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Henry Ford: Why I Favor Five Days' Work With Six Days' Pay

146 points by ntownsend 16y ago

jswinghammer 16y ago
This sort of thinking drove government policy at the start of the Great Depression. President Hoover tried to maintain high wage rates seeing them as the cause of prosperity and not the effect of greater productivity. Henry Ford was probably the most influential person in this camp but most of American business at the time was on board with it as well. Murray Rothbard's "America's Great Depression" has probably the best analysis of Hoover's proto "New Deal" policies. It's very enlightening if you were taught as I was that Hoover did nothing while the depression ravaged the nation.
- jbooth 16y ago
  "proto-New Deal policies?" As I understand it, Hoover was preoccupied with maintaining a balanced federal budget through budget cuts and tax increases. That's the opposite of countercyclical spending, which along with some welfare state components made up the new deal. Maybe he was on board with the welfare state and the idea of people having high wages (who isn't?), but the government doesn't cut the majority of paychecks in the country, and those it does cut, he was, well, cutting. In regards to the Depression, he was pretty diametrically opposed to what the New Deal became. You might have a book that says otherwise, but I've read several books that disagree with you. You've got a pretty high burden of proof to make that statement.
  - kiba 16y ago
    So there are several books that said the same thing about Hoover, but does that mean it is more likely that these historians are more accurate than the historians who provided a renegade viewpoint? I have read another book that said that the early new deals program and regulatory framework were essentially made by insider players, who wrote the rulebooks to fit their business operations. Suddenly, you would have a few entrepreneurs and businessmen, jailed because they do a few things differently. For example, from my fallible memory, a businessman who sold tires has to compete with Goodyear, who have locations around the country. In order for his business to survive, he must sell his tries cheaper than Goodyears does. However, he got fined because Goodyear wrote the regulation rules for the tire industry. Which one is more likely in your opinion? The image of government programs being an entirely benevolent operation put forward by FDR, or political machines benefiting some people more than others, sometime at the expenses of one another? If I got a job with the work progress administration, I might be inclined to vote for FDR because he gave me a job, not whether or not if the work progress administration benefit the economy.
    - jbooth 16y ago
      > Renegade viewpoint? Yeah, in absence of better proof provided, I'll stick with the opinion of the majority of historians. The rest of your points haven't had anything to do with government finances or the attitudes of both presidents towards countercyclical spending vs balanced budgets. They seem like some blindly-applied-backwards-80-years modern republican simplifications about the nature of "government programs". Some dude got screwed by Goodyear at some point in history? Huh? There's been a lot of scholarship on this topic. You've got to do better than that if you're going to make an overarching claim like in your original point. To start with, here's a google search for "herbert hoover balanced budget": http://www.google.com/search?hl=en&q=herbert+hoover+balanced+budget&aq=f&aqi=&aql=&oq=&gs_rfai= http://www.google.com/search?hl=en&q=herbert+hoover+bala...
      - kiba 16y ago
        Yeah, in absence of better proof provided, I'll stick with the opinion of the majority of historians. What is your rationale for sticking with whatever the majority of historians said? The rest of your points haven't had anything to do with government finances or the attitudes of both presidents towards countercyclical spending vs balanced budgets. They seem like some blindly-applied-backwards-80-years modern republican simplifications about the nature of "government programs". Some dude got screwed by Goodyear at some point in history? Huh? Sorry about non-sequitur here. I was talking about the effects of FDR's New Deal programs and regulations, and Goodyear was just one data-points amongst many(presumably). Even so, why you think mine is a Republican simplification of government programs?
        jbooth 16y ago
        Because, respectfully, the entire thought process displayed by your post seems to consist of "government = bad, therefore new deal = bad". It shows very little effort to understand what was actually happening, it boxes a huuuuuge range of possibilities into a simple black/white viewpoint, and it's a silly oversimplification that has high correlation with modern republicans. As far as what the majority of historians said, if it's them or you, and you're not saying something very very persuasive, I'll tend to believe them. No offense intended.
  - yummyfajitas 16y ago
    Hoover didn't balance the budget, he doubled the national debt. http://en.wikipedia.org/wiki/File:Debt1929-50.jpg http://en.wikipedia.org/wiki/File:Debt1929-50.jpg It is true, however, that he raised taxes on the rich. Sound like anyone we know?
