Columbia Law School Scholarship Archive Faculty Scholarship Faculty Publications 1993 The Political Economy of the Wagner Act: Power, Symbol, and Workplace Cooperation Mark Barenberg Columbia Law School, [email protected] Follow this and additional works at: https://scholarship.law.columbia.edu/faculty_scholarship Part of the Labor and Employment Law Commons, Law and Politics Commons, and the Law and Society Commons Recommended Citation Mark Barenberg, The Political Economy of the Wagner Act: Power, Symbol, and Workplace Cooperation, 106 HARV. L. REV. 1379 (1993). Available at: https://scholarship.law.columbia.edu/faculty_scholarship/934 This Article is brought to you for free and open access by the Faculty Publications at Scholarship Archive. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Scholarship Archive. For more information, please contact [email protected]. VOLUME 106 MAY 1993 NUMBER 7 HARVARD LAW REVIEW THE POLITICAL ECONOMY OF THE WAGNER ACT: POWER, SYMBOL, AND WORKPLACE COOPERATION Mark Barenberg TABLE OF CONTENTS PAGE I. INTRODUCTION ........................................................... 1381 H. THE ORIGINS OF THE WAGNER ACT: THE ROLE OF INTEREST GROUPS, MASS POLITICS, AND POLITICAL ENTREPRENEURS .................................. 1392 A. Organized Labor: Historical Weakness, Ideological Passivity ................ 1393 B. Business: The Contingent Impotence of Well-Organized Interest Groups ...... 1396 C. Mass Politics:Propulsive, Disruptive, but Indeterminate ................... 1399 D. The Crucible of the NLRA: The NRA Labor Boards and "the Education of Senator W agner" ...................................................... 1401 E. Progressive Policy Entrepreneurs, in and out of Government ................ 1403 F. The Fortuitous Role of "the Key Man in Congress". ....................... 1410 Im. ROBERT WAGNER'S PROGRESSIVISM: "IF WE INTEND TO PURSUE THE PHILOSOPHY OF THE NEW ERA"......................................................... 1412 A. PragmatistPremises: Scientific Guidance of the "Process of Becoming". ...... 1413 B. Social Control and Planning in the Administrative State ................... 1415 C. "Building ... a Co-operative Order" in the Age of Fordism ................ 1418 D. Sovereign Power and Substantive Freedom in the Large-Scale Enterprise and the Polity ............................................................ 1422 E. Labor-Management Cooperation in Progressive Labor Thought and Practice ... 1427 IV. THE ROLE OF SELF-REFLEXIVE INTERESTS, NoRMS, AND TRUST IN THE POLITICAL ECONOMY OF THE WAGNER ACT ........................................... 1431 A. Processes of Interest-Transformationin the Origins and Impact of the Act .... 1431 z. Contingent Ideological Frameworks ................................... 1431 2. The Perceived and Actual Symbolic Effects of the New Deal Labor Legislation ................................................... 1434 3. ProgrammaticDebate Among ProgressivePolicy Entrepreneurs ........... 1439 B. Worker Interest-Formation and the Justificationfor the Ban on Company Unions ...................................................... 1442 z. The Puzzle of the Justificationfor the Company Union Ban .............. 1442 (a) The Simple Coercion Argument ................................... 1443 (b) The Contracting-Into-SlaveryArgument ............................ 1445 (c) The Empowerment Failure Argument .............................. 1449 1379 1380 HARVARD LAW REVIEW [Vol. io6:1379 2. The Debate Among Political Entrepreneurs Over Company Unionism and Worker Consciousness ............................................... 1450 (a) Progressivism and the Principle of Free Choice ..................... 1451 (b) Wagner's Unresolved Tension Between Individual and Group Consent 1454 (c) "Domination" Under Section 8(a)(2) as Structural Coercion and Hegemonic Interest-Formation .................................... 1456 C. Reciprocity, Trust, and Resentment in Workplace Cooperation .............. 1461 z. The Model of Internal Labor Markets and Relational Contracting ......... 1462 2. Wagner's Model of the Bargaining Problem and its Current Elaborations . 1465 (a) Third-Party Enforcement ......................................... 1468 (b) Self-Interested Reciprocity ........................................ 1468 (c) Collective Empowerment and the DistributionalContest .............. 1471 (d) Group Norms and Conventions .................................... 1475 (e) Trust, Resentment, and Endogenous Interests ....................... 1478 (f) Wagner's Model in Sum: Gift-Exchange Through Empowerment ....... 1485 (g) Deliberative Trust and HierarchicalResentment .................... 1487 V. CONCLUSION: THE LIMITS AND AMBIGUITIES OF VAGNER'S VISION ............ 