CHAPTER SEVEN
In the previous three chapters we have taken a bottom-up look at how labor control regimes were partly organized and pursued through master and servant law and the local courts. Employers faced control issues both in local labor markets and the production process and workplace. Their industries were not at the technological apex of production, much of their resources were sunk in variable capital, and their capacity to insure productivity and thus profit depended on the authority that they could wield in the service relationship. Oriented by the proposition discussed in chapter 2 that the embeddedness of such regimes is rooted in local configurations of institutional power, we examined how in Hanley, Hull and Redditch employers found in the local court a reliable aid to exercise discipline over their workers both in the labor market and in the workplace. In each case we charted specific historical trajectories of how political and economic factors conjoined during this period (and in some instances prior to it) down a path in which the politics of production was embedded partly in this local legal institution. These are only three cases, but as we saw in chapter 2 master and servant and other law and the contract of service were foundation stones for labor control regimes and struggles in other industries and regions around England.
Given political and economic transformations that occurred in the 1860s and 1870s, these local contests roiled upwards, and they became generalized in working-class efforts to fundamentally change existing labor law. These efforts crystallized into a national contest, involving the nascent Trade Union Congress, national federations of employers, the major political parties, and parliamentary politics. In dialectic fashion, what had been generalized by the consolidation of master and servant law in the 1820s and high court decisions in the succeeding decades, and made concrete practice in specific locales, returned as a national conflict.
In this sense our final look at labor law and control involves a top-down analysis, examining the ways in which embeddedness at the national level became the stage for significant transformation. As noted in chapter 2 one of the signal works that raised the question of how economic activity is embedded in societal institutions and has been the touchstone of many subsequent debates is Karl Polanyi’s The Great Transformation: The Political and Economic Origins of Our Time (hereafter GT). Social scientists of disparate intellectual persuasions credit GT and Polanyi’s subsequent work with spurring the examination of the economy as an “instituted” process. Proffering a vision contrary to neoclassical economics, his corpus provides theoretical and methodological bases for analyzing capitalist development and its market economy contoured, channeled, and at times abetted by a broad range of social and political institutions.1 As important, the elaborations and debates on Polanyi’s work are matters of historical analysis and serve as a touchstone for understanding contemporary global capitalism and the social and political movements fomented in reaction against its expansive reach.2 Our reconsideration of Polanyi’s narrative in GT thus has both contemporary and historical import.3
The ambiguities in Polanyi’s writings have spawned a series of debates over the intellectual lineage of his vision and its affinities with other macro perspectives on capitalist development, as well as over core concepts such as embeddedness.4 My aim in this chapter is to engage these issues in so far as they facilitate a rethinking of the narrative of the English Industrial Revolution and its consequences depicted in GT. My hope is that this retelling of the story will reflect on and add to these dialogues.
Confronting the great depredations of economic collapse, the rise of fascist states, and the carnage of war, Polanyi sought to find the institutional roots of the capitalist system that had led to this wreckage. His starting point was in nineteenth-century England, and his account of these transformations hinges on what is now termed the “double movement,” that is, the rapid ascendancy of a market society in the mid-1830s and the societal countermovement in response to protect itself from the damages of a market-driven social order. In this chapter I return to this part of the narrative to provide a revised account of role of class dynamics in the transformation of market, economy, and society. Where in the case studies I have attempted to demonstrate that historical materialism requires a fuller institutional analysis to explain labor control, in this chapter I argue that understanding the institutional dynamics of this great transformation requires class analysis.
Polanyi’s intellectual heritage from its Viennese roots onward was rich and complex, and scholars point to the integument of arguments in his work that suggest an indebtedness to his encounters with Marxist theory and politics. Despite these filiations, it is clear that Polanyi consciously rejected what he saw as a reductionist determinism in historical materialism, and with it a class analysis.5 My aim is to preserve Polanyi’s cogent concern with the role of institutions in capitalist development, but to do so with renewed attention to the ways in which class dynamics were central to the construction of what he termed “market society.” I offer a retelling of the great transformation that is in some respects the converse of Polanyi’s narrative that involves revisiting the ground covered by Polanyi and charting territory he neglected. My focus reprises the theme of this book, that is, class power and legal institutions. In this partial alternative account of the great transformation I turn to how capitalists at the national level embedded the relations in and of production in particular legal institutions in the early part of the Industrial Revolution as a problem-solving regime for labor control, and defended this institutional arrangement against a working-class movement for freedom from these legal bindings. This working-class movement, led by trade unionists, was ultimately successful in surmounting these legal fetters through union organization and their increased political power due to the expansion of suffrage. Paradoxically to Polanyi’s narrative it is this successful fight for “free labor” that births its full commodification. Labor’s triumph is accomplished by what Polanyi would see as a disembedding from state authority.
The Great Transformation, the Rise of the Market Society, and the “Double Movement”
The Great Transformation, of course, is not solely about the rise of market society, but a more sweeping account of what Polanyi takes to be a set of unprecedented institutional changes that restructured the international system. In his long epochal sweep not only the rise of self-regulating market (abetted by the liberal state), but also the balance-of-power system among states creating the relative absence of international conflict and the gold standard anchoring international banking were critical mechanisms that kept European market society afloat, until its monumental crisis in the 1930s. Here, however, we concentrate on the first part of his narrative, the unique historical creation of a market society in England, for it is this part of the story that speaks directly to the questions raised in this volume.
