The Scientific Management-Human Relations succession and the rate of profit

This paper examines what Hassard (2012: 1433) designates “the most notable ‘paradigm-shift’ in

the history of organizational research: scientific management to human relations.” Though

strictly speaking management and organization studies (MOS) is more of a pre-paradigmatic

“theory jungle” or “fragmented adhocracy” (Koontz, 1980; Whitley, 1984; 2000), the closest

thing to ‘normal science’ in the field was actually realized in the interwar period when the

respective networks supporting scientific management (SM) and human relations (HR) contested

for prominence. While neither completely dominated the field, SM remained preeminent until

losing this position to HR in the late 1940s. Orthodox and heterodox explanations for this

succession have divergent understandings of the content of these respective management models.

Conventional accounts argue that Frederick W. Taylor and the SM movement viewed workers as

machines and advocated practices designed to assist employers monopolize management

knowledge, while analysts who embraced the HR ideas advocated by Elton Mayo are held to

have promoted a more humane approach that centered on counseling, informal work groups, and

social identity. By contrast, heterodox scholars argue that the SM model was led by industrial

democrats who accepted that workers both could and should participate in the management of

organizations and charge that Mayo and his acolytes denied that workers have this capacity and

that consequently management must be dominated by an elite informed by HR knowledge and

practices.

Our account of the SM-HR succession contributes to the heterodox perspective by

bolstering materialist theorizing which, in recent decades, has been undermined by the weakened

standing of Kondratiev wave theory. We further this goal by offering a historical narrative that

draws on Marxian profit theory, the contest for power both in the workplace and the wider

community, and on statistical analysis that finds the rate of profit vacillates over time. Having

introduced the theoretical and empirical case that informs our history, we trace how key actors
within the SM and HR models constructed competing networks and engaged in ‘trials of

strength’ through 1920-1950 and conclude by discussing implications that ensue from the

narrative.

Method

This paper is an intellectual history, a historiographical approach that “resists the Platonist

expectation that an idea can be defined in the absence of the world” (Gordon, 2012: 2), as we

concur with Whitley (1986: 182-183) that the evolution of MOS needs to be understood in its

social and historical context with “patterns of intellectual change analyzed as contingent

phenomena rather than reduced to mere manifestations of some universal process”. This

observation is echoed by Schachter (1989) who insists the intellectual ideas, standards and

objectives guiding MOS are not distinct from or independent of broader societal ideas and who

holds that:

researchers making scientific judgments and choices do so as social creatures rather

than as epistemological rationalists following some universally valid set of truth-

generating rules. Thus scientists’ conclusions follow commitments, norms, and

procedures which are socially conventional and historically contingent (Schachter,

1989: 183).

Herein authority structures are pluralist and shifting, with dominant coalitions forged by

temporary and unstable alliances controlling resources and by charismatic reputational leaders

(Whitley 1984; 2000). In this way, we privilege neither ‘internalist’ nor ‘externalist’ accounts of

the growth of knowledge in MOS, but rather accept that the ‘inside’ of MOS is a sociopolitical

subculture of wider society shaped by socioeconomic and cultural forces from the ‘outside’, the

relative strength of which in time and place is a matter of empirical research and historical

judgment.
2
 In tracing the interaction of the SM and HR schools and the eventual rise to prominence

of the latter, we accept these management models strove to have their ideas accepted as received

wisdom by constructing networks of supportive allies. Building on this presumption, we locate

the SM-HR contest in the context forged by changes in the rate of profit and support our case by

testing ideas extant in the secondary literature against evidence located in archival resources. We

note that Rowlinson, Hassard & Decker (2014) rightly underscore the importance of archives but

we go further and observe that it is imperative that scholars draw on appropriate archives when

constructing historical narratives. Consequently, we underpin our history with materials

generated by members of the Taylor Society (an epistemic community established by Taylor’s

inner circle) and by Elton Mayo and his acolytes in order to adequately delineate the SM and HR

schools from other management models. By drawing on these “relics from the past in the hope of

recovering their meaning”, we believe that though we cannot be certain of the truth or falsity of

historical meaning, we can attain “an objective understanding that is more or less valid and that

stands up we against rival bodies of theory” (Bevir, 1999: 27; 311). Rowlinson et al. (2014) also

posit that historians need to expose the theory and methods that constitute the “plumbing” that

structures their narratives. Again we concur, but in so doing insist that theorists are equally

obliged to validate the historical accuracy of the foundational assumptions underpinning their

arguments and note that this requirement is commonly ignored by scholars who theorize the SM-

HR succession without testing the key assumptions that prevail in the secondary literature.

Theorizing the SM-HR Succession

Wren & Bedeian (2009: 200) argue SM lost its preeminence because the “course of history is

such that one idea typically leads to a better idea, and this was the fate of scientific

management”. Founding their arguments on both primary and secondary texts they posit that the

scientific managers’ initially became influential because they were supported by a coalition that

3
in “economic terms sought a rationalization of resource utilization, in social terms sanctioned

individual reward and effort, and in political terms encouraged uplift through efficiency” (Wren

& Bedeian, 2009: 278). Concomitantly, they argue that HR superseded SM because the ideas of

the former better suited the insecurity induced by the 1930s’ Depression and by the consequent

emergence of a great number of individuals who needed to “find their identity and raison d’etre

through affiliation and getting along with others” (Wren & Bedeian, 2009: 405).

While the notion that paradigm shifts in MOS reflect changes in the socioeconomic

context has become a primary trait of theorizing the SM-HR succession, contributors have taken

divergent approaches in support of this notion. One stream draws on economic theory and

understandings of SM and HR extant in the secondary literature, while the other accepts the need

to embrace theory but shares the historians’ skepticism of narratives that are not grounded on

primary texts and archival data. Of the scholars who have built their contributions on economic

theory and secondary literature, Clegg (1981) has been particularly influential. He argues that the

rise and demise of what he calls “technical” (pertaining to SM) and “social regulative”

(pertaining to HR) control practices are cyclical. Theorizing which aspects of the environment

best explain this pattern, he correlates what he deems the “historically-structured” rules shaping

managerial control to the sixty year ‘long waves’ of economic expansion and contraction that the

economist Nikolai Kondratiev theorized are endogenous to capitalist economies. Kondratiev held

that credit availability, liquidity, investment in long-lived capital assets, and technological

innovations interact to create long waves of undulating economic growth. However, there is no

role for profitability in his argument and he posits a weak case for why the fluctuations he

observes are an inexorable trait of capitalism. Nevertheless, Clegg accepts this is the case and

advances an argument that posits that during a Kondratiev upswing, employee bargaining power

increases due to low levels of unemployment. Consequently, managers are impelled to utilize

social-regulative rather than technical forms of labor control, with the converse occurring
4
following the cresting of the wave. Hence, the downswing of the Kondratiev cycle that allegedly

persisted through 1920-1940 underpinned the interwar preeminence of SM, whereas a post-1945

cyclical upswing propelled the rise of HR (Clegg, 1981).

