Co-determination
The German labour unions had already gained equality as dialogue partners of the capital owners during the Great War. The law regulating the ‘Patriotic Emergency Service’ from December 1916 had determined that all factories important for the war effort, which employed more than 50 people, had to have workers’ committees.
In 1919, the SPD led government had passed a law that called for a works council in every enterprise with 20 or more employees.
Now, the labour unions, which closely co-operated in the German Union of Labour Unions, campaigned for co-determination in the supervisory boards. All companies employing over 1,000 people were to have equal representation between workers and owners/shareholders.
The German capitalists were not at all amused, nor were the members of the Erzberger Government. But the SPD and the FVP were backing the labour unions, and they were in charge in Prussia, Saxony and the Thuringian League, the union of the Thuringian microstates, thus controlling the three most industrially important states of the German Empire.
After initial negotiations had led to no solution, the labour unions started a series of strikes in early 1924, which clearly demonstrated that they had the power to stall industrial production.
This forced the entrepreneurs back to the negotiation table. But at the same time, many enterprises started to look for new production plants abroad, where no worker’ representatives would interfere with the decisions of the bosses.
Thus, the first half of 1924 saw a wave of subsidiary companies of German enterprises founded in Hungary, Italy, Belgium, the Netherlands, and Sweden – and to a lesser extent in Poland, Czecho-Slovakia and Slovenia.
The Hugenberg press was campaigning bitterly against co-determination: The capital was fleeing from Germany; the labour unions and the socialist were ruining the Fatherland; Germany was isolated internationally, nobody else even considered co-determination.
But the German workers liked the idea that their representatives should indeed have a word in the boards of directors or supervisory boards; after all, the success of a plant was to a great deal due to the workers. Germany had the best trained and educated working pool in the world, ‘Made in Germany’ had become a trade mark for quality worldwide. All this was not only to be owed to the boldness of the entrepreneurs, but also to the solidity and the effort of the workers. At the same time, it was important to prevent the capitalists from exploiting the workers – a very short-sighted, but frequently found strategy of the capitalists. A well paid working force, which could afford to buy the products of the plants, was much to be preferred to an impoverished proletariat; but many capitalists failed to see that. Especially those, who sold their products to the government and abroad, had a tendency to look for cheap labour.
The Erzberger Government was disunited over the issue: While the Zentrum representatives were not enthusiastic, they still could see the merits of the concept; but those of the GDNP and the NL – both parties were very close to the capitalists – were strictly against co-determination. Chancellor Erzberger wanted to avoid a long, drawn out labour dispute, which truly might impair Germany’s fortune; he therefore tended towards a limited acceptance of the proposals of the labour unions.
But that was an absolute no-go for GDNP and NL. Thus, the government finally was forced to side with the capitalists.
Now, the labour dispute really became hot: A new wave of strikes paralysed production all over the country. And the labour unions were not yet out of tricks, with the government against them, the employees of the Reichsbahn and the Reichspost were called to strike as well.
Within few days, public life came to a stand-still in Germany in early April 1924. At the same time, industrial production had dropped to the absolute minimum witnessed in this century.
The German labour unions had already gained equality as dialogue partners of the capital owners during the Great War. The law regulating the ‘Patriotic Emergency Service’ from December 1916 had determined that all factories important for the war effort, which employed more than 50 people, had to have workers’ committees.
In 1919, the SPD led government had passed a law that called for a works council in every enterprise with 20 or more employees.
Now, the labour unions, which closely co-operated in the German Union of Labour Unions, campaigned for co-determination in the supervisory boards. All companies employing over 1,000 people were to have equal representation between workers and owners/shareholders.
The German capitalists were not at all amused, nor were the members of the Erzberger Government. But the SPD and the FVP were backing the labour unions, and they were in charge in Prussia, Saxony and the Thuringian League, the union of the Thuringian microstates, thus controlling the three most industrially important states of the German Empire.
After initial negotiations had led to no solution, the labour unions started a series of strikes in early 1924, which clearly demonstrated that they had the power to stall industrial production.
This forced the entrepreneurs back to the negotiation table. But at the same time, many enterprises started to look for new production plants abroad, where no worker’ representatives would interfere with the decisions of the bosses.
Thus, the first half of 1924 saw a wave of subsidiary companies of German enterprises founded in Hungary, Italy, Belgium, the Netherlands, and Sweden – and to a lesser extent in Poland, Czecho-Slovakia and Slovenia.
The Hugenberg press was campaigning bitterly against co-determination: The capital was fleeing from Germany; the labour unions and the socialist were ruining the Fatherland; Germany was isolated internationally, nobody else even considered co-determination.
But the German workers liked the idea that their representatives should indeed have a word in the boards of directors or supervisory boards; after all, the success of a plant was to a great deal due to the workers. Germany had the best trained and educated working pool in the world, ‘Made in Germany’ had become a trade mark for quality worldwide. All this was not only to be owed to the boldness of the entrepreneurs, but also to the solidity and the effort of the workers. At the same time, it was important to prevent the capitalists from exploiting the workers – a very short-sighted, but frequently found strategy of the capitalists. A well paid working force, which could afford to buy the products of the plants, was much to be preferred to an impoverished proletariat; but many capitalists failed to see that. Especially those, who sold their products to the government and abroad, had a tendency to look for cheap labour.
The Erzberger Government was disunited over the issue: While the Zentrum representatives were not enthusiastic, they still could see the merits of the concept; but those of the GDNP and the NL – both parties were very close to the capitalists – were strictly against co-determination. Chancellor Erzberger wanted to avoid a long, drawn out labour dispute, which truly might impair Germany’s fortune; he therefore tended towards a limited acceptance of the proposals of the labour unions.
But that was an absolute no-go for GDNP and NL. Thus, the government finally was forced to side with the capitalists.
Now, the labour dispute really became hot: A new wave of strikes paralysed production all over the country. And the labour unions were not yet out of tricks, with the government against them, the employees of the Reichsbahn and the Reichspost were called to strike as well.
Within few days, public life came to a stand-still in Germany in early April 1924. At the same time, industrial production had dropped to the absolute minimum witnessed in this century.