    - jbooth 16y ago
      Yes, the debt went up. Tax revenues collapsed in this period, remember. But Hoover was trying to balance the budget. He saw it as a goal, an end to itself that would reassure credit markets and do a bunch of good. FDR saw stimulating demand as more important in the short term. That's the difference between them. Hoover was raising taxes to try and balance the budget, and only increased government spending very slightly considering he had 25% unemployment. FDR threw it all to the wind for a few years and massively increased deficits as a deliberate policy.
      - kiba 16y ago
        Hoover, a one-time business whiz and a would-be all-purpose social problem-solver in the Lee Iacocca mold, was a bowling ball looking for pins to scatter. He was a government activist fixated on the idea of running the country as an energetic CEO might run a giant corporation. It was Hoover, not Roosevelt, who initiated the practice of piling up big deficits to support huge public-works projects. After declining or holding steady through most of the 1920s, federal spending soared between 1929 and 1932 -- increasing by more than 50%, the biggest increase in federal spending ever recorded during peacetime. --Totally biased source, http://online.wsj.com/article/SB122576077569495545.html http://online.wsj.com/article/SB122576077569495545.html
        nerfhammer 16y ago
        It's deliberately misleading. "between 1929 and 1932" is a misleading way of saying "in 1932". Almost all of the deficit increase and public works spending occurred in 1932 (due to a single bill: the Emergency Relief and Construction Act) near the end of Hoover's presidency, but by saying "between 1929 and 1932" it makes it sound like it was a consistent policy throughout the downturn. In reality by that time in 1932 the depression was already near its worst lows and Hoover had tried keeping the budget balanced prior to that and only had a few months left in office.
  - jswinghammer 16y ago
    With all due respect that's because you haven't read more on the subject. Lord Keynes himself is quoted in Rothbard's book as approving of the United States government's response to the crisis. The notion that depressions are caused by a fall in aggregate demand is looking totally at the symptoms of the crisis and not the causes. Rothbard might be one person but he's not a minor figure in 20th century economics by any means. He's not really on the level of Hayek, Friedman, Keynes, or Mises in terms of influence but he's no joke either. Hoover was the main force in the Harding administration to respond to the crisis of 1920-21 which Harding wisely ignored. The contraction in the economy was very severe but we recovered quickly and no one remembers it--except Austrian economists like Rothbard. And considering the lengths Roosevelt was willing to go to I'm not surprised Hoover didn't like all of The New Deal. I'm not sure Hoover or anyone else saw the seizing of all gold coming. I'm not sure why history forgives him for that act of theft.
    - jbooth 16y ago
      You were doing awesome until "seizing of all gold" -- obviously had a viewpoint but were giving credence to other viewpoints as well.. then that doozy. History forgives him because he ended the depression, won WWII and not everyone agrees with you about abolishing the gold standard being equivalent to quote "seizing of all gold".
      - steveplace 16y ago
        Gold standard and gold seizure are two different things. Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933 all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($166,640 if adjusted for inflation as of 2008) or up to ten years in prison, or both.
      - euccastro 16y ago
        [Edit: steveplace beat me to it. I'll leave this comment around for the reference.] Abolishing the gold standard is not "equivalent" to "seizing of all gold". Both things just happened concurrently: http://www.greatdepressiononline.com/gold-and-the-great-depression.htm http://www.greatdepressiononline.com/gold-and-the-great-depr... First, in 1933, at the height of the Great Depression, the U.S. Government, under the Gold Confiscation Act, confiscated gold money from its citizens and replaced it with paper Federal Reserve Notes. It became illegal for individuals to own gold, except for small quantities that coin collectors and dental practitioners could hold. This alone eliminated the public’s capacity to hold government inflation of the money supply in check; they could no longer redeem inflated paper money for gold.
  - anamax 16y ago
    > As I understand it, Hoover was preoccupied with maintaining a balanced federal budget through budget cuts and tax increases. You got it backwards. In fact FDR campaigned against Hoover's deficit spending. Once in office, FDR reversed course and doubled-down on Hoover's approach. Hoover and FDR shared a belief that excess production was the problem - that's why both pushed govt programs to restrict it. That's what put the "Great" in "Great Depression". (Previous panics didn't last nearly as long.) FDR didn't back off until the approaching WWII made it obvious that an "Arsenal of Democracy" had to actually produce massive amounts of stuff. FWIW, Congressional Repubs at the time voted overwhelmingly for Social Security.
    - nerfhammer 16y ago