Clegg’s use of Kondratiev wave theory has been embraced by others who have theorized

the SM-HR shift. Barley & Kunda (1992), for instance, combine Kondratiev’s long-wave

argument and “rhetorics of control” rooted in cultural antinomies allegedly fundamental to

Western industrial societies. In so doing, they argue managers are attracted to rational

managerial models when profitability is closely linked to capital investment and automation and,

alternatively, show greater interest in those management models that focus on labor utilization in

periods of economic contraction, with these responses being modulated by cultural influences.

Because their theorization is founded on the received wisdom apropos the nature and

significance of SM and HR, Barley & Kunda (1992) assume HR accorded more attention to

labor-management than did SM. Accordingly, they posit that with the onset of a Kondratiev

contraction - and a decrease in returns to capital - in the 1920s, firms began to focus on labor

utilization and turned to the ‘normative rhetorics’ of HR. Abrahamson (1997) and Adler (2003)

similarly draw on Kondratiev to explain the SM-HR succession stressing respectively

organizational performance gaps and technological innovation.

The foregoing contributions are important not least because they dilute the economic

determinism that characterizes Clegg’s contribution. But all are problematic because they ignore

the fact that Kondratiev’s notion that there exists an automatic mechanism that induces waves of

expansion and contraction has substantial theoretical and empirical flaws (Metz, 2011). As

Dirkmaat (2016: n.p.) bluntly observes:

There is no other ‘underlying’ cycle (like Kondratiev’s cycle) in addition to the business

cycle (a cycle of booms and recessions) we’re all already familiar with. There is no

reason to assume that such cycles exist, given the complete lack of theoretical foundation,
5
 while the empirical data is also doubtful at the very least. Data is made to fit the model,

while data less suited is simply ignored. Kondratiev cycles only exist because of a lack of

alternatives.

In recent years this negative assessment has been compounded by the ongoing failure of a

Kondratiev upswing to materialize. With this development, orthodox understandings of the SM-

HR shift in MOS have been left intellectually bereft. This development has induced a turn to

explanations that are explicitly ideational - a development that even those who have thus

engaged appear to lament (Eastman & Bailey, 1998: 243) - and to arguments that embrace an

apolitical understanding of technology choice (Bodrožić & Adler, 2017). In the latter case,

ideational arguments are avoided but the thorny issue of power is treated merely in mechanical

(viz. steam, electricity, etc.) terms, with sociological considerations all but ignored and with no

effort being made to draw on primary evidence. As a consequence, no attention is paid to the

critical role of political influences, social relations, capacity to bargain, and the division of the

surplus between wages and profits in the determination of which technologies organizations and

communities will select at any given time; viz. “sociotechnical” considerations (Badham, 2005).

The latter situation is particularly unfortunate for it returns analysis to the excessive abstraction

from which Barley & Kunda (1992) sought to extricate the field when they enriched Clegg’s

economistic utilization of Kondratiev theory and because without explanation it omits from

consideration a set of characteristics that are part of the stock in trade of both orthodox and

heterodox contemporary technology choice theory (Stole & Zwiebel, 1996; Bailey & Leonardi,

2015).

The problematization of contributions that build on Kondratiev wave theory and/or

narrowly conceived technological change, together with understandings of SM and HR derived

solely from the secondary literature, has been further accentuated by scholars who have drawn

on network-based theory and primary archival evidence to analyze these management models.
6
Nyland (1989) initially took this path on reading early texts that documented the support

industrial democrats in the Taylor Society accorded labor’s effort to win the eight-hour day, a

finding that induced him to doubt the orthodoxy and turn to archival resources. Schachter (1989)

similarly embraced archival analysis after reading early studies of the contributions Taylor and

his acolytes made to the coalition of actors that campaigned for progressive public administration

reform in the early twentieth century. When challenging orthodox understandings of SM, Nyland

(1989) focused on corporate-academic networks and the context forged by the rate of profit. In

so doing he advanced a perspective that, like Clegg (1981), stressed the impact that economic

fluctuations have on the capacity of workers and employers to bargain over employment

conditions. But unlike Clegg (1981), Nyland argued that profit fluctuations are not inevitable and

charged that the SM-HR succession was underpinned by a rebalancing of social power induced

by the changing rate of profit that made possible a bargain that ceded wage and benefit gains in

exchange for conceding employers the “right to manage”. Schachter (1989; 1997), by contrast,

argues the SM-HR succession was a product of the low academic status of postwar MOS

scholars and their consequent wish to both inflate the scientific nature of their contributions and

garner support from those business elites who deemed HR ideas more acceptable than the

‘citizen democracy’ promoted by interwar Taylorists.

Over time, Nyland and Schachter’s revisionist, archive-based approach to the study of the

SM movement attracted a body of historians and was bolstered by O’Connor’s (1999a; 1999b)

independent study of the HR school. On reading primary texts, the latter underscored Mayo’s

conviction that workers lack the cognitive and emotional attributes required to participate in

management. In so doing, O’Connor was aware that numerous interwar management theorists

were industrial democrats and that Mayo’s circle sought to exclude these actors from workplaces

and academia. However, she was unaware that by the time Mayo arrived in the USA in 1922,

Taylor’s inner circle was dominated by industrial democrats and that it was these individuals
7
with whom Mayo and his allies contested. This was a situation subsequently addressed by Bruce

& Nyland (2011) who drew on actor-network theory to analyze how Mayo constructed the

network of actors that eventually induced the SM-HR succession.

Historians who underpin their explanations of the SM-HR succession with critical

readings of primary texts and archival data, have compounded the problematization of

contributions founded on Kondratiev wave theory and received understandings of the two

schools present in the secondary literature. But to date these heterodox contributions have lacked

a theoretical and empirical foundation able to illuminate the relative success of the contending

models over time. To address this situation, we turn from Kondratiev waves to Marx’s profit

theory which we hold offers a materialist foundation on which an argument can be constructed

that is neither excessively reliant on economics or overly reliant on technological change and

that explains the relative success of the contending actor-networks SM and HR fabricated to

support their argument by drawing on theory, statistical studies, and archival evidence.

The Tendency for the Rate of Profit to fall

As was orthodoxy amongst economists of the 18th and 19th Centuries, Marx accepted capitalism

is characterized by a tendency for the rate of profit to fall (TRPF). Indeed, he held this tendency

is “the most important law of political economy”. But despite the weighting Marx accorded this

‘law’, his argument was seldom explored by Marxist scholars prior to the 1970s arguably

because there was little empirical evidence to support the notion that the rate of profit was falling

(Howard & King, 1989; Callincos & Choonera, 2016), a situation that in recent years has been

reversed by researchers who have debated Marxian profit theory and/or used econometrics to

estimate the rate of profit over time.

Marx understood the profit rate to be a measure of the mass of profit against invested

capital. He located his argument in firms’ efforts to raise productivity and thus generate a rate of

8
return at least sufficient to remain in business (Marx, 1977). A key factor Marx believed renders

the latter goal difficult in the long term, is the inclination of firms to decrease the proportion of

their capital utilized to employ workers. This occurs because there are biological and social

limits to what can be required of human beings and consequently investors will eventually be

induced to turn to speculation or increase the proportion of invested capital directed to

purchasing plant, equipment, and materials. The latter practice in modern parlance is termed

‘capital-deepening’. This process Marx deemed problematic for capitalism because workers’

ability to produce more value than they are paid is a primary source of profit with machines,

plant and materials, etc., held to merely transfer their value to new commodities.

