makes a car for every purse. Each road to success is be­set by many hazards: automobile history is strewn with the failures of single-idea companies, and many attempts to emulate the GM story have likewise come to grief.

In recounting the GM saga, Professor Rae is fairness personi­fied. Without any trace of animus he discusses the strong points and the weaknesses of William C. Durant, who put GM together in pursuit of a Napoleonic dream of empire. Durant had no “principle of limitation” in acquiring com­panies to add to the original GM constituent of Buick, but he did have a valid feeling that there was safety in diversification. Durant was thrown out of GM by “bankers” only to regain control of the company with the help of du Pont money. Then, after be­stowing Chevrolet on GM, he was thrown out all over again because of his seemingly incurable habit of “sending good money after bad” in depression times.

In telling the story of Durant, partisans on both sides have had a field day making him angel or devil. For example, Lloyd Morris, in Not So Long Ago, has written sharply of the “harsh” bargain with GM driven by the invest­ment banking firms of J. and W. Seligman of New York and Lee, Higginson of Boston—a bargain in which the bankers exacted a profit of “very nearly 50 per cent” on a loan which carried with it the condition that Durant would absent himself from the GM man­agement. By implication, the bankers took advantage of a good man’s extremity. But it was a Lee, Higginson man, James T. Storrow, who first successfully overhauled the operating struc­ture of GM. Storrow called in the consulting firm of Arthur D. Little, Inc., of Cambridge, Massa­chusetts, to advise him on cen­tralizing research and testing for all the GM companies—and from the Arthur D. Little study came the General Motors Research De­partment. It was Storrow also who gave Charles W. Nash and Walter P. Chrysler their real opportunity in the GM picture.

The Storrow regime lasted for five years, or until Durant tempo­rarily recovered control of the company. Professor Rae obviously disagrees with Lloyd Morris that the bankers’ “fee” for providing GM with Storrow’s management was excessive—for what Storrow (with help from Nash and Chrys­ler) did was to turn an “uncer­tain speculation into a functioning business enterprise.” “By 1915 it was… clearly going to survive as a major component of the American automobile industry; it was even going to survive another five years of William C. Durant.”

What the automobile techni­cians and tycoons did socially was to restore the United States to the “little man” by giving him indi­vidualized mobility at a price he could afford to pay. The mobility broke a power which the railroads and electric traction lines might have exerted to enforce a prohibi­tive travel price. (This is not to say that the rail and traction com­panies ever did go overboard in charging too much save in iso­lated instances.) In connecting town with country and region with region, the automobile made it possible for all manner of small industries to flourish. True, the automobile, by clogging the down­town streets, has made big city life a most deplorable hazard. But the loss has been balanced by a compensating gain, for without the automobile suburban and country life would be impossible.

And who wants to stay for very long in a big city, anyway? With­out any of the ironical implica­tions of Aldous Huxley’s Brave New World, for our modern free­dom “we thank our Ford.”

The Man In The Middle by Nathan W. Shefferman

. (Double­day. 292 pp. $4.50.)

Reviewed by William H. Peterson

The double standard is not lim­ited to male and female in Amer­ica. It extends to unions and man­agement. Businessman A, who welcomes unions to organize his workers, is practically a hero in the press. Businessman B, who opposes union organization of his workers, is considered a moss­back, a reactionary.

Businessman B may explain that once he signs a union shop agreement—an agreement almost never freely arrived at, but rather arrived at under some form of coercion—he accepts the principle of compulsory unionism for his workers. They must join—or else they lose their jobs—the First Amendment guaranteeing free­dom of assembly (the right to join or not to join) and the Fifth Amendment guaranteeing life, liberty, and property notwith­standing.

So, is countering a plant or of­fice organizing drive shameful? Nathan W. Shefferman doesn’t think so and tells why in his re­markably candid The Man in the Middle. He also tells how, and boasts that his Chicago-based firm, Labor Relations Associates, successfully countered 90 per cent of the drives it opposed. Nothing succeeds like success: Sheffer-man’s clients rose past the 500- mark; offices were opened in New York and Detroit; fees were com­ing in at the rate of $1 million a year; among the firm’s customers were such household names as Sears, Whirlpool, Mennen’s, the Kresge and Lerner chains, Macy’s of New York, Nieman-Marcus of Dallas, Hecht’s of Washington, J. L. Hudson of Detroit. And then…

Then one morning into Shefferman’s office came young Robert Kennedy, counsel for an investi­gating committee. Shefferman’s testimony before the McClellan Committee followed. He heard him­self described as a “union-buster,” a charge he vigorously denies. The charge was enough; Shefferman’s business collapsed. His clients also found themselves under attack. The Wall Street Journal of August 17, 1960, for example, carried this headline: AFL-CIO CALLS FOR NATIONWIDE BOYCOTT OF SEARS, CHARGES FIRM “WARS” ON UNIONS. The big labor body said Sears was engag­ing in “a calculated and concerted effort to deprive its employees of their rights to union protection.”

