Ford Motor Company – A Long Strange Trip

Ford MOtor CompanyI saw a story today that showed the Ford Focus automobile is now the best-selling car in the world. The company has had a long and tumultuous history that I think is quite instructive in the ways of capitalism and the ideas of libertarians.

The company was founded in 1903 by Henry Ford and twelve investors including Alexander Y. Malcomson as an equal partner.

Ford was antisemitic. His newspaper, the Dearborn Independent, published false information called The Protocols of the Elders in Zion which is used by those who hate Jews to this day. He was praised by Adolph Hitler and given medals of honor by the Nazi Government.

He was just as virulently anti-union and in 1941 almost closed his entire company rather than unionize, only being convinced by his wife not to do it.

In the early years the Ford company had a Social Department which actively checked up on workers personal habits including those Ford himself found distasteful: drinking, gambling, and fathers who did not support their families.

By 1918 almost 50% of all cars sold in the United States were Model T vehicles, what would almost certainly be considered a monopoly today.

The company appeared near bankruptcy in 2008 and applied for government loans to stay in operation.

So, we know Ford was an anti-Semite, overly involved in the personal lives of his employees, anti-union, essentially ran a monopoly, and the company ran to the government to bail them out from their self-induced financial problems. Now, let’s look at his business practices.

While Ford personally disliked Jews his newspaper disavowed violence and he was never charged with discriminating against Jews. He also hired blacks and the physically disabled which was extremely rare at that time for a major US corporation.

His quickly growing company required heavy work from its employees and to combat turnover ratio he instituted extremely high wages for his employees and offered profit-sharing. He also introduced limited work hours and eventually abandoned his Social Department saying that “paternalism has no place in industry.”

He was anti-union because he thought union leaders, although meaning well, would end up harming workers more than helping them. He thought a good manager did right by workers because it improved profit margins. He practiced what he preached offering high wages and limited working hours.

Despite the fact that by 1918 he had a virtual monopoly on car sales his high wages and low working hours had decreased turnover and increased productivity to a point that he continually lowered prices on his vehicles!

He never engaged in monopolistic practices like GougingCollusion and Cartels. When competition arose it often did so by following his labor friendly practices. Competition did arise organically and consumers and workers benefited tremendously.

He never went to the government asking them to pass laws to help his company and destroy competitors. He ran for office in 1918 at the behest of Democrat Woodrow Wilson in order to support the League of Nations. Ford was a strong pacifist and felt war was a tremendous waste of time and effort.

Ford insisted that war was the product of greedy financiers who sought profit in human destruction and that true capitalist brought prosperity to their nations. Be aware that when Ford used the word financiers, he meant Jews. I find disgusting his assessment that this was some Jewish led conspiracy but the idea that war and misery is profitable for a certain kind of person is absolutely true. He believed true capitalist disavow war and help improve the lives of everyone by driving down the cost of goods and increasing the quality of life for employees. That the pursuit of riches is not the point although those who run a business properly bring prosperity to all around them.

In 2008 when the other US car companies went to the government and took money from them, Ford instead sat down with their unions and hammered out an equitable arrangements. Credit goes to both Ford and the unions. Now the company is thriving to benefit of all parties.

I can’t help wonder what he would think today about the Crony Capitalism that has descended on this country. The men and women of all races, creeds, and colors who fit his profile of financier.

Ford’s antisemitism leaves a lasting legacy to this day but so do his fair-minded business practices. His goal was to a run a company that employed people at a good wage, sold a product people wanted at a fair price, and make the world a better place. He got rich doing it.

A lesson for us all about both business and the folly of unreasoning hatred.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Twist
Current Release: The Sword of Water (Fairly priced at $2.99)
Upcoming Release: The Spear of the Hunt

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