Pioneering Corporate Social Responsibility: Michael Thomas Sadler and Factory Reform

2015 Cambridge Business & Economics Conference ISBN : 9780974211428

PIONEERING CORPORATE SOCIAL RESPONSIBILITY: MICHAEL THOMAS SADLER AND FACTORY REFORM.

Prof. Dr. Garry James Clayton

Bank Rakyat School of Business & Entrepreneurship

UniversitiTunAbdul Razak

JalanTangsi, 50480 Kuala Lumpur, Malaysia
Email:

Phone: +603 2730 7174

(corresponding author)

Assoc Prof Dr. Zulkifflee Mohamed

Bank Rakyat School of Business & Entrepreneurship

UniversitiTunAbdul Razak

JalanTangsi, 50480 Kuala Lumpur, Malaysia

Email:

ABSTRACT

The Industrial Revolution in Great Britain saw the dramatic rise in production, generation of wealth for a new capitalist class and the inherent dangers of an unfettered free market. Without control or regulation the owner-managers of the new mills often exploited the child labour purely to maximise profit. Though without political power the exploited working class were not without voice. In tandem with the development of the Factory System was the demand for its regulation and reform.

Demands for Factory Reform in the early decades of the nineteenth century in the United Kingdom have long been seen as part of the British philanthropic tradition that stretched back to the earlier anti-slave trade movement. Promoted by seemingly well meaning philanthropists determined to protect the weakest members of society the establishing of a tradition seeking “Corporate Social Responsibility” is often overlooked.

One of the most important leaders in the campaign for Factory Reform was Michael Thomas Sadler who highlighted clearly the duality of the integration of philanthropic views with demand for “Corporate Social Responsibility”.

INTRODUCTION

The “Occupy Wall Street” movement has dramatically raised awareness of the importance of Corporate Social Responsibility (CSR) with two thirds of American companies now seeing it as critical for their reputation (Simon, 2012). At its essence Corporate Social Responsibility is a conscious continuing commitment of business to behave ethically and contribute to economic development while improving the quality of life for workers and their families, as well as local communities and society as a whole (WBCSD ,1998; Habisch and Jonker 2005)

As a concept Corporate Social Responsibility is not new. It can be argued that demands for business’s to act in a socially responsible manner is as old as economic endeavor itself, King Hammurabiof Mesopotamia,for example, decreed a code of business behavior in 1700 BC (BRASS Centre, 2007), most researches mistakenly argue that its modern recognizable form dates from the United States of the 1920’s. (Asongu, 2007)Such a view is somewhat myopic as it ignores totally the major nineteenth century debate in Great Britain centred on the need to regulate the new industrial economy.

In the early decades of the nineteenth century Britain’s political, social and economic landscape was dramatically altered by a seemingly never ending series of reform campaigns. Slavery was abolished, Catholic’s Emancipated and Parliament Reformed. One of the major campaigns of the period, Factory Reform – the fore runner of Corporate Social Responsibility, saw three major parliamentary investigations and thirteen separate acts where passed between 1802 and 1878 centred on stamping out the evils of what has become popularly known as the “dark satanic mills”.

Two names intimately associated with the Parliamentarycampaign in the United Kingdom to improve the conditions of the exploited industrial labourers are Hobhouse and Lord Ashley (later Shaftesbury). Yet one who was equally as important but generally ignored was the astute Ultra Tory parliamentary protégé of the Duke of Newcastle, Michael Thomas Sadler (Fisher, 2009).

POLITICAL PHILANTHROPIST

Sadler’s reputation is one of an Evangelical Parliamentarian devoted to the cause of Factory Reform. Yet Sadler’s reputation has been somewhat distorted by his being an early champion of Corporate Social Responsibility. It has led to the claim that he was less a politician than a philanthropist, (Fraser, 1969; Seeley and Burnside, 1842)and even has him condemned as a poor canvasser (Preston, 1978) easily perturbed.(Bradfield, 1965). Such claims prove incorrect when it is realised the very clever political use Sadler made of all the causes he championed. The most striking being his championing of Factory Reform both in the House and on the Hustings.

There have long been two diametrically opposed views as to why Sadler championedthe cause of the Factory Operatives in the early 1830's. Oneheld by his supporters, and subsequently by most historians,suggests that Sadler devoted himself to their cause in preferenceto party politics (Seeley and Burnside, 1842).(Marking him out as a political pioneer of Corporate Social Responsibility).The other, put by Sadler's politicalopponents, suggested that he used Factory Reform solely forpolitical ends, primarily to ensure his own re-election toparliament(Royle, 1832; Hansard, 1832b),and destroy the zeal for the Parliamentary Reform Billby endeavoring to divideits supporters(Royle, 1832). Though the twoviews are opposed each in fact holds elements of the truth contained within. Sadler's opponents were correct in believing he had politicalmotives in championing factory reform; however, unlike hissupporters, they failed to realise that he was prompted by deeplyheld Christian and humanitarian beliefs.

