Wednesday, April 2, 2014

No, Obama, Henry Ford is Not a Good Example for Other Business Owners

Today, in a speech in Ann Arbor, Michigan, President Barack Obama praised Henry Ford as a model for other business owners:
But raising wages is not just a job for organizers, it’s not just a job for elected officials, it’s also a job for business.  It was here in Michigan 100 years ago that Henry Ford announced he was doubling his workers’ wages.  And at the time, some of his fellow business leaders thought he had lost his mind.  But Henry Ford understood it was going to be good for business.  Not only did it boost productivity, not only did it reduce turnover, not only did it make employees more loyal to the company, but it meant that the workers could afford to buy the cars that they were building.  (Applause.)  So you were building -- so by paying your workers more, you were building your own market for your products.
Obama has cited Henry Ford before as well in such a context. 
Yes, Henry Ford did raise the wages of his workers. Whether he raised them enough given how much money he himself made is another story. But, more importantly, citing Henry Ford as a positive example of a business owner conveniently avoids how the man was a tyrant and an enemy of labor.
Back in November, I highlighted this in connection to a piece by Robert Reich contrasting Henry Ford (positively) with the Waltons. (Spoiler: They're actually both awful).

I'm excerpting some of what I wrote back then because it remains relevant.


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)
I'm sorry, but Henry Ford's vision of the economy is not one that I (or any reasonable person should) share. And if liberals want to talk up the value of raising wages, they should find a better example.

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