Wednesday, November 20, 2013

No, Robert Reich, Henry Ford was not a positive, progressive example for Walmart

Let’s start with a fun game. It’s called “Henry Ford or Hitler?”

Quote One: “Unions are organized by Jewish financiers, not labor.”

Unfortunately, I think my title gave the answer away.
Earlier today, I saw an article by Robert Reich on Salon, cross-posted from his blog, entitled "What Wal-Mart can learn from Henry Ford."

"What can Walmart learn from Henry Ford?" I asked myself. Well, it could learn how to use violent thugs to terrorize unions. But, of course, that wasn't Reich's suggestion:

Walmart could learn a thing or two from Henry Ford, who almost exactly a century ago decided to pay his workers three times the typical factory wage at the time. The Wall Street Journal called Ford a traitor to his class but he proved to be a cunning businessman.

Ford’s decision helped boost factory wages across the board — enabling so many working people to buy Model Ts that Ford’s revenues soared far ahead of his increased payrolls, and he made a fortune.
Reich presents Ford as a foil to the Waltons, as an example of an "enlightened" or "progressive" capitalist, so to speak. If he wanted a better foil for Walmart, he could have just gone with Costco.

I may not have been as bothered by the praise of Henry Ford had I not just read another article on Salon ("They spawned the 1 percent: How Washington and Lincoln explain inequality today" by Edward McClelland) using the same Walton-Ford frame, also offering the latter as an example of enlightened capitalism. That article tried to compare Henry Ford to Abraham Lincoln as men representative of a democratic, as opposed to feudalistic, spirit:
As president, Lincoln oversaw a war that destroyed the power of the Southern plantation owners with whom he had so long quarreled. His victory lasted just over 100 years, until the Southern states regained control of the federal government, and began reimposing Washington’s aristocratic way of life on the nation. To understand the difference between Lincolnomics and Washingtonomics, let’s consider two of the most successful businessmen of the 20th century: Henry Ford and Sam Walton. Ford falls into the Lincolnian tradition, Walton into the Washingtonian.

Born in what is now Detroit during the Civil War, Ford understood the value of an economically empowered workforce. He turned traditional economic assumptions upside down by treating laborers not as commodities, but potential customers. Before Ford, planters and industrialists had profited by paying the lowest possible wages and charging the highest possible prices. Ford doubled his employees’ wages, to $5 a day, and used assembly-line efficiencies to produce cars they could afford to buy. His philosophy, which came to be known as Fordism, was fundamental to the development of the modern middle class. And although Ford resisted labor unions, once the United Auto Workers was forced on him by two Lincolnian politicians — President Franklin D. Roosevelt and Michigan Gov. Murray Van Wagoner — he granted it the most generous contract of any automaker, even allowing dues check-offs and the closed shop.
If you resist unions and only grant concessions when forced to after the intervention of the governor and the president, there is nothing enlightened or democratic about your business model.

This extolling of Henry Ford as a model of "progressive" capitalism is not unique to these articles. It's quite common. The president does it. If Henry Ford is our model capitalist, then our standards have really fallen.

Let's learn some more about how Henry Ford ran his business. I've extracted some passages from Greg Grandin's excellent book Fordlandia: The Rise and Fall of Henry Ford's Forgotten Jungle City. The book itself focuses on Ford's eccentric (and fairly creepy) attempt to recreate an American industrial town in the heart of the Amazon. However, for context, Grandin discusses Ford's history in the States.

Yes, Henry Ford raised his workers' wages, but he did not do so without conditions:
…So Ford conditioned his Five Dollar Day plan with the obligation that workers live a wholesome life.

And to make sure they did, the carmaker dispatched inspectors from his Sociological Department to probe into the most intimate corners of Ford workers’ lives, including their sex lives. Denounced as a system of paternal surveillance as often as it was lauded as a program of civic reform, by 1919 the Sociological Department employed hundreds of agents who spread out over Dearborn and Detroit asking questions, taking notes, and writing up personnel reports. They wanted to know if workers had insurance and how they spent their money and free time. Did they have a bank account? How much debt did they carry? How many times were they married? Did they send money home to the old country? Sociological men came around not just once but two, three, or four times interviewing family members, friends, and landlords to make sure previous reports of probity were accurate (Grandin 38).
By the mid-1920s, the authoritarianism always inherent to such “liberal paternalism” had grown as Ford created a regime based on two primary tactics: the "speedup" and fear.

The first, the speedup, entailed working his employees so hard that they became little different from the machines on which they worked:
The first tactic was the speedup, which pushed the idea of synchronized assembly lines to the limits of human endurance and made working for Ford, as one employee put it, a ‘form of hell on earth that turned human beings into driven robots.’ ‘The chain system you have is a slave driver,’ wrote the wife of one worker to Ford…..Every day it seemed like the belt moved a little faster, as performance technicians, armed with stopwatches, shadowed workers, figuring out ways to shave off seconds here and there from their motions. Intellectuals and social critics began to draw attention to the dehumanization of the line. ‘Never before,’ wrote a contemporary observer, ‘had human beings been fitted so closely into the machines, like minor parts, with no independence or chance to retain their individual self-respect.’ Ford’s factory turned workers into ‘mere containers of labor, like gondola cars of coal. They arrived full; they left in the evening as empty of human vitality as the cars were empty of coal. The trolleys which crawled away from Highland Park at closing time were hearses of the living dead.’ (Grandin 69)
If destroying the will of workers didn't succeed that way, well, there was always outright terror:
Fear was the second tactic, needed to forestall the discontent that such a system inevitably generated. It was instilled largely by Harry Bennett, a former pugilist but inveterate brawler who presided over the company’s so-called Service Department, nominally the employment office but in reality a three-thousand-member goon squad—described by the New York Times as the ‘largest private quasi-military organization in existence’—made up of spies and thugs armed with guns, whips, pipes, blackjacks, and rubber hoses otherwise known as ‘persuaders.’ … The terror spread out from Dearborn to encompass Ford’s dispersed assembly plants as Bennett cobbled together an interstate consortium of antiunion toughs. In Dallas, Texas, for instance, Bennett converted the Ford plant’s champion tug-of-war-war team into a security unit, headed by one ‘Fats’ Perry, who by his own estimation handed out scores of savage beatings. ‘If it takes bloodshed,’ the plant management told its workers during a forced mass meeting, ‘we’ll shed blood right down to the last drop’ to keep the plant union free (70).
Fear, of course, does not just stem from physical violence. Ford had his own mini surveillance state operation.
Bennett claimed that one in three line workers was an informer. ‘The whole city,’ recalled one union organizer, ‘was a network of spies that reported every whisper back to Bennett,’ allowing him to stalk workers not just within the Rouge’s gates but in their ‘private life as well.’ He carried out Ford’s edict that workers stop drinking, even in their own homes, and forced workers, at the pain of losing their jobs, to buy a Ford car.” (70-71)
Henry Ford as a model of enlightened capitalism? I think I'll pass.

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