Reprinted with permission from Wooster Magazine, Fall 2003

The ‘father’ of profit-sharing

While teaching philosophy at Wooster , Robert Hartman developed his theory for instilling a sense of value in managers and laborers

by William P. Hustwit

Hartman FamilyI have a great future behind me," Robert Hartman quipped to the Wooster Daily Record in April 1946, recalling a life that could have ended in Nazi Germany. A philosopher and economist, Hartman won national recognition in 1947 – while teaching philosophy at Wooster – for his novel ideas on profit-sharing in American business. His anti-Nazi beliefs shaped his efforts as both a capitalist and philosopher to promote peace in the modern world.

Robert Hartman was born in Berlin on January 27, 1910, as Robert Schirokauer. He attended the German College of Political Science, the University of Paris , the London School of Economics, and Berlin University , where he earned his L.L.B. in 1932. He then served as an assistant district court judge, hearing cases that prosecuted Nazi Party members for crimes against the Weimar government.

As a judge in Berlin, Hartman increasingly saw the corruption of Nazism. He initiated a campaign to defame and challenge Nazi Party officials with articles in newspapers and a political run for election to the German Parliament. Hartman’s less than flattering comments in articles such as "Die Frau Hitler" ("The Woman Hitler") and his continued denunciation of the rising Nazi movement drew the attention of officials. When the Nazi takeover seemed imminent, Hartman prepared to flee Germany. He hid in an insane asylum until a departure to France could be arranged. With a falsified passport, Hartman left continental Europe in 1932 for England.

From 1932 to 1941, Hartman worked a variety of jobs and changed his name from Robert Schirokauer to Robert S. Hartman. During those years, he found employment as a photographer in London and Paris and as a representative for Walt Disney in Sweden . Later, Hartman and a friend offered a rocket-propelled mail service to the British government. The British military passed on the proposal. The Nazis executed Hartman’s friend, Gerhard Zucker, for "an attempt to sell an invention important for Germany to a foreign power."

In 1938, Hartman escaped Europe’s growing political unrest and immigrated to Mexico with his Swedish wife, Rita Emanuel. Shortly thereafter, the German government expatriated Hartman for "activities inimical to the Third Reich."

Hartman and his family moved to the United States in 1941. He attained a teaching position at Lake Forest Academy in Illinois . He also enrolled at Northwestern University and earned a Ph.D. in philosophy in 1946.

Hartman arrived at The College of Wooster in 1945 to begin teaching in the philosophy department. His family quickly embraced small-town life in Wooster . He later commented that "these were among the happiest years of our lives…we loved Wooster ." The Hartmans resided at 910 Quinby Avenue and regularly attended St. James Episcopal Church, where Bob served as a lay reader. But the quiet life that Hartman found in Wooster , far from the evils he witnessed elsewhere, did not keep him from an active career.

HartmanThe post-World War II years and the European recovery prompted Hartman to begin his most important philosophical thinking. He realized that the key to ensuring peace and stability in Europe rested in a firm economic base. After a trip to Europe in 1946, Hartman spoke to a group of Wooster students. "I come home from this journey with unlimited confidence in the power of the human spirit. War and peace are in our hands." He believed that the power to create permanent change in Europe lay with the citizenry – individuals had to realize their roles in society. "Peace will come through the will of the people," wrote Hartman. "There will not be another war in our time if each individual wills it so." The potential for individuals to enact change – and to prevent another large-scale war – rested in their ability to feel connected to a larger community outside of their family, their neighborhood, and even their country, he believed.

In a paper entitled "The Revolution of the Twentieth Century," Hartman urged: "Compassion, the power of our con science, must grow from a local into a global power. We could have prevented the catastrophe if our souls had been strong, our conscience awake, our compassion ardent enough to punish the crimes as they began – in Manchuria , Ethiopia , and Austria ."

The puzzle of how to bring out the best in people had plagued Hartman for a long time. While serving as district judge in Berlin, he frequently pondered the questions of what is good, and how do people know or decide what is good. Having witnessed the organization of evil, Hartman decided that "if evil can be organized so efficiently, why cannot good? I decided I would organize good. But then I had to find out what was good – and what was evil?"

