The “folk political economy” of Maine’s paper workers

Shredding Paper by Michael G. Hillard is an interesting chronicle of the economic and technological history of Maine’s paper industry. It highlights the plight of factory workers with the rise of U.S. industrial capitalism. The book tells the story of laborers who were an integral part of Maine’s industrial economy, describing their changing fortunes as they navigated through moral and technical challenges in rapidly changing markets. It includes firsthand accounts of the lives of factory workers and their families. Using the backdrop of Maine’s paper industry, Hillard sheds light on the complex relationship between labor and firms, as well as on the different economic practices that shaped the U.S. manufacturing industry in the past century. Were the rise and demise of the paper industry inevitable consequences of capitalism, and could capitalism work in a way that would have allowed paper and other similar industries to flourish in the long term?

Maine was the Detroit of paper manufacturing from the early 20th century to the mid-1960s. Chapters 1 and 2 describe the various stages of industrialization and innovation that affected the state’s paper industry. The industry dominated the local political economy, shaping its socioeconomic landscape. Hillard interviewed several previous employees of paper mills in the state, including Great Northern Paper, Oxford Paper, and S. D. Warren Company. The employees’ accounts bring these factories to life through nostalgic memories and provide vicarious glimpses of the hot and humid factory floors and the cold, harsh conditions of the forests where loggers lost limbs and life. As one example, S. D. Warren Company of Westbrook, Maine, is fondly remembered as “Mother Warren” by its former employees, an endearing term associated with founder S. D. Warren’s paternalistic efforts to reinvest some of the company’s profits into research and development and to give back to the local community by building infrastructures such as churches and schools. Because of these efforts, workers overlooked the poor working conditions as they took pride in their work, had a close relationship with management, and enjoyed job security stretching across generations. For these reasons, the company was able to keep unionization at bay for a long time and maintained a good relationship with workers even after they became unionized.

Chapters 3, 4, and 5 focus on the rise of unions such as the United Paperworkers International Union Local 1069, describing various strikes and their outcomes. After S. D. Warren Company was sold to Scott Paper in 1967, the close relationship between management and workers started to fade. Managers with very little experience in papermaking were brought in. Over time, the workers’ discontent with management grew because of unfair labor practices, mismanagement, and poor treatment by foremen. The newly unionized labor had contentious relationship with management and actively fought for contract protection. To illustrate these developments, Hillard dedicates a full chapter to the so-called “Madawaska Rebellion,” detailing the resistance of workers from Fraser’s paper mill in Madawaska, Maine. The workers at the mill, who were predominantly Franco-American, were discriminated against for their cultural and religious identity. These unionized workers and their families took part in the resistance, organizing a strike in 1971. While some union-led strikes, such as the 1977 strike to create mill-wise seniority, were successful, others, such as the 1975 strike organized by the newly formed Maine Woodmen Association, failed.

Chapters 6, 7, and 8 discuss the financialization of Maine’s paper companies and their subsequent decline after the 1980s. In response to competition from national and international companies for market share, paper companies in Maine faced pressure from Wall Street to generate higher profits. They responded by attacking traditional union contracts and made unrealistic demands to workers. When workers walked out in protest of these demands, some companies, such as Boise Cascade and the International Paper Company, fired thousands of their unionized employees in a calculated move to replace them with nonunionized workers. During this time, employers such as Scott Paper took the high road and introduced the concept of “jointness,” which, in theory, was a progressive move for the common benefit of all stakeholders, aiming at increasing cooperation between management and employees. A jointness initiative called High Performance Work Systems was successful in a few Scott Paper locations, with workers benefitting from pay raises after completing skill-improvement training. At other locations such as Somerset and Westbrook, however, jointness was met with resistance from local unions, which viewed it as a move to undermine union power. With financialization of the paper industry, local ownership was lost, and new corporate owners gained more control. Jointness gradually came to an end as shareholders resisted investing in projects that did not generate short-run profits.

In relaying these developments, Hillard introduces the term “folk political economy” to describe a version of history of capitalism from the unique perspective of paper-mill workers, mostly passed down to generations as a community memory. Workers believed that corporate governance and labor relations were better during the Chandlerian era (roughly the first two-thirds of the 20th century), with the term “Chandlerian,” a nod to the work of business historian Alfred D. Chandler Jr., describing companies that emphasized local ownership, hands-on management, and growth and stability over short-term profit. Indeed, Chandler’s book The Visible Hand: The Managerial Revolution in American Business paints management structures similar to those of Maine’s paper companies. One of the key convictions underpinning the folk political economy is that the paper companies entered a period of decline as they shifted from the Chandlerian era to the neoliberal era. Chandlerian companies guided by class-justice values and moral codes formed during the Mother Warren days could not survive the rise of neoliberal capitalist values. The author concurs with this historical interpretation and regards the theoretical underpinnings of the folk political economy to be as rational and enlightening as those of any other theory proposed by scholars.

Shredding Paper leaves us questioning whether the decline of Maine’s paper industry was a result of high costs, poor management, contentious unionized labor, digitization of the newspaper industry, or an inevitable part of globalization. The conventional wisdom has been that, in a competitive capital market, diminishing profits lead to deindustrialization. However, Maine’s paper workers disagree with this view. As revealed in the book, they blame corporate greed and internal factors (such as rapid turnover of ownership and poor management) for the decline of their state’s paper industry. We can learn many lessons from Maine’s folk political economy to prevent industries from suffering similar fate in the future. Generating profit is the goal of any company, but labor dignity and rights should be preserved in the process. Treating Maine paper companies like community assets, not just privately owned institutions steered by shareholders and equity investors, was one of the keys to their survival.