As Margaret Somers and others have emphasized, Polanyi saw a key underlying impetus for the rise of a modern market economy in England not in the rise of modern capitalism, as for Marx, but in industrialization itself (1990, 156). More specifically, his obliquely stated causal analysis does not start with institutions, but with the rise of the factory system and how new technologies of production impelled institutional change (1947, 96–97; 1957a, 74–75). As he states in GT, “On the eve of the greatest industrial revolution in history, no signs and portents were forthcoming. Capitalism arrived unannounced. No one had forecast the development of a machine industry; it came as a complete surprise” (1957a, 89).
Industrial production transformed the functioning of the economy, installing commerce as the servant of industry where the relationship historically had been the reverse. To meet the demands of this new master,
The extension of the market mechanism to the elements of industry—land, labor, and money—was the inevitable consequence of the introduction of the factory system in a commercial society. The elements of industry had to be for sale.
This was synonymous with the demand for a market system. . . . As the development of the factory system had been organized as part of a process of buying and selling, therefore land, labor and money had to be transformed into commodities, as actually they were not produced for sale on the market. (1957a, 75)
A key part of Polanyi’s telling of this first part of the tale of the “double movement” was that land, labor, and money fundamentally could not be transformed into commodities since they were not products of human industry; rather they became, in his terms, “fictitious commodities” (1957a, 72; 1971b, 148).6 Nonetheless, starting in the late eighteenth century efforts began to subsume all three into the market economy. This prolonged process was part of a greater transformation by which social relations themselves became embedded in the market system. Whereas in the past economic activity had been ordered to maintain social relations, society was for the first time in history the handmaiden in the service of the economy. In Polanyi’s narrative the rise of political economy, particularly the dominance of its ideas as expressed through Malthus and Ricardo, played an essential role in these developments (1957a, 75, 122–27; 1971a, 65).7
By Polanyi’s account the most difficult part of this transformation was the commodification of labor, a protracted and sometimes tempestuous process that put the state and political action at the center of the birthing of a “market society.” Initially society reacted against the creation of a free labor market with the construction of a system of poor relief that became known as the Speenhamland system, run through the local governments or civil parishes. This followed traditional forms of parish relief under the poor laws that had been part of an institutionalized order for hundreds of years to insure subsistence for the many workers displaced, dispossessed, and unemployed. Parishes adopting the plan also subsidized the wages of (largely agricultural) workers, who were remunerated below a subsistence wage for their households. These wage subsidies spread to many counties throughout the country.
As Polanyi himself tersely notes, however, “In the long run the result was ghastly,” only furthering pauperism (1957a, 80).8 The state, accepting what political economists regarded as the brute facts of nature, instituted sweeping changes in the social welfare system with the New Poor Law in 1834, abolishing such subsidies, and imposing stringent and punitive standards for assistance in dreaded workhouses. With subsistence no longer guaranteed through parish relief, the New Poor Law gave workers the stark choice of workhouse or factory discipline. “It is no exaggeration to say,” Polanyi observed, “that the social history of the nineteenth century was determined by the market system proper after it was released by the Poor Law Reform Act of 1834” (83). Critically, this involved the application of free market principles to labor with the state receding from the employment relationship. “To separate labor from other activities of life and to subject it to the laws of the market was to annihilate all organic forms of existence and to replace them by a different type of organization, an atomistic and individualistic one. . . . Such a scheme of destruction was best served by the application of the principle of freedom of contract” (emphasis added; 163).9 Labor was now fully commodified with the first half of the “double movement.”
Polanyi argues that the working class was not sufficiently organized to protect itself from the deleterious effects of the labor market until the maturation of unions beginning in the 1870s (1957a, 82, 166). However, what the state had taken away the state could return, and so began the societal reaction to the laissez-faire system in the second part of the “double movement.” A full-fledged market society, a world run on the singular principle of laissez-faire economics, was a dystopian project that would have led to economic, social, and cultural devastation. Recognizing this possibility, a variety of collective interests—including leading politicians, members of the landed elite, working-class leaders, and public intellectuals—spontaneously forced state action to re-embed the market. Factory legislation, public health provisions, education reform, and a host of other enactments that brought the state back in were part of a great collectivist countermovement to protect society as a whole from the chaos and destruction of unrestrained market capitalism.
In Polanyi’s story, class interests themselves were too narrow an impetus for the explanation of such long-term macrosocial changes. He wrote, “Class interests offer a limited explanation of long-run movements in society. The fate of classes is much more often determined by the needs of society than the fate of society is determined by the needs of classes” (1957a, 152). The class interests of both workers and landowners are part of Polanyi’s story of change, but he conceptualized them largely as reflexive, nonideological, and pragmatic responses to the disruptions by the market system, and argued that by themselves they were insufficient to be primary explanatory factors of the countermovement. Moreover, such interests, in the end, were not so material as they were moral and cultural, and concerned with integrity and standing in society. As he summarized the rise of a “collectivist” reaction to laissez-faire liberalism,
The countermove against economic liberalism and laissez-faire possessed all the unmistakable characteristics of a spontaneous reaction. At innumerable points it set in without any traceable links between the interests deeply affected or any ideological conformity between them. Even in the settlement of one and the same problem as in the case of workmen’s compensation, solutions switched over from individualistic to “collectivistic,” from liberal to anti-liberal, from “laissez-faire” to interventionist forms without any change in the economic interest the ideological influences or political forces in play, merely as a result of increasing realization of the nature of the problem in question. (1957a, 149)10
And in reviewing his thesis on the rise of antiliberal interventionism he contended: “Briefly, not single groups or classes were the source of the so-called collectivist movement, though the outcome was decisively influenced by the character of class interests involved. Ultimately, what made things happen were the interests of society as a whole, though their defense fell primarily to one section of the population in preference of another. It appears reasonable to group our account of the protective movement not around class interests but around the social substances imperiled by the market” (1957a, 162–63).