Hartman struggled to answer his questions in such a way that good could be organized to help preserve and enhance the value of human life. Axiology – the science of value theory, a theoretical area in which Hartman specialized – helped him find his answer. Borrowing from several moral philosophers, notably G. E. Moore, Hartman concluded that "a thing is good when it fulfills its concept." If an individual thought of himself as a valuable member of a community, then the good for the individual had been achieved. Hartman set to work organizing what he observed in communities from his experiences in Europe and the Americas to create an economic plan for the twentieth century that would cultivate "what is good."

By 1947, Hartman had organized his philosophical and economic thoughts into an ordered theory for instilling a sense of value in managers and laborers alike: profit-sharing. The concept had been experimented with to a limited extent before World War II. But the needs of the war halted its progressive benefits as industrialists turned their energies to winning the conflict.

After talking over his ideas with several Ohio industrialists, including H. C. Nicholas of Orrville and J. F. Lincoln of Cleveland, Hartman proposed a gathering of forty industrialists from around the country at an Orrville Rotary Club session in June 1947. At this meeting, Hartman unveiled his profit-sharing ideas that would free workers from being mere commodities in the marketplace and make them integral to corporations.

The industrialists who met in Orrville endorsed Hartman’s ideas because of his confidence that the right spirit would ensure success among a sincere group of people – not because of his credentials as a college professor. He assured them, "A teacher is a salesman of ideas, and what are you doing in your life work other than selling one great idea and applying one great philosophy, namely ethics, in the industrial life?"

Hartman’s plan called for cash payments to each employee based on the profit of the company and the amount of the employee’s investment. More than anything, Hartman wanted to "explore a way to release the unlimited potentiality of human beings by making workers not only feel a sense of being a partner with owners in business, but in sharing the rewards in a tangible way."

During the summer, Hartman’s new partners called for a larger meeting in Cleveland . One hundred industrialists from across the country attended, including Fred W. Climer of Goodyear Tire and S. C. Johnson of S. C. Johnson and Son Co. By October 1947, Hartman’s initial committee of a few dozen grew to a consortium of one hundred fifty businessmen known as "The Council of Profit Sharing Industries." The basic tenet of the group’s plan was that man’s inherent productivity is an untapped resource. Through profit-sharing, the worker comes to believe that he is a part of the firm and produces more to raise profits.

Hartman found himself at the height of his economic theory’s success. At an October 18, 1947, meeting of The Council of Profit Sharing Industries, Hartman agreed to serve as secretary of the group and turned over the direction of the organization to the industrialists. That same month, The Wall Street Journal reported that two thousand additional business firms had petitioned to join the Council and its profit-sharing scheme. The program envisioned by Hartman and his industrialist partners eventually became the basis for today’s 401 plans.

Although Hartman’s promise as an economic theorist had been fulfilled, his time at The College of Wooster drew to a close. The teaching committee at the College found Hartman to be "free-wheeling in other fields." Hartman’s investment of time in profit-sharing initiatives worried faculty members. In January 1948, Wooster President Howard Lowry received Hartman’s letter of resignation, and The College of Wooster lost its best-known economist.

The success of Hartman’s profit-sharing endeavors sparked a nationwide industrial movement that secured employment for Hartman at a number of prestigious academic institutions. He taught at The Ohio State University (1948-56), M.I.T. (1955-56), and Yale (1966). Upon winning a Fulbright grant, he worked as the Smith Mundt State Department research fellow and exchange professor at the National University of Mexico (1956-1957). He stayed at that university as professor of philosophy until his death in 1973.

His time in Mexico allowed Hartman to complete one of his lifelong goals: to establish an institute for the study of the ethical sciences, the Institute of Philosophic Research . He procured nearly fifty lectureships across the Americas and Europe . Shortly before his death, he was nominated for a Nobel Prize. Hartman wrote more than ten books, including The Knowledge of Good (Rodopi, 1965) and his most famous work, The Structure of Value (Southern Illinois University Press, 1967), and more than one hundred scholarly articles. The Robert S. Hartman Institute was founded in his honor at the University of Tennessee to promote and advance the study of his work.

Hartman’s intelligence and passion for extending ethical theory to practical affairs touched the lives of many distinguished twentieth-century philosophers, eight of whom contributed to a book, Value and Valuation: Axiological Studies in Honor of Robert S. Hartman (University of Tennessee Press, 1972). One colleague commented in the book, "I have never known a more brilliant, comprehensive, creative mind; or a more enthusiastic, eloquent teacher."

William P. Hustwit is a graduate student in history at the University of Mississippi with an interest in twentieth-century history. He earned a B.A. from Kenyon College in 2002.

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