Henry Ford: Why I Favor Five Days' Work With Six Days' Pay(worklessparty.org)
worklessparty.org
Henry Ford: Why I Favor Five Days' Work With Six Days' Pay
http://www.worklessparty.org/timework/ford.htm
106 comments
"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.
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.
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.
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.
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".
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.
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.
[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-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.
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-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.
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.
War productions does not make prosperous societies simply because the allocation of resource is redirected to military purpose, not to civilian needs.
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.
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.
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.
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.
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.
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.
Not to mention twice (or much more) as many people. Oscar Schindler saved over 1,100 Jews from death, and there's over 5,000 or 6,000 descendants of those survivors today. Can't remember the figures exactly, but it's a lot. And of course, with more people, markets are bigger, potential workforce is bigger, which leads to more wealth, which dovetails nicely with your point about wealth.
And for whatever reason, rising wealth seems to correlate with a decline in birthrates.
Killing people isn't the only thing that keeps a population in check.
Killing people isn't the only thing that keeps a population in check.
Huh? The entire war-production system was a socialist scheme. Who was buying all the goods?
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.
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.
> 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+bala...
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+bala...
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?
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?
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.
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.
> silly oversimplification that has high correlation with modern republicans
I tried to downvote your post because of this line, but I ended up mis-clicking and upvoting, so I might as well explain myself.
I am not a Republican, I am an independent. This holier-and-smarter-than-thou attitude that seems to be mestastisizing needs to stop. Please argue your point with facts and reason, not with a "it sympathizes with viewpoint [X] and is therefore invalid." Democrats, Republicans, Liberals, and Conservatives are all guilty of this, but here on the West Coast (where the Hacker News audience predominantly resides) there is a sort of reflexive superiority complex which seems to have developed especially acutely in those on the left side of the political spectrum, in which there is little hesitation, even outside of overtly political forums, to announce that certain views are wrong simply Republicans subscribe to them as well... And of course we all know that Republicans are all about the blunt-force, black-and-white simple-minded thinking, as opposed to subtle, sophisticated, and nuance-loving Democrats.
Sorry, I'll cut my rant off early. I hope my point got across without offending anyone.
I tried to downvote your post because of this line, but I ended up mis-clicking and upvoting, so I might as well explain myself.
I am not a Republican, I am an independent. This holier-and-smarter-than-thou attitude that seems to be mestastisizing needs to stop. Please argue your point with facts and reason, not with a "it sympathizes with viewpoint [X] and is therefore invalid." Democrats, Republicans, Liberals, and Conservatives are all guilty of this, but here on the West Coast (where the Hacker News audience predominantly resides) there is a sort of reflexive superiority complex which seems to have developed especially acutely in those on the left side of the political spectrum, in which there is little hesitation, even outside of overtly political forums, to announce that certain views are wrong simply Republicans subscribe to them as well... And of course we all know that Republicans are all about the blunt-force, black-and-white simple-minded thinking, as opposed to subtle, sophisticated, and nuance-loving Democrats.
Sorry, I'll cut my rant off early. I hope my point got across without offending anyone.
And of course we all know that Republicans are all about the blunt-force, black-and-white simple-minded thinking, as opposed to subtle, sophisticated, and nuance-loving Democrats.
Repudiate the Tea Party, Palin, Beck, Limbaugh, et al., and we can talk.
Repudiate the Tea Party, Palin, Beck, Limbaugh, et al., and we can talk.
And you've come along to illustrate his point!
His point, made through sarcasm, was that the perception of Republicans among thinking people is currently on the level of "recently-thawed Neanderthals." The modern-day GOP has justly earned this derision by pandering to the religious right.
It is well past time for the Big Tent to split, because I, for one, would like to be known as a conservative again.
It is well past time for the Big Tent to split, because I, for one, would like to be known as a conservative again.
I honestly hope that most "thinking people" look poorly upon fanatics of either party, but I hope you can concede that there are "thinking people" among both. The Democratic party just panders to different special-interest groups.
it shows very little effort to understand what was actually happening, it boxes a huuuuuge range of possibilities into a simple black/white viewpoint
I do not work on whether a viewpoint is black and white or gray but if it represent the true map of the reality. Such explanations is nonsense to me.
and it's a silly oversimplification that has high correlation with modern republicans.
