
Henry Ford: Why I Favor Five Days' Work With Six Days' Pay - ntownsend
http://www.worklessparty.org/timework/ford.htm
======
jswinghammer
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
"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.

~~~
jswinghammer
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
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".

~~~
kiba
For the record, the great depression didn't end until after WW2.

War productions does not make prosperous societies simply because the
allocation of resource is redirected to military purpose, not to civilian
needs.

~~~
stretchwithme
I don't know when exactly it ended but I'm quite certain there was little time
to continue experimenting with socialist schemes when one is under attack.
Industry needed to be able to function in order to produce everything required
to win.

And, yes, war is NOT good for the economy or anything else, other than
repelling invaders. When all your shit's blown up, you ain't got shit.

I figure that without the wars of the 20th century, we'd all have twice as
much wealth, if not more.

~~~
gaius
Well, yes and no. The position the US found itself in after WW2 was that all
its rivals (Britain, Germany, Russia, Japan) had been devastated, and all its
factories were fully intact and geared up for mass production. Not such a big
leap from tanks to construction machinery, jeeps to cars, bombers to
airliners. The Marshall plan was about kickstarting export markets, not
altruism.

So on the one hand, you are right, war is a destroyer of wealth. But on the
other hand, the US benefitted enormously from it. The net effect was to
concentrate wealth that would have existed in territories of its rivals to it.

~~~
stretchwithme
Yes, one is better off when you win.

We are told the Marshall Plan worked wonders. But interestingly, two countries
that were both enemies ended up with very successful economies. And both were
bombed pretty hard at the end of the war.

Which makes me think that a nation's culture and the freedom its citizens have
to take risks and benefit from doing so are more important than handouts. But
you could probably guess I was already pretty biased in that direction.

------
robfitz
_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
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
He ran a "company town" - had stores, sold them lumber to build houses etc.
Most of the money came right back to him.

~~~
yummyfajitas
It only came back to him if the company stores wildly overcharged his
employees. If an employee spent $100 in a store with a 10% markup, Ford still
lost a net of $90.

Do the math - paying your workers "enough to buy your product" is an utterly
flawed business model. It might work incidentally (i.e., high wages might
attract high productivity employees), but it doesn't work as stated.

~~~
gridspy
That other 90% doesn't drop off the planet. It goes to a company that splits
it into profit and expense. Both are spent by different people, but all the
cash goes back into the economy.

The profits might be spent on luxuries, the costs on materials. Once again it
split up. Every time a small fraction goes to the government, or to Henry
Ford.

His point is that he wants all business in America to be vibrant, not just his
own (because his businesses would die if it weren't part of an ecosystem)

~~~
yummyfajitas
The other 90% drops off Ford's balance sheet. The fact that it's spent
elsewhere in the economy does not help Ford.

Don't repeat platitudes, build a model. I.e., make up plausible numbers and
actually _do the math_. You'll see that without making wildly ridiculous
assumptions, it's just a net loss for Ford.

~~~
crpatino
Yes, great plan!!! Make Ford's employee never expend a penny in anything but
Ford's products. Soon enough, Ford will have all the money and his employees
will be eating tires and dressing in scrap metal because the rest of the
economy collapsed.

Or, may I guess, most of the people that buys Ford's cars does not work
directly for Ford.

------
qq66
Amazing article -- I did not know that modern American "consumer culture" was
deliberately created by Henry Ford.

~~~
jodrellblank
Also see:
[http://www.youtube.com/results?search_query=century+of+self+...](http://www.youtube.com/results?search_query=century+of+self+happiness+machines&aq=0)
(6 parts)

~~~
pradocchia
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>

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?

------
petercooper
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.

------
openfly
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
Any recommended links for reading about that?

~~~
openfly
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-
Gu...](http://www.scribd.com/doc/20861910/The-Search-for-God-and-Guinness-A-
Biography-of-the-Beer-That-Changed-the-World-by-Stephen-Mansfield)

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>

Also Guinness makes their employment archives available to descendents of past
workers, which is pretty neat:

<http://www.guinness-storehouse.com/en/somehistory.aspx>

------
rmah
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.

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

~~~
mikecane
Heh. How much time do you think Ford put in when it was all a startup for him?

~~~
sliverstorm
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.

------
rm-rf
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
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
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
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
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-
incom...](http://www.visualizingeconomics.com/2008/05/04/average-income-in-
the-united-states-1913-2006/)

~~~
scotty79
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?

~~~
rjurney
Why don't you reply with some data to have an informed conversation, I'm not
your query engine. Know how to google?

~~~
scotty79
I'm not asking you questions. I'm sharing my questions with you. If you don't
want answers to those questions then don't seek them.

~~~
rjurney
You're too lazy to actually seek answers and participate. Conversation done ;)

------
sambeau
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!

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

------
mkramlich
brilliant

goes to show that progress depends on seemingly unreasonable men.

------
openfly
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.

~~~
hop
You should read his autobiography "My Life, and My Work"
<http://www.gutenberg.org/etext/7213> Its fascinating.

I think highly dyslexic is a better description than illiterate for Henry
Ford, he was a genius.

Pioneered material science, machining and forming metal cost effectively, made
the assembly line, 161 patents, created enormous opportunity for hard working
and smart people, brought cars to the masses.

His political feelings should be put in context, he had a great relationship
with Germany before the war, FDR was massively increasing the size of gov't
and creating entitlements with the New Deal (something few business pioneers
would be for) and during the war, there was talk of FDR taking over the
company he built to produce war goods for a foreign war he opposed intervening
in.

~~~
_delirium
I don't think his right-wing extremism can be explained away as a reaction to
FDR or the impending war, since it goes back quite a bit earlier. He published
_The International Jew: The World's Foremost Problem_ in 1920! It was actually
the inspiration for parts of _Mein Kampf_ (1923), which speaks approvingly of
Ford and lifts some sections more or less directly from him. And, he met with
and corresponded with Nazi representatives several times in the early-to-mid
1920s, a point at which the Nazis were a fringe extremist party not anywhere
near government, so couldn't plausibly be said to be part of normal business
ties with Germany. I think he just kind of hated Jews for some reason.

~~~
brc
It's always worse to look back and compare the actions of someone 100 years
ago to what we would consider normal today. I'm not forgiving the guy, but
you'd have to look around at some of his contemporaries and see if this type
of behaviour was normal. Going further back, a lot of well-regarded American
had slaves, for example.

A lot of people were friendly with the Nazis in the early-mid 1930's. They did
turn Germany around and get it going in the early stages.

