“My Life and Work” is the autobiography of Henry Ford. Written in conjunction with Samuel Crowther, “My Life and Work” chronicles the rise and success of one of the greatest American entrepreneurs and businessmen. Henry Ford and the Ford Motor Company will forever be identified with early 20th century American industrialism. The innovations to business and direct impact on the American economy of Henry Ford and his company are immeasurable. His story is brilliantly chronicled in this classic American biography.
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INTRODUCTION WHAT IS THE IDEA? Open in Kindle
I think that unless we know more about machines and their use, unless we better understand the mechanical portion of life, we cannot have the time to enjoy the trees, and the birds, and the flowers, and the green fields. I think that we have already done too much toward banishing the pleasant things from life by thinking that there is some opposition between living and providing the means of living. We waste so much time and energy that we have little left over in which to enjoy ourselves. Open in Kindle
Power and machinery, money and goods, are useful only as they set us free to live. They are but means to an end. Open in Kindle
Ideas are of themselves extraordinarily valuable, but an idea is just an idea. Almost any one can think up an idea. The thing that counts is developing it into a practical product. Open in Kindle
I am not a reformer. I think there is entirely too much attempt at reforming in the world and that we pay too much attention to reformers. We have two kinds of reformers. Both are nuisances. The man who calls himself a reformer wants to smash things. Open in Kindle
Freedom is the right to work a decent length of time and to get a decent living for doing so; to be able to arrange the little personal details of one’s own life. It is the aggregate of these and many other items of freedom which makes up the great idealistic Freedom. Open in Kindle
On the other hand, we have a different kind of reformer who never calls himself one. He is singularly like the radical reformer. The radical has had no experience and does not want it. The other class of reformer has had plenty of experience but it does him no good. I refer to the reactionary—who will be surprised to find himself put in exactly the same class as the Bolshevist. Open in Kindle
It is possible to prevent the world from going forward, but it is not possible then to prevent it from going back—from decaying. Open in Kindle
The trouble is that reformers and reactionaries alike get away from the realities—from the primary functions. Open in Kindle
Reactionaries have frequently taken advantage of the recoil from such a period, and they have promised “the good old times”—which usually means the bad old abuses—and because they are perfectly void of vision they are sometimes regarded as “practical men.” Open in Kindle
The foundations of society are the men and means to grow things, to make things, and to carry things. As long as agriculture, manufacture, and transportation survive, the world can survive any economic or social change. As we serve our jobs we serve the world. Open in Kindle
We may help the Government; the Government cannot help us. The slogan of “less government in business and more business in government” is a very good one, not mainly on account of business or government, but on account of the people. Open in Kindle
A man ought to be able to live on a scale commensurate with the service that he renders. Open in Kindle
Monopoly is bad for business. Profiteering is bad for business. The lack of necessity to hustle is bad for business. Business is never as healthy as when, like a chicken, it must do a certain amount of scratching for what it gets. Open in Kindle
Money chasing is not business. Open in Kindle
It is very easy, unless one keeps a plan thoroughly in mind, to get burdened with money and then, in an effort to make more money, to forget all about selling to the people what they want. Business on a money-making basis is most insecure. It is a touch-and-go affair, moving irregularly and rarely over a term of years amounting to much. It is the function of business to produce for consumption and not for money or speculation. Open in Kindle
The producer depends for his prosperity upon serving the people. He may get by for a while serving himself, but if he does, it will be purely accidental, and when the people wake up to the fact that they are not being served, the end of that producer is in sight. Open in Kindle
Being greedy for money is the surest way not to get it, but when one serves for the sake of service—for the satisfaction of doing that which one believes to be right—then money abundantly takes care of itself. Open in Kindle
Money comes naturally as the result of service. And it is absolutely necessary to have money. But we do not want to forget that the end of money is not ease but the opportunity to perform more service. In my mind nothing is more abhorrent than a life of ease. None of us has any right to ease. There is no place in civilization for the idler. Open in Kindle
Real simplicity means that which gives the very best service and is the most convenient in use. Open in Kindle
Start with an article that suits and then study to find some way of eliminating the entirely useless parts. This applies to everything—a shoe, a dress, a house, a piece of machinery, a railroad, a steamship, an airplane. As we cut out useless parts and simplify necessary ones we also cut down the cost of making. This is simple logic, but oddly enough the ordinary process starts with a cheapening of the manufacturing instead of with a simplifying of the article. Open in Kindle
Lack of knowledge of what is going on and lack of knowledge of what the job really is and the best way of doing it are the reasons why farming is thought not to pay. Nothing could pay the way farming is conducted. The farmer follows luck and his forefathers. He does not know how economically to produce, and he does not know how to market. A manufacturer who knew how neither to produce nor to market would not long stay in business. That the farmer can stay on shows how wonderfully profitable farming can be. Open in Kindle
Rushing into manufacturing without being certain of the product is the unrecognized cause of many business failures. Open in Kindle
I do not believe in letting any good idea get by me, but I will not quickly decide whether an idea is good or bad. If an idea seems good or seems even to have possibilities, I believe in doing whatever is necessary to test out the idea from every angle. But testing out the idea is something very different from making a change in the car. Where most manufacturers find themselves quicker to make a change in the product than in the method of manufacturing—we follow exactly the opposite course. Open in Kindle
The essence of my idea then is that waste and greed block the delivery of true service. Both waste and greed are unnecessary. Waste is due largely to not understanding what one does, or being careless in doing of it. Greed is merely a species of nearsightedness. Open in Kindle
The institution that we have erected is performing a service. That is the only reason I have for talking about it. The principles of that service are these: Open in Kindle