You'll need to expand your perimeter on political spectrum.
You'll also need to explain why my views is a silly oversimplification.(Err, I mean wrong.)
I do not work on whether a viewpoint is black and white or gray but if it represent the true map of the reality. Such explanations is nonsense to me.
and it's a silly oversimplification that has high correlation with modern republicans.
You'll need to expand your perimeter on political spectrum.
You'll also need to explain why my views is a silly oversimplification.(Err, I mean wrong.)
> 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.
Why?
The last time I looked, nothing about history was subject to "nature". If all historians agreed that Hitler had 7 arms and flew, nothing bad would happen.
If, on the other hand, engineers decided to act as if steel was less dense than air at 1 bar, things would go wrong.
Why?
The last time I looked, nothing about history was subject to "nature". If all historians agreed that Hitler had 7 arms and flew, nothing bad would happen.
If, on the other hand, engineers decided to act as if steel was less dense than air at 1 bar, things would go wrong.
It depends on how that history is applied.
If a false understanding of history is applied in foreign relations, then there are situations where unnecessary wars can be created.
If a false understanding of history is applied to military strategy, wars can be needlessly lost.
There was a reason that the government created and spent so much on the Ministry of Truth in Orwell's 1984. If you control people's understanding of history, you can have a big impact on what they do in the future.
If a false understanding of history is applied in foreign relations, then there are situations where unnecessary wars can be created.
If a false understanding of history is applied to military strategy, wars can be needlessly lost.
There was a reason that the government created and spent so much on the Ministry of Truth in Orwell's 1984. If you control people's understanding of history, you can have a big impact on what they do in the future.
That's true, but it doesn't generate feedback to bad historians.
For example, if a country gets into an unnecessary war because of bad history, the historians aren't penalized.
> There was a reason that the government created and spent so much on the Ministry of Truth in Orwell's 1984. If you control people's understanding of history, you can have a big impact on what they do in the future.
Bingo, and it's not just govt that tries to influence history to influence the future.
Note that there's nothing in here that encourages accuracy.
For example, if a country gets into an unnecessary war because of bad history, the historians aren't penalized.
> There was a reason that the government created and spent so much on the Ministry of Truth in Orwell's 1984. If you control people's understanding of history, you can have a big impact on what they do in the future.
Bingo, and it's not just govt that tries to influence history to influence the future.
Note that there's nothing in here that encourages accuracy.
What is your rationale for sticking with whatever the majority of historians said?
If I may, when the majority of experts in a field all believe the same thing, it is referred to as consensus. The consensus of the experts in any well researched field tends to be, if not actually right, at the very least the best answer that can be arrived at with current information.
Of course, they are not always right, even in a field as well grounded as mathematics, the consensus has been wrong in the past (the consensus for a very long time was the Euclidean Geometry was the only possible geometry.....). But it is quite reasonable to demand that someone trying to say the consensus is wrong has a high bar to meet to establish that.
In general, the most reasonable thing for someone without the expertise or interest to carefully do an indpendent analysis of all available data is to believe the consensus. When someone does meet that high bar to show that the consensus is wrong, then in any reasonable academic field that consensus will change.
If I may, when the majority of experts in a field all believe the same thing, it is referred to as consensus. The consensus of the experts in any well researched field tends to be, if not actually right, at the very least the best answer that can be arrived at with current information.
Of course, they are not always right, even in a field as well grounded as mathematics, the consensus has been wrong in the past (the consensus for a very long time was the Euclidean Geometry was the only possible geometry.....). But it is quite reasonable to demand that someone trying to say the consensus is wrong has a high bar to meet to establish that.
In general, the most reasonable thing for someone without the expertise or interest to carefully do an indpendent analysis of all available data is to believe the consensus. When someone does meet that high bar to show that the consensus is wrong, then in any reasonable academic field that consensus will change.
Hoover didn't balance the budget, he doubled the national debt.
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?
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?
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.
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.
Hoover increased spending by 50%, from $3.1B to $4.6B. FDR called him a Socialist.
http://fraser.stlouisfed.org/publications/erp/page/3796/1208...
