The Personal Relation in Industry by John D. Rockefeller, Jr.

The Personal Relation in Industry is a foundational text in the history of industrial relations, compiled from addresses delivered by John D. Rockefeller, Jr., primarily in the mid-1910s and early 1920s. Drawing on experiences gained during acute industrial conflicts, particularly in Colorado, Rockefeller, Jr. articulates a powerful, progressive vision for workplace reform that rejects the doctrine of inherent antagonism between labor and capital. He argues convincingly that the success of modern industry is contingent not merely on profit generation, but on adopting a spirit of coöperation and brotherhood and actively restoring the lost human connection through democratic systems of representation. This work serves as both a philosophical manifesto and a practical guide for achieving industrial peace by placing the well-being of the employee at the forefront of corporate policy.

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Pre-Summary Sections

Who May Benefit from the Book

• Industrial leaders and corporate executives.
• Labor union officials and organizers.
• Students of economic and social policy.
• Advocates of workplace democracy and reform.
• Management and human resources professionals.

Top 3 Key Insights

1. Industry’s purpose must prioritize social well-being alongside wealth production; success requires subordinating profits to employee welfare when human considerations demand it.
2. Labor and Capital are fundamental partners, not enemies, sharing common interests, and the permanent prosperity of one cannot occur at the expense of the other.
3. Solving industrial unrest requires replacing autocracy with democratic coöperation, making adequate representation of the employees vital for restoring personal contact and resolving grievances.

4 More Lessons and Takeaways

1. There are four essential parties to industry: capital (stockholders), management, labor (employees), and the community (the consumer and government).
2. The immense scale of modern corporations destroyed necessary personal relations, causing suspicion and distrust, which can only be rebuilt through current meetings and conferences between representatives.
3. A successful industrial policy guarantees fair wages, reasonable hours, proper working conditions, and opportunities for self-development, play, learning, and worship for every employee.
4. The most potent measure for industrial harmony is establishing provision for promptly uncovering grievances and adjusting them before they fester into major conflicts.

The Book in 1 Sentence Industrial success demands a shift from antagonism to partnership, prioritizing human welfare and democratic representation over autocracy and profit maximization.

The Book Summary in 1 Minute Rockefeller, Jr. addresses the industrial problem by calling for a spirit of coöperation and brotherhood, asserting that the four parties of industry—capital, management, labor, and the community—are partners. The rise of modern “Big Business” destroyed the personal contact that once made industrial relations easy, leading to massive, costly conflicts like strikes and lockouts. The solution is the establishment of comprehensive representation in industry. Using the Colorado Fuel and Iron Company plan as a model, he shows how employee representation, joint committees, and clear appeal rights restore mutual confidence. This framework ensures employees are treated as human beings, not “cogs in a wheel”, guaranteeing fair play and continuous operation.

The 1 Completely Unique Aspect The author provides extraordinary personal financial data to argue against the perception of capitalist greed, revealing that for 14 years, the common stockholders of the Colorado Fuel and Iron Company—including his father—had received not one cent of return on their $34,000,000 investment, despite public accusations that they had profited immensely while oppressing workers.

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Chapter-wise Book Summary

Chapter I: Coöperation in Industry

“The solution can be brought about only by the introduction of a new spirit into the relationship between the parties to industry—the spirit of coöperation and brotherhood.”

This chapter commences with the recognition that the world is in a period of reconstruction, facing grave industrial problems that can only be solved through coöperation and brotherhood. Rockefeller fundamentally redefines the purpose of industry: it must be regarded as a form of social service, equally concerned with advancing social well-being as with producing wealth, and must subordinate profits to employee welfare when human considerations dictate. The parties to industry are defined as four: capital, management, labor, and the crucial, often-ignored fourth party, the community. The assumption that these parties must be antagonistic is deemed “unthinkable,” as they are functionally partners who cannot succeed without each other. The historical loss of personal contact due to corporate growth fostered suspicion. The remedy is the establishment of adequate representation of the employees through current meetings and conferences, transitioning industry from autocratic control to democratic, coöperative control. Labor unions are recognized as proper and advantageous, securing many benefits, but representation must be comprehensive enough to include all workers. The chapter details a successful American plan built from the bottom up—starting with employee-elected representatives and joint committees to manage issues like safety, health, and recreation—leading to reduced grievances and high degrees of goodwill.

• Chapter Key Points:
  • Industry’s modern purpose must be social service first.
  • The four partners are Capital, Management, Labor, and the Community.
  • Employee representation facilitates democracy and restores essential personal relations.