To follow Marx’s theorizing it is necessary to appreciate that when discussing the TRPF

he was referring to a tendency that firms and the state may countervail in multiple ways and if

these efforts are successful the rate of profit may rise, as well as fall, over time. In brief, he did

not believe that an “irreversible, monotonic fall” in the rate of profit is a characteristic of

capitalism (Obrinsky, 1983: 35). Indeed, he specified a number of strategies that firms and states

might embrace to countervail the TRPF. These included intensifying and/or extending working

hours; lowering wages; cheapening machinery, plant and materials; expanding foreign trade and

investment; and accessing capital in innovative ways (Marx, 1977). A point that has been

ignored in the management literature is that Marx also posited that management and

organizational practices that increase the efficiency of firms without increasing capital deepening

can countervail the TRPF. Under this rubric he included “(e)verything that promotes the

production of relative surplus-value by mere improvement in methods….without altering the

magnitude of the invested capital.” In brief, all managerial practices that free firms “from

hindrances in communications, from arbitrary or other restrictions which have become obstacles

in the course of time [and indeed] from fetters of all kinds” (Marx, 1977: 233).

9
 Marx’s acceptance that there are many ways firms can countervail the TRPF has

sustained a debate as to whether he accepted this tendency would overwhelm all countervailing

influences or if a long-term upswing would inevitably occur as posited by Kondratiev. This

debate has generated broad agreement that while he was aware capitalist economies experience

long term periods of high and low growth neither of these deterministic possibilities is present in

his argument. This is a situation consistent with his distaste for making hard predictions and/or

embracing automaticity this being a point underscored by Vidal, Adler & Delbridge (2015: 414),

who rightly observe Marx preferred to discuss developmental tendencies that reveal broad

patterns and render local unpredictability intelligible.

Vidal et al.’s (2015) contribution is unique within MOS in that they underscore the

significance of vacillations in the rate of profit. They propose that from the end of WWII, the

“US accumulation regime was fordist: a manufacturing-based economy with a class compromise

realized through collective bargaining and a Keynesian welfare state”. In so doing, they add that

by the late 1960s the fordist system could no longer sustain a high rate of productivity growth,

the capital/labor ratio increased and the “rate of profit declined.” (Vidal et al., 2015: 418). While

Vidal et al. assert rather than evidence the last claim, this task has been taken up by a substantial

body of econometricians, a development that has proven fundamental to debate which had

remained arcane so long as it was not underpinned by a sound body of empirical evidence. Given

the complexity entailed in calculating profit rates the findings of these analysts tend to diverge

but nevertheless researchers are consistent in concluding the profit rate has sustained a long-term

decline as captured by Roberts (2016: n.p.):

First, the secular decline in the US rate of profit since 1945 is confirmed and indeed, on

most measures, profitability is close to post-war lows. Second, the main cause of the

secular fall is clearly a rise in the organic composition of capital, so Marx’s explanation

of the law of the tendency of the rate of profit to fall is also confirmed. Third,
10
 profitability on most measures peaked in the late 1990s after the ‘neoliberal’ recovery.

Since then, the US rate of profit has been static or falling. And fourth, since about 2010-

12, profitability has started to fall again.

While much of the quantitative research that has traced the rate of profit has been undertaken by

heterodox econometricians, orthodox scholars have also taken up this task and, in so doing, have

produced similar results. Thus the European Commission that finds there has been a decline in

the rate of profit in Germany, Japan, and the USA since the early 1950s (Fig. 1 below), Kothari

et al. (2015) find the non-financial US corporate rate of profit suffered a secular fall from the

1950s, and Deloitte find that between 1965 and 2012 there was a secular decline in the rate of

return on assets and invested capital (Fig. 2 below).

------------------------------------------------

Figure 1 about here

Figure 2 about here

--------------------------------------------------

Commenting on the Deloitte findings, Denning (2012) observes that when the “best firms have

rates of return on assets or on invested capital of, on average, just over one percent, we have a

management catastrophe on our hands” and laments that MOS and practicing managers have

failed to debate and theorize what this decline implies for organizations.

While many scholars have documented post-WWII profit trends to determine how

changes to the rate of profit impacted the SM-HR succession, it is necessary to follow scholars

who have estimated the profit rate back to the last decades of the 19th Century. This period saw

the onset of the ‘Second Industrial Revolution’ which begun with the Bessemer system of steel

production, was extended by the advance of railways and electrification, and culminated in the

development of the mass production system. Notable of the econometricians who have traced

profit rates back to this period are Dumenil & Levy (1993; 2016) who have estimated both the
11
productivity of capital – the ratio of the net domestic product to the stock of non-residential fixed

capital – and the rate of profit from 1870 to the present – see Figure 3 below. They find the two

variables are positively correlated and estimate the profit rate fell through the first stage of the

Second Industrial Revolution, revived in the first years of the 20th century, collapsed in the

1930s, peaked in the 1940s, and has vacillated at a low level since the 1970s despite the

significant increase in the share of total wealth accruing to property owners.

-----------------------------------------------

Figure 3 about here

-----------------------------------------------

The Second Industrial Revolution passed through two phases, with the first characterized

by a marked increase in the capital stock, a sustained fall in the rate of profit, an expansion of

colonialism and the rise of socialist movements. From the first decade of the 20th century,

however, this situation began to be transformed as the development and institutionalization of

systematic management provided firms with new techniques that could be used to raise

productivity without requiring high levels of capital investment. In 1931, Stanley H. Jevons

underscored the importance of this latter stage and in so doing observed that it was fueled not by

capital-deepening but by capitalizing on management knowledge:

The essence of the new industrial revolution is the search for exact knowledge, and the

planning of processes: from the minutiae of manual operations (based on motion study)

to the lay-out of the machinery of a gigantic plant — even of a whole industry throughout

the country … the date 1911, when Taylor published his famous Principles of Scientific

Management, inaugurates a definite acceleration of the second industrial revolution

(Jevons, 1931: 1-2).

Acceptance of Jevons’ understanding of the scope and importance of Taylor’s

contribution was greatly diminished from the late 1940s. Some forty years later, Nyland (1989)
12
sought to resuscitate this perspective but did not gain substantial support for his views. Dumenil

& Levy (1993: 312-313) met a similar fate when on quantifying all possible independent

variables that might explain the revival of profitability at the end of the 19th Century, they

concluded that the diffusion of systematic management practices proved a “major counteracting

force to the falling profit rate.” More recently, however, these scholars have been assisted by the

fact that reduced growth and increased inequality have become characteristics of capitalism and

also by the work of Field (2007: 2012) who has provided substantial empirical support for

Jevons’ perspective. The latter finds that management and organization science accelerated total

factor productivity through the first years of the 20th century with this developed undergoing a

‘Great Leap Forward’ during the 1930s when firms were compelled to pursue profits by

exploiting management knowledge because they lacked the funds needed to engage in capital-

deepening.

