September 3: Edward Filene

Edward_FileneEdward Filene, the founder of Filene’s department stores and one of the more progressive capitalists in American history, was born on this date in Salem, Massachusetts in 1860. Filene’s innovations included profit-sharing, a 40-hour work week, and paid vacations, as well as a minimum wage for women. He was a major player in the credit union movement, which his philanthropy and leadership developed into a healthy alternative to loan-sharking and under-the-mattress saving for workers. In this endeavor, Filene anticipated community development banking, microlending, and other innovations by more than half a century. Filene was also a major advocate for Workmen’s Compensation (made law in 1911) and for collective bargaining by labor unions. He was an advocate for world peace; among the world leaders he corresponded with were Gandhi, Lenin, Wilson and Clemenceau. (To learn more about Edward Filene, see our September 2004 issue.)

“[Filene] had a great distaste for material things, lived very modestly, never owned an automobile and was scrupulously careful about small expenditures, all because he felt that he was a trustee for the money that he had earned and that trusteeship involved turning his accumulations into the greatest possible disinterested public service.”—Roy Bergengren, Credit Union North America, 1940

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Comments (7)

  1. Both this post and Stillman’s article raise several interesting questions. The Filene Cooperative Association, along with the profit-sharing and paid vacations, all suggest a much more stable labor force than exists in retail today (commonly cited as the major barrier to organization; see this 2007 piece in Labor Notes: http://labornotes.org/node/708). Why the shift? And what would it take to resuscitate those conditions?

    On a different note, Filene’s promotion of credit unions is intriguing, particularly given that he modeled them after village credit unions in India. These days Muhammad Yunus gets credit for ‘inventing’ micro-lending to the poor in Pakistan decades later. Of course, credit unions typically offer larger loans, but the principles seem the same. Stillman notes that Filene seemed unaware of the similarities to the landsmanshaftn; I can’t help but wonder if he was eliminating the competition.

  2. The Workmen’s Compensation was not a progressive innovation. It was set up to protect capitalists (both corporate and individuals) from personal injury lawsuits by workers. Under normal tort law workers would get a lot more in compensation – for most injuries 10 times as much or more.

    Furthermore, under the Workmen’s Compensation laws, workers cannot choose a doctor or other health care professional. Instead, the insurance company can direct the worker to its supported doctors. Treatment options are decided by a doctor with allegiance to the insurance company.

    In addition, that doctor can direct the worker to go back to work despite his/her injuries. They have a great incentive to routinely send injured workers back to work when an independent doctor would instead prescribe treatment and/or rest.

    And finally, the system is rigged such that compensation can take 5- 10 years. The delays are built into the system in order to soften up the worker into despair and utter hopelessness of ever getting compensation and thus the worker eventually settles the case for a pittance. Even the lawyers supposedly representing the workers are in on it because they automaticlly get a mandated percentage of the settlement and thus simply play along.

    I’ve been through the system twice. And my ex-wife was a workers comp lawyer for about 15 years.

    • As an historian of the era involved, I agree with your assessment of the outcome of Workman’s Comp, but…I would not ascribe any malicious intent on the part of Filene in this regard. In 1911, the notion of any workman being able to sue anyone for anything was fairly ludicrous. The industrial system was rigged completely in favor of owners until Progressive legislation. Progressives accepted the transformations of American society so far as advanced industrial capitalism was concerned, but they wished to alleviate its cruelest aspects and eliminate much of its unhealthy ugliness. Only few were of a socialist bent, though many were willing to cooperate with socialists on legislative matters. That a worker might receive more from a straight lawsuit than from Workers Comp in later decades is likely true, but that does not indict Filene for whatever good intentions he demonstrated in the early decades of severely disruptive mass industrialization and urbanization.

  3. Pingback: Our Current Gilded Age: Always Low Wages… topic | My Blog

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  5. I understand that his original last name was Katz. He wanted to Americanize it and stick to the cats theme, so he choose Filene. He probably meant feline. So the story goes.

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