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Wednesday, February 26, 2014

The Triangle Fire of 1911: A Story of Greed, Control, and Sadism in Business

If the standard business calculations and even greed are not sufficient to account for what occurs in the business world, perhaps we need to dig deeper in order to get to more subterranean motives that are not typically thought to surface amid the business fauna and flora. Did Richard Fuld, the CEO of Lehman Brothers when it collapsed in 2008, tell his subordinates to keep buying real-estate-based properties and securities because he was greedy? Was it greed that relentlessly pushed him to over-reach as repeatedly found Lehman to be wanting in comparison with Goldman Sachs? Rather than cutting into Lehman's over-dissected cadaver to look for pathogens besides greed, I engage here in a "dig" vicariously near Washington Park in New York City, at the site of a horrendous fire in a garment factory that occurred about a century before the implosion at Lehman Brothers. 

On March 25, 1911, 146 garment workers burned in the infamous “Triangle Fire.” The vast majority of the people who died—the youngest being 14 years-old—were women. Onlookers at street-level watched helplessly as 62 workers jumped or fell to the ground—many aflame as they plummeted. Louis Waldman, who would be elected to the New York Assembly, describes the scene as follows:

“Word had spread through the East Side, by some magic of terror, that the plant of the Triangle Waist Company was on fire and that several hundred workers were trapped. Horrified and helpless, the crowds—I among them—looked up at the burning building, saw girl after girl appear at the reddened windows, pause for a terrified moment, and then leap to the pavement below, to land as mangled, bloody pulp. This went on for what seemed a ghastly eternity. Occasionally a girl who had hesitated too long was licked by pursing flames and, screaming with clothing and hair ablaze, plunged like a living torch to the street. Life nets held by the firemen were torn by the impact of the falling bodies. The remainder waited [on the ninth floor] until smoke and fire overcame them. The fire department arrived quickly but . . . [had no ladders]  that could reach beyond the sixth floor.”[1]

The Triangle Fire in 1911. Why did NYC allow the construction of a building whose top floors were beyond the reach of existing fire ladders? (Image Source; wikipedia)

As policemen looked on helplessly, I wonder if any of them remembered beating those same workers a year before when the entire garment labor force in New York City went on strike in order to unionize. Max Blanck and Isaac Harris, the company’s owners, had paid off the police (and hired prostitutes) to attack the striking women. Adding insult to injury, the police would arrest them and tell the judge that the women had attacked them. Tellingly, Blanck and Harris held firm on the union issue even as the owners of the other companies capitulated on that pivotal point.

Blanck and Harris steadfastly believed that ownership of a factory meant that only they had the right of control not only over the terms of labor, but also what goes on inside the factory.[2] Hence, they were able to retain the industry norm of locking side exits so foremen could inspect the worker’s and their bags for stolen materials. Even though this policy doubtlessly came from the two owners, they subsequently claimed that they had not known the side doors were locked on the ninth floor and thus were not culpable as they made their way to the roof and onto another from the tenth floor. Incidentally, the foreman on the ninth floor managed to leave without unlocking any of the alternative exits. The owners evaded a criminal manslaughter conviction by discrediting a credible worker-witness, but they would have to pay $75 per victim, which the insurance settlement more than covered with $60,000 to spare.[3] In short, the owners who had singularly resisted unionization actually made out rather well from having defeated their workers’ demand for a safer workplace.

To be sure, winning on the union point was not necessary for an agreement on safety, as the two owners agreed to reduce workweek hours and increase wages. I submit that greed and the resulting unethical policy and conduct may not suffice in getting to the bottom of this tragedy. Far less obvious than the mangled, bloody pulp on the sidewalk is the owners’ shared mentality. Although a level of industry competition fit for Adam Smith’s The Wealth of Nations motivated Blanck and Harris to incessantly strive to reduce costs, including the labor cost of production, a fixation on being in control certainly of their “stuff” and even other people—almost to the point of viewing the workers at work as part of the “stuff”—may have surpassed even greed as the underlying motivation or even obsession. Certainly the owners were unique in the garment industry then in the extent to which they refused to admit a union during the strike in 1910; unionization represented to them an affront to their total control.[4] In other words, Blanck and Harris may have had “control issues.”

Even so, “being the boss” may not get us far enough down in our archeological dig. In 1913, Blanck was arrested again for locking the door in his factory during working hours.[5] In retrospect, the discredited worker who had testified two years earlier on the Triangle factory fire must have felt some vindication, at least concerning Blanck’s association with the short-sighted policy. The fine of only $20 unlikely had much impact on Blanck in his second venture, the workers of which could have little faith in the gilded justice of the courts and the moneyed laws of the legislatures.

