People From Boston

"One of the undesirable by-products of the factory system was the frequent abuse of unskilled workers, including children, who were often subjected to unhealthy working conditions, long hours, and low pay. The appalling conditions spurred a national anti-factory campaign. Led by Mary Parker Follett and Lillian Gilbreth, the campaign gave rise to the “human relations movement" advocating more humane working. Among other things, the human relations movement provided a more complex and realistic understanding of workers as people, instead of merely cogs in a factory machine."

"Mary Follett devoted a lifetime to searching for the true principles of organization which would ensure a stable foundation for the steady, ordered progress of human well-being. That her search was not in vain will be evident to all who read the lectures. Her teaching is not theoretical, but is based on a close study of the practice of a large number of business undertakings. She chose this field of enquiry to supplement her work on local and national government because she realized that the principles which should determine organization are identical, no matter what the purpose which that organization is designed to serve."

"You may wonder why I have talked of government, and of the League of Nations, instead of spending all my hour on leadership in industry. I have done it deliberately, because it seems to me a fact of very great significance that we are finding the same trend in all these different fields. It reinforces us in our conviction that we are moving in harmony with the deeper and more vital forces of human progress."

"Before Mary Follett, industrial groups had seldom been the subject of study of political or social scientists. It was her special merit to turn from the traditional subjects of study - the state or the community as a whole - progressively to concentrate on the study of industry... Her approach was to analyse the nature of the consent on which any democratic group is based by examining the psychological factors underlying it. This consent, she suggested, is not static but a continuous process, generating new and living group ideas through the interpenetration of individual ideas."

"Democracy is a great spiritual force evolving itself from men, utilizing each, completing his incompleteness by weaving together all in the many-membered community life which is the true Theophany. The world today is growing more spiritual, and I say this not in spite of the Great War, but because of all this war has shown us of the inner forces bursting forth in fuller and fuller expression."

"Since I have been in England I have been asked several times why I am studying business management. I will try to tell you. Free to choose between different paths of study, I have chosen this for a number of reasons. First of all, it is among businessmen (not all, but a few) that I find the greatest vitality of thinking to-day, and I like to do my thinking where it is most alive. I said last winter to a Professor of Philosophy: 'Do you realize that you philosophers have got to look to your laurels, that businessmen are doing some very valuable thinking and may get ahead of you?' And he acknowledged this, which I think was a very significant concession. Moreover, I find the thinking of businessmen to-day in line with the deepest and best thinking we have ever had. The last word in science—in biology—is the principle of unifying. The most profound philosophers have always given us unifying as the fundamental principle of life. And now business men are finding it is the way to run a successful business. Here the ideal and the practical have joined hands. That is why I am working at business management, because, while I care for the ideal, it is only because I want to help bring it into our everyday affairs."

"Man can have no rights apart from society or independent of society or against society."

"Another reason is because industry is the most important field of human activity, and management is the fundamental element in industry. It is now generally recognized that not bankers, not stockholders, but management is the pivot of business success. It is good management that draws credit, that draws workers, that draws customers. Moreover, whatever changes should come, whether industry is owned by individual capitalists, or by the State, or by the workers, it will always have to be managed. Management is a permanent function of business."

"Individuality is the capacity for union. The measure of individuality is the depth and breadth of true relation. I am an individual not as far as I am apart from, but as far as I am a part of other men. Evil is non-relation."

"It is a mistake to think that social progress is to depend upon anything happening to the working people: some say that they are to be given more material goods and all will be well; some think they are to be given more "education" and the world will be saved. It is equally a mistake to think that what we need is the conversion to "unselfishness" of the capitalist class."

"The third reason why I am working at business management is because I believe in control, and so do our most progressive business men. I believe in the individual not trusting to fate or chance or inheritance or environment, but learning how to control his own life. And nowhere do I see such a complete acceptance of this as in business thinking, the thinking of more progressive business men. They are taking the mysticism out of business. They do not believe that there is anything fatalistic about the business cycle that is wholly beyond the comprehension of men; they believe that it can be studied and to some extent controlled."

