“Two percent of the people think; three percent of people think they think, and 95 percent would rather die than think.” Henry Ford
Good morning and welcome to Bygone Relics and that quote sums up why we are here. Folks, we are the ones that will have to do the thinking. Today we are going to think about two important concepts that Henry Ford popularized. One is productivity and the other is Fordism aka welfare capitalism aka industrial paternalism. These two concepts are dearly missing from today’s economic environment, but first let’s look at the man and introduce you to the man that built the first automobile assembly line where he made his Model- T.
“Don’t find fault, find a remedy.” Henry Ford
This quote sums up the man that was going places and knew he needed to take people with him. Henry grew up poor, leaving his family to go and work in Detroit where the automotive industry was just beginning to appear. He worked hard, first as a machinist, then a farmer and sawmill operator, and later as an engineer for the Edison Illuminating Company of Detroit. His hobby was understanding and building motors by breaking them down and rebuilding them. He became quite adept and began to build his own cars at home. His first was the Ford Quadricycle in 1896. It had taken him years to build this version, but it would be years again before he could turn it into a business. While he could build cars, he needed capital and capital meant partners, partners who did not share his vision. While his cars improved, his business didn’t as he bounced from one failed partnership to another arguing over control and vision of what the company could or should become.
In 1903 after having proved himself as a man that could build cars, Henry Ford was able to start the Ford Motor Company and even then, it took another 5 years before his signature car the Model- T was ready to be manufactured for the public. It was simple, it was cheap at $825, and it was always in black because Henry Ford wanted it that way. The transition from the shitting horse to the smoke belching auto was now able to move forward in masse, and it sure did.
Henry Ford bridged the industrialist from John D. Rockefeller to Andrew Carnegie to himself. They were a generation older and had seen the railroad develop across the country and both had built their empires on different technologies. Rockefeller in kerosene and oil, and Carnegie in railroads and later steel. But Rockefeller, Carnegie, and Ford were kindred spirits in that they all came working long hours, learning their industries from the ground up, and ultimately creating productivity at mass scale where there was none. Rockefeller was one of many oil refiners, but whereas many just refined kerosene (which was the preferred product at the time as it served as heating oil for many cities) and dumped the byproducts, He used laboratory experiments to create new products and markets to sell the products from the “waste.” This allowed him to lower prices and gain more market share and the public would benefit as well by having a cheaper and safer source of heat for their homes. Carnegie did the same with steel by controlling the coal and iron fields and a line of steamships allowing him to control pig iron, steel rails, and coke manufacturing. The public benefitted from cheaper and better steel rails for trains, steel for buildings, in fact after the Great Chicago Fire of 1871, their city leaders decided to rebuild with more steel buildings.
Ford was no different in that he set out to increase productivity in a nascent industry, and I am certain he learned the lessons of the great industrialists that came before him. Make it cheaper and more affordable so that more people benefit, and they will go back to buy more. Well, Ford introduced the Model-T in 1908 and by the 1920s that is what most people drove in America and what most people could afford. The car got cheaper and cheaper as Ford’s productivity miracle was the assembly line method of production. He broke down building a car into small tasks, automated many things, and was able to make cars more cheaply than his competitors and the Model-T gained 60% market share across the country. The assembly line wasn’t a new concept, but no one had taken a new industry like automobiles and used the assembly line at scale. Ford had vision and confidence and had seen what the market would be even if his customers didn’t themselves.
“If I had asked people what they wanted, they would have said faster horses.”
This is a quote attributed to Ford, but probably never quite uttered by the man, but they sum up a man of vision although one not quite willing to listen to his customers. It was probably because of the single-minded vision that when GM offered more options like colors, financing, and trade ins that GM catapulted past Ford into the largest auto company. This wasn’t until the easy money era of the 1920’s when money was available and seeing how the 1920’s ended with people so indebted, maybe Ford was right to maintain a Spartan outlook on owning an automobile.
Although he believed in a lower cost at all costs method of producing his vehicles, he certainly didn’t act that way with one of his biggest costs: labor. This is where Rockefeller and Carnegie are quite different in their philanthropy and method of operations than Ford. Rockefeller and Carnegie gave most of their money away toward the end of their lives. They build great things and most of the country’s libraries in America still bear their name. Ford and his family have done a lot of philanthropy work as well, but Ford did it while he was building his empire.
In 1914, Ford doubled the wage of his workers to $5 a day. The world couldn’t believe it. His competition would have to follow suit, or their best workers would defect to Ford, and many did. Ford had taken the prosperous town of Detroit and made all the workers in its potential car-owners of the future. He wanted productivity and his workers’ productivity allowed him to cheapen his cars even more because the turnover went from 100% to very low. This was Fordism, sharing the wealth, or the company taking care of its workers and allowing the workers to experience a substantial increase in their cost of living. By 1926, he cut the workweek from 6 8-hour days down to 5. His workers had more leisure time and that made them happier and more productive employees.
“It is high time to rid ourselves of the notion that leisure for workmen is either ‘lost time’ or a class privilege.” Henry Ford
Cars allowed people freedom, hell they still do, and Ford realized that the more prosperous worker wanted to utilize that freedom. The American worker was the most productive in the world, they began to consume more things because of a rise in disposable income, and they had earned their leisure time by helping industrialists create great fortunes. Ford was one of the first to share this with his workmen. Ford was forward looking for sure, in fact he didn’t even have an accounting department until the 1950’s. Accounting is backward looking at what has been done and Henry Ford was not that type of man. He was a man of action and result that always used that instinct as his guide.
“The object of education is not to fill a man’s mind with facts; it is to teach him how to use his mind in thinking.” Henry Ford
Why do I tell you the story of Henry Ford you might ask? Well, I believe that the lazy entitled American had its roots in the Ford plants and their big wages and lots of leisure time. I say that not to belittle Ford or Fordism, quite the contrary. Ford thought about his vision and used the best methods available to solve those problems and create a positive. There is a large difference in earning leisure time after building something great. They sold 60% of the country’s automobiles. The assembly wasn’t new, even Fordism wasn’t new (mining companies had built mining towns and offered housing and other amenities for years). Ford used both while building a new industry by clear conscious thought. His workers had helped him to immense wealth and fame, and they had been working 48-hour weeks for years. They had helped Ford build the Model-T into a huge success when they received the huge pay raises to $5, but they earned it first. Today, it is an expectation before earning anything. People want to work from home with no idea if they are productive or care that they are. They are not, as we are finding out. Junior workers that don’t know their ass from a hole in the ground are seeing their growth stunted and they aren’t experienced or smart enough to know that it is happening. Ford was the rising tide that lifted all boats whereas many workers of today are nothing but drains. They drain energy from their bosses, they drain unearned wages from their employers, and they drain productivity from the economy. Parenting, the educational system, and social media has created drains and we as a country are circling one now. Don’t hate me for being negative, just go to YouTube. Search Nordstrom retail theft and watch our cities allow thieves to take millions of dollars of goods without confrontation because lawyers have so polluted our legal system. Watch videos of workers not working but getting paid full-time hours. Watch the unproductive time while at work continuing to rise while you sit through another mandatory training sapping the company of productive hours about sensitivity, legalese, or policy. If Ford were alive today, I am certain he would suggest cutting pay in half and adding another workday to compensate for the unearned entitlement and inefficiency of the current worker.
Sincerely Yours,
C Thomas Printer
On this date in history..234 years ago to be exact, the first loans to the American government were made by New York City banks.
Also born on this date fighter pilot and author Roald Dahl.