Eugen Schwiedland, L’organisation de la grande industrie en Autriche (1891)

Eugen Schwiedland examines a proposed organization of Austrian industrial relations through three connected institutions: workers’ committees within factories, separate employer and worker corporations within industrial districts, and councils of conciliation and arbitration. Drawing on existing factory practices, especially in Germany and Austria, he evaluates government bills submitted in June 1891 rather than describing an already enacted system. His central argument is that effective conciliation requires organized parties capable of articulating interests, negotiating differences, and sustaining agreements. He supports compulsory institutions as a practicable route toward worker representation under Austrian political conditions, while exposing the limitations imposed by administrative supervision and restricted associational freedom.

The first section traces workers’ committees to sickness funds, relief societies, and informal groups of trusted employees. Initially established more as auxiliaries to employers than as independent defenders of workers, these bodies gradually acquired responsibilities for welfare administration, factory regulations, grievances, and discipline. Schwiedland distinguishes their practical development from earlier French and German proposals that remained unrealized. Their importance lies in the experience of cooperation: elected representatives can acquire responsibility through deliberation, while employers learn to recognize workers’ knowledge and legitimate complaints.

Factory examples demonstrate both the protective and disciplinary dimensions of this participation. At Brandts’s textile factory in Mönchen-Gladbach, a committee investigating a weaver’s allegedly defective work discovered a technical fault rather than worker negligence. Such inquiries could prevent unjust fines or dismissal, identify problems with materials and machinery, and improve production. Committees also administered relief, supervised apprentices, and moderated penalties in cases of hardship. Yet their authority sometimes extended into private conduct, including drinking, dancing, marriage, and sexual morality. Schwiedland treats this disciplinary influence favorably, although the examples reveal how representation could simultaneously restrain managerial arbitrariness and intensify paternalistic supervision.

Ils sont pour ainsi dire des organes qui constituent un self-government à certains égards, tout en inaugurant un régime énergique et une stricte discipline.

English translation: They are, so to speak, organs which constitute a self-government in certain respects, while at the same time inaugurating an energetic regime and a strict discipline.

This qualified self-government did not displace employers’ technical and commercial control. Many committees dealt primarily with the administration of working conditions rather than wage levels themselves. Others possessed broader powers: at Freese’s Berlin factory, representatives participated in regulating hours and negotiating piecework rates, while at Baerensprung and Starke changes to factory regulations required agreement between employer and committee. Schwiedland therefore presents a range of institutional arrangements rather than a single established model.

Although voluntary committees benefited from the mutual goodwill underlying their creation, their rarity made voluntary initiative inadequate to the scale of industrial conflict. Schwiedland consequently advocates compulsory committees in Austria, linking social peace to the improvement and recognition of workers rather than to military repression. He acknowledges workers’ educational efforts, collective idealism, and justified dissatisfaction. His support for statutory representation nevertheless reflects political constraints: freely developing unions might promote eventual reconciliation, but Austrian resistance to freedom of organization encouraged reform through officially constituted bodies.

Under the government proposal, committees would be required in all factories, although administrative uncertainty over what counted as a factory would complicate implementation. Their mandatory functions included communicating grievances concerning wages and working conditions, seeking conciliation, and electing representatives to higher institutions. Additional responsibilities—such as welfare administration, safety supervision, and consultation over penalties—could be granted voluntarily. Electoral provisions covered women as well as men, but age and service qualifications threatened to exclude substantial portions of the workforce. Schwiedland uses labor-turnover statistics to question these restrictions and urges protection for existing committees with more liberal rules. He also criticizes the vague grounds on which administrative authorities could dissolve committees, identifying their affinity with Austrian police powers.

The second section moves from factory representation to the organization of industries across a district. Existing compulsory craft bodies provide a comparison, not an identical precedent. In small industry, workers’ bodies were partly subordinate to those of masters; implementation remained uneven, and masters often failed to enforce provisions protecting workers and apprentices. Workers, however, had used these institutions to develop capable leadership and defend their interests, while continuing to establish unions wherever possible. Official representation therefore need not eliminate autonomous organization.

For large-scale industry, the proposed structure would instead establish two independent corporations, one of employers and one of workers, in towns or districts containing sufficient concentrations of similar industries. Their creation would depend on ministerial decree, which would define the industries covered, territorial boundaries, and institutional seat. Membership would be compulsory once a corporation was established: employers would belong by operating covered establishments, and workers by being employed in them.