      Hoover began deficit spending only near the end of his presidency. Prior to that he drastically raised taxes and tried to balance the budget.
- brc 16y ago
  I think we can all pretty much agree that both Hoover and Roosevelt (and the administration in general) made things worse. The biggest problem we have is the obsession with GDP instead of trying to measure things like wealth creation - which is precisely what Henry Ford was in the business of.
- rjurney 16y ago
  You read a visionary interview about the fundamental labor reforms that made the pursuit of happiness a reality, from three years before the depression started, and your comment is to start the old saw debate about the causes of the great depression? And it's top comment? Are we voting for goodness or troll points? I get confused.
deleted 16y ago
[deleted]
cma 16y ago
Courts ruled that Ford had to engage in extremely narrow profit-seeking behavior: http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company
robfitz 16y ago
But it is the influence of leisure on consumption which makes the short week so necessary. The people who consume the bulk of goods are the people who make them. That is a fact we must never forget -- that is the secret of our prosperity. That is pretty evil mastermind... he's thinking on a whole other level.
- qq66 16y ago
  I love the "chess"-like planning ahead here, but it seems as though unless Ford was selling a huge fraction of the discretionary purchases in the country, it would be hard to finance this... If you spend $100 to give your workers 2 extra hours of leisure a week, maybe only $5 or $10 would be spent on Ford cars and the rest would be spent on other stuff...
  - JoeAltmaier 16y ago
    He ran a "company town" - had stores, sold them lumber to build houses etc. Most of the money came right back to him.
    - mikecane 16y ago
      Was he the first to do that? I read a book about Frick & Carnegie and was shocked to learn Frick had company housing and stores for the workers of Carnegie's steel empire. I wonder where this idea came from? Not even wikipedia has its origins: http://en.wikipedia.org/wiki/Company_store http://en.wikipedia.org/wiki/Company_store EDIT: I should have clicked more. Pullman: http://en.wikipedia.org/wiki/Company_town http://en.wikipedia.org/wiki/Company_town
      - ugh 16y ago
        Company housing was very, very common in Europe when the Industrial Revolution really got started. Many German towns which got a train connection early on have these typical big red brick houses were the workers lived, probably the most visible reminder of that practice.
openfly 16y ago
Uhm, Henry Ford was known for violently suppressing unions in his factories. He considered unions to be closely tied to "Jewish Zionist" ambitions. He was also a heavy monetary supporter of Adolf Hitler. In fact, he refused to give back awards he received from the Third Reicht, and was in fact buried with them. Oh, and he was illiterate. So word of advice... don't take advice from Henry Ford.
- kiba 16y ago
  The merit of his characters does not mean that his advices are automatically ineffective and immoral.
  - openfly 16y ago
    Sure, but Fordlandia, his inability to read, and his belief in such absurdity as "The protocols of the elders of zion" speak volumes as to the man's mental state. Which at best is mildly insane.
    - qq66 16y ago
      He also created modern American industry. Try to evaluate his output at a finer grain than the entire individual over his entire lifetime.
      - openfly 16y ago
        I gotta godwin this, I just can't resist it. Sorry. "I regard Henry Ford as my inspiration" - Adolf Hitler Ref: http://www.washingtonpost.com/wp-srv/national/daily/nov98/nazicars30.htm http://www.washingtonpost.com/wp-srv/national/daily/nov98/na...
        sliverstorm 16y ago
        So? Maybe if Ford said Hitler was his inspiration, but not the other way around.
- 16y ago
openfly 16y ago
Also, look at the business policies and employment benefits first introduced by the Guinness brewery when they were founded. If you want to see how to establish a universally unbeatable brand identity they have a how to guide for the ages.
- theBobMcCormick 16y ago
  Any recommended links for reading about that?
  - openfly 16y ago
    I read "The Search for God and Guinness", fun read even if you aren't religious ( I am not ): http://www.scribd.com/doc/20861910/The-Search-for-God-and-Guinness-A-Biography-of-the-Beer-That-Changed-the-World-by-Stephen-Mansfield http://www.scribd.com/doc/20861910/The-Search-for-God-and-Gu... Just saw this, I haven't given it a listen yer, but I do intend to. Looks fun: http://www.thedigitalhubelevate.com/memoirs_of_guinness http://www.thedigitalhubelevate.com/memoirs_of_guinness Also Guinness makes their employment archives available to descendents of past workers, which is pretty neat: http://www.guinness-storehouse.com/en/somehistory.aspx http://www.guinness-storehouse.com/en/somehistory.aspx
joshfraser 16y ago
cool, now get back to your 90hr a week startup...
- mikecane 16y ago
  Heh. How much time do you think Ford put in when it was all a startup for him?
  - sliverstorm 16y ago
    I have no evidence whatsoever, but I'd imagine a good 70 hours a week at least. You lived your job back then- ref: farmers. Plus, the fact that moving to a 5-day work week was so monumental strongly implies the entire nation was on a 6-day work week, and the loosly-religious ones probably worked on Sunday too.
