Empire of Things

by Frank Trentmann

  By the 1970s, the paternalist boss, so dominant even half a century earlier, was largely a thing of the past, in Europe as in America. So, increasingly, was the culture of the personal gift, which bosses used to cement loyalty and discipline. The days of the golden watch for decades of service were numbered. Ironically, the decline of paternalism – and, in the United States, the decline of union power – was paralleled by a rise in company spending. Nurseries, recreation, pensions and – especially in America – medical insurance all expanded and began to be treated as a basic entitlement rather than a special favour. In 1954, 20 per cent of payroll in American firms went to non-wage incentives. Twenty-five years later, it was 37 per cent.31

  The rise of ‘wellness’ since the 1970s and attempts to promote a healthier lifestyle are best understood as variations on a historic theme, not a new departure. As in the early days of Ford, perks and services continued to have two main functions: to attract skilled staff and to reduce the number of hours lost to stoppage and absenteeism. What changed was their form, in response to changes in lifestyle. Hi-tech firms in Silicon Valley today offer Botox as well as baseball. In addition to building team spirit, fitness programmes started to target individual lifestyle. The National Cash Register Company introduced morning and afternoon exercise for its employees as early as 1944. By the 1970s, the soaring health-care costs from smoking and coronary heart disease caused headaches for firms, large and small. Lincoln Plating, a metal finishing company in Nebraska, started with free blood-pressure checks in the 1970s. A decade later, they added ‘lunch and learn’ educational lessons. By 2000, a ‘wellness programme’ was in place, with sticks and carrots. Smoking on site was prohibited. Quarterly check-ups and personal wellness goals were mandatory and workers received free pedometers to monitor their daily activity. The company sponsored ‘wellness Wednesdays’ and an annual 14,000-feet mountain challenge. Those who managed to lower their cholesterol and blood pressure gained credit on the ‘consumer-directed’ health plan. Gym membership was reimbursed for staff and their families. Since its inception, the programme has saved the firm half its health-insurance costs. The aircraft maker Lockheed reduced absenteeism by an estimated 60 per cent with the help of its wellness services.32

  How typical are such success stories? ‘Wellness’ is now part of a global management culture, but a 2009 survey found significant regional differences about what this means in practice. Workers might sweat on Wednesdays at Lincoln Plating, but in the rest of the United States wellness is first and foremost about immunization and flu shots. The gym is secondary. In Europe, with more comprehensive public-health systems, the priorities are the reverse. Asian companies devote most energy to biometric health screening and on-site health classes.33

  It is tempting to imagine that the enormous growth of commercial consumer culture in the last half-century must have spelled the death of company recreation. This would be too simple. That there is more commercial leisure today than two or three generations ago is undeniable. Company teams have withered while private fitness studios have mushroomed. Bars and restaurants have replaced working men’s social clubs. Even this trend must not be blown out of proportion, however. In France, 2.5 million employees belong to one of 8,000 company clubs. There are inter-company competitions and, in 2000, the ministry of youth and sport launched a national day (17 June) in support of company sports.34 As many Finns today exercise at their workplace as at a commercial gym. In Scandinavian countries especially, companies continued to invest in their recreational facilities. In Kristinedal, Gothenburg, the Swedish ball-bearing manufacturer SKF in the 1970s erected a dedicated leisure hall the size of a football pitch. The basement housed a pool and gym and a central kitchen; the first floor a dining room and the main sports hall. On the top floor, workers had access to hobby rooms and their own TV studio. For a tiny fee, they could play ping-pong or relax in the sauna, any time between 6 a.m. and 10 p.m. Today, the complex remains in the hands of the SKF staff fund, while members of the public now also enjoy access to the facilities.35