Chapter II: Labor and Capital—Partners

“Capital cannot move a wheel without Labor, nor Labor advance beyond a mere primitive existence without Capital. But with Labor and Capital as partners, wealth is created and ever greater productivity made possible.”

Rockefeller emphasizes that Labor and Capital are fundamentally human beings (“men with muscle and men with money”). He refutes the idea that their relationship is necessarily antagonistic based on a fixed amount of wealth; rather, their coöperation increases wealth and productivity. The greatest social service is the organization of industry to provide maximum opportunity for workers’ self-development. The necessity of both organized Capital (corporations) and organized Labor (unions) is acknowledged, though the potential for evils in both must be addressed. The core issue remains a lack of mutual understanding, previously solved by personal contact which the scale of modern business eradicated. The author describes the context for the development of the “Industrial Constitution” at the Colorado Fuel and Iron Company (CF&I), initiated after acute industrial disturbances. This Constitution ensures fair treatment for every employee—union member or not—by establishing representatives chosen by secret ballot and forming joint committees for cooperation, conciliation, safety, and health. Crucially, the plan establishes multiple levels of appeal, ensuring grievances can be addressed up to the president of the company or the State Industrial Commission.

• Chapter Key Points:
  • Industrial parties are human, not abstract, forces.
  • The CF&I Industrial Constitution guarantees employee rights and formalizes partnership.
  • Prompt disinfection of grievances is key to avoiding distrust and hatred.

Chapter III: The Personal Relation in Industry

“If in the days to come, as you have to do with labor, you will put yourself in the other man’s place and govern your actions by what you would wish done to you, were you the employee instead of the employer, the problem of the establishment of the personal relation in industry will be largely solved…”

This chapter asserts that the ability to deal successfully and amicably with labor is the single most important qualification for industrial chief executives, a subject often ignored in training. Drawing parallels to personal life, college, and military success, Rockefeller argues that personal relations are vital in industry. The evolution from small enterprises (where the owner knew all employees personally) to vast corporations destroyed this vital contact, resulting in skyrocketing strikes and immense financial and moral losses. He restates his foundational belief that Labor and Capital are partners, and that treating the other party according to the Golden Rule is the “most fundamental business principle”. Since direct contact is impossible in large companies, officers must actively engage with employee representatives. He describes his personal visit to the Colorado camps, engaging directly with thousands of workers and their families, noting this personal effort was critical to building mutual confidence and securing the adoption of the Industrial Plan. The industrial plan acts as a mechanism to guard against the arrogance of petty bosses and allows for the sympathetic and prompt adjustment of grievances—the “ounce of prevention” required for industrial health.

• Chapter Key Points:
  • Personal connection is critical to the success of all human enterprises.
  • Autocratic management and loss of contact breed antagonism and conflict.
  • Applying the Golden Rule and timely grievance adjustment prevents industrial war.

Chapter IV: Representation in Industry

“Surely it is not consistent for us as Americans to demand democracy in government and practice autocracy in industry.”

Speaking as a member of the Public Group at the National Industrial Conference (1919), Rockefeller demands that the high spirit of coöperation shown during the war be extended to solving national industrial problems. He emphasizes that the four parties of industry must coöperate without any one party arbitrarily dominating the others. The lack of personal contact today causes suspicion and distrust. The core principle of representation, upon which American democracy is founded, must therefore be extended to the workplace. Rockefeller resolves that the conference should approve the principle of representation, recognizing the employee’s right to an effective voice in determining employment terms, working and living conditions, and the right to bargain collectively. He stresses that while the specific form of representation should be determined locally by the parties concerned, it must always ensure prompt grievance adjustment.

• Chapter Key Points:
  • The spirit of wartime coöperation should transition to peacetime industry.
  • Industrial democracy is a necessary extension of governmental democracy.
  • Representation must allow employees an effective voice in all common matters.

Chapter V: To the Employees

“Every corporation is made up of four parties: Stockholders, directors, officers and employees. This little table… illustrates my conception of a corporation…”

In this address to CF&I employees, Rockefeller, Jr. uses the evocative metaphor of a four-legged table to visually illustrate the nature of a corporation, where stockholders, directors, officers, and employees are necessary, perfectly joined, equally responsible, and fundamentally “on the square”. He demonstrates that Labor (wages) receives the first claim on earnings, emphasizing that for 14 years, the common stockholders had received no financial return, directly refuting the widely spread accusations of capitalist oppression. He warns that Capital, like Labor, must receive a fair return or it will withdraw, jeopardizing the entire enterprise. Furthermore, he passionately condemns the “wicked, that false doctrine” that workers should strive for minimum effort for maximum pay, illustrating how this action (Labor dropping its corner of the table) causes all earnings to fall, hurting everyone. He concludes by committing to staying in Colorado until the new plan, which he had personally studied and developed based on exhaustive visits to the camps, is successfully adopted to prevent future strikes.

