Henry Ford said “If I had asked people what they wanted, they would have said faster horses.”
If you are going to tell a lie I think it is best to open with it, and so I did. There is actually no evidence that Henry Ford ever said that., but there is evidence that he didn’t. Still, If you are ever part of one of those dreadful group retreats you might hear this one from someone with a better parking space than you who is urging the team to think outside the box. Now you have ammo to derail the whole thing.
Speaking of quotes, near as I could find “thinking outside the box” was first uttered as an expression by or on behalf of Gestalt Psychologist Karl Duncker. It was in reference to thought experiments he conducted in the 1940’s involving matches, thumbtacks a candle and a box. I find this trite expression to be linguistic sadism and apologize for it’s use here. If it helps I will promise to try my best not to use it again, at least in this piece.
The Henry Ford misquote is supposed to be about how innovative he was. Indeed ,Henry ford was forward thinking but he didn’t make his success by assuming people were idiots who didn’t know what they wanted, which is what is really being implied here. This quote goes along with the great myth that I and so many other children were mistaught, that being that Henry Ford Invented the car.
In fact almost a hundred years before Henry Ford was born, Nicolas-Joseph Cugnot invented the first working self-propelled land-based mechanical vehicle. Thankfully our tendency towards laziness in language led us to automobile and eventually to car. By the time Henry Ford built his famous 4 horsepower, ethanol powered Quadricycle, Karl Benz already had a ten year old patent for the modern automobile and Bertha Benz had undertaken the famous first long distance automobile trip (66 miles) when she took the kids and went to mom’s apparently without Karl’s knowledge.
Henry Ford is also credited with is the invention of the moving assembly line. This is not true ether. What the engineers at his motor company did however was to refine the automation process to an art form. So good was the assembly line at the Ford plant that a car could be produced in 93 minutes rather than the 12 hours plus previously. Cars were coming of the line so fast that the only paint which would dry quick enough was Japan Black. This is said to be the reason for the famous line about having one any color as long it is black.
in 1914 his workers were paid a minimum of 2.34 cents for each nine hour shift on the the assembly line. The story goes that Ford told his managers to “Figure out how much more we can give our men”. After a grueling game they had been urged kicking and screaming to doubling the minimum wage, one frustrated bean counter challenged Ford by saying Why don’t you make it $5 a day and bust the company right?” Ford agreed, he also cut shifts from 9 hours a day to 8 and the workweek to five days from 6.
Why would Ford to do such a hare-brained thing. Make no mistake it was seen that way. Certainly doom was just beyond the horizon for everyone. Other auto companies would leave Detroit so as not to have to compete, those that stayed would go bankrupt, the workers would be seen as rich slobs with those elaborate wages, and of course Ford could not sustain itself long doing that.
I imagine the right wing politicians hit the Sunday morning radio circuit to question Ford’s sanity and to pre-declare his imminent demise. Since there was no Internet yet, trolls (who were all economic experts even then) walked the streets with rough cut cardboard placards painted with memes telling the world that the price of everything would double thanks to Fords stupidity (it is not known if they used the term libtard yet for anyone who did not agree with them ). None of that doom came about though, nor did any of the gloom, at least not for Ford. In fact pretty much the opposite happened. Ford wasn’t crazy and he hadn’t had an Ebeneezer scrooge epiphany either. He was just a smart businessman.
Before you get all weepy eyed, it wasn’t altruism that drove the decision. Working on Ford’s assembly line was fast paced repetitive work. Employee turnover is costly and Ford had plenty of it. Often workers would simply walk off the job and, given the nature of an assembly line manufacturing, even having the guy who places the radiator cap walk off mid shift could stop production. According to this article Ford hired more than 52,000 workers in one year to maintain a workforce of just around 14000. He also found that nine hours was just to long for workers, at any wage and that is why he went to 8 hours. Plus Ford told Edward Peter Garrett of the Saturday Evening Post that he was buying higher quality work and that workers who have their heart in the job actually save the company money.
Ford wrote the following in his 1926 book Today and Tomorrow
“The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.”
This and other things Ford said gave rise to the belief that at least in part Ford made the move so that his employees might buy his cars. Of course there are those who take umbrage with this. The claim that Ford’s employees could never buy enough cars to make up the profits “lost” to wages” is technically correct but it is also incredibly myopic and purposely glosses over the larger benefit in an effort to defend a generally anti livable wage sentiment. What these penny pinching wage haters miss, that Ford understood is that better paid employees take better care of themselves and of others by giving more to charity, that they buy houses (thereby obtaining real wealth) and stick around and that they spend money they would not otherwise have had at all sorts of places. Restaurants, barbershops and clothiers thrive and hire additional staff who must also be paid better wages to keep them off of Henry Ford’s factory floor. These people also buy cars and spend money and the cycle continues.
History shows us that Ford didn’t tip over like it was supposed to, in fact Henry’s lunacy paid off for Ford and the company thrived The scholarly folks who extol the evils of a higher wages, employ a number of cudgels in their arguments. One of these that they use with certainty is that increased wages = increased prices. Yet the window sticker on on the Tin Lizzy went down. The runabout sold for $440 in 1914 and before the war effort increased the price in 1917 the 1916 runabout sold for $345.
Whoever crafted the fake Henry Ford quote likley did it to show that Ford was an innovator who thought ahead of his customers, that he built a better mouse trap despite there being no expressed desire for mice to be trapped. In fact the Ford Motor Company did build a better trap, because Henry Ford recognized not only what the customer wanted but also that to really thrive his product needed to be affordable, even to his own employees.
Ford was visionary in that he realized that success in business was not a solo affair but rather an uncomfortable troilistic romp. Ford may well have seen employees as the necessary evil, but really isn’t it better when all partners are satisfied even if it means some sword crossing?
A lot was different then but a lot has not changed. Cars are made with pretty much the same process though advances in automation continue to made workers more and more obsolete. ( I plan to take a look at the effects of this automation in a later post.) Wages haven’t changed much ether. Starting pay under the contact between the UAW and Ford is 14.77 an hour. The sixty two and a half cents an hour starting pay that Ford workers earned in 1914 is worth 15.16 cents today. Attitudes of the wage adverse have not changed much ether.
In 1914 when Henry Ford had the radical idea that better pay meant better workers and a more robust economy, the economists saw nothing but ominous shadows in their crystal balls. Today when anyone mentions a livable wage the economist still see doom and gloom. Kind of makes one wonder if maybe there is something wrong with the crystal balls.