  Commercial fast food has made its way into firms and schools in the United States and Britain, but in many affluent countries the company canteen remains as important in people’s lives as it was a century ago, if not more so. In Scandinavia, the share of food prepared away from home doubled in the 1970s–’80s as women entered the workforce. This benefited the collective as well as the commercial food sector, and was facilitated by union agreements and public support until subsidies were cut in the 1990s. In 1997, most Finnish employees ate in a canteen or brought a packed lunch; only 4 per cent went to a restaurant. In continental Europe, according to a 2003 estimate, one third of all eating away from home took place in canteens, worth 6 billion euros of sales a year. In half the cases, firms subsidize canteen meals. In Paris, two out of three employees have their lunch in a company cafeteria; to give a sense of perspective, in an early industrial canteen like that of Sandoz in Basel, numbers had barely reached one in five in the 1920s. In Denmark, some firms have introduced canteen take-away services for the whole family to enjoy.36

  Companies, moreover, also subsidize commercial recreation and entertainment. Many firms may no longer run their own gym or cinema club, but they continue to support such activities outside their walls. The Swiss pharmaceutical giant Roche, for example, offers a free culture pass which entitles employees and their families to reduced tickets to cinemas and theatres, the circus and the ‘bird’s-eye jazz club’; tickets to the Basel Symphony are half price. The employee association, founded in 1950, has long ceased to be a simple ‘salmon and salami club’ handing out food baskets at the Christmas ball. There is hardly anything in the vicinity of Basel which members cannot buy at a discount, from massages, dry cleaning and domestic heating oil to up to 40 per cent off on appliances. Workers receive CHF100 when they sign up with a fitness club. In addition, the firm offers a special mortgage package. Similarly, Boeing operates a discount programme that stretches from cars and computers to flowers and fitness centres.37 Many private gyms would fold without such company schemes. Rather than viewing them as mutually exclusive, with the rise of one leading to the extinction of the other, it is better to think of ‘private’ consumer culture and ‘collective’ services as completing each other. The latter helps prop up the former.

  The most extensive braiding of these two strands has occurred in France and was set in motion by the Liberation. Too many bosses had been discredited by collaboration with the Nazis to allow a simple return to pre-war paternalism. Unions wanted a voice, the government industrial peace to rebuild the country. The compromise was a system of work councils, established by the decree of 22 February 1945. In practice, these comités d’entreprise (CEs) fell short of delivering genuine participation. They have been largely consultative. What they lacked in managerial muscle, however, they made up for with a sizable budget for culture and tourism. Any firm with more than fifty employees was required to have a CE, and support it. On average, firms today devote 1 per cent of their payroll to their social and cultural activities – at the Banque de France it is a whopping 7 per cent. With 11 million employees belonging to a CE in France, that is a lot of collectively funded consumption – €11 billion in 2009, to be precise, with €2.6 billion coming directly from the employer and an additional €7.8 billion from salaries. Most of it goes to fund holidays, sport and nurseries. The Chèques Vacances, a network introduced in 1982 for employees in small firms, distributes coupons for hotels and restaurants worth another €1.3 billion. It also supports a social tourism programme for single parents and the disabled.38

  Thanks to their CE, workers can play tennis on the company court and borrow the newest books, DVDs and video games from the multimedia library; smaller firms can use a ‘bibliobus’ with 3,000 books on board that stops by once a month. Above all, they can travel cheaply. Most CEs have their own offres touristiques that put together everything from a day-trip to a cruise. Others run their own ski chalets and youth hostels.
In 1994, all CEs together owned one quarter of a million beds of accommodation, from holiday villages in the Savoie to camping sites on the Côte d’Azur. When it comes to ‘perks’ in France, the subsidized camping van is vastly more important than the company car. The average French worker effectively goes on holiday at half the cost. A third of the staff at Canon’s French branch in Courbevoie spend their annual holidays at the firm’s holiday village. Messier, the aircraft-landing-gear manufacturer, subsidizes one flight per family per year, as well as ferries to Corsica and Morocco. Other firms give staff 50 per cent discounts on package tours to Disneyland and Parc Astérix. Admittedly, though collectively funded, very few of these trips are any longer collectively enjoyed. Families do not travel as work teams but drive away into the sunset in their private car. Equally, we must not get too nostalgic. Most workers did not travel together in the years after Liberation either. In the 1960s, barely a quarter of French firms had a CE, and those that existed spent a minuscule amount on holidays.39 The big expansion only came in the next few decades, alongside the boom in commercial charter flights and package holidays, not in spite of it.