Thus a response required a societal rather than a sectional countermovement.11 The market economy was re-embedded through successive state actions into societal structures, and antiliberal collectivism gained traction against the destructive tendencies of laissez-faire economics and the market society it had advocated. In the second half of the “double movement” English society, at the precipice, caught a glimpse of the free market abyss and built institutional walls to protect itself from the plunge.
Problems in the Narrative
One of the difficulties in understanding Polanyi’s narrative of this great transformation is that it precedes his explicit and elaborated theory of institutional embeddedness by over a decade (Dale 2010; Gemici 2008; Randles 2003). Regardless of whether Polanyi offered more than one conception of embeddedness, how infrequently the term appeared in GT, or if his theory of instituted economies changed over time, GT’s narrative motor animating the story of the rise and taming of market society relies on some version of these core ideas.12 In GT these theoretical insights are largely woven into the tapestry of his expansive analytic narrative of the demise of mercantilism and the abrupt turn to laissez-faire.13 Unraveling the threads of this complex weave provides not only a chance to revisit particular pieces of the story, but to think about how the cloth itself was fashioned. This is particularly the case in terms of the place of legal institutions and class power and conflict in the contrapuntal movements of embedding and disembedding. Retelling the story of the great transformation involves threading power into the narrative of institutional change and, as I will argue below, this at times leads us to reweave the design of the tapestry.
Problems of institutional change arise at both ends of the narrative of the double movement. Both critics and sympathizers alike have noted that the initial impetus for disembedding the economy is an ad hoc explanation partly leaning on technological determinism. For all his attention to the institutional organization of economy and society, Polanyi provided no explanation for why contemporary institutions failed to resolve the dilemmas created by the demands of an increasingly technologically complex industrialism.14 Rather, the narrative ambiguously suggests an inevitability of this transformation and focuses on the failed resolution to the problems of commodifying labor with the Speenhamland system.
Relatedly, the centrality of a spontaneous “societal” reaction to the rise of the market economy frequently hypostatizes society and the state at the expense of concrete analyses of institutional conflict and change.15 Polanyi’s narrative of organic societal response, however, provided no specific accounts of why and how these reflexive reactions against the perils of market forces were channeled into coherent actions for institutional change, or how the countermovement resulted in particular constellations of embeddedness.16 As Gareth Dale argues, it pivoted between a voluntarism in explaining the rise of market society and functionalism in charting the countermovement response, and in the end offers no unified causal analysis (2010, 79). The Great Transformation suffers from this and the other dilemmas we have reviewed because it lacks an underlying theory of power generally and an analysis of institutional power more particularly.17 As a result Polanyi was unable to pursue how the contradictions, tensions, and power dynamics within these institutions shaped the course of the double movement Concurring with Chris Howell that all industrial relations institutions are “congealed form(s) of class power” I offer a partial retelling of the double movement that emphasizes the class struggles within these institutions and their result in a new institutional path for capital and labor (2005, 23).
Class Struggle and the Emancipation of Collective Laissez-Faire: A Retelling
My retelling of Polanyi’s story remains predicated on his insights on the embeddedness of the economy. Indeed, in response to some of his sympathetic critics who, as I have noted, observe that Polanyi did not fully realize the promise of this stricture in GT, this narrative focuses squarely on the ways in which economic relations were defined and mediated by the legal system. In a reversal from Polanyi, however, I argue that it was not until the last quarter of the nineteenth century, well beyond the heyday of laissez-faire liberalism and well into his claimed societal reaction of the double movement, that labor becomes “commodified” in his own terms. Additionally, I assert that this inversion of Polanyi’s narrative is critical in understanding not just the labor market, but also the institutional embeddedness of the social relations in production. Whereas Polanyi rejects a focus on the production process when he eschews Marxist theory, the full importance and impact of institutional embeddedness can only be appreciated by a focus on both exchange and production relations. Unionists fought not only for a transformation of the labor market, but also change in how the law governed power in the workplace.18 Finally, while Polanyi’s story of reaction centers on a spontaneous societal response in the double movement, my narrative more directly focuses on a class struggle that was critical in refashioning the legal institutions that defined the employment relationship. This is not to say that other classes or groups were inconsequential; labor had influential reformist allies and friends of convenience in its struggles. And certainly structures of gender and race were integral in the construction of this new capitalist order. However, the transformation of labor’s legal status was (Anglo-Scot male) union inspired and largely led, and both capitalist federations and labor unions were explicit that they were the principal actors in this political conflict. Just as important, the response of male-controlled working-class organizations was to distance themselves as much as possible from the protective reaches of the state once they had established the minimum conditions for their legal integrity. Contrary to Polanyi’s story of the double movement, unions largely sought refuge from rather than in state institutions, opting for what has become known as “collective laissez-faire.” For working-class leaders there were quite sound experiential reasons for this path in addition to a lineage in radical political ideology that affirmed it.
