avant garde capitalism in france

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Avant-Garde Capitalism in France

Author(s): J.-J. ErmencSource: The French Review, Vol. 31, No. 2 (Dec., 1957), pp. 129-135Published by: American Association of Teachers of FrenchStable URL: http://www.jstor.org/stable/383540.

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Avant-Garde Capitalism in FrancebyJ.-J.Ermenc

OVER A CENTURY AGO n France here existeda variantofcapitalism which, in its treatment of labor, was far in advance of its time-perhaps a century. Its practitioners abandoned the amoral labor preceptsof conventional conservative capitalism; the cardinal principles of laissezfaire, laissez passer and self-determination or rugged individualism wereconsidered pass6. They instituted health, welfare, and education plans forthe improvement of the conditions of life in the factory and the communityfor the workingman and his family. The welfare plans frequently providedfor cradle to grave security; through them financial aid to offset themisfortunes of illness, accident, premature death, unemployment, and oldage was assured. These plans were usually administered by employees. Oc-casionally the employees acquired an equity in their company by investingtheir surplus funds in company stock. This was perhaps the first instance ofpeoples' capitalism.It was not a major movement in French capitalism but it did includesome private enterprises of first magnitude in the national and internationalindustrial firmament.

Avant-garde capitalism in France came to international attention at theParis Universal Exposition of 1867. It came as a surprise to most industrialobservers. Previous Expositions had been showcases for technologicalprogress. The Paris Exposition of 1867 carried on this tradition but had anadditional category for exhibitors to display, in some form, the social prog-ress they had helped their employees make. As prizes were awarded for out-standing technological developments so a category of New Prizes wasestablished by the imperial decree of Napoleon III for those ... who havesucceeded in ameliorating the material, moral, or intellectual condition ofthe working population.Among the interesting exhibits of industrial town planning at the Exposi-tion, the most impressive seemed to be that of the cite ouvriare ocated onthe outskirts of Mulhouse in northeastern France.The project itself was begun in 1853 with the organization of a home loancorporation by twelve manufacturers of Mulhouse who supplied the capital.The corporation undertook to build homes for workingmen and to en-courage them, with liberal financial terms, to buy the homes on the install-ment plan. A downpayment of about ten per cent of the purchase price wasrequired and the balance was payable in the amount and frequency of rent

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130 FRENCH REVIEWover a thirteen-year period. By the end of the first year of the existence ofthe corporation, 384 homes were built and sold; by 1876 a total of 920 homesof varying style and plan, and including areas for gardening, had been soldfor a total of 2,700,000 francs.The project included a public laundry, baths, a nursery school, and co-operative stores for food and clothing. In 1869 a manufacturer of Mulhousecontributed 100,000 francs for the construction and endowment of a work-ingman's club. The national government supplied funds for the constructionof roads and public buildings.While Guizot's law of 1833 had established a system of public schools,attendance was not compulsory and few children attended. However, aresident of the cite ouviere at Mulhouse was required, as a condition ofresidence, to send his children to school until they became twelve. Beginningin 1866 further education, for those willing and able, was provided in aschool for commercial training. Later reputable schools for instruction inchemistry and machine maintenance were established. These facilities forvocational education were initiated and supported by the capitalists ofMulhouse.The effect of the Mulhouse project in decreasing labor disputes andincreasing industrial productivity was noted in 1867 by the authoritativeBritish magazine Engineering; the cite ouvriere was described as . . . apractical model of one of the greatest desiderata in the manufacturing dis-tricts of England. The friendly, cooperative feelings which existed betweenemployee and employer, the poor and the wealthy, were contrasted with theclass antagonisms which generally prevailed in England. It concluded withthe hope that the example of Mulhouse would be heeded by British capital-ists.There were other cites ouvrieres constructed later at Guebwiller, Beau-court, Colmar, Marcq-en-Bareuil, Marseilles, and Paris but none achievedthe fame of Mulhouse.The inspiration for the cites ouvrierescame from Louis Napoleon both aspresident and emperor. He encouraged financial and industrial leaders toform organizations a la Mulhouse to finance low cost, comfortable housingfor workingmen. A fund of 16,000,000 francs was set aside to reimbursepossible losses of the home loan corporations up to one-third of the cost ofthe project.Despite the gaucherie involved in a donor of a prize winning it, the judgesof the Paris Exposition of 1867 awarded a grand New Prize to Napoleon IIIfor being the stimulus in the development of the cites ouvrieresof France.There was an additional sour note to the award of this prize to the socialistEmperor. It is to be found in an article, appearing in Harper's of April,1872, which suggested that Napoleon won the New Prize because he had




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AVANT-GARDE CAPITALISM 131not permitted exhibits of the Social Palace at Guise to be displayed at theExposition.

