Modern Manors: Welfare Capitalism since the New Deal

Modern Manors: Welfare Capitalism since the New Deal

Modern Manors: Welfare Capitalism since the New Deal

Modern Manors: Welfare Capitalism since the New Deal


In light of recent trends of corporate downsizing and debates over corporate responsibility, Sanford Jacoby offers a timely, comprehensive history of twentieth-century welfare capitalism, that is, the history of nonunion corporations that looked after the economic security of employees. Building on three fascinating case studies of "modern manors" (Eastman Kodak, Sears, and TRW), Jacoby argues that welfare capitalism did not expire during the Depression, as traditionally thought. Rather it adapted to the challenges of the 1930s and became a powerful, though overlooked, factor in the history of the welfare state, the labor movement, and the corporation. "Fringe" benefits, new forms of employee participation, and sophisticated anti-union policies are just some of the outgrowths of welfare capitalism that provided a model for contemporary employers seeking to create productive nonunion workplaces.Although employer paternalism has faltered in recent years, many Americans still look to corporations, rather than to unions or government, to meet their needs. Jacoby explains why there remains widespread support for the notion that corporations should be the keystone of economic security in American society and offers a perspective on recent business trends. Based on extensive research, Modern Manors greatly advances the study of corporate and union power in the twentieth century.


“Big Yellow,” as Kodak employees called their company, referred to its colorful film cartons and generous benefits. a pioneer in the employee welfare movement, by the 1920s Kodak was a prominent member of welfare capitalism's vanguard. Along with company housing and health insurance programs, it had an elaborate production planning system to minimize layoffs. Once hired into the “clan,” employees often remained with Kodak their entire working lives. Profit sharing kept wages up and, if there were layoffs, Kodak paid jobless benefits out of its own private fund. Here was proof of the corporatist credo that the business enterprise should be the industrial worker's primary source of security.

Kodak did not use its welfare policies to reshape workers' private lives, as, for example, Ford Motor's Sociological Department had attempted to do. Kodak had an Anglo-Saxon work force that was largely native born. With no need to “Americanize” his workers, George Eastman, Kodak's founder, built Kodak's programs around a cash nexus that was relatively impersonal and unintrusive. Eastman gave employees the same things that the company's owners were after—a share of Kodak's fabulous profits.

Eastman had a deep-seated fear that disgruntled workers might sabotage or shut down the company's gargantuan film-making factory in Rochester. Rather than simply bribe employees with high wages, the company's approach was more strategic. Funds were channeled through specific benefit programs intended to harmonize employee interests with those of management. But a more immediate problem was the U.S. Justice Department's antitrust division, which repeatedly investigated Kodak's monopoly in the film industry. Kodak's widely publicized benefit programs were meant to create the impression of a “good trust,” one that jurors would treat sympathetically if the firm found itself in court.

Like Eastman, the engineers who ran Kodak attributed the firm's continuing profitability to its technical prowess. Company managers were imbued with the ethos that social problems were amenable to the same scientific methods Kodak applied to its research and production problems. Kodak's blend of mass production, scientific management, and financial benefits gave a technocratic twist to welfare capitalism. Other science-based firms pursued similar policies in the 1920s, inspiring lofty hopes that technologists would create a new kind of capitalism, as in economist Thorstein Veblen's “Soviet of the Engineers.”

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.