"Democracy has meant to many "natural" rights, "liberty" and "equality." The acceptance of the group principle defines for us in truer fashion those watchwords of the past. If my true self is the group-self, then my only rights are those which membership in a group gives me."

"The group process contains the secret of collective life, it is the key to democracy, it is the master lesson for every individual to learn, it is our chief hope or the political, the social, the international life of the future."

"As the psychic coherence of the group can be obtained only by the full contribution of every member, so we see that a readiness to compromise must be no part of the individual's attitude. Just so far as people think that the basis of working together is compromise or concession, just so far they do not understand the first principles of working together."

"Early psychology was based on the study of the individual; early sociology was based on the study of society. But there is no such thing as the "individual," there is no such thing as "society"; there is only the group and the group-unit — the social individual. Social psychology must begin with an intensive study of the group, of the selective processes which go on within it, the differentiated reactions, the likenesses and unlikenesses, and the spiritual energy which unites them."

"What then is the essence of the group process by which are evolved the collective thought and the collective will? It is an acting and reacting, a single and identical process which brings out differences and integrates them into a unity. The complex reciprocal action, the intricate interweavings of the members of the group, is the social process."

"We see now that the process of the many becoming one is not a metaphysical or mystical idea; psychological analysis shows us how we can at the same moment be the self and the other, it shows how we can be forever apart and forever united. It is by the group process that the transfiguration of the external into the spiritual takes place, that is, that what seems a series becomes a whole. The essence of society is difference, related difference. "Give me your difference" is the cry of society to-day to every man."

"One of the most interesting things about business to me is that I find so many business men who are willing to try experiments. I should like to tell you about two evenings I spent last winter and the contrast between them. I went one evening to a drawing-room meeting where economists and M.Ps. talked of current affairs, of our present difficulties. It all seemed a little vague to me, did not seem really to come to grips with our problem. The next evening it happened that I went to a dinner of twenty business men who were discussing the question of centralization and decentralization. Each one had something to add from his own experience of the relation of branch firms to the central office, and the other problems included in the subject. There I found L hope for the future. There men were not theorizing or dogmatizing; they were thinking of what they had actually done and they were willing to try new ways the next morning, so to speak. Business, because it gives us the opportunity of trying new roads, of blazing new trails, because, in short, it is pioneer work, pioneer work in the organized relations of human beings, seems to me to offer as thrilling an experience as going into a new country and building railroads over new mountains. For whatever problems we solve in business management may help towards the solution of world problems, since the principles of organization and administration which are discovered as best for business can be applied to government or international relations. Indeed, the solution of world problems must eventually be built up from all the little bits of experience wherever people are consciously trying to solve problems of relation. And this attempt is being made more consciously and deliberately in industry than anywhere else."

"Group organization is to be the new method in politics, the basis of our future industrial system, the foundation of international order. Group organization will create the new world we are now blindly feeling after, for creative force comes from the group, creative power is evolved through the activity of the group life."

"We can never wholly separate the human from the mechanical side... But you all see every day that the study of human relations in business and the study of operating are bound up together."

"We can confer authority; but power or capacity, no man can give or take. The manager cannot share his power with division superintendent or foreman or workmen, but he can give them opportunities for developing their power"

"THE subject I have been given for these lectures is The Psychological Foundations of Business Administration, but as it is obvious that we cannot in four papers consider all the contributions which contemporary psychology is making to business administration — to the methods of hiring, promoting and discharging, to the consideration of incentives, the relation of output to motive, to group organization, etc. — I have chosen certain subjects which seem to me to go to the heart of personnel relations in industry. I wish to consider in this paper the most fruitful way of dealing with conflict. At the outset I should like to ask you to agree for the moment to think of conflict as neither good nor bad; to consider it without ethical prejudgment; to think of it not as warfare, but as the appearance of difference, difference of opinions, of interests. For that is what conflict means — difference. We shall not consider merely the differences between employer and employee, but those between managers, between the directors at the Board meetings, or wherever difference appears."