As one of FDR's brain trust stated, "practically the whole New Deal was extrapolated from programs that Hoover started."
http://www.pbs.org/wgbh/amex/goldengate/sfeature/sf_30s.html
http://fraser.stlouisfed.org/publications/erp/page/3796/1208...
As one of FDR's brain trust stated, "practically the whole New Deal was extrapolated from programs that Hoover started."
http://www.pbs.org/wgbh/amex/goldengate/sfeature/sf_30s.html
Interesting stuff. It does seem to turn out that Hoover pushed less for balanced budgets than I thought, although there are lots of statements attributed to him around 1932 trying to balance the budget, the tax hikes, etc.
But I thought the difference was more clear-cut than that as far as their actions.
Still, I find it hard to justify the statement that "they had the same view in regards to counter-cyclical spending and balanced budgets" -- FDR championed crazy deficits to stimulate the economy for a decade, Hoover seems to have been trying to move towards a balanced budget after a brief round of stimulus.
But I thought the difference was more clear-cut than that as far as their actions.
Still, I find it hard to justify the statement that "they had the same view in regards to counter-cyclical spending and balanced budgets" -- FDR championed crazy deficits to stimulate the economy for a decade, Hoover seems to have been trying to move towards a balanced budget after a brief round of stimulus.
According to Wikipedia (http://en.wikipedia.org/wiki/Herbert_Hoover#1932_campaign), there are statements attributed to FDR accusing Hoover of reckless spending and criticizing him for spending too much and putting too many people on the dole. There are a lot of statements attributed to Bush about humble foreign policy, limited government and deregulation, and statements attributed to Obama about how forcing people to buy insurance is a bad thing.
In general, I assume that a politicians views agree with what he does rather than the lies he tells to get elected.
In general, I assume that a politicians views agree with what he does rather than the lies he tells to get elected.
All fair points
Hoover signed into law drastic tax increases, e.g. Revenue Act of 1932.
He did attempt some spending programs near the end of his presidency which was also at a point where the depression was already around the point of its most extreme GDP contraction.
You could argue that was FDR did in terms of spending and bank reforms was similar to what Hoover started near the end of his presidency but orders of magnitude larger. In contrast debt/GDP actually remained neutral during the New Deal due to concurrent GDP expansion.
He did attempt some spending programs near the end of his presidency which was also at a point where the depression was already around the point of its most extreme GDP contraction.
You could argue that was FDR did in terms of spending and bank reforms was similar to what Hoover started near the end of his presidency but orders of magnitude larger. In contrast debt/GDP actually remained neutral during the New Deal due to concurrent GDP expansion.
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
--Totally biased source, http://online.wsj.com/article/SB122576077569495545.html
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.
> 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.
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.
Hoover began deficit spending only near the end of his presidency. Prior to that he drastically raised taxes and tried to balance the budget.
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.
Are we voting for goodness or troll points? I get confused.
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.
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.
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.
That is pretty evil mastermind... he's thinking on a whole other level.
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...
He ran a "company town" - had stores, sold them lumber to build houses etc. Most of the money came right back to him.
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.
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.
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)
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)
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.
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.
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.
Or, may I guess, most of the people that buys Ford's cars does not work directly for Ford.
Okay, so lets pretend that you are right about vanishing money. You are failing to take into account the productivity gains you get from proper rest.
1) Tired workers make costly mistakes, often countering any extra production they may have made 2) Tired workers work more slowly 3) Tired workers miss opportunities to save time through better work methods
Reducing hours towards 32hours /week will usually net you more produtivity per week. Increasing past this will give you temporary improvements, but they won't last beyond a couple of weeks.
Not to mention - the more Ford pays per hour, the better the quality of the workers he attracts.
1) Tired workers make costly mistakes, often countering any extra production they may have made 2) Tired workers work more slowly 3) Tired workers miss opportunities to save time through better work methods
Reducing hours towards 32hours /week will usually net you more produtivity per week. Increasing past this will give you temporary improvements, but they won't last beyond a couple of weeks.
Not to mention - the more Ford pays per hour, the better the quality of the workers he attracts.
Of course his employees are not his entire business model. But it sure improves margins, increases volume so economies of scale work better etc.
