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Carl Zeiss (11 Sep 1816 - 3 Dec 1888) German industrialist who gained a worldwide reputation as a manufacturer of fine optical instruments, at a time that demand was increasing for science and medicine. His successor partner, Ernst Abbe enhanced the reputation of the company and established invested in the workers. Short biography of Carl Zeiss >>

A FACTORY THAT OWNS ITSELF

HOW THE GREAT ZEISS OPTICAL WORKS OF JENA RUNS ITSELF FOR THE BENEFIT OF ITS EMPLOYEES, OF THE CITY IN WHICH IT STANDS, AND OF A FAMOUS UNIVERSITY — A FINANCIAL SUCCESS IN COÖPERATION
BY
RICHARD AND FLORENCE CROSS KITCHELT

[p.658] DOWN in southern Germany near the Thuringian forest, in a section so beautiful that Charles V is said to have placed it next to Florence, there lies, like plum pudding in a bowl, the little old town of Jena. Its first famous plum, the University, has been a wellspring of science, aesthetics, and philosophy these several centuries. And the second famous plum is the Carl Zeiss Works, where the science of coöperation and the philosophy of human brotherhood are being practised and proved as a byproduct of optical instrument manufacture.

Years ago, back in 1846, one Carl Zeiss, scientific instrument maker to the University of Jena, established his first little workshop, which, after thirty years, employed only 36 people. But in the next dozen years the number rose to 300. It is now 3,000 and still growing, while there are 1,000 more in the affiliated glass works. At first they made only microscopes: now they make also photomicrographic instruments and appliances for visual and ultra-violet light, lantern and projection apparatus, instruments for the observation of ultra-microscopic particles, also photographic lenses, stereoscopes, binoculars, and various kinds of measuring instruments, such as rangefinders for the army and navy, and finally great telescopes.

For these things the Carl Zeiss Works are famous. They are becoming equally famous as a great industrial enterprise not owned by capitalists but by itself, completely the common property of all connected with it. And this is the more interesting story.

When Carl Zeiss found his business growing too large for him, in 1866, he took into partnership a young University professor, then but twenty-six years of age. This man was the son of a spinning-mill operative of Eisenach, and was named Ernst Abbe. He became remarkable as a scientist and inventor, and also as a business organizer.

This last talent he used in a new way. The child of a spinning-mill operative must have come face to face with the problems of bread without butter and of a home without security. Whatever may have been the cause, he was as deep a student of social and industrial conditions as he was of pure science, and, because of his interest in those conditions, gave up high professorial honors. When he became impressed with the fundamental injustice to the wage worker inherent in the modern capitalistic system — that injustice involving the insecurity of his position, and the expropriation of part of his earnings — he determined that he, at least, as far as he could, would establish juster conditions in his own province.

In 1891, two years after Abbe had acquired sole control of the optical works, upon the death of Carl Zeiss, he forswore his great fortune and created the Carl Zeiss Stiftung. To this foundation he transferred the ownership of the business and a controlling share in the affiliated glass works. That is, he transferred the ownership of the Zeiss Works to itself. In five years more, 1896, the grand-ducal government of Saxe-Weimar ratified and invested with statutory force the provisions of this foundation. Over it the State has final control, but subject always to the charter.

The administration is vested in a committee representing the works, the university, and the Government. Only [p.659] general features of the charter can be outlined here, for, complete, it covers fifty-seven printed pages.

It is notable that no capitalists draw any dividends from the industry. Income in excess of current expenses is devoted to three general purposes: first, improvement and enlargement of the business itself; second, increase in the wages of the operatives; third, betterment of their social conditions.

This common good to everyone in the works is attained in various ways through Abbe's charter, and in no spirit of paternalism. Of that he was intolerant. He sought merely justice.

No superintendents or higher officials may receive more than ten times as much in wages as the average wage paid for the last three years to all the workmen over twenty-four years of age who have been in the factory for three years. Therefore at present the highest salaries are about $5,000 a year. And the managers, those officials who act on the governing board, may not share in the dividends.

All workmen are guaranteed a definite weekly wage which is the minimum they may receive. But all work is done on a piece basis, and the weekly income is supposed to be in excess of the minimum wage. In addition to this, at the end of each year a part of the surplus is also distributed. This, during the last fourteen years, has averaged 8 per cent. of the wages. There has been an increase of about 14 per cent. in the average wage since 1902, and the wage, not including the annual bonus, is at present somewhat higher than the average paid elsewhere in Germany for work requiring similar skill.

Eight hours is a working day. It is worthy of note that on the eight-hour basis, which was introduced in 1900 by vote of the workmen themselves, the average product is 4 per cent. larger than it was when nine hours made a day's work.

Overtime, which is always optional, is paid for at 25 per cent. (when done at night 50 per cent. and on holidays 100 per cent.) more than the regular rate.

For regular holidays, and when called from work unavoidably for emergency military service, jury duty, sickness in family, etc., workmen are allowed full pay; for service with the reservists, lasting six weeks, half pay. A six days' vacation with full pay is allowed each year to employees over twenty years old who have been in the establishment at least one year. A longer vacation may be taken, but they are paid only for six days.

No fines are assessed for any reason. For specified offences, reprimand or discharge may be inflicted after due trial.