qq66 16y ago
Amazing article -- I did not know that modern American "consumer culture" was deliberately created by Henry Ford.
- pradocchia 16y ago
  That was the spirit of the times--finding ways to ensure demand kept up with rapidly expanding industrial capacity.
- jodrellblank 16y ago
  Also see: http://www.youtube.com/results?search_query=century+of+self+happiness+machines&aq=0 http://www.youtube.com/results?search_query=century+of+self+... (6 parts)
  - pradocchia 16y ago
    For primary sources, try Propaganda (1928) by Edward Bernays. Bernays pioneered many modern advertising techniques. He created demand where none existed prior, typically though psychological means. Torches of Freedom is a famous example: http://en.wikipedia.org/wiki/Torches_of_Freedom http://en.wikipedia.org/wiki/Torches_of_Freedom Supposedly, he also had a hand in convincing the public that water fluoridation was safe and beneficial to human health, on behalf of Alcoa, and in concert w/ the American Dental Association. Does anyone have a primary source for that one?
- megablast 16y ago
  I thought it had a lot to do with the end of the war, the overcapacity that all those new factories and workers created, and the start of the advertising industry.
- j1o1h1n 16y ago
  The eight hour day, forty hour week was a key victory won by the persistent efforts of the trade union movement (and anarchists and socialists). Mr Ford seems to have been writing a clever justification for a pre-emptive capitulation. And it seems to have been a good piece of business for him. But it is Labour Day, not Henry Ford Day.
thehigherlife 16y ago
oddly enough this page is blocked at my office...
rmah 16y ago
As with many people, Henry Ford had both his good points and his bad points. Some may feel his sins outweighed his good deeds, but Ford did do a lot of good as well. One needs to take care to not reduce people to a two dimensional caricature. To do so may cause you to dismiss the good and fail to learn valuable lessons.
mkramlich 16y ago
brilliant goes to show that progress depends on seemingly unreasonable men.
petercooper 16y ago
This is all great thinking on Ford's part but one piece stands out for me: We try to pay a man what he is worth and we are not inclined to keep a man who is not worth more than the minimum wage. I like Ford's approach but he would not be impressed with how restricting the ability to lay off low value workers has damaged our economy. People are even put off of hiring knowing that they might be paying higher unemployment insurance at the end of it, and Europe was dominated (and weighed down) by trade unions for a long time.
rm-rf 16y ago
Ford didn't do this to be nice. He did it because: "we can get at least as great production in five days as we can in six" Smart man. By working them shorter hours, he could work them harder.
scotty79 16y ago
Ok. So we are almost 100 years from the last significant reduction of work burden on humanity. How many times industrial technology has doubled its efficiency since then? Why Americans still work as much as then (or even more)? Where the benefits of having better industrial technology went? Is your daily life that much better than life in 1926? Does cost of any advanced piece of equipment that you use now in your life that did not exist back then justifies all of your effort multiplied by our incredible technology that seems to be be missing?
- rjurney 16y ago
  This is a smart comment. You parsed the article! :) Aren't Americans much wealthier today than 84 years ago? Hasn't the work paid off materially? I play with data for fun all day and live comfortably. My grandfathers worked like dogs and were poor. Isn't this a common story?
  - scotty79 16y ago
    Did you grandfathers actually told you that they worked like dogs and were poor? I think a lot of people don't share your story and don't play with data for fun all day. Instead they still put 40 hours/week plus unpaid overtime into a job they hate that makes them unpleasantly tired.
    - rjurney 16y ago
      Of course not, they would never complain. Poor southerners don't do that. The one did talk about losing the farm though. Don't take his word for it though, look at some data: http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/ http://www.visualizingeconomics.com/2008/05/04/average-incom...
      - scotty79 16y ago
        Ok, so income tripled from 15 to 45. How about purchasing power of that income? How much housing could you buy for that income back then an now? How many children could you raise back then and now for that income? How does tripling even compare to increase in efficiency of industrial and agricultural production? "Losing farm" is impossible now?
sambeau 16y ago
I love the idea that Henry Ford created a culture that had time to use the products that he was creating, and to do it he started with his own employees. "The people with a five day week will consume more goods than the people with a six day week" "the people would not have the time to consume the goods produced. For instance, a workman would have little use for an automobile if he had to be in the shops from dawn until dusk" Genius!
robak 16y ago
5usd a day == 250usd/day today == 31.25usd/hour. With much lower taxes. Cool.

