Notes
Chapter 2
The Origins of Management
Industrial capitalism begins when a significant number of workers is employed by a single capitalist. At first, the capitalist utilizes labor as it comes to him from prior forms of production, carrying on labor processes as they had been carried on before. The workers are already trained in traditional arts of industry previously practiced in feudal and guild handicraft production. Spinners, weavers, glaziers, potters, blacksmiths, tinsmiths, locksmiths, joiners, millers, bakers, etc. continue to exercise in the employ of the capitalist the productive crafts they had carried on as guild journeymen and independent artisans. These early workshops were simply agglomerations of smaller units of production, reflecting little change in traditional methods, and the work thus remained under the immediate control of the producers in whom was embodied the traditional knowledge and skills of their crafts.
Nevertheless, as soon as the producers were gathered together, the problem of management arose in rudimentary form. In the first place, functions of management were brought into being by the very practice of cooperative labor. Even an assemblage of independently practicing artisans requires coordination, if one considers the need for the provision of a workplace and the ordering of processes within it, the centralization of the supply of materials, even the most elementary scheduling of priorities and assignments, and the maintenance of records of costs, payrolls, materials, finished products, sales, credit, and the calculation of profit and loss. Second, assembly trades like shipbuilding and coach making required the relatively sophisticated meshing of different kinds oflabor, as did civil engineering works, etc. Again, it was not long before new industries arose which had little prior handicraft background, among them sugar refining, soap boiling, and distilling, while at the same time various primary processes like iron smelting, copper and brass working, and ordnance, paper and powder making, were completely transformed. All of these required conceptual and coordination functions which in capitalist industry took the form of management.
The capitalist assumed these functions as manager by virtue of his ownership of capital. Under capitalist exchange relations, the time of the workers he hired was as much his own as were the materials he supplied and the products that issued from the shop. That this was not understood from the beginning is attested by the fact that guild and apprenticeship rules and the legal restraints common to feudal and guild modes of production all persisted for a period, and had to be gradually stripped away as the capitalist consolidated his powers in society and demolished the juridical features of pre-capitalist social formations. It was partly for this reason that early manufacturing tended to gravitate to new towns which were free of guild and feudal regulations and traditions. In time, however, law and custom were reshaped to reflect the predominance of the “free" contract between buyer and seller under which the capitalist gained the virtually unrestricted power to determine the technical modes of labor.
40 Labor and Monopoly Capital
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