Firm Strategies and Industrial Conflict: Evidence from Germany

• In Event: Business Preferences, Strategies and Political Outcomes

Abstract

In the early twentieth century, one of the most pressing issues facing firms as industrialization proceeded was to prevent or respond to strikes. Yet despite the vast literature in labor economics and industrial organization, we still lack systematic data from this time period that address both the onset of industrial conflict, as well as the outcomes of such conflicts. Many existing studies neglect the use of lockouts as potential pre-emptive or responsive strategies of firms during this period, and also the political dimension of both lockout and strike support that could affect the results of such strategies. What explains the onset and outcomes of industrial conflicts between firms and workers? To what extent do characteristics of industries matter, as opposed to the political support for workers? Our answers from this important historical time period are limited due to the paucity of data on the outcomes of conflicts, as well as the political support during such conflicts.

In this paper I address these questions with specific data on industrial conflict from Imperial Germany. I use multiple datasets to test theories at the industrial sector and locality level, to examine the role of political intervention as well firm lockout strategies regarding the onset of industrial conflict as well as their outcomes. The data, from private reports of German industrial trade unions and various statistical yearbooks, allow me to assess whether certain types of unions that had been receiving assistance from the social democratic party (SPD) and central union offices were more likely to be involved in some conflicts, and whether such conflicts were more likely to end successfully for workers; further, the data allow one to test whether firms in those same industries engaged in more successful lockouts or not. Preliminary findings indicate that more politically supported unions were more likely to engage in strikes, and those strikes were more likely to succeed; however, those unions also faced much more resistance in terms of lockouts from firms. The results have implications for our historical understanding of how industrial conflicts were settled, and indicate the relevance of political support for economic actors when labor law is weak.

Author

• Alexander Kuo, University of Oxford