February 2000, Vol. 123, No. 2
Book reviews
Gazing
into the future
Empowering
employees
Capital For Our Time: The Economic, Legal, and Management Challenges of Intellectual Capital. Edited by Nicholas Imparto. Stanford, CA, Hoover Institution Press, 1999, 448 pp. $14.95, paper.
Working in the Twenty-First Century: Policies for Economic Growth Through Training, Opportunity, and Education. By David I. Levine. Armonk, NY, M.E. Sharpe, Inc., 1998, 64 pp. $61.95, hardback; $24.95, paper.
In American society, now is the time to think about the future. Several convergent factors are shaping our present discourse in all areas of society, including the area of economics. First, we are preparing for a mathematically symbolic moment, as the world enters a new millennium, although it is not clear that this moment has any real meaning except to legacy computer systems. We are also in a period of economic prosperity that gives us confidence in ourselves and the ability to shape our future. Finally, the first two events come at a time of technological revolution, perhaps as significant as the building of railroads or the application of electricity to our lives. Technology offers the chance to re-mix the odds of economic players—holders of the new technology have the opportunity to reinvent themselves into the new social and economic elite. A transforming technology has the same effect as reshuffling the cards in poker—everyone has a new opportunity to be a winner.
The shift from "things" to "ideas" is a captivating idea in itself. Is the value of this article a "thing" like the computer that was used to write it, or is it an idea conveyed by a "thing," such as words on the page of a book? Is the value in bytes or in the ideas transmitted to the reader? At what point do my ideas have economic value and when do they turn from my intellectual property into my intellectual capital, something I can assign an economic value?
Capital for Our Time deals precisely with these questions. Written as a series of essays by different authors, the book addresses the primary issues evolving as intangible ideas take on tangible value. The book begins with a series of essays on economics. After all, economists teach that paying for something will induce producers to create more of it. There is no evidence that intellectual property is immune from the laws of economics. If intellectual property is treated as another form of capital, it gains value and should encourage more intellectual property to be created and sold. As it gains value, this intellectual property takes on issues more traditionally reserved for other types of capital. Once ideas are defined as having value, then issues of management and law come into play. While there are essays in the book dealing with economics, accounting, and management, the discussion turns to matters of legal rights.
Our Anglo-Saxon ideas of value derive from our understanding of land. Property laws have a strong history, having been built up over a series of centuries, but applying them to ideas can be problematic. Land itself is a tangible. I can see it, measure it, and quickly decide whether someone else is using it without my permission. These facts are less clear in the area of ideas. What is the value of my name when it is used on the Internet? Who has the right to that name and if someone else uses my name, what are my rights? The challenges these questions present in a standard legal system based on years of law and tradition are multiplied when applied to global communities. Even if a set of case law develops in the United States to address these issues, the Internet is truly a global matrix, and international law can be much murkier. Several of the essays can be summarized as discussion on creating a body of law that allows labor to benefit from its intellectual capital.
Ideas demand a different set of skills both to produce them and move them into intellectual capital that has tangible worth. Preparing a work force that will successfully adapt to this new environment is the focus of Working in the Twenty-First Century. Levine cites public policy strategies that embrace a future with great potential but less stability than in present society. Through a series of chapters, focused on current policies, he described present societal problems, how we got into the current situation, and how we can find a way out of it. His chapter four, "Getting Out of This Mess: Invest and Reinvent," summarizes much of his philosophy. Through systematic investment in institutions, including government, and incentive plans that encourage people, government, and business to move in the correct direction, he believes that society can plan its way into a bright future.
Unlike some policymakers, Levine maintains an abiding faith in the value of government as a tool in this transformation. While he cites present government policies that work against the new economy, he has an abiding faith that a reinvented government will be a positive tool for change in the next century. His vision is of an inclusive society, motivated and guided by enlightened policies, accountable for their actions and empowered by an energized government. By adopting best practices, institutions as diverse as business corporations and schools can work for a common goal.
Both books offer thought-provoking ideas about the future, but they share a common faith in it. While they acknowledge a future that is less stable than the present, they both approach the future as a stable commodity where change comes at a planned pace event and where tomorrow may be different than today, but not surprising. Neither book envisions radical and wrenching change—change that destroys as well as creates and comes so quickly as to be unmanageable. While both books should be commended for recommending solutions as well as identifying problems, the value of these books is in their illumination of the present situation. Readers may wish to use them to access points to their own vision of tomorrow.
—Michael Wald
Bureau of Labor Statistics
Atlanta region
The Business of Employee Empowerment: Democracy and Ideology in the Workplace. By Thomas A. Potterfield. Westport, CT, Quorum Books, 1999, 161 pp. $55.