"There are three main ways of dealing with conflict; domination, compromise and integration. Domination, obviously, is a victory of one side over the other. This is the easiest way of dealing with conflict, the easiest for the moment but not usually successful in the long run, as we can see from what has happened since the War."

"Certain changes have been going on in business practice which are destined, I believe, to alter our thinking fundamentally. I think this is a contribution which business is going to make to the world, and not only to the business world, but eventually to government and international relations. Men may be making useful products, but beyond this, by helping to solve the problems of human relations, they are perhaps destined to lead the world in the solution of those great problems of coordination and control upon which our future progress must depend."

"Power is not a pre-existing thing which can be handed out to someone, or wrenched from someone. We have seen again and again the failure of "power" conferred. You could give me dozens of cases. The division of power is not the thing to be considered, but the method of organization which will generate power."

"There is no such thing as vicarious experience."

"The study of human relations in business and the study of the technology of operating are bound up together."

"Fifteen years ago, I found it easy to be in favor of international capital mobility -- the free flow of investment financing from one country to another. Then it was easy to preach for an end to all systems of controls on capital that hindered this flow. Now it is harder."

"In my view, Marx has trapped himself. He has been primed to expect a deeper layer of real reality underneath mere appearances. And he has chosen the wrong model of the underlying real reality--the labor theory of value, which is simply not a very good model of the averages around which prices fluctuate. Socially-necessary labor power usually serves as an upper bound to value--if something sells for more, then a lot of people are going to start making more of them, and the prices at which it trades are going to fall. But lots of things sell for much less than the prices corresponding to their socially-necessary labor power lots of the time. And so Marx vanishes into the swamp which is the attempt to reconcile the labor theory of value with economic reality, and never comes out."

"Economists’ instincts are that uncertainty about current prices, future prices, and the real meaning of nominal trade-offs between the present and the future; distortions introduced by the failure of government finance to be inflation-neutral; windfall redistributions; and the focusing of attention not on preferences, factors of production, and technologies but on predicting the future evolution of nominal magnitudes must degrade the functioning of the price system and reduce the effectiveness of the market economy at providing consumer utility. The cumulative jump in the price level as a result of the inflation of the 1970s may have been very expensive to the United States in terms of the associated reduction in human welfare."

"Hayek says that the problem with classical liberalism was that it was not pure enough. The government needed to restrict itself to establishing the rule of law and to using antitrust to break up monopolies. It was the overreach of the government beyond those limits, via central banking and social democracy, that caused all the trouble. A democratic government needs to limit itself to rule of law and antitrust–and perhaps soup kitchens and shelters. And what if democracy turns out not to produce a government that limits itself to those activities? Then, Hayek says, so much the worse for democracy. A Pinochet is then called for to, in a Lykourgan moment, minimalize the state. After social democracy has been leveled and the rubble cleared away, then–perhaps–a limited range of issues can be discussed and debated by a–limited–restored democracy, with some kind of group of right-wing army officers descended from latifundistas Council of Guardians in the background to ensure that property remains sacred and protected, and the government small enough to fit in a bathtub. […] Hayek was formed in Austria. From his perspective the property and enterprise respecting Imperial Habsburg government of Franz Josef eager to make no waves, to hold what it has, and to keep the lid off the pressure cooker appears not unattractive. This is especially so when you contrasted would be really existing authoritarian alternatives: anti-Semitic populist demagogue mayors of Vienna; nationalist Serbian or Croatian politicians interested in maintaining popular legitimacy by waging class war or ethnic war; separatists who seek independence and then one man, one vote, one time. An “authoritarian” after the manner of Franz Josef looks quite attractive in this context–and if you convince yourself but they are as dedicated to small government neoliberalism as you are, and that the Lykourgan moment of the form will be followed by soft rule and popular assent, so much the better. And if the popular assent is not forthcoming? Then Hayek can blame the socialists, and say it is their fault for not understanding how good a deal they are offered."