146 points by ntownsend 16y ago

This sort of thinking drove government policy at the start of the Great Depression. President Hoover tried to maintain high wage rates seeing them as the cause of prosperity and not the effect of greater productivity. Henry Ford was probably the most influential person in this camp but most of American business at the time was on board with it as well. Murray Rothbard's "America's Great Depression" has probably the best analysis of Hoover's proto "New Deal" policies. It's very enlightening if you were taught as I was that Hoover did nothing while the depression ravaged the nation.

jbooth 16y ago
"proto-New Deal policies?" As I understand it, Hoover was preoccupied with maintaining a balanced federal budget through budget cuts and tax increases. That's the opposite of countercyclical spending, which along with some welfare state components made up the new deal. Maybe he was on board with the welfare state and the idea of people having high wages (who isn't?), but the government doesn't cut the majority of paychecks in the country, and those it does cut, he was, well, cutting. In regards to the Depression, he was pretty diametrically opposed to what the New Deal became. You might have a book that says otherwise, but I've read several books that disagree with you. You've got a pretty high burden of proof to make that statement.
- kiba 16y ago
  So there are several books that said the same thing about Hoover, but does that mean it is more likely that these historians are more accurate than the historians who provided a renegade viewpoint? I have read another book that said that the early new deals program and regulatory framework were essentially made by insider players, who wrote the rulebooks to fit their business operations. Suddenly, you would have a few entrepreneurs and businessmen, jailed because they do a few things differently. For example, from my fallible memory, a businessman who sold tires has to compete with Goodyear, who have locations around the country. In order for his business to survive, he must sell his tries cheaper than Goodyears does. However, he got fined because Goodyear wrote the regulation rules for the tire industry. Which one is more likely in your opinion? The image of government programs being an entirely benevolent operation put forward by FDR, or political machines benefiting some people more than others, sometime at the expenses of one another? If I got a job with the work progress administration, I might be inclined to vote for FDR because he gave me a job, not whether or not if the work progress administration benefit the economy.
  - jbooth 16y ago
    > Renegade viewpoint? Yeah, in absence of better proof provided, I'll stick with the opinion of the majority of historians. The rest of your points haven't had anything to do with government finances or the attitudes of both presidents towards countercyclical spending vs balanced budgets. They seem like some blindly-applied-backwards-80-years modern republican simplifications about the nature of "government programs". Some dude got screwed by Goodyear at some point in history? Huh? There's been a lot of scholarship on this topic. You've got to do better than that if you're going to make an overarching claim like in your original point. To start with, here's a google search for "herbert hoover balanced budget": http://www.google.com/search?hl=en&q=herbert+hoover+balanced+budget&aq=f&aqi=&aql=&oq=&gs_rfai= http://www.google.com/search?hl=en&q=herbert+hoover+bala...
    - kiba 16y ago
      Yeah, in absence of better proof provided, I'll stick with the opinion of the majority of historians. What is your rationale for sticking with whatever the majority of historians said? The rest of your points haven't had anything to do with government finances or the attitudes of both presidents towards countercyclical spending vs balanced budgets. They seem like some blindly-applied-backwards-80-years modern republican simplifications about the nature of "government programs". Some dude got screwed by Goodyear at some point in history? Huh? Sorry about non-sequitur here. I was talking about the effects of FDR's New Deal programs and regulations, and Goodyear was just one data-points amongst many(presumably). Even so, why you think mine is a Republican simplification of government programs?
      - jbooth 16y ago
        Because, respectfully, the entire thought process displayed by your post seems to consist of "government = bad, therefore new deal = bad". It shows very little effort to understand what was actually happening, it boxes a huuuuuge range of possibilities into a simple black/white viewpoint, and it's a silly oversimplification that has high correlation with modern republicans. As far as what the majority of historians said, if it's them or you, and you're not saying something very very persuasive, I'll tend to believe them. No offense intended.
- yummyfajitas 16y ago
  Hoover didn't balance the budget, he doubled the national debt. http://en.wikipedia.org/wiki/File:Debt1929-50.jpg http://en.wikipedia.org/wiki/File:Debt1929-50.jpg It is true, however, that he raised taxes on the rich. Sound like anyone we know?
  - jbooth 16y ago
    Yes, the debt went up. Tax revenues collapsed in this period, remember. But Hoover was trying to balance the budget. He saw it as a goal, an end to itself that would reassure credit markets and do a bunch of good. FDR saw stimulating demand as more important in the short term. That's the difference between them. Hoover was raising taxes to try and balance the budget, and only increased government spending very slightly considering he had 25% unemployment. FDR threw it all to the wind for a few years and massively increased deficits as a deliberate policy.