Complete personal liberty of association, and in religious and political affiliation, is guaranteed.

Five to fifteen years' service entitles the workmen to a pension for disablement, equal to 50 per cent. of the regular wage received during the last year of work. Additional pension of 1% per cent. is allowed for each additional year of service up to 75 per cent. of this wage.

Old age pensions, amounting to 75 per cent. of the last wage, may be claimed after 30 years of service by employees over 65 years of age. Upon the death of a workman, the widow receives four tenths of the amount of pension to which he was entitled, and each orphan two tenths. The full wage of the deceased workman is paid to his widow for three months, regardless of the length of time he was in the employ of the establishment.

Probably the most unusual provision anywhere existing for the well-being of workingmen is that of continuing, for a period, the wages of discharged employees. When it is necessary, because of slack work or change in methods in any department, to dismiss employees, their full wages are continued for a period equal to one sixth of the time they were employed, but not exceeding six months.

A sick fund has been established. From it employees receive 75 per cent. of their regular wage, when incapacitated through illness, for a period not exceeding one year. Free dental, medical, and hospital service, and also free burial are provided from this fund, both for workmen and their families.

Apprentices are examined medically at intervals.

For suggested improvements in the [p.660] establishment, and for new inventions by employees, money prizes are given, from thirty to forty such awards being granted annually.

In these ways the income of the works goes to the weekly wage and financial security of the employees. Many other things are done for their well-being. The establishment does not build homes for its work-people. That is done by a wholly independent association, the Jena Cooperative Building Society, which thus far has erected 168 homes. But the Zeiss Foundation has donated $3,750 to this society, and has lent it $26,250 at 3 per cent. interest.

Aerated water, milk, and rolls are sold within the works at cost.

The town of Jena also comes in for a share of the profits. Two splendid buildings have been erected for it out of the profits of the works. They are the Public Bath and the Volkhaus. In the latter there are a reading room and library, a school of arts and crafts, a museum for popular and technical physics, and two assembly halls, one large and one small, open for any kind of popular or political meeting.

To the old university, this business, founded on a science learned within her walls, pays its respects. The Zeiss Works have added to its regular funds, and also have made extraordinary improvements: new buildings for physical, hygienic, and mineralogical institutions; an institute for scientific microscopy; extensions of the chemical institute; and a seismographic institute for the astronomical observatory. And the entire scale of professorial salaries has been raised.

From their earnings, the works have greatly enlarged the plant, and have improved the product in scientific and commercial value. The business is eminently successful from a financial as well as from a human point of view. In the face of the competition of other purely capitalistic enterprises, in the last ten years, under Abbe's charter, the number of employees has more than doubled. The new buildings are large-windowed and of concrete, and similar construction is gradually replacing the older brick buildings. The glass works spread their buildings and raise their thirteen great chimneys on a hillside on the edge of the town.

For the administration of this unusual enterprise there is, as regulated by the Stiftung, a self-perpetuating governing board of four members, who must be experts in science or business. In addition, there is a fifth member who is a commissioner appointed by the grand-ducal government (through its department that directs the university). This commissioner cannot be appointed against the unanimous opposition of the other members, and one of these must be connected with the glass works. None of the members of the board may share in the dividends.

In a plain little office lined with books and pamphlets, and decorated with one picture (that of Ernst Abbe), is found the secretary, Dr. Frederick Schomerus.

He acts as a sort of intermediary between the workers and the management. It is worthy of note that there have never been any strikes or labor troubles at the Zeiss Works.

The interests of the workers are represented by a committee of 120, elected by the votes of all employees over eighteen years of age. From this large group an executive committee of seven is chosen, which meets weekly.

The fact that the workmen can thus deal directly with the management has not prevented at least two thirds of them from becoming members in the national unions of their respective crafts. Naturally, they elect their local union officials to the works committee. However, negotiations are made with these men not as union officials but as elected representatives of the workmen.

Because of the pressure of outside competition, the Zeiss enterprise has been limited in the extent to which it could improve the condition of its work people. But it has demonstrated how much can be done even under present conditions. Finally, it has taught the further lesson that the complete elimination of the capitalist from an industrial enterprise does not prevent its progress and success, even from a business point of view.

Nature bears long with those who wrong her. She is patient under abuse. But when abuse has gone too far, when the time of reckoning finally comes, she is equally slow to be appeased and to turn away her wrath. (1882) -- Nathaniel Egleston, who was writing then about deforestation, but speaks equally well about the danger of climate change today.

Carl Sagan: In science it often happens that scientists say, 'You know that's a really good argument; my position is mistaken,' and then they would actually change their minds and you never hear that old view from them again. They really do it. It doesn't happen as often as it should, because scientists are human and change is sometimes painful. But it happens every day. I cannot recall the last time something like that happened in politics or religion. (1987) ...(more by Sagan)

Albert Einstein: I used to wonder how it comes about that the electron is negative. Negative-positive—these are perfectly symmetric in physics. There is no reason whatever to prefer one to the other. Then why is the electron negative? I thought about this for a long time and at last all I could think was “It won the fight!” ...(more by Einstein)

Richard Feynman: It is the facts that matter, not the proofs. Physics can progress without the proofs, but we can't go on without the facts ... if the facts are right, then the proofs are a matter of playing around with the algebra correctly. ...(more by Feynman)

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