Like Dumenil & Levy (2013; 2016), Field (2007; 2012) argues managerial technologies

induced a profit boom that was sustained for decades but waned as the associated practices

became universalized. When this process caused profits to fall to a critical stage in the 1970s, a

coalition of business and state actors launched an offensive designed to restore the profitability

of firms. This ongoing offensive entailed a dramatic merger and acquisition movement, a

reduction in the share of national product apportioned to wage earners, a curtailment in trade

union power, offshoring of investments, wars for resources and markets, ‘innovative’ monetary

and taxation policies, and capital-deepening. This program propped up profit rates, particularly

for oligopolistic enterprises, but overall investors have nevertheless found it increasingly

difficult to realize a level of profitability sufficient to motivate them to risk their capital in non-

financial assets.

Summing up, there exists an unprecedented body of evidence that the rate of profit rose

with the turn to new management and organization technologies at the end of the 19th Century
13
and has undergone a vacillating but sustained decline through the last sixty years. Building on

this foundation, we next advance a history of the SM-HR succession that is not reliant on the

automaticity of Kondratiev cycles and/or narrowly technologically deterministic accounts but

rather is informed by Marxist profit theory and inspired by the actor-network approach.

Scientific Management, Human Relations, and Profitability

A sustained decline in the rate of profit characterized the US economy in the quarter century

after 1870. In this environment though firm’s struggled to survive, they found little more was

needed to manage the employment relationship than a wage-incentive regime and robust

discipline. Once the rate of profit began to rise at the end of the 19th Century, however,

unemployment fell and workers found that by organizing they were able to win increased wages

and benefits (Barley & Kunda, 1992). Nyland & Bruce (2012) argue that as these processes

unfolded, Taylor was induced to explore how the goals of trade unionists and scientific managers

might be reconciled, and advised the Taylor Society that this process could be furthered by

having trade unionists participate in the management of enterprises (Taylor, 1914; see also

McKelvey, 1952, Nadworny, 1955, Layton, 1971; Nyland, 1996, Nyland & Bruce, 2012).

Following Taylor’s death in 1915, the Taylor Society built on their mentor’s effort to

build a rapprochement with organized labor. This effort was reciprocated once the scientific

managers openly declared that workers could and should participate in management activity

(Person, 1917) and demonstrated their willingness to use their technical knowledge and social

standing to improve employment conditions. The reconciliation was also assisted by the entry of

the USA into WWI which saw both a spike in war profiteering and an influx of military leaders,

progressive corporate liberals, and social scientists into the Taylor Society network. Military

officers rallied because the Taylorists used their skills to support the war effort and because the

military viewed industrial democracy as a means to minimize workplace disputes that might

14
hamper the production of war materials. Social scientists and corporate liberals, by contrast,

were able to become active members of the SM network because in 1917 the Taylor Society

opened membership to non-engineers on the grounds that both social scientists and workers have

unique capacities that can assist the management process (Person, 1917).

By 1919, the benefits labor gained by actively networking with the scientific managers

permitted Morris Cooke - Taylor’s favorite disciple - to attend the International Labor

Organization (ILO) conference as a technical advisor to Samuel Gompers, the President of the

American Federation of Labor (AFL) (Nyland, 1989). A year later these men further cemented

their affiliation by jointly editing a volume that advocated a program of industrial democracy

(Cooke, Gompers & Millar, 1920; Stabile, 1984).The profitability slump of 1920-1921 unsettled

the emerging entente, but the impact was limited both by its brevity and by the support the SM

network received from actors who commanded strategic positions within the state (notably

Secretary of Commerce, Herbert Hoover) and from civic and corporate liberals and socialists

(Layton, 1971).

The SM network’s continued support for industrial democracy created a difficulty for

Elton Mayo when he arrived in the USA in 1922. Vehemently antiunion, Mayo held that

industrialization had rendered workers irrational and unable to participate in the management of

organizations (O’Connor, 1999a, 1999b; Bruce & Nyland, 2011). That he was thus convinced he

had made explicit when earlier he observed the “suggestion that the workers in any industry

should control it after the fashion of ‘democratic’ politics would …. be to determine problems

requiring the highest skill by placing the decisions in the hands of those who were unable even to

understand the problem” (Mayo, 1919: 59). Such views were at odds with those present in the

Taylor Society and this was a quandary for Mayo for the Society was the preeminent epistemic

network in US management circles and he needed a public podium where he could showcase his

ideas to employers who might enroll him in their networks and pay him for his services (Trahair,
15
1984). He was able to resolve this dilemma and present a paper titled ‘The Basis of Industrial

Psychology’ to the Taylor Society in 1923 because its leaders accepted that psychology could

indeed make a contribution to management, because he gained a short-term appointment at the

Wharton School where a number of high-ranking Society members were employed, and because

he was supported by the Rockefeller network.

Given the Taylor Society audience’s sympathy for industrial democracy, Mayo (1924)

wisely shrouded his anti-unionism when presenting his address, choosing instead to underscore

the fact that psychologists could assist workers to address the internal and external workplace

pressures that caused them distress. This perspective appears to have elicited a lackluster

response from his audience this being a development not surprising given such observations

were commonplace within the Society. Members who had previously explored such issues

included Ordway Tead who in 1918 had published Instincts in Industry, a Study of Working-

class Psychology and Lillian Moller Gilbreth who in 1921 had published The Psychology of

Management. These contributions were characterized by an insistence that the psychology of the

‘human element’ is consistent with SM precepts, workers are both individuals and members of

communities and act accordingly, and worker wellbeing is enhanced by their ability to

participate in decisions that impact their lives. These were ideas expanded upon by Society

members through the 1920s, most notably by Mary Parker Follett (1926) who, in an address to

the Taylor Society, insisted that workers’ humanity impelled them to strive for self-governance

and accordingly urged psychologists to support workplace ‘cumulative authority’.

The fact that Taylor Society theorists systematically and sympathetically addressed the

social psychology of the ‘human factor’ well before Mayo arrived in the USA renders

problematic the notion that it was Mayo’s embrace of the human/social issue that rendered his

work attractive to the Rockefeller network in which he eventually found his niche. What appears

to have been far more important in enabling him to secure a place was his acceptance that
16
workers’ irrationality necessarily excludes them from management. This was a notion attractive

to the Rockefeller family which was hostile to the notion that workers should be able to

participate in the management of the organizations in which they worked and was a conviction

that had induced them to unleash a wave of terror when in 1913 Rockefeller employees struck in

favor of union recognition, with the consequent death of 75 miners, three miners’ wives, and

eleven of their children.

Subjected to widespread condemnation for the ‘Ludlow Massacre’, the Rockefellers

strove to find means by which this criticism could be countered while remaining adamant that

they would not negotiate with independent unions. As part of this effort they introduced what

became known as the ‘Rockefeller Plan’ which allowed employees representation on committees

dealing with working conditions, safety, health, and recreation but did not permit them to join an

independent union. Rockefellers’ decision to underwrite Mayo appears a continuation of his

effort to institutionalize strategies that promised to induce industrial harmony while excluding

workers from any involvement in management. This was a perspective to which he was

committed despite the advocacy of his advisors Mackenzie King and Raymond Fosdick, both of

whom urged him to grant union recognition at Rockefeller-owned businesses.