The Social Palace, or Familistbre, at Guise was built in 1859 by M. Godinthe owner of a factory which manufactured heating apparatus. It is said tohave been suggested by Fourier's Phalanstery.The Familistbre is a variation upon the cite ouvriere.The principal build-ings included three large four-story quadrangular buildings in which theemployees, as well as M. Godin and his officials, lived with their families.The arrangement of rooms in each of the quadrangular units was unique.As a family expanded or contracted in its life cycle, rooms could be addedor given up as required. This in modern sociologese would be called

flexible housing.A cafW,bakery, restaurant, and other cooperative stores for food, drink,and clothing were located on the first floors of the buildings. It was saidthat the fifteen hundred occupants of the Familistbre could perform all thechores of running a household without going from under cover. A moderncity planner would recognize the Familistbreas the prototype of the super-block.In addition to the housing units there were school houses, a hospital, abath house, laundry, a large theater, a billiard room and other recreationalfacilities.Both boys and girls were required to attend school until the age ofthirteen. (Contrary to prevailing European opinion it was not consideredquixotic by the avant-garde capitalist to educate females.) The boys werethen permitted to enter apprentice training at the shops across the river.Absences of children from school resulted in fines being imposed upon theirparents.The theatre was used to stimulate a participating as well as a spectatorinterest in music and drama among the Familistere residents. A choralsociety promoted competition among groups of singers and an employees'orchestra was sponsored.Before 1859 Godin had reduced the length of the working day fromfourteen to ten hours.He had also formed a mutual aid society for the employees to which thecompany and the employees paid fixed fees, each month. The society pro-vided benefits for the sick, the disabled, the aged, and survivors. Godininduced the employees to assume the administrative responsibility of thesociety. The successful administration of it by the employees led Godin toturn over the administration of the Familistere to the society.The funds of the mutual aid society were built up by its participation in aprofit sharing plan initiated by Godin. In 1880 it was invited to buy stockin the Godin enterprises which included a factory in Belgium. Eventually all




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132 FRENCH REVIEWstock in the company was owned by the mutual aid society and all memberswere given shares in the company. This may suggest the future develop-ment of peoples' capitalism in the United States.A pioneer in the development of profit-sharing as an incentive for work-ingmen to increase their work-effectiveness was M. Leclaire, a large-scalepainting and decorating contractor of Paris. The success of Leclaire wasnoted by John Stuart Mill in his book Political Economy. He wrote of

... . the beneficent example set by M. Leclaire and followed by otheremployers of labor on a large scale in Paris. A statue of Leclaire stood inthe Square des Epinettes, in Paris, until 1942.In 1830 Leclaire entered the painting and decorating business in Paris.Its labor force was described as .... notoriously the most dilatory, in-temperate, debauched, and intractable workmen to be found in Paris.Leclaire believed that if workingmen shared in the profits of an enterprisenot only would they become more productive workers, but, having a vestedinterest in the company, would become less tolerant of shirking and wasteby their fellow workers. This belief was verified by experience; profit sharingwas profitable for both Leclaire and his employees. By 1870 the plan bene-fited over one thousand employees. (By the end of the nineteenth centurythere were over one hundred companies in France sharing profits withtheir employees.)In 1838 Leclaire had helped a group of his best workingmen form amutual aid society. By 1860 the society had accumulated sizable capital andwas invited to invest it in the Maison Leclaire. As the sole perpetual partnerit became, in effect, the owner of this profitable enterprise.The welfare accomplishments of two of the largest coal mine companies inFrance are notable. At Anzin, near Valenciennes, and Blanzy in Sa6ne-et-Loire, beginning in 1834, excellent homes with land about them for gardenswere provided for the miners at rentals amounting to five per cent of theirwages. For those who wished to buy their homes, loans were offered by thecompanies with no interest charges. Schools were established and main-tained by the companies. At Blanzy there were 6,300 children in companyschools taught by 118 instructors. There were mutual aid societies to whichboth employee and employer contributed. The funds maintained medical,hospital, and nursery service and provided for old age and survivor benefits.At Anzin where 15,000 men were employed, there were on pension in1867, 356 men, 455 widows, and financial assistance was given to 218orphans. At Blanzy pensions were offered after thirty years of service andafter the age of fifty five. The pensions at Blanzy were as high as 900 francsper year; this was close to the income of the average workingman in France.The recreational organizations encouraged and subsidized at both Anzin