"The Good Economist Hayek is the thinker who has mind-blowing insights into just why the competitive market system is such a marvelous societal device for coordinating our by now 7.2 billion-wide global division of labor. Few other economists imagined that Lenin’s centrally-planned economy behind the Iron Curtain was doomed to settle at a level of productivity 1/5 that of the capitalist industrial market economies outside. Hayek did so imagine. And Hayek had dazzling insights as to why. Explaining the thought of this Hayek requires not sociology or history of thought but rather appreciation, admiration, and respect for pure genius.The Bad Economist Hayek is the thinker who was certain that Keynes had to be wrong, and that the mass unemployment of the Great Depression had to have in some mysterious way been the fault of some excessively-profligate government entity (or perhaps of those people excessively clever with money–fractional-reserve bankers, and those who claim not the natural increase of flocks but rather the interest on barren gold). Why Hayek could not see with everybody else–including Milton Friedman–that the Great Depression proved that Say’s Law was false in theory, and that aggregate demand needed to be properly and delicately managed in order to make Say’s Law true in practice is largely a mystery. Nearly everyone else did: the Lionel Robbinses and the Arthur Burnses quickly marked their beliefs to market after the Great Depression and figured out how to translate what they thought into acceptable post-World War II Keynesian language. Hayek never did. My hypothesis is that the explanation is theology: For Hayek, the market could never fail. For Hayek, the market could only be failed. And the only way it could be failed was if its apostles were not pure enough."

"[W]e have crossed a great divide, between what we used to do in all of previous human history and what we do now. Utopia, it is true, this is not. I imagine Bellamy would be at once impressed and disappointed. The economic historian helps explain why. ...With our increasing wealth, what used to be necessities become matters of little concern ...conveniences turn into necessities. Luxuries turn into conveniences. And we humans envision and then create new luxuries. ...He saw humanity on a hedonic treadmill: "...the triumph of economic growth is not a triumph of humanity over material wants; rather, it is a triumph of material wants over humanity." ...[T]his hedonic treadmill is one powerful reason why, even when all went very well, we only slouched rather than galloped toward utopia."

"To live content with small means; to seek elegance rather than luxury, and refinement rather than fashion: to he worthy, not respectable; and wealthy, not rich; to study hard, think quietly, talk gently, act frankly; to have an oratory in my own heart, and present spotless sacrifices of dignified kindness in the temple of humanity; to spread no opinions glaringly out like show-plants, and yet leave the garden gate ever open for the chosen friend and the chance acquaintance: to make no pretenses to greatness; to seek no notoriety; to attempt no wide influence; to have no ambitious projects; to let my writings be the daily bubbling spring flowing through constancy, swelled by experiences, into the full, deep river of wisdom; to listen to stars and buds, to babes and sages, with open heart; to bear all cheerfully, do all bravely, await occasions, hurry never; … in a word, to let the spiritual, unbidden and unconscious, grow up through the common. This is to be my symphony."

"Another group at MIT and Harvard University developed the notion of “organizational learning.” Chris Argyris and Donald Schön were the key figures in this group. Argyris was a student of Kurt Lewin, who was a participant in the Macy Foundation meetings that were chaired by Warren McCulloch."

"Argyris is best known for his theory, in collaboration with the late philosophy scholar Donald Schön, on the two types of learning — single-loop and double-loop. This theory refers to the way people respond to changes in their environment. Single-loop learning is the repeated attempt at the same problem by an organization or individual, without varying the method or questioning the goal. Double-loop learning goes beyond that, modifying the goal in light of the experience.Argyris’s work raises profound questions about how organizations run, and casts doubt on what is widely accepted as good practice. But he offers management a profound exploration of the fundamental principles of organizational behavior and human interaction in the workplace."

"Belief in the stable state serves primarily to protect us from apprehension of the threats inherent in change. Belief in stability is a means of maintaining stability, or at any rate the illusion of stability. But the most threatening situations are those that confront us with uncertainty, and by ‘uncertainty’, I don’t mean risk, which is a probability ratio which we all know how to handle, particularly those who are managers of industry. We can deal with risk."

"Old questions are not answered—they only go out of fashion."