    - kiba 16y ago
      Hoover, a one-time business whiz and a would-be all-purpose social problem-solver in the Lee Iacocca mold, was a bowling ball looking for pins to scatter. He was a government activist fixated on the idea of running the country as an energetic CEO might run a giant corporation. It was Hoover, not Roosevelt, who initiated the practice of piling up big deficits to support huge public-works projects. After declining or holding steady through most of the 1920s, federal spending soared between 1929 and 1932 -- increasing by more than 50%, the biggest increase in federal spending ever recorded during peacetime. --Totally biased source, http://online.wsj.com/article/SB122576077569495545.html http://online.wsj.com/article/SB122576077569495545.html
      - nerfhammer 16y ago
        It's deliberately misleading. "between 1929 and 1932" is a misleading way of saying "in 1932". Almost all of the deficit increase and public works spending occurred in 1932 (due to a single bill: the Emergency Relief and Construction Act) near the end of Hoover's presidency, but by saying "between 1929 and 1932" it makes it sound like it was a consistent policy throughout the downturn. In reality by that time in 1932 the depression was already near its worst lows and Hoover had tried keeping the budget balanced prior to that and only had a few months left in office.
- jswinghammer 16y ago
  With all due respect that's because you haven't read more on the subject. Lord Keynes himself is quoted in Rothbard's book as approving of the United States government's response to the crisis. The notion that depressions are caused by a fall in aggregate demand is looking totally at the symptoms of the crisis and not the causes. Rothbard might be one person but he's not a minor figure in 20th century economics by any means. He's not really on the level of Hayek, Friedman, Keynes, or Mises in terms of influence but he's no joke either. Hoover was the main force in the Harding administration to respond to the crisis of 1920-21 which Harding wisely ignored. The contraction in the economy was very severe but we recovered quickly and no one remembers it--except Austrian economists like Rothbard. And considering the lengths Roosevelt was willing to go to I'm not surprised Hoover didn't like all of The New Deal. I'm not sure Hoover or anyone else saw the seizing of all gold coming. I'm not sure why history forgives him for that act of theft.
  - jbooth 16y ago
    You were doing awesome until "seizing of all gold" -- obviously had a viewpoint but were giving credence to other viewpoints as well.. then that doozy. History forgives him because he ended the depression, won WWII and not everyone agrees with you about abolishing the gold standard being equivalent to quote "seizing of all gold".
    - steveplace 16y ago
      Gold standard and gold seizure are two different things. Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933 all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($166,640 if adjusted for inflation as of 2008) or up to ten years in prison, or both.
    - euccastro 16y ago
      [Edit: steveplace beat me to it. I'll leave this comment around for the reference.] Abolishing the gold standard is not "equivalent" to "seizing of all gold". Both things just happened concurrently: http://www.greatdepressiononline.com/gold-and-the-great-depression.htm http://www.greatdepressiononline.com/gold-and-the-great-depr... First, in 1933, at the height of the Great Depression, the U.S. Government, under the Gold Confiscation Act, confiscated gold money from its citizens and replaced it with paper Federal Reserve Notes. It became illegal for individuals to own gold, except for small quantities that coin collectors and dental practitioners could hold. This alone eliminated the public’s capacity to hold government inflation of the money supply in check; they could no longer redeem inflated paper money for gold.
- anamax 16y ago
  > As I understand it, Hoover was preoccupied with maintaining a balanced federal budget through budget cuts and tax increases. You got it backwards. In fact FDR campaigned against Hoover's deficit spending. Once in office, FDR reversed course and doubled-down on Hoover's approach. Hoover and FDR shared a belief that excess production was the problem - that's why both pushed govt programs to restrict it. That's what put the "Great" in "Great Depression". (Previous panics didn't last nearly as long.) FDR didn't back off until the approaching WWII made it obvious that an "Arsenal of Democracy" had to actually produce massive amounts of stuff. FWIW, Congressional Repubs at the time voted overwhelmingly for Social Security.
  - nerfhammer 16y ago
    Hoover began deficit spending only near the end of his presidency. Prior to that he drastically raised taxes and tried to balance the budget.
brc 16y ago
I think we can all pretty much agree that both Hoover and Roosevelt (and the administration in general) made things worse. The biggest problem we have is the obsession with GDP instead of trying to measure things like wealth creation - which is precisely what Henry Ford was in the business of.
rjurney 16y ago
You read a visionary interview about the fundamental labor reforms that made the pursuit of happiness a reality, from three years before the depression started, and your comment is to start the old saw debate about the causes of the great depression? And it's top comment? Are we voting for goodness or troll points? I get confused.

