For more than hundred years after the Industrial Revolution, family businesses and the outwork and workshop system remained as a transitional system of production. By doing so, they retarded the diffusion of the organizational rationality often described as scientific management. This retardation was aggravated by paternalism, which could be recognized in relations between masters and operatives and in the family relationship which was often brought into factories. Paternalism and family relationships did not always hinder the advancement of capitalist production, in spite of their traditional character. On the contrary, they accelerated it by keeping peace within factories and, as a result, promoting productivity. Two sorts of paternalism appeared one after another from the Victorian Period to the beginning of the twentieth century : face-to-face paternalism and industrial or corporate paternalism. The first, appropriate to small firms, was dependent on masters' favour so much that it could not be translated into a formal system of operatives' rights. It may nevertheless be called the original form of paternalism, because it lies at the root of all paternalisms. The author refers to the differences between the face-to-face paternalisms of England and Japan as well. In Japanese paternalism, employers were more selfish and expected from their employees a quid pro quo beyond what would have been expected by their English counterparts. Corporate paternalism, appropriate to large-scale limited liability firms, was regarded as a regular policy of labour management, and came to represent, in effect, a system of employees' rights. Although it was, in the end, superseded by government welfare policy, employers hesitated for a long time to abandon corporate paternalism, because it was regarded by them as one of the most effective means of conciliating trade unions. It has to be noticed at the same time that the survival of corporate paternalism retarded the appearance of state paternalism.
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