I just read an interesting article in the Daily Beast written by Daniel Gross entitled: “Henry Ford Understood That Raising Wages Would Bring Him More Profit.”
Historically there are aspects not mentioned by the writer of this article which alter some of what really happened as opposed to the public perception of what happened. Still, I do not believe that the author’s, Daniel Gross, purpose was to delve into the historical variables which he is most likely aware. Instead he uses the experience of Henry Ford to illustrate aspects of short and long term profits along with other business related concepts which have seemingly become lost in today’s age.
For me the article illustrates a principle that in order to maintain customers a business cannot move to a point where its products are services become prohibitive to their customers. A monopoly or oligopoly may charge whatever it wants, but in order to survive it cannot charge beyond what the market can bear. Ford understood that if his own workers could not afford to purchase the products that they produced, then his potential market of customers severely contracted and eventually those who could afford his goods would no longer have a need for the goods as they already possessed them.
Is that idea still a part of many of the business leaders today?
If you are seeking additional information about Henry Ford, here is a quick list of resources to get anyone started.
If you would like a simple overview from audio and visual sources, PBS ran this feature as part of its American Experience series.
For reading, I would recommend beginning with a lengthy work, nearly 900 pages:
The tome is meticulously detailed, but also very readable for anyone interested in the subject. The unique aspect about this book is that Brinkley had unprecedented access to the Ford Motor Company Archives.
Another source which was actually my initial reading about Henry Ford is his own autobiography:
It is a short work, less than 200 pages, but offers insight into Ford’s thought process and may surprise some today as to how many modern business concepts originated during the time-period of Henry Ford and have remained unchanged in many respects.
For those highly interested in business history, Allan Nevins and Frank Ernest Hill wrote a trio of books which focus more on the Ford Motor Company than being a standard biography of Henry Ford. Since publication in the 1950s, these 3 volumes have been standards for graduate students in history.
- Ford: The Times, the Man, the Company
- Ford: Expansion and Challenge, 1915-1933
- Ford: Decline and Rebirth, 1933-1962
There are many other works out there, but when I think about business, Henry Ford, and the Ford Motor Company, these books are among those that I often recommend.