deleted 16y ago

[deleted]

cma 16y ago

Courts ruled that Ford had to engage in extremely narrow profit-seeking behavior: http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company http://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Company

robfitz 16y ago

But it is the influence of leisure on consumption which makes the short week so necessary. The people who consume the bulk of goods are the people who make them. That is a fact we must never forget -- that is the secret of our prosperity. That is pretty evil mastermind... he's thinking on a whole other level.

qq66 16y ago
I love the "chess"-like planning ahead here, but it seems as though unless Ford was selling a huge fraction of the discretionary purchases in the country, it would be hard to finance this... If you spend $100 to give your workers 2 extra hours of leisure a week, maybe only $5 or $10 would be spent on Ford cars and the rest would be spent on other stuff...
- JoeAltmaier 16y ago
  He ran a "company town" - had stores, sold them lumber to build houses etc. Most of the money came right back to him.
  - mikecane 16y ago
    Was he the first to do that? I read a book about Frick & Carnegie and was shocked to learn Frick had company housing and stores for the workers of Carnegie's steel empire. I wonder where this idea came from? Not even wikipedia has its origins: http://en.wikipedia.org/wiki/Company_store http://en.wikipedia.org/wiki/Company_store EDIT: I should have clicked more. Pullman: http://en.wikipedia.org/wiki/Company_town http://en.wikipedia.org/wiki/Company_town
    - ugh 16y ago
      Company housing was very, very common in Europe when the Industrial Revolution really got started. Many German towns which got a train connection early on have these typical big red brick houses were the workers lived, probably the most visible reminder of that practice.

openfly 16y ago

Uhm, Henry Ford was known for violently suppressing unions in his factories. He considered unions to be closely tied to "Jewish Zionist" ambitions. He was also a heavy monetary supporter of Adolf Hitler. In fact, he refused to give back awards he received from the Third Reicht, and was in fact buried with them. Oh, and he was illiterate. So word of advice... don't take advice from Henry Ford.

kiba 16y ago
The merit of his characters does not mean that his advices are automatically ineffective and immoral.
- openfly 16y ago
  Sure, but Fordlandia, his inability to read, and his belief in such absurdity as "The protocols of the elders of zion" speak volumes as to the man's mental state. Which at best is mildly insane.
  - qq66 16y ago
    He also created modern American industry. Try to evaluate his output at a finer grain than the entire individual over his entire lifetime.
    - openfly 16y ago
      I gotta godwin this, I just can't resist it. Sorry. "I regard Henry Ford as my inspiration" - Adolf Hitler Ref: http://www.washingtonpost.com/wp-srv/national/daily/nov98/nazicars30.htm http://www.washingtonpost.com/wp-srv/national/daily/nov98/na...
      - sliverstorm 16y ago
        So? Maybe if Ford said Hitler was his inspiration, but not the other way around.
16y ago

openfly 16y ago

Also, look at the business policies and employment benefits first introduced by the Guinness brewery when they were founded. If you want to see how to establish a universally unbeatable brand identity they have a how to guide for the ages.

theBobMcCormick 16y ago
Any recommended links for reading about that?
- openfly 16y ago
  I read "The Search for God and Guinness", fun read even if you aren't religious ( I am not ): http://www.scribd.com/doc/20861910/The-Search-for-God-and-Guinness-A-Biography-of-the-Beer-That-Changed-the-World-by-Stephen-Mansfield http://www.scribd.com/doc/20861910/The-Search-for-God-and-Gu... Just saw this, I haven't given it a listen yer, but I do intend to. Looks fun: http://www.thedigitalhubelevate.com/memoirs_of_guinness http://www.thedigitalhubelevate.com/memoirs_of_guinness Also Guinness makes their employment archives available to descendents of past workers, which is pretty neat: http://www.guinness-storehouse.com/en/somehistory.aspx http://www.guinness-storehouse.com/en/somehistory.aspx

joshfraser 16y ago

cool, now get back to your 90hr a week startup...

mikecane 16y ago
Heh. How much time do you think Ford put in when it was all a startup for him?
- sliverstorm 16y ago
  I have no evidence whatsoever, but I'd imagine a good 70 hours a week at least. You lived your job back then- ref: farmers. Plus, the fact that moving to a 5-day work week was so monumental strongly implies the entire nation was on a 6-day work week, and the loosly-religious ones probably worked on Sunday too.

