Michael Maiello's picture

    Labor Day and the Myth of Henry Ford

    Every so often, somebody tells the story of Henry Ford, friend of the working man.  You see, he paid his workers a higher wage, helping to transform a population of Detroit immigrants into part of a mass affluent American middle class that supported America's economic growth for the better part of the 20th century. It's a nice story that appeals to common sense.  Ford built not only cars, but a customer base for its product.  It's the perfect counterpoint to globalization's "race to the bottom" for wages.

    This is a fairy tale I've fallen for in the past as well.  We're all looking for a good argument in favor of raising wages for average workers in an era where the spoils of productivity have gone to upper management and equity holders.

    But, as you might expect, there's more to the Henry Ford story.  Ford was a capitalist tycoon of his time and considered himself something of a statesman and community organizer.  It's a popular worry these days, that the financial elite has divorced itself from the concerns of average Americans.  The op-ed pages of The New York Times have quite commonly hosted calls for society's wealthy savior.  This has come from both the voices on the left and the right.  Sometimes its Michael Bloomberg.  Sometimes it's "America Elects," described by Thomas Friedman has backed by "serious hedge fund money."  Most recently, it's been Mitt Romney cast as our patrician leader.

    It wasn't until I read the manuscript to my best friend's novel (about which, much more to come before the end of the year) that I learned the rest of the Ford story and why this yearning for a tycoon leader is so dangerous.  Ford didn't just pay his workers $5 a day.  He worried that his laborers would spend it on drink, whores and games of chance.  He had definite ideas about what a household should look like and how it should be run.

    To that end, he created a Department of Sociology within his company, staffed with inspectors who pried into the loves of Ford's workers.  The $5 a day wage, which was more of a profit sharing plan, was extended only to those laborers who met Ford's standards of decency and temperance.  Would it surprise you if I said that these standards did not apply equally to all workers and that it was the lower wage immigrants who had their lives micromanaged?

    Times have surely changed, but we still allow employers to fire employees for their political beliefs, or for failing a drug test, or for writing something offensive on a blog.  In our system, employers wield tremendous coercive power.  Some part of human nature is also vulnerable to the idea that if you provide somebody with money, even in exchange for labor, that you have some right to tell them how to spend it.

    Ford's defenders might well argue that his sociologists did a lot of good.  No doubt people curbed gambling and substance addictions in pursuit of higher wages.  The problem is that being a successful auto company executive does not justify excessive influence over the lifestyle decisions of other people.

    This is at the heart of people's frustration with Chick-Fil-A.  Its executives and owners are certainly entitled to their opinions.  But it's at best frustrating to see that they get an outsized voice just because they sell a lot of chicken pucks on biscuits.

    When people tell the Henery Ford story, they should tell the whole story.  He had bigger ambitions than building a middle class.  He was out to influence individual lives and, ultimately, the culture.  He wasn't accountable to many people along the way.  Some people don't have a problem with this.  They seem okay with a democracy where the wealthiest voices are the loudest.  I find this impulse at best disturbing.



    Terrific post, destor!

    The $5 a day wage, which was more of a profit sharing plan, was extended only to those laborers who met Ford's standards of decency and temperanceT.

    This process is definitely being enacted currently by the GOP with their intent being that unless one's religious faith is the same as what they tout as Christian values, then they will enact their condemnation and damnation via  legislation ant ensuring that SCOTUS has only those who share their religious ideology.

    destor, This is a great post. I am embarrassed to admit that I have been woefully ignorant of the truths about Ford.  It's important that these facts are made known and hopefully, the parallels will be drawn between today's members of the corporate world and many of the 1% who continue to prosper from the hard work of the 99% with nary any interest in learning, much less truly identifying, with their lives and struggles. 

    Are the majority of the current placeholder's in corporate America better or worse than Ford in how they 'see' and feel about the workers/employees?  Are they implementing, or attempting to implement, processes that are mired in the same philosophy as Ford's?

    Republicans also do this when they suggest that food stamp recipients should be drug tested, or even when they second guess the purchases of the poor:  "Why does that supposedly poor person have air conditioning?" they ask.

    My friend did all of the serious research on this.  His book is brilliant.  But, as I said, more on that to come.


    When I lived near one of Henry Ford's mills in suburban Detroit I covered the 50th Anniversary of the opening of one of the elementary schools he built for the kids of the mill-workers.  I talked to a woman who had been a little girl when the mill was open, and she went to school there.  She told me that Ford showed up at many of the school functions and always brought little gifts for the kids--sometimes apples, sometimes pencils--but the kids were a little afraid of him because they'd heard the stories about how their parents had to toe the line according to Ford's ideas of morality.  She said sometimes he would be smiling at them and then be scowling within seconds if he saw something he didn't like.

    Men were fired for drinking or carousing and their company houses were subject to random, unannounced inspections.  They were expected to go to church. There was a Ford newspaper that published kids stories and poems, and was full of little homilies about what made a good worker.

    She said they made so much more than most other workers, they felt privileged to be working there, but at the same time they felt like they couldn't breathe without getting permission.

    If your friend hasn't already, tell him to read "The Flivver King", Upton Sinclair's scathing novel about Henry Ford, and "Henry Ford and the Jews", by Neil Baldwin.  I have both of them and would be glad to lend them to him if he's interested.

    Are the majority of the current placeholder's in corporate America better or worse than Ford in how they 'see' and feel about the workers/employees? 

    I don't know about a majority but some of Walmart's policies creep me out.

    For me the larger point is that in a high-unemployment economy where decent jobs are increasingly scarce and unions are relatively small and under fierce assault, employees or wannabe employees are willing to tolerate more abuse in exchange for a paycheck.  Larger and more politically influential employers, and their advocacy organizations, oppose societal full employment policies because it gives them less leverage. (The ones who will say so publicly typically give as their reason that full unemployment necessarily leads to high and intolerable inflation.) 

    As long as we have gross economic (and political) power imbalances of the sort we have now, the choice of how to exploit those power imbalances will remain in the hands of those who "enjoy" them.  It should be seen as a given that some will exploit such overweening power in ways that are more problematic and even offensive to employees and other citizens, whereas others will not.  

    A corporation that has consciously developed its own Department of Sociology may not be that different from other enterprises that reproduce cultures of selection just as extensive as the Ford vision but go unnamed and thus avoid the scrutiny that publicly announced plans tend to draw to themselves.

    Now I could, as I have in the past, talk about arguments between Hayek and Galbraith over whether Capital markets only appear spontaneous or in fact are "free" places of exchange where new forms of life can appear. I could bring up Marx's observation that unions reinforce bourgeois institutions.

    But it is Labor Day and I am tired from work so I will confine myself to my experience of working in a corporate world. There is a conformity that governs how much and what kind of responsibility will be given to one within a system. Those who want more than what is given have to become entrepreneurs to experience what can be taken. One can choose which side of the culture to conform to.

    It is the same culture.

    What's given and what can be taken (at, of course, varying degrees of risk).  Much to think about, moat. Happy Labor Day.

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    pried into the loves [lives?] of Ford's workers

    You can fire people for their political beliefs? Have the courts made any decision about this?

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