Genesis of a Campaigner

Sadler’s had from 1806 an active interest in the plight of child labourers when as superintendentof the 'New Sunday School' in Leeds. He observed that children employed in factories were unable to make adequate use of these very limited educational opportunities as a direct consequence of the extremely long hours they were working (Ward, 1972; Gill, 1963).

The general public got to hear of Sadler's concern in 1822when Alaric Watts, the editor of the LeedsIntelligencernewspaper, published an early article on the need for Corporate Social Responsibility which he condemned theinhumanity of the current mill-owner business practices (Gibb, and Beckwith, 1954). Watts wrote the article after avisit to the Leeds Infirmary with Sadler. It appears thatWatts sought the opinions andadvice of Sadler, who was an expert on conditions created by unfettered economic markets.

Sadler’sexpertise was not limited to the conditions in Yorkshire, when in 1829 he published“Ireland: its evils and their remedies” Sadler was able to show the infamy of a national system that employed children like slaves in a cruel, wasteful and demoralizing manner (Seeley and Burnside, 1842). Not only did this work bring Sadler to the attention of the general public it resulted in his being offered the seat of Newark in the House of Commons by the borough’s “owner” the Ultra Tory Duke of Newcastle.

HOBHOUSE’S PARLIAMENTARY LEADERSHIP

In parliament Sadler quickly became an ardent supporter of Hobhouse (Hodder, 1887) who, spurred by Richard Oastler's publication of a series of controversial letters entitled 'Slavery in Yorkshire', introduced a comprehensive Factory Regulation bill in 1831 (Kydd,1857; Seeley and Burnside, 1842).Throughout the parliamentary struggle Oastler and Sadler kept inclose touch, Oastler sending Sadler data, arguments and advice,while in return Sadler sent reports of the struggle in the House (Driver, 1946).Personally Sadler believed that Hobhouse's bill did not go farenough in limiting the duration of work, though this did notprevent him from taking a leading role in the struggle for itspassage. Indeed Sadler appears to have been the effective leaderin the House countering hostile moves and petitions (Driver, 1946).

In late September Hobhouse accepted all amendments to his bill leaving an Act only applicable to the cotton industry, with no machineryfor its enforcement. To supporters of factory reformHobhouse's billhad been emasculated. Determined to get a better reform measurepassed they joined together with Oastler under the famous 'FixbyCompact, and accredited Sadler as their parliamentary representative ((Kydd, 1857; Driver, 1946).

Hobhouse replaced

Hobhouse was stunned when Sadler agreed to introduce anotherfactory regulations bill, limiting the hours of work for childrento ten per day. Writing initially to Oastler, and subsequentlyto the Leeds press, Hobhouse went so far as to question Sadler'sjudgement:

“..should Mr. Sadler make the effort which he seems to, contemplate of limiting the hoursof labour to ten,you may depend upon it he will not be allowed toproceed a single stage with such an enactment, and sofar from producing any beneficial effect he will onlythrow an air of ridicule and extravagance over the wholeof this kind of legislation. I trust that on maturereflexion that very respectable Gentleman will adopt a more useful course of conduct.”

(Zegger, 1973).

Apparently Hobhouse was attempting to prevent factory reformbecoming an issue in parliament, for two reasons. Thefirst was that Hobhouse was annoyed that anyone should question his politicalability in achieving the best possible measure. The second wasthat Hobhouse wanted the factory regulations matter settledquickly to allow undivided attention to be centred on parliamentaryreform (Zegger, 1973). For both reasons Sadler was determined to press aheadwith his proposed measure. Believing that Hobhouse simply ‘conceded his billviews and judgement’ (Driver, 1946), Sadler was determined to pass a betterbill. Further it appears that Sadler was usingfactory reformto slow down parliamentary reform by dividing attention. Sadlerwas one of a group of Ultra Tories who realising the extent ofthe Parliamentary Reform Bill were doing everything they could tosave the existing constitutional arrangements.

SADLER’S CAMPAIGN

Having accepted the parliamentary leadership of the Ten Hoursmovement Sadler moved quickly and methodically,introducing a bill to regulate the 'Labour of Children in Millsand Factories' on 15 December 1831 (Cowherd, 1956; Hansard, 1832a),, This move totallyrefuted Hobhouse's prophecy since Sadler did not bring an 'air ofridicule' to the legislation and was able to proceed more than a'single stage'. Sadler was able to contradict Hobhouse by usinghis political ability to best advantage. He consulted theWhig Reform Ministry and convinced them not to oppose his bill on thefirst reading, but to wait until he outlined the details in thesecond before deciding what stance to take on the issue (Hansard, 1832a).