A Brief Return to Preliminaries
In chapter 2 we examined key aspects of nineteenth-century English labor and legal history that are the foundations of this retelling. To briefly review, England’s legal system was thickly planted with statute and common law that governed the employment relationship. Born of increasing frustrations by capitalists in particular trades, new statute law started to accumulate in the mid-eighteenth century and ultimately was consolidated under the Master and Servant Act of 1823. As we saw, using novel language that surpassed centuries’ old law on employment, these master and servant acts gave employers new powers and created what the legal historian Robert Steinfeld has termed a relation of “coerced contractual employment.” While Polanyi asserted that labor was becoming a “fictitious commodity” within a market society, master and servant law complicates his account. Workers were bound to their employers under a standing order for service. In effect the free will of liberalism and the hierarchy of patriarchy were wedded together: (adult male) workers were deemed to be free agents to choose employment, but in making this commitment they bound themselves to the will of their employer. The law cast most enduring or exclusive employment relations as one of a hierarchical status arrangement of continual service. The intersection of master and servant law and the New Poor Law confounds Polanyi’s analysis of the disembedding of labor in a market society. For, as we noted in chapter 2, under the New Poor Law workers were no longer able to request relief from the parish in which they currently worked. With the abolition of this right of settlement by hiring, the New Poor Law reinforced the legal duty of service to the employer. Rather than increasingly labor mobility in a free market, the New Poor Law had the effect among some groups of workers of binding them more firmly to their employers.
As the century progressed, capitalists in particular industries and regions, such as Hanley, Hull, and Redditch, increasingly relied on the law as a punitive tool to maintain control of the workplace and, at times, redefine workers’ tasks in the production process. Over the same period local legal institutions developed that made recourse to the law easier and, given the class composition of many urban benches, a more reliable venue for employers constructing labor control regimes. By the late 1850s, when national data became available, the use of master and servant law was entrenched in a number of areas and industries. In some of those industries in which it was sparingly used, it nonetheless hung as a shadow over the workplace. Master and servant law was also effective in putting a rapid end to spontaneous labor stoppages and in making strikes themselves more difficult. Workers had recourse through civil action against capitalists for ill treatment and nonpayment of wages, but evidence suggests that in practice, as in the title of the act, masters came first.
On a collective level workers found themselves in a legal netherworld with regard to their capacity to organize. The repeal of the Combinations Acts at the end of the first quarter of the nineteenth century removed statutory barriers criminalizing association, but workers could still be prosecuted under common law for conspiracy. This, too, was a relatively recent construction, and much as master and servant law, criminal prosecutions for conspiracy against workers groups were products of the industrial revolution (Orth 1991, 38; Wright 1887, 43). Its common law basis was solidified by superior courts from the 1840s onward, and along with newly enacted legislation against interference with other workers, and the lack of a legal status for unions themselves, these laws insured that organized labor lacked unambiguous state sanctification.
Employers also increasingly used the non-labor-related law and the courts to change the contours of custom. As the nineteenth century advanced, a wide array of capitalists in both mining and fabrication industries used criminal prosecution for larceny to eviscerate customary rights claimed by workers to the gleaning of waste or the taking of a set amount of inferior product for household use (Philips 1977; Woods 1979). In some instances, as in the woolen industries of Yorkshire, manufacturers created private police forces to eradicate what they redefined as theft (Godfrey 1999a, 1999b). In this case the law was used to emphasize the cash nexus of the employment relationship and reinforce capitalist conceptions of property rights.
From the start of the industrial revolution onward the employment relationship was legally entangled in ways antithetical to Polanyi’s narrative of the double movement. Master and servant law ensured that labor never became institutionally unmoored, and capitalists in a number of industries increasingly turned to it as a form of labor control during the decades that for Polanyi mark the rise of the market society. During the repeal contests of the early 1870s the attorney general himself, drawing on Henry Maine’s famous dichotomy, noted, “The truth is our law regarded labor as a matter of status, not of contract, and regulated wages and employments” (Curthoys 2004, 196).19 In this sense, even with the passage of the New Poor Law, labor never became the disembedded “fictitious commodity” so central to GT’s narrative. Instead, in a number of areas around the country, labor became more institutionally entwined as employers in these areas embedded their labor control regimes in the threat and practice of the law.
As noted in chapter 2, despite the passage of the Combination Acts which putatively legalized unions, they remained in a legal netherworld. The 1825 act had legalized collective organization concerning wages and hours, but no other issues, and while collective agreements were no longer illegal, they had no binding standing in law. Workers had pressed for repeal of the old Combination Laws so they could be free from prosecution for common law criminal conspiracy, but the new act limited this exemption to these two issues. The law contained vague language concerning “molesting or . . . obstructing” and “threats and intimidation” that left strike activity at risk to legal sanctions, especially when workers engaged in picketing. And language concerning “endeavouring to force or prevent” made approaching and attempting to persuade fellow workers about a union position during a contract of service a possible criminal offense. More generally, while the 1825 act permitted union activity concerning wages and hours, it did not legally recognize unions themselves. This statutory law remained essentially in place for the next half century (Orth 1991, 86–92). Employers generally preferred the easier master and servant law as a means of labor control and as a means to combat strikes. However, by the 1860s unions were very aware that their efforts to exert collective control over the labor process and the workplace had no legitimation in law and were open to criminal prosecution.20
The 1825 act did not negate problems posed by the common law of conspiracy as unionists had hoped, and its ambiguous language invited court activism in similar ways as had the definition of service reviewed in chapter 2. During the course of the nineteenth century many superior court judges issued rulings based in a “dogmatic individualism” in exercising a “quasi-legislative role” (Curthoys 2004, 7). These rulings bolstered the application of conspiracy doctrine to strikes, since in a number of cases they found that attempts to dissuade workers to enter a struck workplace interfered with their right to make their own bargains and obstructed the employer’s capacity to use his capital as he pleased.21 Indictments for conspiracy were infrequent, but when they occurred in the 1850s and 1860s unions realized acutely that struggle against employers remained on legally tenuous grounds.22 The implications for unions were foreboding.