1489 1993] WAGNER ACT 1381 ARTICLE THE POLITICAL ECONOMY OF THE WAGNER ACT: POWER, SYMBOL, AND WORKPLACE COOPERATION Mark Barenberg* To shed light on the legal debate over new forms of workplace collabo- ration, this Article reexamines the origins of the National Labor Relations Act of 1935. ProfessorBarenberg concludes that the Wagner Act scheme was profoundly cooperationist, not adversarialas is conventionally assumed. Re- visionist historiography shows that, contrary to the claims of public choice theorists, Senator Wagner's network of political entrepreneurs was the de- cisive force in the conception and enactment of the new labor policy, amidst interest group paralysis and popular unrest. Drawing on original archival materials and oral histories, ProfessorBarenberg reconstructs the progressive ideology of Wagner and his circle. That elite network understood, consonant with recent critical theories, that legal symbols could shape worker con- sciousness. Their goal, however, was not to pacify but rather to galvanize workers to seek the collective empowerment that alone could secure demo- cratic consent and cooperation in both the enterprise and in the polity in the era of mass production. Wagner rejected the leading interwar model of workplace cooperation - company unionism - because he believed it could not combine high-trust cooperation with protection of workers against in- strumental and symbolic "domination" by employers. Unlike recent legal- economic theorists who presume a world of self-interested, rational behavior, Wagner understood that workplace hierarchiesgenerate cultural contests over trust and resentment. Wagner's model is more akin to current theories that maintain that human interests and perceptions - including dispositions toward trusting cooperation - are constituted intersubjectively and self- reflexively. I. INTRODUCTION T HIS Article reexamines the political and intellectual origins of the Wagner Act in order to reconstruct the vision of political economy, ideology, and law that impelled Robert Wagner's crusade to build a cooperative social democracy. It draws on historical evidence to il- luminate two issues currently at the center of labor law: the substan- tive controversy over the appropriate legal policy toward innovations in workplace cooperation, and the methodological contest between * Associate Professor of Law, Columbia Law School. For their help and encouragement, I thank Jim Atleson, Bernie Black, Vince Blasi, Richard Briffault, Ken Casebeer, Jack Coffee, Daniel Ernst, Martha Fineman, Terry Fisher, Steve Fraser, Josh Freeman, Ron Gilson, Vic Goldberg, Jeff Gordon, Milton Handler, Alan Hyde, Jim Liebman, Lance Liebman, Jerry Lynch, David Millon, Eben Moglen, Subha Narasimhan, Kellis Parker, Jim Pope, Simon Rifkind, Mark Roe, Chuck Sabel, Bill Simon, Peter Strauss, Kendall Thomas, and Michael Wachter. I am also grateful for financial support provided by Columbia Law School Alumnae/i. 1382 HARVARD LAW REVIEW [Vol. io6:1379 self-interested rationalism and symbolic constructionism for under- standing labor relations and law. With varying degrees of explicitness, Robert Wagner's progressivism addressed both problems, and his "so- lutions" to them were tightly intertwined. He presaged, to a surprising degree, the more self-consciously theoretical views of several present approaches to labor relations specifically and to social conflict and coordination generally. These approaches hold that economic and political actors' desires, interests, perceptions, and identities are shaped endogenously and self-reflexively in the practices, discourses, and power relations of legal, political, and economic institutions.' In this light, this Article portrays Wagner as an exemplar of those "prac- titioners" of institutional ordering whose "programs often profoundly shape our [theoretical] reflections on problems of coordination in un- suspected ways. "2 The last decade brought with it a profusion of new and potentially contradictory analyses of the origins, impact, and desirable future of American labor law. These analyses can be roughly arrayed into two methodological categories - call them self-interested rationalism and symbolic-constructionism - which loosely correspond to the respective I These approaches contrast with traditional economic theory, which takes actors' subjective preferences, interests, and perceived choice constraints as "exogenous" variables, and explains or predicts actors' behavior on the assumption that they act rationally to satisfy those preferences and interests within the choice set or environmental constraints they face. See, e.g., HAL R. VARIAN, MICROECONOMIC ANALYSIS 115-18 (2d ed. 1984); George J. Stigler & Gary S.