Hoopes (2003; 2011) has succinctly argued that Rockefeller was entranced by Mayo

because he offered to substitute “therapy for democracy” and a ‘scientific’ justification for

placing profit before public purpose. But Mayo’s prioritization of corporate interests soon

estranged him from the scientific managers. Indeed, this was ensured when, on gaining a

continuing academic appointment with Rockefeller support, Mayo (1925) revealed one of the

roles that he believed psychologists should play in workplaces. Writing in Harpers he charged

that trade union leaders were “genuine neurotics” who the “rulers of society” should marginalize

by institutionalizing programs founded on psychologists’ ability to shape workers’ emotions,

attitudes, and behavior. Long-standing Taylor Society member, Robert Bruere, responded to this
17
revelation by denouncing the notion that psychologists should enter the ‘class struggle’ as the

employer’s agent and by calling on psychologists to embrace the stance of the Taylor Society “to

whom science is not a catch-word but the breath of life and the hope of peaceful progress”

(Bruere, 1925: 221).

Bruere’s retort had little impact on Mayo. This is unsurprising given that by 1925 he was

being funded by a network of corporate actors who were deeply concerned that workers were

attempting to limit their profits and were being supported in this endeavor by the Taylor Society

network (Layton, 1971). Notable in providing this support was Mary Van Kleeck who was the

first woman to join the Society and who in 1924 argued that the Rockefeller Plan denied

employees a voice in the governance of the firm despite their being “fit for democratic

participation in the workplace” (Van Kleeck & Selekman, 1924). Concerned at this challenge,

Rockefeller commissioned Mayo to ‘balance’ Van Kleeck’s criticisms and he dutifully

determined that if there was employee dissatisfaction amongst Rockefeller employees, this was

due to the existence of a “morbid preoccupation with personal issues as between worker

representatives and local management” (Mayo, 1929). In offering this assessment Mayo used the

opportunity to allege that Van Kleeck “seems to assume that a ‘democratic’ method of managing

industry is necessarily appropriate” when in reality such methods “would revive and accentuate a

situation of class conflict” (Kimmel, 2000: 240).

The contest between the SM and HR networks was expanded in new directions when

profitability collapsed in 1929. The respective responses of the two models reflected their

differing ideologies, their divergent appreciation of who should participate in the management of

organizations and of the state, and their conflicting explanations for the crisis. The SM network

was informed by the conviction that corporate managers and property-owners had caused the

crisis by taking a share of the rewards made possible by productivity growth so substantial they

had undermined consumer demand. Important in cementing this conviction was Foster and
18
Catchings’ 1925 volume simply titled volume Profits. These authors argued that the rate of profit

and hence the US economy was at risk because saving did not necessarily entail an equivalent

amount of investment and because the state was not willing to ensure that workers’ wages were

maintained at levels sufficient to prevent a crisis of underconsumption and consequent

underinvestment and mass unemployment.

That a major crash would occur should business leaders and the state fail to engage

policies that would ensure there was adequate demand in the economy became a primary theme

promoted by the scientific managers through the late 1920s (Nadworny, 1955; Bruce, 2016).

This was a message conveyed to President Roosevelt by Rexford Tugwell when he became one

of the latter’s initial four-man ‘Brain Trust’ in 1933. When explaining the Depression and the

demand management techniques he believed would have to be embraced to overcome the crisis

Tugwell observed:

If we have (sic) been watching, describing, analyzing industry as we should, we must

have known that the greatest economic event of the nineteenth century occurred when

Frederick W. Taylor first held a stop watch on the movements of a group of shovers in

the plant of the Midvale Steel Company. [Instead the] forces which were to make the

future went unnoticed. If we had had eyes to see the implications of Taylor's work we

should have known that the vast expansion of production which must follow would clog

all the old channels of trade, swamp the mechanisms of an artificially limited commerce,

and end in a period of violent reconstruction. (Tugwell, 1932: 86)

Thus informed, Roosevelt initially tried to assist firms to raise profits and wages by

permitting them to collude and fix prices and output, a strategy Taylor Society leaders decried

and the more so when, in so doing, Roosevelt tried to ban strikes in colluding firms. When these

policies were struck down by the Supreme Court, however, the President turned to the ideas of

the Society which as Storrs (2000, p. 94) has observed had “emerged as a prominent advocate of
19
industrial democracy [and actively engaged in] developing the ideas and creating the alignment

of political forces that would forge the New Deal.” This latter effort included the development of

what Society leaders termed ‘Industrial Codes’ that would increase the ability of workers to

build independent trade unions and access social security and by so doing temper corporation’s

tendency to monopolize the gains generated by productivity growth in the form of profits

(Pabon, 1992; Lee, 1995).

Tead and Metcalf (1933) well reflected the views of Society members when they argued

that escape from the Depression required that workers be accorded increased security of

employment and livelihood, training that would facilitate their workmanship and enable them

develop rounded personalities, and representation in all deliberations relating to industrial and

state governance. In brief, they urged firms and the government to institutionalize policies that

were “broad, sound, and inclusive enough to make it likely that the workers will feel safe and

benefited” and accepted that cooperation from workers requires that, “a price must be paid - the

price of admitting them as more nearly equal partners in the conduct of the enterprise” (Tead &

Metcalf, 1933: xiv).

In his discussion of the scientific managers with whom he collaborated in the 1930s, John

Kenneth Galbraith (1981) reports that their efforts to bolster workers’ ability to bargain and

access social security elicited intense hostility from business leaders. In stark contrast, Mayo’s

response to the Depression was well received by the corporate mainstream. As Gillespie (1993:

204) observes, this was not least because he argued that workers are irrational and unfit to “have

any control over their jobs and working environment.” This charge had both micro and macro

dimensions. At the enterprise level, it was argued that the Hawthorne studies had generated

irrefutable evidence that workers were emotionally maladjusted and that the best ways to address

this situation was to train supervisors to provide employees with psychological counseling. Mayo

advanced this message at the 1929 American Economic Association conference where the
20
discussant was a Columbia University economist and Taylor Society member, Elizabeth Baker.

While Taylor Society scholars commonly expressed support for the notion that counselling

might contribute to worker wellbeing Baker doubted the veracity of intruding into workers’

private lives. In so doing she observed that even if this practice was deemed acceptable it was

unlikely that firms would be willing to sustain the cost that large-scale counseling programs

would impose on their profits through periods of market decline (Baker, 1930). These

observations proved prescient when Depression induced falling profits subsequently motivated

Western Electric’s management to end the Hawthorne studies.

Consistent with his micro-level claims, when Mayo addressed the cause of the

Depression and what needed to be done to overcome the crisis he insisted the cause “must not be

attributed to “capitalism” or to some peculiar defect of American industry” (Mayo, 1931: 293).

