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tolerate hunger and poverty, when they grow solely out of bad management, and especially out of
the bad management that is implicit in an unreasoned financial structure. Of course the war upset
affairs in this country. It upset the whole world. There would have been no war had management
been better. But the war alone is not to blame. The war showed up a great number of the defects
of the financial system, but more than anything else it showed how insecure is business supported
only by a money foundation. I do not know whether bad business is the result of bad financial
methods or whether the wrong motive in business created bad financial methods, but I do know
that, while it would be wholly undesirable to try to overturn the present financial system, it is
wholly desirable to reshape business on the basis of service. Then a better financial system will
have to come. The present system will drop out because it will have no reason for being. The
process will have to be a gradual one.
The start toward the stabilization of his own affairs may be made by any one. One cannot achieve
perfect results acting alone, but as the example begins to sink in there will be followers, and thus
in the course of time we can hope to put inflated business and its fellow, depressed business, into
a class with small-pox that is, into the class of preventable diseases. It is perfectly possible,
with the reorganization of business and finance that is bound to come about, to take the ill effect
of seasons, if not the seasons, out of industry, and also the periodic depressions. Farming is
already in process of reorganization. When industry and farming are fully reorganized they will
be complementary; they belong together, not apart. As an indication, take our valve plant. We
established it eighteen miles out in the country so that the workers could also be farmers. By the
use of machinery farming need not consume more than a fraction of the time it now consumes;
the time nature requires to produce is much larger than that required for the human contribution
of seeding, cultivating, and harvesting; in many industries where the parts are not bulky it does
not make much difference where they are made. By the aid of water power they can well be made
out in farming country. Thus we can, to a much larger degree than is commonly known, have
farmer-industrialists who both farm and work under the most scientific and healthful conditions.
That arrangement will care for some seasonal industries; others can arrange a succession of
products according to the seasons and the equipment, and still others can, with more careful
management, iron out their seasons. A complete study of any specific problem will show the way.
The periodic depressions are more serious because they seem so vast as to be uncontrollable.
Until the whole reorganization is brought about, they cannot be wholly controlled, but each man
in business can easily do something for himself and while benefiting his own organization in a
very material way, also help others. The Ford production has not reflected good times or bad
times; it has kept right on regardless of conditions excepting from 1917 to 1919, when the factory
was turned over to war work. The year 1912-1913 was supposed to be a dull one; although now
some call it normal ; we all but doubled our sales; 1913-1914 was dull; we increased our sales
by more than a third. The year 1920-1921 is supposed to have been one of the most depressed in
history; we sold a million and a quarter cars, or about five times as many as in 1913-1914 the
normal year. There is no particular secret in it. It is, as is everything else in our business, the
inevitable result of the application of a principle which can be applied to any business.
We now have a minimum wage of six dollars a day paid without reservation. The people are
sufficiently used to high wages to make supervision unnecessary. The minimum wage is paid just
as soon as a worker has qualified in his production which is a matter that depends upon his own
desire to work. We have put our estimate of profits into the wage and are now paying higher
wages than during the boom times after the war. But we are, as always, paying them on the basis
of work. And that the men do work is evidenced by the fact that although six dollars a day is the
minimum wage, about 60 per cent. of the workers receive above the minimum. The six dollars is
not a flat but a minimum wage.
Consider first the fundamentals of prosperity. Progress is not made by pulling off a series of
stunts. Each step has to be regulated. A man cannot expect to progress without thinking. Take
prosperity. A truly prosperous time is when the largest number of people are getting all they can
legitimately eat and wear, and are in every sense of the word comfortable. It is the degree of the
comfort of the people at large not the size of the manufacturer's bank balance that evidences
prosperity. The function of the manufacturer is to contribute to this comfort. He is an instrument
of society and he can serve society only as he manages his enterprises so as to turn over to the
public an increasingly better product at an ever-decreasing price, and at the same time to pay to
all those who have a hand in his business an ever-increasing wage, based upon the work they do.
In this way and in this way alone can a manufacturer or any one in business justify his existence.
We are not much concerned with the statistics and the theories of the economists on the recurring
cycles of prosperity and depression. They call the periods when prices are high prosperous. A
really prosperous period is not to be judged on the prices that manufacturers are quoting for
articles.
We are not concerned with combinations of words. If the prices of goods are above the incomes
of the people, then get the prices down to the incomes. Ordinarily, business is conceived as
starting with a manufacturing process and ending with a consumer. If that consumer does not
want to buy what the manufacturer has to sell him and has not the money to buy it, then the
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