I was having a conversation with Joe Marier today about Wal Mart, and that led to a conversation about Endicott-Johnson, the company that pioneered “Welfare Capitalism.” E-J was (unbeknownst to me) a big part of my life growing up. I was born in Johnson City, named after George F. Johnson, one of the partners in the shoe company. I rode carousels provided to the city by E-J. My dad, whose own father worked the sneaker assembly line at the factory, lived in E-J built housing as a kid, and later worked in the town of Endicott, also a namesake of founder Henry Endicott.
By the time I was old enough to pay attention, E-J was just a memory. The stone archway leading into the increasingly decrepit main strip in Johnson City proclaimed, “Home of the Square Deal” (The top of the arch reminds us that it was “Erected by Workers”, leaving the impression that it was a spontaneous monument of gratitude on their part to their gracious corporate benefactors). The factories, long since silent, loomed like the skeletons of some ancient civilization, their broken windows peering soullesly over St. James’ Church, where I was baptized and I served as pallbearer when my grandmother was buried. Despite living in their hometown, I never owned a pair of E-J shoes.
In the Wikipedia account of E-J, the benevolence of this Willy Wonka-esque system seem warm and inviting:
The E-J story is dominated by George F. Johnson (1857–1948), or George F as he was popularly called, who rose through the shoe factory ranks to become the half-owner of E-J, and its highest executive until his death in 1948.
George F’s reign was dominated by his Square Deal version of welfare capitalism that, like progressive movements of the early twentieth century advocated providing parades and churches and libraries to “uplift” workers. George F’s Square Deal consisted of worker benefits even in harsh economic times that were generous and innovative for their time, but also meant to engender worker loyalty and discourage unionizing.
For workers, the Square Deal consisted of a chance to buy E-J built and E-J financed homes, a profit sharing program, health care from factory-funded medical facilities and later (built in 1949) two worker recreational facilities. But the Square Deal was more than an employee benefit program. E-J and the Johnson family also provided or helped to finance two libraries, theaters, a golf course, swimming pools, carousels, parks and food markets, many of which were available to the community without charge. Reminders of the source of that generosity were inescapable.
Those reminders mean nothing to the generation now inhabiting the broken cities and towns that sprung up from this American industrial powerhouse. They are relics of another time, and even the many emblematic carousels built by the company seem an antique and fortunate accident of history rather than a planned contribution to the community to help build morale.
Now, globalization has destroyed the house that George and Henry built. I don’t know if Welfare Capitalism is ideal, but I have come to believe that globalization isn’t. If there were ever a resurgence in American industry brought on by the evolving fiscal crisis, I wonder if a system like this would ever have a place again? It left happy memories in the minds of workers still dwelling in the Southern Tier of New York, and the remnants of a culture created to make people comfortable with the otherwise often dehumanizing work of the assembly line remain to remind us, if we care to notice.
And if this system is just socialism at the corporate level (which is still probably better than laissez-faire capitalism, my Ron Paul allegiance notwithstanding) and ultimately unsustainable, what would work? How can America get it’s groove back? Because in case you haven’t noticed, the world is growing out of its dependence on us.
It seems like it might be a good idea to figure out who we need to be and how we need to get there. There’s a lot that needs fixing if we want an America that we can be as proud of as our grandparents were. Our future as a nation depends on it.
I’m smelling another Agree to Disagree here, because I’m not sure that we do need to collectively “figure out who we need to be” in order to continue to be a great country. Too utopian. I think incrementally.
What is wrong with laissez-faire capitalism? Is the very story you posted not an example of free-market (i.e., voluntary) welfare? Which seems to have worked, unlike the failing government (i.e., forced) welfare of today.
S.,
The idea is that the government should have stepped in to raise tariffs on shoes from other countries, to protect this one. That way it could have stayed in business longer.
Incidentally, shoes still have tariffs on them, and it’s between eleven and forty-eight percent. The source is linked on my name.
Schmendrick,
Laissez-faire capitalism gives entirely too much power to the market to regulate itself. This would be fine if capitalism were the economic system in the Garden of Eden. Considering that we’re a bunch of sinners, though, and that capitalism has greed/the “pursuit of wealth” as its driving force, there’s a lot of room for bad practices to creep in.
That’s why we’ve got the globalization problem. Some Chinese kid forced to work in a factory in quasi-slave conditions to help buy his family rice earns 13 cents an hour making my Air Jordans and I pay $145 bucks for them at the Mall. Consequently, the American factories paying their workers just wages can’t compete, and go under, and then even the people TRYING to do the right thing have to outsource their labor to the Chinese kids.
The market demands regulation. How much and what form it should take is debatable.
Steve, I’d add that a 18 to 48 percent tariff on shoes is far from laissez-faire. Textiles are a tough business: one of the things that affected textiles was also the fact that it did not take as massive a facility to make Chuck Taylors in the 70s as it did to make EJs in the 20s. So domestic competition was squeezing on facility costs, and foreign competition was squeezing on facility and labor. You can raise tariffs on the latter, but there’s not much you can do about the former without grievously injuring property rights.
And what if we decided to block all foreign shoes from entering our shores? Would that China any safer, or better off, or less bellicose? Would it make us better off?