Rather, he insisted the crisis had been caused by a breakdown of the balance between production

and consumption induced by the fact that the rapid pace of US industrialization had generated a

“suddenly enriched “worker” class that is unable to expend its surplus wisely” (Mayo, 1931:

293). Having exonerated capitalism and determined that workers were to blame for the crisis,

Mayo conceded that escape from the Depression required new means to “organize consumption

and the social problems of economic stability” (Mayo, 1931: 294).

That consumption and production were ‘unbalanced’ was a view shared by both SM and

HR theorists. But in his 1933 Human Problems Mayo made it clear the two schools had very

different understandings of how to achieve the required balance. He opens his text by alleging

that worker discontent with the existing order was a consequence of a preoccupation with

personal problems and the obsessions and neuroses that permeate both the fabric of civilization

and the group relationships and routines that employees initiate spontaneously in workplaces. He

then critiques the alleged obsessional character of union activists who seek to exploit this

discontent and unjustly blame employers for their own inadequacies and who insist that firms
21
should be “government controlled”. Responding to the “threat” posed by these “obsessives”,

Mayo makes it clear that while not hostile to state governance of the economy, he opposed the

notion that this activity should be influenced by the irrational “horde”. Rather, he insisted

management of both organizations and the national economy must be in the hands of an elite

body of ‘rational’ administrators trained and advised by individuals such as himself who “can

grasp a multitude of complex relations” (Mayo, 1933).

In 1935 Mayo addressed the London International Congress for Scientific Management

where he openly challenged the industrial democrats charging that the scientific managers were a

threat to business and community interests. Titling his paper ‘The Blind Spot in Scientific

Management’, he argued that SM was a threat because these technicians were unable to see that

the “spontaneous social organization of a group is the chief determinant of individual attitudes.”

Scientific management has never studied the facts of human organization; it has accepted

the nineteenth-century economic dictum that economic interest and logical capacity are

the basis of the social order. It would seem possible, therefore, that scientific

management has itself done much to provoke that apparent hostility between

management and workers which now inconveniently hampers every development

towards ‘rationalization’ (Mayo, 1935a: 214).

While Mayo must have known his allegation that the SM network had not “studied the facts of

human organization” or sought to understand the complexity of workplace relations and

industrial psychology was untrue, he nevertheless persisted. He repeated the charge in a

presentation he gave to a group of Boston business executives on returning to the USA and in so

doing pandered to the hostility with which the business community viewed the Second New Deal

by expanding his critique to include New Deal social planners seeking to govern enterprise

activity from Washington (Mayo, 1935b). Urging rejection of these centralizing actors, he

advised that those who desired an alternative to SM should consult Leadership in a Free Society
22
a work being prepared by his colleague T.N. Whitehead. This 1936 volume challenged the

Taylor Society’s understanding of what democracy entails. Utilizing evidence generated by the

Hawthorne studies, Whitehead endorsed Mayo’s claim that workers do not have the rationality

required to participate in management of firms or the wider society. True democracy, he insisted,

involves the selection of leaders from organizations that people are convinced will act in a

manner that will ensure prosperity and in the USA this meant business executives (Whitehead

1936: 209).

A perspective that exonerated corporate leaders for any blame for the Depression and

held that these actors should be permitted to monopolize the governance of workplaces and

public life, was unable to effectively challenge SM through the depths of the crisis. Indeed, it

was deemed fascistic by such a notable as Lynd (1937) and in this context, the Taylor Society

was able to enroll the Roosevelt administration in its network with increasing success despite

intense hostility from a large proportion of the business community. Swenson (2002) argues this

was possible because the policies advocated by the Society had enormous popular support and

the backing of a small but highly influential body of corporate executives. Evidence of the

breadth and depth of the scientific managers’ base include (a) the ability of the Taylor Society to

garner support for an industrial democracy agenda from organized labor and those who

administered the Second New Deal, (b) the leading role played by Society members in the

governance of the Academy of Management through its first ten years (Person 1938), and (c) and

the support that Rockefeller’s Standard Oil of New Jersey and the Rockefeller Foundation

accorded the New Deal from 1936.

The latter development was a consequence of the fact that in 1936, Raymond Fosdick -

who had long urged Rockefeller to recognize independent trade unions, who was sympathetic to

the New Deal, and who was deeply concerned at the threat posed by fascism - was appointed

President of both the Rockefeller Foundation and the Rockefeller General Education Board
23
(Cullen, 1992). This development proved a disaster for Mayo’s long-term job security, for the

following year the Foundation informed Harvard that it would fund Mayo for five more years but

would hereafter cease its support. The archival data suggests this decision reflected Fosdick’s

conviction that the Foundation needed to prioritize research that could address the threat of

fascism and the fact that Mayo had produced few publications of substance. The latter sought to

rectify this last situation but to no avail and the task fell to Roethlisberger and Dickson who, in

1939, published Management and the Worker a text that was to underpin the HR network’s

eventual accession even though, as Levitt & List (2011) have determined on using statistical

techniques to analyze the raw documents, the claims made were “entirely fictional”.

Reflecting the overt hostility that by the late 1940s characterized the SM-HR

contestation, the ‘findings’ presented in Management and the Worker were dismissed by Taylor

Society member Mary Gilson. The latter was an experienced personnel officer and a professor of

economics at Chicago University. She asserted that what the HR researchers claimed they had

determined at Hawthorne was common knowledge to anyone with industrial experience and

added that if the authors really wanted to know how workplace alienation and insecurity might

be overcome they should look to a monograph by Morris Cooke of the Taylor Society and Philip

Murray of the Congress of Industrial Organizations. As she explained, this book spelt out “what

can be done by management taking labor into its confidence and working shoulder to shoulder

on operational processes and industrial policies at every level of production and supervision”

(Gilson, 1940: 100). This was an assessment echoed years later by Jacoby (1985: 103) who

argues the Cooke-Murray text aimed to render “organized labor an active participant in

determining production procedures and administrative policies designed to increase the output

and distribution of goods and services” at both the level of the firm and the nation. By contrast,

the period following the withdrawal of Roosevelt funds was not auspicious for Mayo. Once this

source of income ceased the Dean of the Business School told him he would have to teach or
24
seek employment elsewhere and Roethlisberger - appalled at the cavalier manner in which Mayo

utilized the Hawthorne data - requested that he be relocated away from his former mentor and

subsequently penned a positive review of the Cooke-Murray volume.

Breen (2002) has demonstrated that the intellectual dominance of the Taylorists was

sustained during the war years when both the SM and the HR scholars were recruited to the war

effort. As in WWI, the military insisted that the output of war materials had to be prioritized and

in this context the scientific managers were able to introduce jointly-managed programs of

personnel training and industrial democracy in over 5000 workplaces, with HR scholars making

a decidedly secondary contribution to this effort. However, as Jacoby (1985: 274) has observed,

this endeavor proved the last gasp of the industrial democrats’ attempt to promote a “scientific,

neutral approach to personnel management as the independent profession that Brandeis and the

Taylorists had hoped it might prove to be”.