From Polanyi’s perspective it is reasonable to argue that the superior court rulings on strikes were part of the disembedding of economy from society in the first half of the double movement: superior courts sought to impose a strict laissez-faire doctrine on the employment relationship. Yet during the same period these courts also reinforced the subservience of labor under contracts of service. Moreover, master and servant law was consolidated during the rise of market society, and its use by capitalists in many industries to subordinate labor intensified during the period of the societal countermovement. Throughout these decades employment was legally embedded, but it was institutionally anchored by neither a state-imposed free contractual market relationship nor a societally imposed protective order. This is a part of a story of great institutional transformation, but it is one that belies the contrapuntal rhythms of GT’s double movement. The course of labor law confounds Polanyi’s underlying its logic of embeddedness. It is a story of class struggle within institutions, one that takes a turn toward a new order of collective laissez-faire, driven by a working-class effort toward freedom from the status of servitude, in its own protective efforts to gain security within a market society.
While Polanyi’s narrative of the countermovement emphasized increased state intervention and a societal reaction against the market liberalism, the struggle over labor laws offers an inverse picture. The efforts to change labor’s legal status were dominated by trade unionists, though they had important assistance from Positivist intellectuals, several radical lawyers, and a few parliamentary allies. Their victory was achieved to a large degree because of increased working-class political power with the Second Reform Act of 1867, which significantly expanded the number of adult male workers on the voting rolls. Finally, while these reformers turned to the state for relief, their object was largely to secure legislation that would insulate them from oversight from the central government and the courts. What unions most desired, and what they partially achieved, was to be legitimated and then left alone to their own devices, what Kahn-Freund termed “collective laissez-faire.”23
In the spring and summer of 1863 the Council of the United Trades of Glasgow met to discuss their grievances with master and servant and law. In an ensuing communication to other councils to take action for reform they asserted, “Here then, we have a law made by employers, made for employers, and by employers administered. Was ever anything so grossly unfair?”24 The Glasgow meeting led to a call to action and a numerously attended conference the following spring in London, the first salvo in a twelve-year campaign that culminated in the reform of these laws and the passage of legislation securing the legal status of unions (Howell 1905, 1:151).
Most contemporaries and historians characterize these decades as ones of growing conciliation and reformism in which working-class and union leaders put behind the radicalism of Chartism to achieve gains within the existing system.25 Nonetheless, both capital and labor explicitly recognized the struggle over labor law as one of class conflict, and their solutions were irreparably divergent. The substantive goal of the unions was for their legal security and the decriminalization of their relations with capital. “We ask for no privileges—no exemptions,” argued labor leader George Howell. “Give us the protection of law, and make us amenable to law, as citizens of a free State; we ask for nothing more, and shall be content with nothing less” (Bee-Hive, Feb. 25, 1871). In a sense labor argued for negative liberty rather than positive state intervention, and this was predicated in a three-pronged rationale.
First, as a practical matter, the experience of the past half century had led working people to distrust the courts at all levels.26 To the unions, “Involvement with the law meant, for them, as for the individual worker, exposure to a hostile environment, where the stakes were very high and where the dice were loaded.”27 Making employment a purely civil and private matter and insuring the legality of unions and their actions left workers free to confront employers on their own terms. This was a turn to liberalism, but for unions it represented a rebalancing of the employment relationship for collective or individual bargaining.
Second, as E. P. Thompson detailed decades ago in The Making of the English Working Class, working-class radical politics was based in a deep-seated suspicion of the state. From the planting of the roots of the Liberty Tree with Paineite politics in the 1780s onward through the Chartist movement that preceded the period of this study, many working-class radicals had advocated for a minimalist state. Within this radical tradition the state represented elite corruption and an impediment to freedom, and these ideas still held significant currency in contemporary working-class popular politics.28 For union activists struggling to secure their collective freedoms this was a comfortable and cogent politics based also on decades of experience, and they likewise adopted a parallel posture of insuring against state intrusiveness.
Third, and relatedly, the campaign for universal male household suffrage leading to the extension of male suffrage in the Second Reform Act of 1867 reaffirmed an older artisanal theme of popular politics that focused on the property of labor as the basis of adult male freedom and citizenship.