But Shefferman holds counter-organizational work simply cannot be equated with union-busting. He believes in free unionism and not in compulsory unionism. Under Taft-Hartley and the First Amend­ment guaranteeing free speech, management is free to give its side—likely either an open shop or no shop—to its employees. (And for the record, the author says that but a small part of his consult­ing business was in such work; most of it consisted of other labor relations matters like job evalua­tion, supervisory training, wage and salary administration, and so on.)

The Shefferman technique of contesting an organizing drive can be seen in his account of the efforts of the International Association of Machinists to crack the Whirlpool plant at Clyde, Ohio, in 1956. Two Labor Relations Associates men, Messrs. Patterson and Nevitt, were assigned to the job, as against 18 union organizers brought in by the I.A.M. The organizers canvassed virtually every employee’s home day and night. Employees were showered with leaflets, handouts, letters, pamphlets, and newspaper ads. The issues were hot; the NLRB election not too far off.

Patterson and Nevitt immedi­ately counseled management on how to meet shifting day-to-day union tactics. They reviewed daily the union’s bombardment of litera­ture and advised how to answer it. They evaluated employee com­plaints and recommended correc­tive action in some cases. They held meetings with the Whirlpool super­visors and counseled them on what could and could not be said under Taft-Hartley. As an offset to the union membership-card-signing activity—a measurement of the strength of the organizing drive—they conducted employee opinion polls. When the election came, the I.A.M. lost by a margin of three to one. For this and other profes­sional services not related to the drive over better than a three-yearperiod, Labor Relations Services were paid by Whirlpool close to $75,000. Mr. Shefferman thinks the I.A.M. spent a whole lot more in Clyde.

He complains that there is a curious ambivalence in America, a double standard on the matter of countering a union drive. Many people think it is all right for an employer not to want a union. But the employer is frequently “re­garded as a bit sneaky, and prob­ably a heel, if he took steps not to have it. If he did take the counter-steps, he surely ought to do it in person or with regular personnel. Never, heaven forbid, must he em­ploy specialists part time, as he would a lawyer or a management consultant, or a psychologist run­ning tests, or a heating engineer.”

Not that Nathan Shefferman is a bitter man. Life on the whole has been good. The McClellan hearings are behind him. He has spent 50 years in labor relations. He has known the great and the near-great in the American labor move­ment—Gompers, Lewis, Hillman, Dubinsky, Beck, Hoffa, Meany, Reuther, Carey, and so on. He fought some of them, won, and then lost. And in this semi-autobio­graphical work at this stage of life, best let bygones be bygones. Oth­ers can fight the wars, which, be­cause of bigger unions and bigger businesses, he thinks will be bigger than they were in his day. Others can contest the principle of compulsory unionism and rail against the double standard. Na­than Shefferman has said his piece.

Revolt On The Campus by M. Stanton Evans.

(Chicago: Henry Regnery Company. 248 pp. $4.50.)

Reviewed by John W. Tietz

M. Stanton Evans is the Coun­try’s youngest metropolitan edi­tor, and he writes a stirring ac­count of the struggle of an in­creasing segment of college youth for emancipation from the oppres­sive, gray, leveling, socialistic, campus conformity. In an auto­biographical introduction he traces his own undergraduate rebellion against the typical cam­pus ideology of the 1950′s: a mix­ture of Keynesian economics, col­lectivism, ethical relativism, downgraded religion, and slanted college journalism. He found an accurate diagnosis of the campus malady in William F. Buckley’s God and Man at Yale and began his own emergence. He chanced upon a copy of The Freeman, drank in the philosophy of ISI and FEE, helped to establish the In­dependent Library on campus, to revive the Calliopean Society, and establish a periodical, The Inde­pendent. The revival of individualism, despite the smothering at­mosphere of dogmatic liberalism, was pioneered by Yale undergrad­uates.

After discussing the constitu­ents of contemporary liberalism, its aimlessness and its lack of standards, the author describes three premature and unsuccessful rebellions against this orthodoxy. They failed, but a new wind was rising, as witness the presidential polls of late 1960. By Inaugura­tion Day, 1961, an unbelievable conservative revolution was at hand. The surprise of the aca­demic and political world is well described.

Now, aiding the “old guard,” such as von Mises and Hayek, there is a host of younger scholars, journalists, and writers. There are new organizations—philosophical and political. The stories of the Intercollegiate So­ciety of Individualists, Young Americans for Freedom, Young Republicans, the struggle in the National Students Association—which is not the voice of all stu­dents—are recounted attractively. The impact of these upon the world of liberalism and a look into the conservative future closes this fascinating story of the struggle of youth for “Independence from Dependence”—from a dependence leading down the “Road to Serf­dom.”

  • John Chamberlain (1903-1995) was an American journalist, business and economic historian, and author of number of works including The Roots of Capitalism (1959). Chamberlain also served as a founding editor of The Freeman magazine.