• Chapter Key Points:
  • The corporation is a four-sided partnership requiring equal support and fairness.
  • The common stockholders’ 14-year lack of dividends proves their commitment despite public abuse.
  • A doctrine promoting low effort threatens the prosperity of the entire company.

Chapter VI: To the People of Colorado

“The time has come when the business man of this State and county must think in terms of the laboring man, and the laboring man must think in terms of the business man; when each must strive to imagine himself in the other’s place…”

Addressing the citizens and business community of Denver, Rockefeller expresses deep appreciation and defends his father, describing him as highly democratic, approachable, and actively engaged with workingmen, despite the immense public criticism they faced. He formally clarifies his views on labor unions, stating that he believes the organization of labor is “just as proper and advantageous” as the organization of capital. However, he insists that such organizations must operate with due regard for the employer and the public, and that all workers should be free to join or work independently. He reiterates the guiding philosophy that industrial policy must prioritize the well-being of men and women, subordinating profits to welfare when necessary, while maintaining that a business must also render service and earn a fair return to survive. The Colorado Industrial Plan is presented as the embodiment of these views—a cooperative, democratic system designed to prevent the “wantonly wasteful” outcome of another strike by bridging the gap between labor and capital through common interests.

• Chapter Key Points:
  • Rockefeller, Jr. defends his father’s character and democratic engagement with employees.
  • Labor organizations are strongly favored, provided they respect the interests of all parties.
  • Industrial peace requires mutual empathy, where business and labor imagine themselves in the other’s place.

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Additional Sections

10 ‘Notable Quotes from the Book’

1. “Industrial relations are essentially human relations.”
2. “The day has passed when the conception of industry as chiefly a revenue-producing process can be maintained.”
3. “The fourth party, namely, the community, whose interest is vital and in the last analysis controlling, is too often ignored.”
4. “Partnership, not enmity, is the watchword.”
5. “…not higher wages, but recognition as men, was what they really sought.”
6. “We must ask ourselves… what is the purpose of industry?”
7. “If there is to be peace and good-will between the several parties in industry, it will surely not be brought about by the enforcement upon unwilling groups of a method…”
8. “To cling to such a conception is only to arouse antagonisms and to court trouble.”
9. “The ultimate test of the rightness of any particular method of division must be the extent to which it stimulates initiative, encourages the further production of wealth, and promotes the spiritual development of men.”
10. “Men are rapidly coming to see that human life is of infinitely greater value than material wealth…”

About the Author John D. (John Davison) Rockefeller, Jr. is the author of The Personal Relation in Industry, a collection of addresses first published in 1923. These materials reflect his deep engagement with the fundamental problems of industrial relationships, especially in the context of major labor disputes like those involving the Colorado Fuel and Iron Company. Rockefeller, Jr. positioned himself as a representative of the public interest, aiming to promote the “well-being of mankind throughout the world”. He advocated for applying democratic principles to the workplace, believing that industry should advance social well-being as much as material prosperity. Despite public perception, he strongly supported the principle of labor organization and collective bargaining, provided it was conducted fairly. He shared personal details demonstrating his father’s democratic nature and commitment to the working classes, emphasizing that his own training came from this democratic atmosphere.

How to Get the Most from the Books Focus on applying the “Industrial Creed” and the Golden Rule principle to contemporary labor issues, prioritizing genuine personal connection and fair representation.

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Conclusion

The Personal Relation in Industry is a compelling case for revolutionizing industrial thought. John D. Rockefeller, Jr. forcefully argues that industrial conflict is not an inevitable consequence of capitalism but a result of failing to maintain human relationships. By proposing the Industrial Creed—a set of principles built upon partnership, justice, and the Golden Rule—and championing the system of employee representation tested in Colorado, he lays out a concrete blueprint for industrial peace. The book serves as a timeless reminder that industry’s success depends fundamentally on recognizing the humanity of labor, ensuring the dignity of every worker, and making democracy and coöperation the watchwords of the workplace.