Factory Discipline

Table of Contents

 

1. Summary of scientific paper 3
2. Criticism of scientific paper 6
3. Conclusion 9
4. Bibliography 10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Summary of scientific paper 
   

The Industrial Revolution that occurred in Great Britain throughout 1790-1890 years had great impact on the organisation of the working process.  Prior to the 19^th century it was common to manufacture goods at home, however it has been changed in the years of Industrial Revolution.

The work life could have been divided into two major categories: manufactories and factories.  Manufactories, widely known as workshops, have brought minor changes to the prior system. Even though the worker could no longer work at home, but have to rent out a space and the equipment at the manufactory, the employees were in total control of themselves: pace of work, working hours and conduct. Capital owners of the workshops were indifferent to the performance of the employees, as the main source of income was the fixed rental payment on capital. Whereas, in the entities with imposed discipline, the employer was the one to decide all the aspects of work. In such conditions the reward was given not for the productivity, but the behaviour of the individual in the working place.

There were two different opinions regarding the factory discipline. The capitalism critics, who were opposed to the idea of factory discipline, highlighted that capitalism failed to provide proper working conditions and deprived freedom of the employees. The only choice available for the worker was either to be exploited on the factory or not to work at all. This has given rise to the coercion theory, which suggests that disciple was able to derive more work from an individual that one would freely contribute.

Those, with pro- capitalistic views, have argued that this has been a necessity, triggered by the Industrial Revolution with its technological advance. The new production patterns were based on the labour division and broad use of machinery that resulted in the need for coordination. Better labour organisation, timing and smaller stock reduced the fixed costs which contributed to the wage increase.

No institution can survive any considerable time, unless it is efficient. Factory discipline has been in use for decades, and what is more, people were willingly accepting the deprivation of freedom. The higher wages, which included disgust premium for working under the restrictive set of rules, were paid. Employees were willingly accepting the restrictive discipline, in return for higher wages. In fact, the workers were hiring the employers, so that to derive a better pay-off from the activity performed. And the study showed that despite not liking the discipline, the production was higher with imposed discipline, even though workers disliked it a lot.

At the time of Industrial Revolution the labour market has been defined as competitive. However, Gregory Clark proved it to be a common misconception. He argued that despite, all the studies that had been conducted, the empirical evidence stated in favour of the spot labour market, which is non-competitive, since the coercion theory is only possible in the spot market. Only a few industries were actually using the new technology in the manufacturing process.

Coordination theory originates from the wide implementation of technological developments in the production process once the Industrial Revolution has started.  Coordination theory operates within the competitive labour market. The principle of coordination theory lies in the fact that indiscipline would generate extra costs. Since the production involved expensive machinery, the attendance was important because of the absence of a single worker the production process could not run. Therefore, discipline in order to coordinate the workers could be a viewed as a technical necessity to adjust for the new production practice. The employers were forced to introduce fixed working hours, since the cost of not coordination was high. For the employers the cost of stock and machinery staying idle wasting its capacity was a loss. However, coordination theory does not distorts working efforts contributes by the employees; otherwise the capitalists’ profits would be decreased by the employees’ wages shooting too high.

Coercion theory evolves from the notion of deriving greater working efforts, thus greater productivity, from the employees than they would have given willingly. In a way, this has been also the response to the technological development. More capital was involved in the production process in some industries once the Industrial Revolution started. Under the coercion theory assumption, only those entities with high capital ration per worker introduced factory discipline, since driving the worker harder was beneficial for the capitalist. Besides, the theory argues that the savings on the coordination cost would be not enough to cover for the disgust premium associated with the factory discipline. On the top of that, the factory imposed fines for the deviation from rules that exceeded the actual cost of disobedience to the firm, as to combat the irrational decision in favour of immediate pleasure. This theory was only possible provided the labour market was uncompetitive at the time, so that the worker could freely move from one sector to another without the need to acquire highly complex skills.

Discipline is not the only solution designed to influence the workers’ productivity. A system of incentives could have been used instead. Discipline uses the set of strict rules to control the employee, deviation from which results in a serious of fines, while incentive system is encouraging people by the means of remuneration in the end. At some factories the owner has used both systems within the same entity just in the different parts. The studies have shown that under the discipline, even though the worker disliked it greatly, the productivity was the highest.

Besides, the incentive system has been proven to be less efficient than discipline due to the human nature. One of the imperfections of the labour market is that a worker has difficulties in associating immediate pleasure with the punishment afterwards. It is more straightforward in the discipline system: one got fined for the action or inaction once has done in present. While it is harder to relate higher work effort paid at the moment with the higher remuneration at the end of the period.

Labour market had several imperfections, which made coercion profitable. Firstly, in the competitive labour market the employers could not increase the working efforts of the employees above the level they would have contributed freely. It leads to the wages, exceeding the workers marginal product, therefore incurred losses for the employer. Secondly, incentives could have been used instead, provided the workers were perfectly rational and would reproduce the same output as the disciplined workers. However, it is problematic to establish the desirable output.  

 

2. Criticism of scientific paper

The Industrial Revolution has put capitalists in the position to either adopt the changes brought to the production process and increase their comparative advantage or stick to the original methods and gradually loose the market share. Imposition of factory discipline has strong correlation to the machinery advances that have been introduced to the market. Equipment required greater specialisation of labour, in order to reduce the complexity and increase the dexterity of the task. David Landes proposed that the capital owner divide the labour for the primary reason so that there would be indeed the need for the capital owner¹. However, this does not eliminate the gains from the division of labour.  
Adam Smith commented on the division of labour in his work “The Wealth of Nations”: 
“The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgement with which it is any where directed, or applied, seem to have been the effects of the division of labour”². Though, Smith himself admitted that highly repetitive task might stultify one to a great extent. A person is needed that sets the rules and directs the flow of production. Only a person with entrepreneurial traits, which enables to compound the factors of production in such a way so that produce a competitive product, would be able to run an entity. This leads to the idea that the capital owners and the management they provide are crucial to the factories. Left without any supervision the factory would not exist any prolonged period of time, since there would be no one who would accumulate the revenue. Besides, the capital owners are in such a position so that to be able to detect future trends and notions but still close to the production to select the ones that would be beneficial.