Once the war was over, the military withdrew its support for prioritizing production and

the rate of profit began to fall. In this context, the network opposed to the industrial democrats

initiated a major campaign to compel all-round acceptance of their “right to manage” (Harris,

1982; Moody, 2012; Philips-Fein, 2002; Fones-Wolf, 1994). This offensive was fueled by a

libertarian anti-statist, antiunion ideology and its success was underpinned by the fact that

though profitability began to decline as early as 1945 it remained historically high supported

both by the management and organizational productivity ‘great leap forward’ of the 1930s and

by the preeminent economic position of the US given the war-induced devastation in Europe and

Asia. In this context, while firms could not fully exclude an expanded and radicalized labor

movement and an interventionist state from management processes, they were able to buy off the

radical challenge posed by the scientific managers’ alliance with labor and social progressives.

The GM strike in 1945-1946 illuminates how corporations undermined the threat posed by the

Taylorist industrial democrats. Led by Walter Reuther, the United Auto Workers advocated a
25
regime of codetermination inspired by the agenda proposed by Cooke and Murray in 1940,

wherein labor, government, and business, would jointly determine wage, price, and profit policy

and by so doing generate a high-wage, low-price economy. This was an agenda that by “treading

on the most sacred of managerial prerogatives” was totally unacceptable to corporations. For as

Fones-Wolf (1994: 20-21) observes, “Reuther and the UAW epitomized the mounting threat

unions posed to employer control over their own firms” and they responded with the vehemence

they believed was required.

Confronted by the industrial democrats’ challenge, GM which at the time was the most

profitable corporation in the USA, used the power thus gained to induce the “armed truce” that

was the so-called 1950 “Treaty of Detroit”. This settlement ceded union recognition in return for

organized labor agreeing to limit their demands to collective bargaining over wages and

conditions of employment, with all other areas of management being the exclusive prerogative of

the employer. As Harris (1982: 130) underscores, the high postwar profits enjoyed by US firms

were central to this outcome: “the postwar years were extremely profitable for American

business: the cost of wage increases was easily passed on to final consumers, so the resistance of

center firms to substantial annual money wage rises was not strong.” But employers’ willingness

to cede union recognition was forthcoming only so long as organized labor abandoned its

demand that the management of organizations be democratized and the welfare state expanded.

The Treaty of Detroit meant that the UAW, one of the most politically progressive forces in the

country, essentially abandoned the fight to expand industrial democracy. Auto workers received

generous private pensions, healthcare, and supplemental unemployment insurance from their

employer rather than the government and thus saw little need to expend political capital on these

issues (Moody, 2012).

The postwar struggle over who has the right to manage marked the start of the blacklists

and loyalty oaths popularly dubbed “McCarthyism”. In this dark period, the Taylorist industrial
26
democrats were subjected to virulent assault. Morris Cooke and van Kleeck, for instance, were

both denounced as subversives with the latter hauled before the House Un-American Activities

Committee (HUAC), stripped of her passport and branded a Communist (Christie, 1983: 237).

Seeking to rally resistance to this assault from Taylor Society members, Van Kleeck (1946)

implored members to remember that “this Society happens to be the group in the United States

which can best carry forward the principles and the traditions of scientific management.” With

McCarthyism looming and anti-New Deal and anti-labor attacks become ever more virulent, this

appeal was heard by individuals fearful of clinging to these principles. As Schrecker (1986;

2010) observes, the McCarthyist assault soon spread to the Academy, with junior faculty proving

particularly vulnerable as the charge of sedition expanded beyond Communists to include those

who had actively supported New Deal programs. Before the anti-Communist furor abated in the

mid-1950s, more than one hundred college teachers had lost their jobs or were denied tenure

because of their politics. Cynically, university managers justified these actions by claiming that

Communism was incompatible with academic employment and by redefining professional

responsibilities to include the preservation of institutional reputation.

Conservative business leaders had been outraged by the New Deal, deeming it a

fundamental challenge to their place in American society, and greatly feared an expanded state

aligned with a powerful labor movement as advocated by Cooke and Murray. However, they

could not launch a direct assault on these programs on socioeconomic grounds so, instead, they

claimed the Democrats had condoned Soviet subversion: the HUAC investigations gave them the

perfect arena for their campaign against the New Deal (Harris, 1982; Schrecker, 1986; Fones-

Wolf, 1994).

Within MOS, Taylor - the theorist-practitioner long recognized as the leading intellectual

in the field - was systematically denigrated while a hero acceptable to business conservatives,

Mayo, was entrenched. As Schachter (1989) observes, this process began to be institutionalized
27
from 1947 as academics became aware that it was career-wise to distance oneself from the

industrial democrats. In this context, the Taylorists began to be depicted in the academic

literature as villains who advocated ideas that were excessively rational and ignorant of

personality differences. Henceforth, she observes, the:

…literature assumes that at best Taylor offers discrete techniques for organizing internal

motivation and control. Scientific management is no longer presented as a philosophy of

hope – a chance for knowledge to redeem a corrupt, unresponsive political system. It is

simply a scheme for offering employees certain incentives, and an ineffective scheme at

that (Schachter, 1989: 111-112).

Conclusion and Discussion

Recapitulating our historical narrative, and reconciling the earlier parts of our argument, we

maintain that the SM-HR succession is best theorized by invoking a materialist explanation that

recognizes the importance of technological, ideational, economic, and political developments

and with the history being underpinned by primary historical documents rather than merely

grounded in the secondary literature. Focusing on variability in the rate of profit, we demonstrate

that with the rise in profitability at the end of the 19th Century, the scientific managers advanced

a reform agenda that had immense appeal to corporate, state, and academic progressives even

while its democratic dimension engendered hostility amongst conservatives such as Rockefeller

Jr. and Henry Ford. It appealed to progressives because SM offered: (a) a viable means of

arresting declining profitability, (b) a mutual-gains strategy for managing relations with workers

and their unions, (c) planning methodologies for two large-scale military campaigns (WWI and

WWII), and (d) a strategy for balancing aggregate supply and aggregate demand in the

macroeconomy.

28
 During the 1940s and 50s, conservative US business leaders crafted and popularized a

libertarian ideology that has become a core element of contemporary conservatism. They argued

that the welfare state - which the New Dealers had forged and which Taylorist industrial

democrats had helped democratize - threatened to undermine American constitutional liberties.

Uncontained state and union management of the economy and the workplace, it was asserted,

leads to totalitarianism. Conversely, the right of property-owners to use their wealth as they wish

goes hand-in-hand with democracy and prosperity for all. The postwar revival of profitability

gave business an opening to spread this ideology and they did so with vigor (Moody, 2012).

Harris (1982: 156) well summarizes the environment:

The general conservatism of the American political climate; the anti-Communist and

antiradical ethos of Cold War America; and the general success and stability of the

postwar economy, which allowed business to buy the acquiescence of the organized

working class in the entrenchment of managerial control with job security, real wage

increases, and fringe benefits are clearly the explanations.