  Holidays for the masses had been an integral element in the clash of ideologies in the inter-war years. Fascists had their leisure organizations, social democrats and trade unions theirs; the Workers Travel Association in Britain started in 1921, initially arranging trips to the battlefields of the Great War before discovering holiday camps; the Swedish RESO (Folkrörelsernas Reseorganisation) in 1937. Danish trade unions copied Butlin’s holiday resorts. Little of that energy survived the Second World War. A Bureau International du Tourisme Social (BITS) was founded in Brussels in 1963, but ‘social tourism’ has proved no match for the private car and package tour. The Belgian trade union organization Vacances et Santé, born in 1938, still exists, and has holiday homes catering for 1.5 million nights of accommodation a year,40 but this is barely more than what two cruise ships manage together. The French comités d’entreprise steered social tourism in a new direction, as a partner rather than the enemy of commercial holidays. The work council did for millions of ordinary French workers what fascist leisure organizations like the Nazi Kraft durch Freude had done for a largely middle-class clientele: they paved the road to mass tourism.41 This was, perhaps, the CE’s main historical contribution.

  Perks had a special significance in post-war Japan. Japanese firms competed for skilled employees on benefits rather than wages. In the 1950s, ‘non-wage benefits’ ranged from 8 per cent up to 25 per cent of a salary. In 2002, according to a survey, a third of employees were living in a company flat or receiving a housing allowance. Another third received congratulatory or condolence payments. One in six workers went to a subsidized canteen. The ‘lost decade’ of the 1990s simultaneously pressed companies to cut costs and to meet their workers’ demand for more flexible benefits. The answer was the ‘cafeteria plan’, which allowed staff to order from a menu of benefits. Seiyu, the department store, introduced its plan in 1996, with choices ranging from help with a babysitter and the mortgage to a ‘subsidy for using Western food’. A decade later, around 10 per cent of Japanese firms had switched to a ‘cafeteria plan’. Company housing was cut back and leisure subcontracted. By 2008, perks had shrunk to an estimated 5 per cent of cash wages, the lowest since the 1950s. Still, at the time of writing, what is impressive is how much has stayed, not just not how much has gone. Toyota has not only kept its baseball teams and philharmonic orchestra but also its own hospitals. In Japanese firms, half the perks continue to go to housing. Support for cultural activities and sport has increased since the 1990s.42

  While the company town proper, then, became more marginal in the second half of the twentieth century, consumption continues to benefit from sponsorship by firms in a variety of ways. Its persistence is visible not only in the old industrialized West but also among recent newcomers such as South Korea. Into the 1980s, Korean companies resembled boot camps. Canteen food and leisure facilities were the preserve of privileged managers. Cramped dormitories and dirty baths were a constant complaint and helped spark strikes in the 1970s and ’80s. The decisive change came after military rule collapsed in 1987. As growth slowed down, the government was forced to intervene in wage negotiations. Greater benefits were a way to restrain wages, contain strikes and to incorporate workers on shorter hours into a company culture. Korean companies reinvented themselves, shedding their authoritarianism for family values. Hyundai built athletic fields for sports teams and corporate flats for single workers. At LG, employees could play golf or learn a foreign language together to create team spirit. At its headquarters, all staff, from top to bottom, would meet once a month in the basement company pub, with free beer on tap.43

  Globally, the greatest assault on firm services came with the wave of privatization in Eastern Europe after the fall of communism in 1989, and China’s so far successful attempt to escape a similar fate by liberalizing its economy. Privatization meant a change in ownership, but, more than that, it pushed firms to focus on their ‘core business’ and divest themselves of their stake in the community. State enterprises had been practically their own commonwealths, overseeing everything from housing and health to sport and music. In Russia in the early 1990s, social spending by state enterprises amounted to 4 per cent of GDP. A typical Russian state enterprise spent around 20 per cent of its profits on housing and feeding its workers and looking after their children. In Poland, it was 10 per cent. In China, benefits made up as much as 40 per cent of pay.44

