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Friday, January 30, 1998

Professor minds his 'Manors'

ANDERSON Jacoby's book traces employer responsibility's history, modern welfare capitalism

By J. Sharon Yee

Daily Bruin Contributor

Wednesday night, the only voice that could be heard at the Anderson Graduate School of Management (AGSM) was that of Professor Sanford Jacoby.

Jacoby, who also teaches in the history and public policy departments at UCLA, read an excerpt from his new book, "Modern Manors: Welfare Capitalism Since the New Deal," in front of a standing-room only audience.

The book focuses largely on the idea of welfare capitalism in America by chronologically outlining the successful histories of three major corporations: Kodak-Eastman, Sears-Roebuck, and Thompson Industries (now TRW).

These companies decided to adopt new ways of ensuring employee loyalty by providing them with security and benefits traditionally taken care of by the government and by avoiding labor unions, a phenomenon termed welfare capitalism.

"The notion that companies have a responsibility to their employees is not a new or revolutionary idea, but it is essential to understand the history of welfare capitalism in fathoming what is happening now," Jacoby said, referring to recent trends of widespread corporate downsizing.

He further described welfare capitalism as a kind of "corporate paternalism," whereby employers are committed to providing their employees with long-term benefits and compensation (such as health insurance and pension) in addition to their salaries.

Jacoby, who received his B.A. at the University of Pennsylvania and Ph.D. at the University of California, Berkeley, spent nine years traveling around the country researching the book, often looking up company archives and interviewing former employees.

Though predominantly a scholarly work which requires a background knowledge of business, Jacoby recommended the book to undergraduates who have a general interest in working in the corporate sector.

"A lot of students see today's job market different from what it was for their parents, and though this book doesn't provide a quick answer to anything, it can shed light on historical perspectives that can ultimately affect what happens in the future," he said.

Jacoby challenges the conventional view that welfare capitalism faltered in the post-war era, according to Edward Berkowitz, a professor of history at George Washington University.

"(Jacoby's) basic argument is that welfare capitalism did not die in the 1930s," he added, referring to a time when the U.S. government pushed large labor programs such as the New Deal.

"Employers, either out of a sense of paternalistic benevolence or, more likely, a dollars-and-cents understanding of the labor market, have tried to reduce turnover by linking pay to the company's productivity and by improving the conditions of work beyond those of their competitors," Berkowitz said.

Jacoby explained the title of the book as an analogy to the Middle Ages, when feudalism reigned and the lords of the manors offered "security and identity in return for deference and fealty."

Since its publication a few months ago, the book has received wide critical acclaim and rave reviews, gaining the attention of prestigious book reviews, such as that of the New York Times.

"The book promises to be important to our understanding of the current nature of the employment relationship," said Daniel Mitchell, a fellow professor and colleague at AGSM.

"Welfare capitalism is less paternalistic today than in the past," he continued, "Employees, on the other hand, are more skeptical of corporate promises and support political mechanisms to enforce a certain degree of paternalism."

"'Modern Manors' is an engaging work that will become a standard reference in the field of human resource studies/industrial relations and will be cited widely by economic and business historians," said Thomas A. Kochan, a management professor at the Massachusetts Institute of Technology.

"One can predict with confidence that this book will exercise an important influence over modern American historiography," Berkowitz concluded. "It represents an extremely impressive achievement."

INGA DOROSZ

Professor Sanford Jacoby signs his book, "Modern Manors," as his daughter Margaret Jacoby looks on.