One of the floors on which Triangle sewers worked. (Image Source: YouTube)

For our purposes here, that Blanck “just didn’t get it” even after the horrific tragedy in 1911 points to a sordid mentality beyond even a rather extreme control-fixation coming out of an inner sense of insecurity or emotional instability. The sickness also manifests in Blanck’s (and Harris’s) decision in 1910 to start the violence by paying prostitutes and officers of the law to beat workers on the picket line as though the two owners themselves had been attacked. Can we really say that they were not somehow involved in starting the fire, even if indirectly through a foreman putting a lit match in a scrap bin on the eighth floor? After all, the owners and foremen made it out of the building relatively quickly, and they already knew how to subvert officers of the law (both police and judges) so respect for the law would not have been an obstacle. The prospect of a nice insurance settlement may have also been in the mix, even if the money were secondary to the fuming desire to inflict still more pain on the workers who had presumed even to question the bosses’ (right of) control. I suspect the owners viewed the workers as subhuman in a sense, certainly not worthy of respect as fellow human beings.

In short, a certain sadism may enter into the equation as the desire to see those whom the owners viewed as inferior suffer for having dared resist the total control and insist on a share as a unionized workforce. I suspect the owners viewed themselves as the parents (or adults) and their workers as their children (based on level of income and being immigrants) even though this family picture breaks down even as a metaphor when the workers leave work. As “parents,” Blanck and Harris must have been jolted in 1910 as they finally had to encounter the “daughter” they had always excluded from the family (i.e., labeling her as a “black sheep” and so informing, or forming, the other family members as if supporting actors). The system works for the family’s dominant coalition and its enabling stakeholders (e.g., owners, foremen, suppliers, police, and the courts) by shielding them from their own pathologies. By 1910, the “daughter” had grown up sufficiently in self-confidence to recognize the ruse and insist, even at the risk of starvation (i.e., being estranged from the only family/normal she had known), on a share in the control governing and structuring her relationships with those who by then had become well ensconced in monopolized control. Blanck and Harris (two gay parents?) must have felt humiliated as their conveniently labeled “problem child” began to relate to them as one adult relates to another. A warped perspective maintained over years from the sheer willfulness of an underlying pathology can withstand the onslaught of reality with remarkable stubbornness. Hence, Blanck maintained his “locked door” policy in the wake of a horrific showing of reality.

The force of a warped mind engaged in business can overcome resistance from even greed; turning strikers into resentful victims (and perhaps even burnt corpses) is not exactly good business (i.e., financially as well as ethically). Reducing business to its financial element, treating it as the basis of business, not only enables Blanck’s and Harris’s absolutist notion of private property (the analogue in government being absolute national sovereignty), but also discounts or dismisses outright putrid motives that may reach further down than greed in the recesses of the mind, where hypertrophic (exaggerated) subterranean emotional monsters can evade the light of day by as they slither about in the river Styx.

1. Louis Waldman, Labor Lawyer (New York: E.P. Dutton & Co., 1944), pp. 32–33. If you are a writer or interested in improving your writing, the following sentence from the quote above provides a good example of what not to do. Waldman writes, “Life nets held by the firemen were torn by the impact of the falling bodies.” This sentence is in the passive voice (e.g., It was done by him). The passive can be used to emphasize a noun that would be the direct object in the active voice. Did Waldman really want to emphasize the life nets? “Falling bodies” fits better with the emphasis in the paragraph. Try this out for size: “The falling bodies tore through the life nets being held up by firemen.” Here, I want to emphasize the life nets more than the firemen, so I have used the passive voice in the subordinate clause. There is indeed a place for the voice, but only strategically rather than as a habit (often gained from using the device to evade responsibility rather sheepishly (e.g., “You will be asked to show I.D.” rather than “I/We will ask you for your I.D.”). Little people finding themselves with some power tend to find the allure of passive aggression too tempting to resist. Hence Maggie Smith’s line on Downton Abbey, “We give these little people some power and it goes to their heads like strong drink.” Notice the active rather than passive voice here as the Dowager Countess pushes back against the lower passive aggression. Part of my intent as a writer is to make the subterranean agendas transparent so we all know what is really going on rather than continuing to be beguiled by mere subterfuge primped up like some tropical bird.
2. Interestingly, 21 years later, Adolf Bearle and Gardiner Means would pen The Modern Corporation and Private Property in order to present their thesis that ownership (i.e., the stockholders) had become separated from control (i.e., the management) in the large-scale corporation-form of business enterprise. Blanck and Harris both owned and managed their company, and thus viewed the two as rightfully fused.
3. John M. Hoenig, "The Triangle Fire of 1911", History Magazine, April/May 2005.
4.Triangle Fire,” American Experience, PBS (aired February 25, 2014.
5. Hoenig, “The Triangle”

Sunday, February 23, 2014

On the Tyranny of the Status Quo

Ever wondered why so much energy must be expended to dislodge a long-established institution, law, or cultural norm? Why does the default have so much staying power? Are we as human beings ill-equipped to bring about, not to mention see, even the “no-brainer” changes that are so much (yet apparently not so obviously) in line with our individual and collective self-interest? In this essay, I look at Ukraine, Spain, and Illinois to make some headway on this rather intractable difficulty.

The full essay is at "On the Tyranny of the Status Quo"