The foregoing account of the SM-HR succession draws on Marx’s conviction that

capitalism is characterized by a tendency for the rate of profit to fall. As Marx freely concedes,

this tendency can be countervailed by numerous influences. Amongst these contingencies, his

inclusion of managerial and organizational practices that enhance productivity without inducing

an increase in capital-deepening has not previously attracted the attention of MOS scholars. This

omission perhaps reflects the critical view of managers that is common amongst Marxists and

the fact that until it was statistically evidenced that the rate of profit has undergone a sustained

fall Marx’s TRPF thesis attracted marginal attention even from Marxist scholars. This situation

has and is continuing to be transformed by findings generated by econometric studies and by a

socio-economic environment in which low rates of economic and productivity growth have

29
become the norm and the efficacy of traditional monetary and fiscal instruments of macro-

economic management appears to have greatly diminished.

In sympathy with Marx, we reject ideas that are excessively economistic, technologically

deterministic, or ideational and this includes all suggestions that the TRPF is an inexorable trend

that cannot be reversed. But remaining consistent, we also reject the notion that the current

period of insecurity and austerity will necessarily come to an end as is presumed by analysts who

have embraced Kondratiev and other forms of determinism. The rate of profit has been subject to

a long-term fall for, as with all technological innovations, as the diffusion and uptake of those

aspects of the SM agenda that capitalists were willing to embrace became institutionalized across

organizations, the capacity of these innovations to countervail the TRPR began to wane. In

response, the business community and its political allies have striven to sustain the rate of profit

by offshoring, by monopolizing an ever greater share of new wealth, by undermining the

bargaining power of labor, by unleashing wars to capture resources and markets, and by

engaging in capital-deepening. But while these strategies have had substantial success and

continue to be exercised, capitalists have found it ever more difficult to sustain a profit rate

sufficient to induce a high rate of capital investment and hence austerity and instability remain

characteristics of our age.

In advancing the previous observations, we accept that in our account of the SM-HR

succession the stakes were extraordinarily high. As Gantman (2005: 4) notes, the management

discipline, “upon which the rationality of the capitalist enterprise is founded, enjoys a privileged

status in contemporary society”. For the latter, management theory is an “ideological discourse”,

and so, the contending claims of the SM and HR schools for this privileged position in the social

order were unambiguously related to the legitimation of the capitalist social order itself and

beliefs pertaining to “who should manage organizations and how” (Gantman 2005: 4).

Accordingly, it is reasonable to hypothesize that changes to this order might correlate with
30
ideologies, and so, “it makes sense to relate managerial ideologies not to the economic cycles,

but to the very evolution of the capitalist system” (Gantman, 2005: 8; emphasis added), as we

have done.

Interrogating the place of management in the context forged by the rate of profit, we have

remained sensitive to the fact that, like every other social institution, management is fashioned

by and/or buttresses existing relations of production. It is a social practice wherein “its

content…is embedded in the historical and cultural relations of power and domination (e.g.

capitalism, patriarchy) that enable/impede its emergence and development” (Alvesson &

Willmott, 2012: 41). These social relations are critical as they are the means via which managing

is “defined, allocated and undertaken” (Alvesson & Willmott, 2012: 17). How the functions of

management are enacted invokes “the issue of who is to occupy positions of authority within the

division of labor and who is to derive the greatest advantage from this social division”.

Accordingly, MOS is fashioned from “recurrent struggles over the question of whose purposes,

or interests, work (production) is to serve – the owner, the manager, the producer, the consumer?

Equally there are struggles over how work is to be organised - autocratically, bureaucratically,

democratically?” (Alvesson & Willmott, 1992: 6).

In this context, and as Tsoukas (1994: 289) observes, management should not be defined

in terms of the functional “micro-actions of individuals” but rather by investigating “the logic of

management (derived from its embedment into a particular socioeconomic system) which is

empirically manifested in its trajectory of development in particular societal contexts”. And, if

the form and content of management is inextricably embedded in, and so, forged by both the

forces and social relations of the capitalist mode of production (Knights & Willmott, 1986;

Alvesson & Willmott, 1992; Marx, 1977; Adler 2007), then it seems a logical necessity to

interrogate this material context - as we have done - in order to adequately understand the

emergence of particular management models in specific times and places.

31
 Further, if management - particularly the ‘right to manage’ - is fundamentally political

and highly contested, then we also need means to account for ‘winners and losers’ in the contest

of management ideas and the right to manage, and in theorizing this process we need to consider

both the ideas of scholars and the context in which particular management practices and ideas

emerge. Our central argument has been that the primary driving force of capitalist

socioeconomic systems – corporate profitability - shaped the content of hotly contested

discourses on the determination of who enjoys the right to manage and how. In so doing we have

not suggested that ideas per se are unimportant. Nor do we accept that the ideational context is

inconsequential. On the contrary, we believe that the oscillating interplay of material and

ideological factors fashion MOS in a recursive, mutually-causative manner over time. Material

conditions may have more impact in certain times/places because of the magnitude and

seriousness of the particular conditions at play (e.g. a secular decline in the average rate of

profit), whereas in others the strength and uptake of the management idea itself and the interests

it serves may be of more importance in explaining victory or loss in the relevant contest. In sum,

“management can be theorized via the construction of models seeking to explain, on a macro-

scale, the context-dependent rise and demise of particular forms of management” (Tsoukas,

1994: 289).

Another objective of this paper has been to underscore the need and the capacity of MOS

to join the ranks of other social sciences that are seeking to resolve pressing socioeconomic

problems that have their origin in the inability of the OECD states to restore the post-war vitality

of their communities. As we have demonstrated, the average rate of profitability has flat-lined

since a century-high level in 1942 and arguably the world economy remains in the grips of an

economic crisis that seems impervious to conventional measures, and yet MOS has little if

anything to say on the matter. Henry Mintzberg (2009) declared that the GFC is actually, at the

core, “a crisis of management”. Citing the sub-prime mortgage debacle, he argues that these
32
events belie “a monumental failure of management”; companies were not being managed but

heroically “led” by detached and hubristic financiers for short-term spectacular performance. Yet

while many share his sentiments concerning the short-termism, greed, etc., of those in the

corporate finance circles, few believe the crisis to be attributable to a failure of management.

Fewer still believe that management - either as a profession or as an academic discipline - has

any significant role in proposed remedies for the crisis. The conventional wisdom is that like the

Great Depression of the 1930s, the present crisis requires public (i.e. state) action and in current

policy debates, it is professional and academic economists not management theorists to whom

governments are turning for advice.

This situation stands in stark contrast to the exalted position of SM in the American

political economy in the first half of the 20th Century, this being a ‘technology’ (Bloom, Sadun,

& Van Reenen, 2016) then perceived to have induced the turnaround in average profitability,

that helped America plan and successfully execute two global military campaigns, and that

assisted the Roosevelt administration to lift the US economy out of the 1930s Depression. The

progressive majority in the Taylor Society once had the ears of the nation’s top political leaders

and played an activist role in American society seeking to democratize corporate governance at

the level of the firm and promote tripartite governance at the level of the nation-state. Their

legacy serves as a model for contemporary MOS scholars seeking to restore managers to the

position of “higher order corporate statesmen,” as opposed to simply “hired hands” (Khurana,

2006).

33
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