Counterpoised to slavery was freedom to sell his labour power in conditions of equity and justice: that a man should be able to maintain himself without recourse to charity or the state Poor Law; that he would have a degree of freedom in the regulation of his trade or job; and that collective organisation of the trade, informal unions or otherwise, was desirable, if not always possible. . . . The basis of a popular claim for universal manhood suffrage became the notion that the property which working men possessed was the property in their labour. . . . To be in possession of this property was to be free, to have possession of one’s self and to have the potential to shape and dispose of one’s labour and person. (McClelland 2000, 99, 101)
This conception of freedom was no simple valorization of individualism, since understandings of reciprocity and collective ownership of a trade were deeply embedded within this tradition. Nonetheless, for “working men” of the British “nation,” state intervention was tainted with the mark of dependency.
Finally, working-class leaders and sympathizers frequently drew on popular political economy to construct their case for their class interests. In GT’s political economy, championed by Ricardo and Malthus, is an ideological juggernaut that displaced all competing ideas of economy and society in its wake. Polanyi recognizes the work of Robert Owen as providing an alternative to this ascendant discourse in the nineteenth century, but the rise of an oppositional discourse was more complex. From the early decades of the century working-class leaders and organic intellectuals had been appropriating facets of classical economics to create a popular political economy.29 This discourse was used as a foil against the hegemonic claims of laissez-faire economists and politicians in a variety of economic and political struggles. Exemplary of such moves were the claims for working peoples’ control over their own “property” their labor, and unionists frequently had recourse to this argument in their campaign of the 1860s and 1870s. In advocating for the legal freedom of trade unions, the secretary of the Amalgamated Society of Engineers, William Allan, responded to a series of questions before the Royal Commission on trade unions with precisely such an argument:
[1774] What do you mean by “protection of trade”?—The protection of trade I can only understand as being similar to protecting my property, that is to say, to make the best of it I can by using all legal means. . . .
[1778] I object to the illustration; I want to know the fact; what do you mean by “encroachments on the trade”? Do not give me any illustration, but tell me the fact?—I will explain it this way; I learned a trade, I served my time to a trade, that trade is my capital, and I consider that I have a right to protect it. . . .
[1783] But there is no capital in labour?—Is not there? It is my capital.30
Popular political economy proved effective in legitimating working-class positions and refuting laissez-faire hardliners in advancing an alternative understanding of liberal freedom. However, it did so by conceding the centrality of markets in organizing the economy, and to this extent recognizing labor as a commodity.31 Contrary to Polanyi’s narrative, many union activists accepted the market principle, and they did so because in part because through their popular political economy that could make claims for institutional freedom for the control of their labor.
The push for transformation of labor law was spearheaded by a relatively small group of activists. From the inception of the Conference of Amalgamated Trades from 1867–71 and the Trades Union Congress (TUC) from 1868 (and more particularly its Parliamentary Committee established a bit later), much of the lobbying for reform centered around these organizations. Other craft and trade unions, local trades associations (such as the London Trades Council and the Sheffield Association of Organized Trades), and short-lived confederations also advocated for change throughout the period. Union activists obtained critical support from a small circle of sympathetic MPs and civil servants in the Home Office, and coteries of Christian Socialists and Positivists who, as public intellectuals, expended considerable energy championing the reform cause.32 This was not a spontaneous societal reaction against market society.
A Royal Commission on trades unions in 1867–69 and a Royal Commission on labor laws in 1874 were partly the result of the concerted politicking of the unions and their associates, and the unions secured important allied support in the first commission through which their quest for reform was articulated in a minority report.33 However resolution of their concerns over master and servant and conspiracy law remained slow. The former was partially reformed with an act in 1867 that mandated imprisonment only for “aggravated offences.” These were not defined, though, leaving the issue in the hands of distrusted magistrates, and the offense itself remained criminal. One commentator in the workers’ Bee-Hive noted in the renewed campaign for repeal that the law remained one of the “disgraceful relics of industrial barbarism” and flatly stated that “whilst such a state of the law exists, working men cannot fairly regard themselves otherwise than as a degraded class” (June 27, 1874). The legal integrity of trade unions was finally established with the Trade Union Act of 1871, but unions were sorely disappointed when the Liberal government also shepherded to passage the Criminal Law Amendment Act at the same time. The CLAA was the Liberal’s simultaneous attempt to clear unions of restraint of trade charges and address the fears of capital, and it contained revised language on “threats” and “molestation” that left the door open for further prosecution of peaceful picketers (Curthoys 2004, 153–65). As one union tract declared with contempt, “If making the working-classes the victims of special criminal legislation, intended to hamper them in their efforts to improve their condition, is not class legislation, and with a vengeance, let the representatives in Parliament answer!” (Hunter 1873, 4).
With two high-profile cases in 1872 and 1873 that, from the unionists’ perspective, saw strikers imprisoned with impunity, the campaign intensified and received more favorable press.34 Moreover, as Curthoys notes, “During the early 1870s, when unionists believed that iniquitous laws were being perpetuated by the political influence of capital, their language assumed a very markedly “class” tone, and was viewed by some politicians with especial alarm” (2004, 4). Equally alarmed, if not more so, were employers who had been far more sluggish in organizing for their interests.
Employers’ federations had an uneven history for several reasons, not the least of which was the pressure of competition. In part, some larger capitalists also saw accommodation to union organization as a way of insuring stability and eliminating smaller competitors. Throughout the mid-Victorian period local employers federations constructed for purposes of arbitration or conciliation boards had uneven and often inauspicious histories (Allen 1964; Fraser 1974, 106–17). The activism of trade unions for legal reform served as a more potent impetus for capitalist organization.
