Henry Ford: Why I Favor Five Days' Work With Six Days' Pay
worklessparty.org
worklessparty.org
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.
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.
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.
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...
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?
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.
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.)
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.
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.
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.
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.
Repudiate the Tea Party, Palin, Beck, Limbaugh, et al., and we can talk.
It is well past time for the Big Tent to split, because I, for one, would like to be known as a conservative again.
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.
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?
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.
--Totally biased source, http://online.wsj.com/article/SB122576077569495545.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
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.
In general, I assume that a politicians views agree with what he does rather than the lies he tells to get elected.
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 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.
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.
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.
War productions does not make prosperous societies simply because the allocation of resource is redirected to military purpose, not to civilian needs.
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.
Killing people isn't the only thing that keeps a population in check.
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.
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.
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.
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.
Are we voting for goodness or troll points? I get confused.
That is pretty evil mastermind... he's thinking on a whole other level.
EDIT: I should have clicked more. Pullman: http://en.wikipedia.org/wiki/Company_town
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.
This, to me, suggest the uncompetitiveness of company towns.
The Foxconn facilities in China might be a contender as well, but I don't know enough to say.
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.
I mean, say what you like about fascists, but their factories always run at high capacity.
Note the evangelical nature of his argument - it all works better if everybody else does it too. He understood that perfectly.
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)
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.
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.
Or, may I guess, most of the people that buys Ford's cars does not work directly for Ford.
"[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.
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?
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.
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:
"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.
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?
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?
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.
How does tripling even compare to increase in efficiency of industrial and agricultural production?
"Losing farm" is impossible now?
"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!
goes to show that progress depends on seemingly unreasonable men.
So word of advice... don't take advice from Henry Ford.
"I regard Henry Ford as my inspiration" - Adolf Hitler Ref: http://www.washingtonpost.com/wp-srv/national/daily/nov98/na...
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.
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.
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...
But you haven't provided any concrete stories, references, or even descriptions in your response. Just a lot of what seems to be gossip.
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.
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.
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.