The second reading of the bill had originally been plannedfor January 1832. However, further consultations with theministry led Sadler todefer the reading until 16 March (Hansard, 1832a). In the intervening monthsshort-time committees throughout the north were extremelybusy holding meetings, publishing broadsheets and organisinga massive petition campaign aimed at arousing national interestin the issue. This activity helped spread the agitation through-out the north, and south to London (Cowherd, 1956).

By the time Sadler rose to present his bill for its secondreading parliament had been inundated with petitions. Buildingon the propaganda campaign Sadler gave his finest speechin parliament (Kydd, 1857; Ward, 1972), a speech praised as a classic pieceof nineteenth-century British oratory (Driver, 1946). Though Sadler used nonew arguments in the speech he spoke in such a dramatic waythat he impressed all who listened including the offended Hobhouse (Zegger, 1973).During the speech Sadler made some very subtle yet telling pointsaimed directly at the procrastinating Whig ministers and Sir RobertPeel who had joined the parliamentary opposition to FactoryReform. The address, dramatic and at times cutting, was alsovery detailed and methodical in typical Sadler style.

The speech skilfully blended idealism with political commonsense. At onelevel the speech was a classic statement of nineteenth century Corporate Social Responsibility which integrated Ultra Tory paternalismwith Evangelical social concern (Ward, 1972). However, Sadler was awarethat the Ultra Tories had been virtually destroyed by the 1831 election,and that if the measure was to be passed he would have to broadenits appeal. He therefore did his best to make the issue non-partisan,stressing that it was popular in the country andsupported by all who were humane and wise (Hansard, 1832b).It is a tribute to Sadler's political skill that as a member of aminority faction on the edge of extinction, speaking on acontentious issue, he managed to sway the House and arousepublic interest to the extent that he did.

His success was all the more striking because it was easilyalleged against him that he was not a manufacturer and thereforecould not possibly know what he was talking about (Royle, 1832; Birley, 1832). At theoutset, and throughout his speech, he had to establish hiscredentials to speak on the issue. This he did by demonstratingthe breadth of his knowledge - using arguments from Holy Writ,books written by Britain's most eminent Physicians, parliamentaryspeeches of both Sir Robert Peels, and a pamphlet writtenespecially for him by the leading manufacturer supporter of theBill, John Wood (Hansard, 1832b; Driver, 1946).

More importantly Sadler’s speech moved tocounter foreseeable objections to factory legislation by hisopponents. To the claim that there was no real problem sincefactory work was light and produced no ill-effects, he answeredthat it was the duration and not the nature of the work which wasevil. To those who argued that while there were isolated abuses,these were extreme examples and not to be taken too seriously,he replied that Parliament legislated against atrocious crimes,which were also extreme examples. To those who objected thatit was wrong and counter-productive to pass legislation thatwould interfere with the economic free market, he demonstratedthat employer and employee did not meet on equal terms, and thatit was absurd to see the employee as a free agent. Finally he tackled a major objection ofdoctrinaire liberals - that whatever the problemlegislative interference was in itself an evil. In answer to this he restated a characteristic Ultra Tory position - that voluntaryaction was best, but that the lesser evil of legislative interference was appropriate where the alternative was the survival ofa greater evil through inaction (Hansard, 1832b).

In addition to countering potential objections, Sadler'sspeech stated positively the case for factory reform. Sadler showed thatinterference with economic forces had a large body of precedentranging from divine injunction of the Sabbath to parliamentaryaction as recently as the last session of Parliament when theanti-Truck bill was passed. He added weight to the precedentargument by noting that felons and slaves were far better protected than the child operatives of Britain. In the most dramatic part of his speechSadler likened factory masters to slave owners of the worst ilk. After building up the attention of the members, by noting thevarious methods used to force children to work excessive hours,Sadler produced a set of heavy black leatherthongs used to beatchildren into working in exactly the same way cart whips were usedon West Indian slaves (Hansard, 1832b). Sadler's use of the slave analogy seems to have been a jibe aimed atthe Whig ministers, who he believed were hypocrites whose zeal forthe abolition of slavery was not matched by any enthusiasm forfactory reform (Southgate, 1962).

Another important feature of Sadler's speech was hisridiculing of opponents' evidence. He noted that certaindivines and physicians would be found who would attest to thefact that the factory system produced no ill effect on the moraleor welfare of child operatives. In some cases, indeed, theywould go so far as to suggest the system was a method of protectingmorals. Such evidence to Sadler was ludicrous, since it wasin direct opposition to the findings of Britain's eminent physicians (Hansard, 1832b).