Note the evangelical nature of his argument - it all works better if everybody else does it too. He understood that perfectly.
Note the evangelical nature of his argument - it all works better if everybody else does it too. He understood that perfectly.
It's effectively pure fascism. It works fine so long as you treat your workers decently and they don't revolt.
I mean, say what you like about fascists, but their factories always run at high capacity.
I mean, say what you like about fascists, but their factories always run at high capacity.
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
EDIT: I should have clicked more. Pullman: http://en.wikipedia.org/wiki/Company_town
EDIT: I should have clicked more. Pullman: http://en.wikipedia.org/wiki/Company_town
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.
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.
For some reason(Correct me if I am wrong), the company town business model seem to have completely disappear.
This, to me, suggest the uncompetitiveness of company towns.
This, to me, suggest the uncompetitiveness of company towns.
Maybe, but I'm not surprised to see that they failed around the same time the notion of a large corporation took off. The goal of a large corporation is to reduce liabilities while increasing profits, not the other way round. Company towns probably just weighed these companies down while they tried to turn their attention to a national infrastructure.
Almost completely. I don't know if Disney counts.
Having lived for a semester at Vista Way, I think Disney World's College Program is as close to a living in a company town as you can get nowadays in the US. They completely control two municipalities, and provide the jobs, the bank, the housing, the food, the fire department, the EMS, the phone company, and the transportation services.
The Foxconn facilities in China might be a contender as well, but I don't know enough to say.
The Foxconn facilities in China might be a contender as well, but I don't know enough to say.
You could argue that the ~10 miles surrounding any Wal-Mart Super Center are company town-ish (company suburb?); I bet most of the money paid out comes back in from employees returning to buy staples (figuratively).
But on the other hand:
"[The well-managed business'] workmen have the leisure to enjoy life and the wherewithal with which to finance that enjoyment."
Ford theorizes that greater amounts of leisure time and better pay for workers are good for both the workers, for their enjoyment, and the employers, for having larger markets; I don't see this as evil.
"[The well-managed business'] workmen have the leisure to enjoy life and the wherewithal with which to finance that enjoyment."
Ford theorizes that greater amounts of leisure time and better pay for workers are good for both the workers, for their enjoyment, and the employers, for having larger markets; I don't see this as evil.
Amazing article -- I did not know that modern American "consumer culture" was deliberately created by Henry Ford.
That was the spirit of the times--finding ways to ensure demand kept up with rapidly expanding industrial capacity.
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.
Also see: http://www.youtube.com/results?search_query=century+of+self+... (6 parts)
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?
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?
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.
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.
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.
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.
Any recommended links for reading about that?
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...
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
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
Also Guinness makes their employment archives available to descendents of past workers, which is pretty neat:
http://www.guinness-storehouse.com/en/somehistory.aspx
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.
cool, now get back to your 90hr a week startup...
Heh. How much time do you think Ford put in when it was all a startup for him?
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.
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.
"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.
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?
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?
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?
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?
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.
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.
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...
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?
How does tripling even compare to increase in efficiency of industrial and agricultural production?
"Losing farm" is impossible now?
Why don't you reply with some data to have an informed conversation, I'm not your query engine. Know how to google?
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!
"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!
oddly enough this page is blocked at my office...
[deleted]
brilliant
goes to show that progress depends on seemingly unreasonable men.
goes to show that progress depends on seemingly unreasonable men.
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.
So word of advice... don't take advice from Henry Ford.
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.
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.
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.
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.
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.
Yes, that's fucked up and sad. Maybe all his success went to his head. My point was that not everything he did good should be cast in the bad light, for instance, a person wanting to run a manufacturing business could gain a lot from taking his advise. I'm not an apologist, just think there is value in reading about extraordinary people.
Wow, that's a horrifically one sided and incorrect view. Only held btw in the US, and by people who are not familiar with the actual history. Ford, like GM and IBM invests considerable effort in hiding their roles in that war.
Ford however, was one of the few who "took sides". They didn't just support the Nazis for economic reasons ( which is pretty damned horrific ), they actually hindered allied production purposefully.