  As in the West, privatization has reduced this figure. Yet many services managed to survive. The Russian story, in particular, has been one of adaptation rather than extinction. Paternalism lived on, and with it the suspicion of free unions. A manager of an equipment plant in Krasnoyarsk in Siberia explained in 1996 why his firm knew best: ‘We provide our employees with various services. We sell them food and consumer goods at discount. We finance the hospital, housing and schools. We have property in the Crimea for their vacations. We do everything – we have pigs and we grow mushrooms for them.’ 45 All the new trade union did was criticize. So, he said, it was only right to abolish it. Across Russia, the second half of the 1990s saw a vast transfer of flats, kindergartens and sports fields from enterprises to municipalities. Still, in 2000, one in six firms ran their own summer camps and cultural facilities. The number of cafeterias had barely changed and, while most firms no longer owned their own sports grounds, they now subsidized their workers’ recreation. Interestingly, almost half the foreign-owned firms provided housing; more than Russian-owned ones did.46

  Size matters. Recreation and welfare services were never the sole preserve of the giants of industry – the Krupps, Toyotas and Bat’as. In the inter-war years, light industries, banks and services, too, started to sponsor company teams.47 Still, the scale of services fell sharply with the size of a firm. A family firm with a dozen employees does not tend to build a pool. This was why the French state introduced the chèques vacances to give workers in small firms at least some indirect benefits. Big companies with a few hundred employees or more are the norm in Sweden, Germany and Britain, but the exception in Greece and Italy. As a space of consumption, the world of work was therefore sharply divided. On one side were corporations that organized life and leisure. On the other were small enterprises and family shops which did little more than throw a Christmas party. Inevitably, our search for company activities has biased us towards the former. Before we finish, therefore, it would be useful to step back briefly and regain a sense of proportion by remembering that most workers in modern capitalist societies never dipped their toe in a company pool. The majority of Japanese workers make their living in small or medium-sized enterprises, not as ‘salarymen’ at Hitachi. What is their leisure like? The anthropologist James Roberson observed the lives of the fifty-five employees of a metals company in Tokyo in 1989–90. The company did belong to a ‘resort trust’, had a baseball club and handed out gifts and alcohol at four festivals
a year, but that was the limit of its contribution. Contrary to the popular idea that, in Japan, life after work continued to revolve around the work group, he found that most employees spent their free time with friends from their nakama groups – non-kin networks – not their co-workers. Occasionally, colleagues went out drinking together, but most of their leisure time was spent alone or with friends playing Pachinko, going dancing or fishing.48

  THE STATE

  If the firm’s contribution to consumption in the twentieth century was considerable, that of the state was even greater. Of course, kings and governments have always left their mark on their subjects’ way of life. In eighteenth-century France, the fine wool worn by officials accounted for a significant share of the luxury trade. In 1871, the short-lived Paris Commune gave schoolteachers free furniture. In early modern England, the destitute could turn to the Poor Law for help. Still, prior to the 1930s, state spending on health, housing, education and welfare was tiny. The economic historian Peter Lindert, who has put together the most comprehensive statistics, found that in the nineteenth century not a single country spent even 3 per cent of its gross domestic product (GDP) on social programmes. By 1930, a small group of Scandinavian countries, Germany, Britain and New Zealand led the developed world with between 2 per cent and 5 per cent of GDP.49 By 2007, that figure had climbed to 20 per cent in the developed world; in France it was 29 per cent.50

  These figures capture ‘social spending’ – especially pensions, health and income support – but they are only one portion of overall ‘public consumption’, which extends from warheads to museums. The state is a voracious consumer. In the European Union today, 16 per cent of the gross national product goes towards the public purchase of goods and services; public authorities buy almost 3 million desktop computers a year. As a consumer, the state packs a big punch, for the environment as well as the economy. A report by the National Health Service found that in 2004 English hospitals emitted as much carbon as all of Estonia; some of this was from buildings and transport, but three fifths came from the procurement of drugs, food and equipment.51