Several employers groups both regionally and nationally, were already active and vociferously anti-union by the early 1870s. As Arthur McIvor notes, “Frequently, employers formed and joined organisations when they perceived their ability to dominate the labour contract being undermined by the introduction of trade unionism in their workplace, or, alternatively, where the labour contract was deemed to require negotiation. . . . Through organisation, individual employers gained access to associations’ sophisticated strikebreaking and victimisation machinery that could be exploited to undermine militancy during tight labour markets, restrict labour mobility and keep activists from the shop floor” (1998, 16–17). From the mid-1860s through the early 1870s a robust economy provided many such challenges. The industries involved included some of the largest and most heavily capitalized, including shipbuilding, engineering, coal mining, earthenware, and the iron trades.35 In 1873, after several years of watching first the CAT and then the TUC Parliamentary Committee make headway in their public campaign to repeal laws, major associations of employers came together to found the National Federation of Associated Employers of Labour (NFAEL). Their purpose was “fundamentally an ideological attack on the TUC’s programme” (Curthoys 2004, 186). They soon established their own periodical, Capital and Labour, whose masthead motto declared their agenda: “The Freedom of Labour—The Sanctity of Contract and of Law,” and in its introduction stated that “Capital and Labour asks for nothing but justice, and desires to set labour wholly free” (Feb. 25, 1874, 1).
From 1867 with the first parliamentary committee, through the final transformation of the law in 1875, most employers’ association representatives and the NFAEL maintained several fundamental principles. First, they insisted that a summary process and criminal penalties for violation of contract must be maintained in order that employers could maintain authority in the workplace: “It is only by a summary process and severe penalties that any real protection can be given to employers against the caprice or willfulness of workmen. . . . It furnishes to employers the only security for the due performance of work contracted to be done. If it were repealed, they would be absolutely at the mercy of the workmen.”36 Many employers and associations were convinced that without coercive power workers would simply walk away from fines, “the more irresponsible class of servants or workmen, and particularly workmen who have a Union at their back encouraging breaches of contract, not only in single file but en masse, will snap their fingers at decrees of damage, and carefully avoid all suretyship for performance” (Capital and Labour, July 21, 1875, 380). They argued that employers were dependable targets of civil suits and judgments because they had sunk capital in and responsibilities to their businesses. Workers, however, were often footloose and did not have to be so responsible. Employers emphasized that the absence of a few workers could stop an entire production facility and perhaps even be the cause of substantial damage to equipment while putting many others out of work. Therefore the penalties that they sought to have maintained readily fit such “crimes,” and their damage was an offense against the larger community.37
Second, in the battle over the CLAA, most employers’ associations involved in the campaign fought stalwartly to retain some legal curbs on picketing. As a cotton manufacturer who was part of a NFAEL delegation to lobby the Home Secretary fretted, “I cannot see why they [the unions] want to get rid of this Act, unless they desire to be perfectly free to carry out their own avowed design of establishing an imperial government for the working man, which shall have the control of capital and labour” (NFAEL 1874, 22).38 The Liverpool Master Builders’ Association argued for a complete ban on picketing and proclaimed that “the liberty of all classes engaged in trade would be absolutely sacrificed to the intolerable tyranny of the trades unions” if any legislation short of this was passed.39 Throughout this political struggle these capitalists and their sympathizers in Parliament and the press proffered a vision of the labor contract based on a strict laissez-faire individualism.
Not all employers and association representatives who participated in the debates were so openly hostile to either the unions or changes in the law. Some, following the lead of the parliamentarian A. J. Mundella and Rupert Kettle, a county judge, sought accommodation through formal boards of arbitration or conciliation, and several important union leaders concurred with the idea. Such boards had checkered records of both endurance and success, which varied greatly by region and industry. Two acts championed by sympathetic MPs and in consultation with several union leaders were passed during this period to facilitate such boards, but they were not used significantly.40
Ultimately a conjuncture of circumstances helped shift the tide in favor of the unions. A turning point in the push for reform came with the passage of the Second Reform Bill in 1867 that enfranchised well over 1,000,000 urban male householders and thus many workingmen. While the large majority of working-class males remained disenfranchised, this bolstering of numbers and the addition of urban seats through the reform made the skilled male worker, one who was more likely to be in an organized trade, a recognizable force. Second, government leaders, members of both parties and civil servants recognized by the 1870s that organized labor was an irremovable fixture of the British economy. Abstract principles gave way to concrete pragmatism, leading to a legal solution finally pursued by a Conservative government in 1875.41 In these battles the unions proved to be the more organized and effective lobbyists than their capitalist counterparts.42 Third, doctrinal nostrums of freedom advocated in laissez-faire economics, read partly through popular political economy and reformist liberalism, proved compatible with labor and union law reform. In the end, a majority in Parliament came to see that “the role of the legislature was to secure equal treatment under the law; but ultimately: ‘the solution to these problems could be found only in absolute freedom . . . freedom between master and men’” (Spain 1991, 120).