qq66 16y ago

Amazing article -- I did not know that modern American "consumer culture" was deliberately created by Henry Ford.

pradocchia 16y ago
That was the spirit of the times--finding ways to ensure demand kept up with rapidly expanding industrial capacity.
jodrellblank 16y ago
Also see: http://www.youtube.com/results?search_query=century+of+self+happiness+machines&aq=0 http://www.youtube.com/results?search_query=century+of+self+... (6 parts)
- pradocchia 16y ago
  For primary sources, try Propaganda (1928) by Edward Bernays. Bernays pioneered many modern advertising techniques. He created demand where none existed prior, typically though psychological means. Torches of Freedom is a famous example: http://en.wikipedia.org/wiki/Torches_of_Freedom http://en.wikipedia.org/wiki/Torches_of_Freedom Supposedly, he also had a hand in convincing the public that water fluoridation was safe and beneficial to human health, on behalf of Alcoa, and in concert w/ the American Dental Association. Does anyone have a primary source for that one?
megablast 16y ago
I thought it had a lot to do with the end of the war, the overcapacity that all those new factories and workers created, and the start of the advertising industry.
j1o1h1n 16y ago
The eight hour day, forty hour week was a key victory won by the persistent efforts of the trade union movement (and anarchists and socialists). Mr Ford seems to have been writing a clever justification for a pre-emptive capitulation. And it seems to have been a good piece of business for him. But it is Labour Day, not Henry Ford Day.

thehigherlife 16y ago

oddly enough this page is blocked at my office...

rmah 16y ago

As with many people, Henry Ford had both his good points and his bad points. Some may feel his sins outweighed his good deeds, but Ford did do a lot of good as well. One needs to take care to not reduce people to a two dimensional caricature. To do so may cause you to dismiss the good and fail to learn valuable lessons.

mkramlich 16y ago

brilliant goes to show that progress depends on seemingly unreasonable men.

petercooper 16y ago

This is all great thinking on Ford's part but one piece stands out for me: We try to pay a man what he is worth and we are not inclined to keep a man who is not worth more than the minimum wage. I like Ford's approach but he would not be impressed with how restricting the ability to lay off low value workers has damaged our economy. People are even put off of hiring knowing that they might be paying higher unemployment insurance at the end of it, and Europe was dominated (and weighed down) by trade unions for a long time.

rm-rf 16y ago

Ford didn't do this to be nice. He did it because: "we can get at least as great production in five days as we can in six" Smart man. By working them shorter hours, he could work them harder.

scotty79 16y ago

Ok. So we are almost 100 years from the last significant reduction of work burden on humanity. How many times industrial technology has doubled its efficiency since then? Why Americans still work as much as then (or even more)? Where the benefits of having better industrial technology went? Is your daily life that much better than life in 1926? Does cost of any advanced piece of equipment that you use now in your life that did not exist back then justifies all of your effort multiplied by our incredible technology that seems to be be missing?

rjurney 16y ago
This is a smart comment. You parsed the article! :) Aren't Americans much wealthier today than 84 years ago? Hasn't the work paid off materially? I play with data for fun all day and live comfortably. My grandfathers worked like dogs and were poor. Isn't this a common story?
- scotty79 16y ago
  Did you grandfathers actually told you that they worked like dogs and were poor? I think a lot of people don't share your story and don't play with data for fun all day. Instead they still put 40 hours/week plus unpaid overtime into a job they hate that makes them unpleasantly tired.
  - rjurney 16y ago
    Of course not, they would never complain. Poor southerners don't do that. The one did talk about losing the farm though. Don't take his word for it though, look at some data: http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/ http://www.visualizingeconomics.com/2008/05/04/average-incom...
    - scotty79 16y ago
      Ok, so income tripled from 15 to 45. How about purchasing power of that income? How much housing could you buy for that income back then an now? How many children could you raise back then and now for that income? How does tripling even compare to increase in efficiency of industrial and agricultural production? "Losing farm" is impossible now?

sambeau 16y ago

I love the idea that Henry Ford created a culture that had time to use the products that he was creating, and to do it he started with his own employees. "The people with a five day week will consume more goods than the people with a six day week" "the people would not have the time to consume the goods produced. For instance, a workman would have little use for an automobile if he had to be in the shops from dawn until dusk" Genius!

robak 16y ago

5usd a day == 250usd/day today == 31.25usd/hour. With much lower taxes. Cool.