Ces corporations sont organisées d'une façon indépendante et ne sont aucunement subordonnées l'une à l'autre.

English translation: These corporations are organised in an independent manner and are in no way subordinated to one another.

Employers would participate directly in their corporation’s assembly, whereas the workers’ assembly would consist of delegates elected by factory committees, with representation apportioned according to employment. These corporations would discuss common economic interests, take up questions unresolved within establishments, and elect representatives to conciliation councils. Their executive committees could meet to negotiate district-wide working conditions before invoking formal conciliation. Isolated establishments outside the territorial-industrial grouping would remain dependent on their factory committees for comparable functions.

Schwiedland regards these negotiations as a means of replacing an actual trial of economic strength with a joint assessment of the circumstances determining that strength. Wage demands and working hours must be considered against market conditions, production costs, sales, and the possibility of maintaining satisfactory business returns. Conciliation does not abolish conflicting interests; it seeks to make their economic foundations intelligible before conflict becomes a strike. Its institutional prerequisite is explicit:

Sans organisation préalable des deux parties intéressées, les ouvriers et les patrons, il ne peut en général être question de l'efficacité d'une Chambre de conciliation et d'arbitrage.

English translation: Without prior organisation of the two interested parties, the workers and the employers, there can in general be no question of the efficacy of a Chamber of conciliation and arbitration.

Corporate independence from the opposing party would not, however, mean independence from the state. Authorities would approve leadership and statutes, commissioners could suspend meetings, and provincial or ministerial authorities could suspend or dissolve corporations on broadly formulated grounds. Workers might also have to contribute financially to their own corporation. Schwiedland sees the scheme as a potentially useful response to restricted freedoms of coalition, association, assembly, and the press, but anticipates that free unions could eventually develop alongside it. The longer-term objective is collective determination of working conditions in place of the supposedly free agreement between isolated individuals.

The third section explains the proposed conciliation and arbitration councils as the culmination of this representative structure. Government could establish them for industries already organized into corporations, and potentially for organized small industry as well. Their primary task would be to reconcile disagreements over the conditions under which work continued or resumed. Schwiedland carefully distinguishes such collective, economic or social conflicts over future employment terms from legal disputes concerning rights under existing contracts. The latter belonged to existing labor tribunals and other designated adjudicatory institutions, not to the proposed councils’ principal bargaining function.

Councils would contain equal numbers of employer and worker assessors, elected by their respective corporate assemblies, together with a president and vice-president. Proceedings could be requested by either corporation, by individual employers or groups of workers within the council’s jurisdiction, or exceptionally by political authorities seeking to prevent or end a strike. The envisaged sequence ran from factory committee discussions through negotiations between corporate executives to council proceedings, ideally before any interruption of work.

Within the council, equally represented parties would negotiate through trusted representatives in oral proceedings not open to the public. Agreements would be published. If conciliation failed, the council could pronounce an arbitral award and ask the parties whether they accepted it; their responses would also be published. Refusal to participate would suspend proceedings and trigger public notice. A complete division between employer and worker assessors could even leave the council without an award if its president abstained.

Schwiedland therefore does not present the proposal as a system of assured, binding arbitration. Its central unresolved issue is enforcement:

Le projet ne dit rien touchant la manière en laquelle on pourra faire respecter les obligations imposées, ni à propos de la durée à laquelle la sentence arbitrale pourra se rapporter.

English translation: The draft says nothing touching the manner in which the obligations imposed can be made to be respected, nor with regard to the duration to which the arbitral award may relate.

He questions how compliance could be secured without free employer and worker associations capable of providing material guarantees for agreements. The proposal supplies procedures, representation, and publicity, but not a demonstrated means of making awards effective.

A parallel mining bill pursued similar purposes, although it formally combined employer and worker bodies within a single corporation rather than establishing two wholly separate corporations. Schwiedland closes with a strongly favorable but qualified judgment: the bills represent an important attempt to organize industry rationally, yet remain subject to parliamentary alteration and vulnerable to criticism for excessive state intervention. Across all three sections, the same tension persists. Durable industrial peace requires meaningful collective organization, but the Austrian government proposes to cultivate that organization through institutions whose autonomy it simultaneously restricts.