The opening scene of Shakespeare’s tragedy Macbeth has three witches stirring their satanic brew while the play’s namesake comments that "so foul and fair a day I have not seen." While reading this book, one might conjure similar thoughts that so foul and yet fair a book I have not read in a long time. At times, The Business of Employee Empowerment is brilliant, interesting, and remarkably analytical. Yet, there are some assertions that are frustrating, incongruous, or misleading. These distractions, however, are only minor problems. Thomas Potterfield has written a valuable contribution to the growing literature and understanding of employee empowerment, participatory management, total quality management, or whatever the term used to describe the various and myriad constructs of labor-management cooperation.
The author segments the process and evolution of the empowerment into three basic categories: ideology, domination, and freedom. These segments, he asserts, are grossly misunderstood, and those misunderstandings are perpetuated in literature, and become too structured for the process to substantially succeed. Thus, complete power-sharing between employees and managers never occurs in the world of work. Workers never really escape the industrial serfdom of the job site.
The book is basically divided into two distinct sections: the first section analyzes the theoretical development of the segments, and the second illustrates the validity of Potterfield’s theories as applied to a case study of a fictitiously named Fortune 100 company. In the author’s words, one of the chief goals of the publication is to illustrate how the current and past structures of "empowerment" distorted reality in ways that serve to protect and sustain existing relations of power and dominance within the corporation.
Without citing it as a reference, this parallels the "paradigm theory" of the often cited psychologist Thomas Kuhn. Kuhn’s theory is that any existing school of thought is dominant until challenged by a new paradigm. The established paradigm immediately tries to eliminate or absorb the new ideology, and if unsuccessful is replaced by that new theory. The new paradigm or hybrid of the old one is dominant until it is challenged. Political economists following the seminal theories of Harry Braverman in the seminal work Labor and Monopoly Capitalism will easily recognize this process as it applies to labor-management relations. Basically, Potterfield argues that the so-called "empowerment" process is a band-aid attempt to stem the hemorrhaging of corporatist capitalism in a rapidly changing global and technological society. It adapts the current system to market forces by giving workers a sense of workplace control without really changing the institutional structure.
Yet this is not, in the author’s opinion, such an evil or pernicious thing. If capitalism had to evolve to provide true workplace democracy it would benefit the system and workers. Potterfield works for the truest capitalistic institution, the multinational corporation. He apparently is not a practicing radical, except perhaps in theoretical thinking. His resources for this book are very balanced, running from radical theorists Karl Marx and Herbert Marcuse to management icons Philip Crosby, Edwards Demming, and Peter Drucker. In between, he consults a range of labor-management and organizational development experts such as Tom Peters and Robert Waterman (Getting to Yes); MIT Professor Thomas Kochan (The Transformation of Industrial Relations); and former Secretary of Labor Robert Reich (The Work of Nations). In reading this book, and the psychological implications for empowerment as a means to pacify the workforce, I was reminiscent of Marx’s adage that religion is the opiate of the masses.
As mentioned, there are some frustrating flaws in The Business of Employee Empowerment. The misreading of labor history is probably the most glaring error. "Unlike many of the earlier attempts at participatory management, empowerment has really taken hold of the collective imaginations of corporate leaders and management theorists," the book claims. Later it states that empowerment is an attempt to create more democratic and participatory approaches to management beginning in the 1950s and 1960s. The 1994 Commission on the Future of Worker-Management Relations (which the author fails to cite in the bibliography as a resource), chaired by Harvard Professor and former Secretary of Labor John Dunlop, acknowledges that Filene’s Department Store in the 1890s marked the first real acceptance of employee empowerment by management. In addition, the often cited book, The American Idea of Industrial Democracy, by Milton Derber, gives a complete history of employee participation from the Civil War through the 1960s.
It will also appear obvious to the serious student of industrial relations that some basic resource materials published within the last 10 years or so are missing. While no study can cite all the sources on any given topic, such works as Negotiating for the Future, by Irving and Barry Bluestone, the former one of the architects of the Saturn experiment, should have been cited. As a result, those persons interested in fully understanding the process of employee empowerment should read other resources to complement this book. Obviously, The Business of Employee Empowerment is not for the casual reader, but then it was not meant to be.
It should also be noted that the trade unionist is likely to take issue with some of the claims made in the book. The contributions and participation of unions is not even mentioned until far into the book. Potterfield’s statement that corporate America gave workers a middle class standard of living will also draw the attention of trade unionist readers. Even if one considers the impact of "welfare capitalism," they must accept that this was a reaction against unions and an attempt to circumvent their influence.
Yet despite minor and frustrating errors, the book is very good and worthwhile. The shop-floor team leader, the human resource director, or the student of "work" theory, however, will find it easy to digest. The author leaves readers pondering the question, "Are there companies where empowerment’s emancipatory potential is more fully developed, where employees participate fully in all of the decisions that affect their working lives?" Potterfield, as well as many industrial relations scholars, are waiting for an answer. Most workers would like that answer to be "yes."
—Henry P. Guzda
Industrial Relations Specialist
U.S. Department of Labor
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