Steelworkers’ union vetoed management innovations before 1890

Evidence

By 1901, it con­ trolled 80 percent of the U.S. market. The vigorous growth of this industry, which involved large-scale introduction of new techniques and machine processes in production, relied firmly on the hierarchical division of labor. Yet prior to 1890, steel production was characterized by a great degree of worker control over production. Skilled workers contracted with manage­ ment, receiving a price per ton of steel based on a sliding scale which reflected the current market price of steel. The skilled workers then hired other workers (“unskilled” ) whom they paid out of their pockets, and agreed on a division of the receipts among themselves. Through their knowledge, their control over the work process, and the power of their union (the Amalgamated Association of Iron, Steel and Tin Workers), these skilled workers had de facto veto power over any managementproposed changes in the work process— including technological innovation. — Samuel Bowles and Herbert Gintis, Schooling in Capitalist America, 765

Categorization

• XREF: The Amalgamated Association’s craft control evokes the pre-factory proto-capitalist production system of location 756-759 here, and resonates with Milgrom/Roberts on how control of production knowledge determines bargaining power.