Also, he got lucky. He built one of the first car companies and he did a good job at first. End result is he ended up being one of the big 3. Every industry has em. He was in the right place at the right time. From then on he had a large enough enterprise that it could run itself, all he had to do was sit back and not get too involved. Which he couldn't do. He nearly bankrupted the company and embarked on a bunch of inglorious economic escapades resulting in him being kicked out of the Ford.
I mean... jesus, who the hell taught you people history? How can you possibly look up to this guy FOR ANYTHING. He was a bull headed arrogant deceitful bastard who tried very hard to quite literally destroy his own country and his people.
Ford however, was one of the few who "took sides". They didn't just support the Nazis for economic reasons ( which is pretty damned horrific ), they actually hindered allied production purposefully.
Also, he got lucky. He built one of the first car companies and he did a good job at first. End result is he ended up being one of the big 3. Every industry has em. He was in the right place at the right time. From then on he had a large enough enterprise that it could run itself, all he had to do was sit back and not get too involved. Which he couldn't do. He nearly bankrupted the company and embarked on a bunch of inglorious economic escapades resulting in him being kicked out of the Ford.
I mean... jesus, who the hell taught you people history? How can you possibly look up to this guy FOR ANYTHING. He was a bull headed arrogant deceitful bastard who tried very hard to quite literally destroy his own country and his people.
>> "How can you possibly look up to this guy FOR ANYTHING."
I'm not sure what you're trying to argue here.
EVERY Human life can teach us things. Good and bad. If you don't want to learn, then fine, ignore him and anyone else you disagree with their politics etc
You seem to be arguing "he was evil vs he was good" which is pretty irrelevant if he had some good ideas, which IMHO he did.
I think you'll find many many historical/famous people have seriously flawed personalities, did terrible things as well as good etc. We are only human after all...
I'm not sure what you're trying to argue here.
EVERY Human life can teach us things. Good and bad. If you don't want to learn, then fine, ignore him and anyone else you disagree with their politics etc
You seem to be arguing "he was evil vs he was good" which is pretty irrelevant if he had some good ideas, which IMHO he did.
I think you'll find many many historical/famous people have seriously flawed personalities, did terrible things as well as good etc. We are only human after all...
I would love to learn more.
But you haven't provided any concrete stories, references, or even descriptions in your response. Just a lot of what seems to be gossip.
But you haven't provided any concrete stories, references, or even descriptions in your response. Just a lot of what seems to be gossip.
Down at the Club, further sage advice from Mr Ford: "When "Mr. Lee Jackson" is proposed for the club there would seem to be no reason, as far as reading goes, why anything unusual about Mr. Jackson should be surmised, until you know that Mr. Jackson is really Mr. Jacobs."
Genghis Khan wiped out more ethnic groups than Hitler even had a passing opinion about, but his tactics are still taught at military academies and war colleges and his basic doctrine--maneuver warfare--has for centuries been the most effective.
Moral judgment and proficiency are two different things. Ford was a brilliant industrialist who happened to be an anti-Semite. It doesn't mean we can't learn from his example, though we might think twice before we build massive statues of him.
Moral judgment and proficiency are two different things. Ford was a brilliant industrialist who happened to be an anti-Semite. It doesn't mean we can't learn from his example, though we might think twice before we build massive statues of him.
The merit of his characters does not mean that his advices are automatically ineffective and immoral.
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.
He also created modern American industry. Try to evaluate his output at a finer grain than the entire individual over his entire lifetime.
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/na...
"I regard Henry Ford as my inspiration" - Adolf Hitler Ref: http://www.washingtonpost.com/wp-srv/national/daily/nov98/na...
So? Maybe if Ford said Hitler was his inspiration, but not the other way around.
Many people disagree with the idea of Unions. That doesn't mean you should ignore everything they say just because you don't like one of their viewpoints.
People aren't "good" or "evil". People are complex. If you ignore someone just because you dislike some of their ideas, you'll ignore pretty much everyone.
Also it's incredibly unfair to judge someone without taking into account the political and social climate while they were alive.
People aren't "good" or "evil". People are complex. If you ignore someone just because you dislike some of their ideas, you'll ignore pretty much everyone.
Also it's incredibly unfair to judge someone without taking into account the political and social climate while they were alive.
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.