Assuming the capital owners are rational, they would try to maximise their profits. Therefore, once the technical advances appeared the industries, these sectors that could apply the machinery in the production, adopted the equipment. Though for efficient use of the technology, labour re-organisation had to be carried out.

Two contradictory systems have been designed to promote efficiency: factory discipline and system of incentives. It embodies the proverbial carrot and stick motivation techniques. Incentives model, which depicts the carrot, encourages the worker to perform at the top of one’s abilities in exchange for a reward. In the factories that used child labour extensively the rewards were introduced to maintain discipline. Tangible at first, those with the highest output, were rewarded by a doll if a girl and a rich meal if a boy³. Though, over time the tangible rewards transferred into intangible, such as a praise notification on the wall in the factory. If a child did badly, a shameful notice was hanged on the board instead.

However, at times the combination of these methods was used by the employers in order to achieve the desired outcome. For instance: the riddance of “St. Monday” in exchange for Saturday’s half-holiday⁴. The capital owners have given the workers half a day off on Saturday, provided Monday would become the normal working way. So that the employers used incentive system in order to establish discipline. The total number of working hours not only increased due to the full working day on Monday, but some capitalists have also reduced the meal time and prolonged the working day. Once again the campaign was used to exploit the workers’ moment-to-moment decision making.

Discipline, as the proverbial stick, was threatening the employees to increase the working efforts. The set of rules grounded the behavioural principles the employers though was necessary. Fines were imposed for the breach of the rules, with the rates exceeding the cost to the entity. This was an attempt to condition disobedience with the money losses, as well as an opportunity to profit on the employees’ irrational behaviour in favour of the immediate pleasure.

Besides, unless the fines were made the actual difference to the worker’s wage, it wouldn’t have been noticed. Therefore, to establish such a relatively new notion of factory discipline, the fines should have been aggressive, as the main objective was not to leave anyone indifferent to it. Another tool in the persuading the employees to follow the factory rules was the threat of dismissal from the job⁵.

There are two distinct views on the origins of factory discipline: the coercion and coordination theories. The state of the labour market is essential in the definition of the right theory, as coercion theory is only applicable in the spot market, while in the competitive market it makes no use at all. Despite the fact that the technological advances gave rise to the factory discipline, the coordination theory has proved itself to be less profitable than coercion. The revenues generated by the coerced workers were higher than the savings from the coordination of the production process. Even though the coordination is essential for the smooth and efficient production, only coercion is possible of deriving greater work efforts along with productivity, thus profitability of an entity increase. The argument in favour of discipline, rather than incentives is one of the inefficiencies of the labour market. The psychology of a human being that need discipline in order to achieve high performance, as the incentive system is not enough once related to the factory production. D. Landes concluded that “The historical record shows that capitalists have always been ready to lease equipment to workers when it pays, that is, when leasing yields a secure income”. Once the incentive system has proved itself efficient, capitalists would have eagerly adopted the notion. Unless, the workers did not need any supervision in terms of work conduct and their performance was acceptable, the employers would have chosen the system of incentives instead.

 

  4. Conclusion

Factory organisation that companies are enjoying at present has not always been that way. At the time of Industrial Revolution new techniques were introduced. System of incentives along with the factory discipline was implemented at the factories. However, the “workshop” organisation of the production was still used. The Industrial Revolution was actually related only to a small number of industries in the market, leaving majority to evolve on its own pace. This has lead to the controversial situation in the labour market. It was regarded as being competitive, however, due to its multiple imperfections, its true nature was still spot.

The empirical study showed that the coercion theory was more successful, which proves the point that the labour market was not competitive, but spot, as coercion cannot exist in the competitive labour market. One the of labour market imperfections, which made coercion possible, was human psychology, since for efficient performance a person needs constant supervision and deadlines. Besides, it is relatively hard for the person to coincide the relation between immediate sacrifice of leisure and remuneration afterwards.

However, the discipline progressed over time, as the discipline of the 20^th century has nothing to do with the widely used in 19^th. Firstly, the labour market has evolved in totally competitive. Secondly, strong legislative ground was established supported by the public and the government. Though this might only be the truth for the developed countries, as countries with emerging economies still use the remnants of the 19^th century discipline along with child labour.     
Discipline brought the necessary coordination to the production process. Not in a sense of timing everyone’s action but to coordinate the supply relative to demand.    

 

 

 

 

5. Bibliography 
 
CLARK, GREGORY, (1994): “Factory Discipline,” The Journal of Economic History, 54(1), pp. 128-163.

LANDES, DAVIS S., (1986): “What Do Bosses Really Do?” The Journal of Economic History, 46(3), pp. 585-624.

POLLARD, SINDEY, (1963): “Factory Discipline in the Industrial Revolution,” Economic History Review, 16 (2), pp. 254-271.

REID, DOUGLAS A., (1976): “The Decline of St. Monday 1766-1876,” Past and Present, 71, pp. 76-101.

¹ Landes (1986), pp. 590

² Landes (1986), pp. 586

³ Pollard (1963), pp. 266

⁴ Reid (1976), pp. 86

⁵ Pollard (1963), pp.261