The Employers and Workmen Act and the Conspiracy and Protection of Property Acts achieved many of the hard-fought goals of labor leaders and their allies. The former abolished all penal provisions in the old master and servant acts. Breaches of contract were treated as purely civil matters among equals and the law set out a series of damage penalties for infractions. With the latter Parliament sought to finally banish the issue of conspiracy from union collective action. Language regarding “molestation and destruction” disappeared and collective actions could only be construed as conspiracies when the action would be indictable as a crime if committed by a single person (Curthoys 2004, 224–33). The victors and even most disgruntled employers saw this as marking a new and final equilibrium in employment relations in which collective laissez-faire would become dominant. The state distanced itself from industrial relations as it discarded a system of law that had governed it for the better part of a century. Most all of the participants in this protracted struggle assumed that a mature market in labor was finally at hand.
Superior court judges, however, were not part of this settlement, and their insularity from other political institutions allowed them to continue to call into question the legality of unions. “The judges sought to curb union power either out of a conscious design to protect the existing economic and political order, which unions were perceived to threaten, or owing to a more subtle class bias that rendered judges simply incapable of impartially adjudicating trade union matters” (Klarman 1989, 1559). From the last part of the nineteenth century into the first decades of the twentieth century, judges remained committed to a strict theory of individual contracts of employment and they also exposed the unions again to conspiracy charges through tort law. A series of rulings, capped by the now-famous Taff Vale decision of 1906, forced Parliament to return to what they had assumed was settled law, to pass further legislation fully protecting unions from such continued judicial jeopardy, finally institutionalizing the system that became known as collective laissez-faire.
In the mid-1860s a small group of local union leaders shifted their horizons and began to question the fundamental inequity of the law in a more coordinated fashion. They realized that a top-down solution was necessary to redress their grievances. Joining forces with the nascent TUC and its Parliamentary Committee, which turned its sights to breaking the legal manacles on the labor movement, these working-class leaders forged a successive series of direct challenges to the legal status quo. Though crucially aided at key points by sympathetic intellectuals and select MPs, the campaign to repeal master and servant law and other legislation was nonetheless decidedly a working-class agitation. Employers had no illusions otherwise, and they rallied through several organizations in the latter part of the decade to stymie labor’s efforts.
This transformation reprises our discussion of the role that critical junctures play according to historical institutionalists in chapter 2. The rise of the TUC, coupled with the passage of the Second Reform Bill in 1867, shifted the balance of class relations on the national political landscape in a relatively brief time frame. Liberals and Conservatives faced a new electoral landscape, and in the pull and tug of the early 1870s in which great champions of their parties—Gladstone and Disraeli—vied for power, it was the latter who ultimately delivered reform in 1875. On the surface this appears paradoxical: in this moment of opportunity in national political space, unions chose not increased national state intervention on their behalf, but the modified market solution of collective laissez-faire. Yet from the unions’ perspective this made strategic sense. To achieve collective power over their labor required that they sever themselves from laws that had been used to enforce their subordination and advantage capitalists.
The result, though tenuous, was a new institutional path sought by trade union leaders, which insulated labor relations and, more particularly, the labor contract from capitalist power wielded through the law. Given the independence of judges in the high court system, and their overall enmity to collective action on the part of workers, it would take another thirty years to completely solidify this victory. Yet the victory of 1875 established a new course of labor relations in England that was to endure for many decades.43 Important for my argument, and paradoxical to Polanyi’s thesis, this new path established labor more completely as a commodity in the market.
In many respects the story above is a mirror image of the one told by Polanyi. In GT he argues that the English state disengaged from labor relations in the mid-1830s, whereas I focus on the growing legal infrastructure of the local state over the same period that could be used for such purposes. Polanyi’s concept of a double movement is predicated on a “spontaneous” reaction to the process of fictitious commodification by diverse groups and forces. Alternatively, I emphasize a concerted and strategic class struggle as the dynamo of change. And while Polanyi characterizes the resolution of the double movement as a process of re-embedding, I argue that unions acted to buffer themselves from state power and sought haven in their preferred version of market relations. In the terms of GT, this was a relative disembedding.
This alternative narrative shares aspects of emplotment with stories told by a number of other social scientists and historians of nineteenth-century British and American labor. Though the specifics of their stories diverge significantly at points (both from my own account and one another’s), a number of historians and social scientists make claims that American labor unions’ continuing battles with and defeats by the courts and inability to insure gains through representative institutions led to the development of “business unionism.”44 Other analysts argue such strategies in the face of juridical obstruction are characteristic of Anglo-American union struggles as opposed to Continental labor histories (Steinmetz 2000a).
Yet while these analyses are in some respects inversions of Polanyi’s, all nonetheless affirm the most fundamental claim of GT and Polanyi’s larger corpus, that is, capitalist labor relations are necessarily institutionally embedded. The revised narrative offered above describes how capitalists in a number of important sectors of British industry relied on legal institutions to subordinate labor, enforce discipline in the workplace, and constrain labor markets, particularly during the rise of “market society.” Ultimately unionists forced a transformation of these institutions in a pragmatic response to a structurally constrained field of action. This analysis confirms what Polanyi’s sympathetic critics argue: that we need to attend to the political struggles that fashion these institutions and analyze how legal processes fashioned in these struggles are endogenous to capitalist organization of labor. Such struggles were (and are) never determined by market forces: the subjugation and commodification of labor are always dependent on complex processes of embeddedness. To fully understand these processes, however, requires us to navigate into the interior of institutional power, to understand the structural cleavages that animate it, and to see both recursive processes that reproduce it and contradictions that create the ruptures for change. In so doing we reveal the structured institutional matrices through which people acted and power worked.