"A social system does not move smoothly from one state of its culture to another... Something old must come apart in order for something new to come together. But for individuals within the system, there is no clear grasp of the next stable state - only a clear picture of the one to be lost Hence, the coming apart carries uncertainty and anguish for the members of the system since it puts at risk the basis for self-identity that the system had provided."

"We need another and a wiser and perhaps a more mystical concept of animals. Remote from universal nature, and living by complicated artifice, man in civilization surveys the creature through the glass of his knowledge and sees thereby a feather magnified and the whole image in distortion. We patronize them for their incompleteness, for their tragic fate of having taken form so far below ourselves. And therein we err, and greatly err. For the animal shall not be measured by man. In a world older and more complete than ours they move finished and complete, gifted with extensions of the senses we have lost or never attained, living by voices we shall never hear. They are not brethren, they are not underlings; they are other nations, caught with ourselves in the net of life and time, fellow prisoners of the splendour and travail of the earth."

"His Maine books, like Northern Farm, sing of harmonious, self-reliant country living: uncramped, governed by seasonal rhythms, connected to all the generations who’d farmed the land before them."

"On his own land or on others', he sought the company of rural people. In their husbandry he found the "poignant and poetic recognition of the long continuity of man" that was his own real calling."

"The house was full of the sound of the gale. It was a winter northeaster, furious with wind and snow, and driving down against us from the dark and desolate North Atlantic and a thousand miles of whitecaps and slavering foam."

"Every year at the farm I watch the insect kingdom come into its northern being, flourish in what we have of heat and sun, live out its myriad life, and disappear almost as if it had never been."

"The three great elemental sounds in nature are the sound of rain, the sound of wind in a primeval wood, and the sound of outer ocean on a beach. I have heard them all, and of the three elemental voices, that of ocean is the most awesome, beautiful and varied.”"

"Schumpeter’s approach has an important implication for political behavior. If the constellation of economic interests regularly changes because of innovation and entry, politicians face a fundamentally different world than those in a natural state: open access orders cannot manipulate interests in the same way as natural states do. Too much behavior and formation of interests take place beyond the state’s control. Politicians in both natural states and open access orders want to create rents. Rent-creation at once rewards their supporters and binds their constituents to support them. Because, however, open access orders enable any citizen to form an organization for a wide variety of purposes, rents created by either the political process or economic innovation attract competitors in the form of new organizations. In Schumpeterian terms, political entrepreneurs put together new organizations to compete for the rents and, in so doing, reduce existing rents and struggle to create new ones. As a result, creative destruction reigns in open access politics just as it does in open access economies. Much of the creation of new interests is beyond the control of the state. The creation of new interests and the generation of new sources of rents occur continuously in open access orders."

"A final aspect of all open access orders is Schumpeter’s notion of creative destruction, one of the most powerful descriptions of a competitive, open access economy. When Schumpeter wrote Capitalism, Socialism, and Democracy in the early 1940s, the economic theory of perfect competition among atomistic firms (i.e., firms too small to have market power) had come under sustained attack as unrealistic. Large and powerful economic organizations dominated the new economy, and their behavior did not match the textbooks. Despite this dominance, the economy produced historically unprecedented, sustained economic development. Schumpeter asked, How could large businesses that were supposed to choke off competition and growth nonetheless generate such spectacular productivity increases in a world that seemed ever more competitive?"

"International specialization and division of labor requires institutions and organizations to safeguard property rights across international boundaries so that capital markets as well as other kinds of exchange can take place with credible commitment on the part of the players."

"Economists with a historical bent have only just begun to study institutional change and its impact on industrial organization. Douglass C. North has been the innovator here. In his work with he outlined a most useful theory of institutional change and applied it to American economic growth. In his study with Robert Paul Thomas he demonstrated how the changing industrial organization affected the rise of the west. The works of North and his colleagues use this sweeping panorama of history to test, buttress, and refine their theory. They have not yet focused on a detailed analysis of the historical development of any specific economic institution."

"Robert Fogel and Douglass North have been awarded this year's Prize in Economics for having renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change."