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AVANT-GARDE CAPITALISM 133and Blanzy included a gun club, an archery club, gymnastic and fencingclubs, and brass bands. During the winter, the company sponsored lectureson history, economics, and cultural subjects. By the end of the nineteenthcentury the cost of welfare programsto the companies at Blanzy and Anzinwas roughly equal to one-half the dividends paid to their stockholders.The welfare programs of these companies greatly influenced the socialsecurity laws of France which were drafted later for the entire coal miningindustry.- In the field of heavy industry the outstanding example of avant-gardecapitalism is the vast mining, metallurgical, and manufacturing establish-ment of the Schneider Company at Le Creusot in the purple grape countryof Burgundy. This company was of particular interest to English engineerssince it was providing formidable competition to the British steel interestsfor foreign markets. It was puzzling to many observers that this could be so,for by 1860, Le Creusot, in expanding to Brobdingnagian proportions, hadoutgrownits local natural resources and was importing iron ore from Algeriaand coal from southern France. It had also established a comprehensivehealth, welfare, and education program affecting 25,000 employees. Despitethe fact that the costs of production at Le Creusot included the burdens ofextra transportation costs and fringe benefits, the profits at Le Creusotas reported each year in the English press remained approximately at tenper cent over the years.The mainspring of the labor policy at Le Creusot was its educationalsystem. It was begun in 1841 with a total enrollment in company schools ofone hundred sons and daughters of employees. By 1867 the enrollmentreached a peak of four thousand and well over one hundred teachers.Attendance at the company schools had several important inducements.One was the company rule that no one could have a job in the company, atany level, unless he could read and write and was over the age of fourteen.Another stimulus was the prospect of social mobility via education.It was possible for the children of employees, who were willing and able, tobecome educated, at company expense, for management positions and sorise above their fathers' status in society.In 1867 about one hundred promising boys from the company primaryschools were sent from Le Creusot for five years of secondary school educa-tion. During this time the group was winnowed to about ten boys who wereprepared for the competitive admission examinations to the governmentengineering schools. By 1872 secondary education was being provided at LeCreusot. For those who became the chaff in the winnowing process, therewere jobs available in the white-collar category as draftsmen and designers.Courses for adults were also offered. In 1867 about five hundred working-




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134 FRENCH REVIEWmen took special courses for the upgrading of their skills. The classes weretaught by graduate engineers who had received their preparatory educationin the company school system.The advantage of the educational plan at Le Creusot to the industrialoperation was derived from its creation of an intelligent and adaptablelabor force which could quickly master the new technologies which weremaking existing industrial methods obsolete at a quickening pace. It was alabor force from which new ideas also could be expected.Engineering in 1867 suggested editorially that the French were outstrip-ping the British not only in taste and delicate manipulation but also in solidworkmanship and skill. It regularly reported the news of developments atLe Creusot and inspection trips to it became de rigueur for the industriallyinformed.An eminent American engineer and educator, Professor Robert Thurstonvisited Le Creusot in 1873. He wrote of it: .... the organization and ad-ministration were simply admirable.. . the personnel consisted of a largerpercentage of well informed and well educated officials than we had met inany similar establishment in Europe.The improvement of the material conditions of life for the Le Creusotemployee was accomplished largely through fringe benefits. They in-cluded: 1) Subsidized social activities; 2) Allowances for the families ofmen on military leaves; 3) Allowances for large families; 4) Loans for thepurchase of company built homes on reasonable terms (between 1862-65,five hundred employees bought six-room homes with gardens); 5) Archi-tectural service for those interested in building their own homes; 6) AProvident Fund started in 1838 for financial help to sick and injured work-men as well as for annuities to widows and orphans; 7) A free hospital of130 beds supplemented by a corps of nursing sisters who attended patientsin their homes; 8) A free maternity hospital; 9) Old age pensions; 10) Ahome for the aged.While the liberals expected that the workingmanwould respondfavorablyto a better environment the results were still surprising. Between 1841 and1866 only nine felonies were reported. The Mining Journal wrote in 1869,

.... woman beating, which disgraces English working communities is, itmay be said, entirely unknown [at Le Creusot]... Drunkenness, that curseof our country [United States] is very rarely seen at Le Creusot.Le Creusot continues today as it did almost a century ago. During thecommunist show of strength strikes in France in 1950, Le Creusot was incontinuous operation.There were many other incursions of avant-garde capitalism into theFrench economy. It was the period of the Second Empire that marked theflowering of this genus. This brand of capitalism is the prototype of con-




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AVANT-GARDE CAPITALISM 135temporary liberal capitalism in the United States. But unlike its avatar itwas achieved without threats, violence, or legal sanctions. What then, in-deed were the pressures which brought it into being?One might infer that it was inspired by the appalling social conditionsindustrialization seemed to be creating. And one could not doubt that theinfluence of such men as Sismondi, Fourier, Proudhon, and Louis Blancincreased the sensitivity of the reflective capitalist to these conditions. Butsuch factors would have to be considered as impulses only--effective tostart movement in a direction to relieve the pressure. The persistence ofavant-garde capitalism required more than humanitarian impulses.A more complete explanation for its development is to be found in theindustrial environment of the nineteenth century. It was a period of socialunrest, of swift technological change, and of expanding industry. The tech-nological revolution made obsolescence an imminent industrial risk. Anowner of a factory had to be able to change quickly from old techniques andmachines to the new. These factors, in the estimation of the French avant-garde capitalist requiredgreater numbers of satisfied, willing, and educatedworkingmen. Their paternalistic programs were directed toward this end.In the final reckoning the persistence of avant-garde capitalism was dueto the fact that it was financially profitable. Its exponents also demonstratedthat in the era of predatory capitalism, enlightened labor policies werepossible. It is unfortunate that they were not as vigorous preachers of theircause as those who believed that capitalism was inherently evil.DARTMOUTHOLLEGE

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avant garde capitalism in france

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