1. An absence of fear of the future and of veneration for the past. One who fears the future, who fears failure, limits his activities. Failure is only the opportunity more intelligently to begin again. There is no disgrace in honest failure; there is disgrace in fearing to fail. What is past is useful only as it suggests ways and means for progress. Open in Kindle
2. A disregard of competition. Whoever does a thing best ought to be the one to do it. It is criminal to try to get business away from another man—criminal because one is then trying to lower for personal gain the condition of one’s fellow man—to rule by force instead of by intelligence. Open in Kindle
3. The putting of service before profit. Without a profit, business cannot extend. There is nothing inherently wrong about making a profit. Well-conducted business enterprise cannot fail to return a profit, but profit must and inevitably will come as a reward for good service. It cannot be the basis—it must be the result of service. Open in Kindle
4. Manufacturing is not buying low and selling high. It is the process of buying materials fairly and, with the smallest possible addition of cost, transforming those materials into a consumable product and giving it to the consumer. Gambling, speculating, and sharp dealing, tend only to clog this progression. Open in Kindle
CHAPTER I THE BEGINNING OF BUSINESS Open in Kindle
One idea at a time is about as much as any one can handle. Open in Kindle
There is an immense amount to be learned simply by tinkering with things. It is not possible to learn from books how everything is made—and a real mechanic ought to know how nearly everything is made. Machines are to a mechanic what books are to a writer. He gets ideas from them, and if he has any brains he will apply those ideas. Open in Kindle
There was nothing more that the big steam tractors and engines could teach me and I did not want to waste time on something that would lead nowhere. Open in Kindle
That is the way with wise people—they are so wise and practical that they always know to a dot just why something cannot be done; they always know the limitations. That is why I never employ an expert in full bloom. If ever I wanted to kill opposition by unfair means I would endow the opposition with experts. They would have so much good advice that I could be sure they would do little work. Open in Kindle
I cannot say that it was hard work. No work with interest is ever hard. I always am certain of results. They always come if you work hard enough. Open in Kindle
Many inventors fail because they do not distinguish between planning and experimenting. Open in Kindle
CHAPTER II WHAT I LEARNED ABOUT BUSINESS Open in Kindle
That was my first sale. I had built the car not to sell but only to experiment with. Open in Kindle
There was no “demand” for automobiles—there never is for a new article. Open in Kindle
The most surprising feature of business as it was conducted was the large attention given to finance and the small attention to service. That seemed to me to be reversing the natural process which is that the money should come as the result of work and not before the work. The second feature was the general indifference to better methods of manufacture as long as whatever was done got by and took the money. Open in Kindle
My idea was then and still is that if a man did his work well, the price he would get for that work, the profits and all financial matters, would care for themselves and that a business ought to start small and build itself up and out of its earnings. If there are no earnings then that is a signal to the owner that he is wasting his time and does not belong in that business. Open in Kindle
A good business was not one that did good work and earned a fair profit. A good business was one that would give the opportunity for the floating of a large amount of stocks and bonds at high prices. It was the stocks and bonds, not the work, that mattered. I could not see how a new business or an old business could be expected to be able to charge into its product a great big bond interest and then sell the product at a fair price. I have never been able to see that. Open in Kindle
Money is not worth a particular amount. As money it is not worth anything, for it will do nothing of itself. The only use of money is to buy tools to work with or the product of tools. Therefore money is worth what it will help you to produce or buy and no more. If a man thinks that his money will earn 5 per cent, or 6 per cent, he ought to place it where he can get that return, but money placed in a business is not a charge on the business—or, rather, should not be. It ceases to be money and becomes, or should become, an engine of production, and it is therefore worth what it produces—and not a fixed sum according to some scale that has no bearing upon the particular business in which the money has been placed. Any return should come after it has produced, not before. Open in Kindle
A manufacturer is not through with his customer when a sale is completed. He has then only started with his customer. Open in Kindle
That is the shortsighted salesman-on-commission attitude. If a salesman is paid only for what he sells, it is not to be expected that he is going to exert any great effort on a customer out of whom no more commission is to be made. Open in Kindle
If to petrify is success all one has to do is to humour the lazy side of the mind but if to grow is success, then one must wake up anew every morning and keep awake all day. Open in Kindle
Life, as I see it, is not a location, but a journey. Even the man who most feels himself “settled” is not settled—he is probably sagging back. Everything is in flux, and was meant to be. Life flows. We may live at the same number of the street, but it is never the same man who lives there. Open in Kindle
But it is not a bad thing to be a fool for righteousness’ sake. The best of it is that such fools usually live long enough to prove that they were not fools—or the work they have begun lives long enough to prove they were not foolish. Open in Kindle
The man who has the largest capacity for work and thought is the man who is bound to succeed. I cannot pretend to say, because I do not know, whether the man who works always, who never leaves his business, who is absolutely intent upon getting ahead, and who therefore does get ahead—is happier than the man who keeps office hours, both for his brain and his hands. It is not necessary for any one to decide the question. A ten-horsepower engine will not pull as much as a twenty. The man who keeps brain office hours limits his horsepower. If he is satisfied to pull only the load that he has, well and good, that is his affair—but he must not complain if another who has increased his horsepower pulls more than he does. Leisure and work bring different results. If a man wants leisure and gets it—then he has no cause to complain. But he cannot have both leisure and the results of work. Open in Kindle
Concretely, what I most realized about business in that year—and I have been learning more each year without finding it necessary to change my first conclusions—is this: (1) That finance is given a place ahead of work and therefore tends to kill the work and destroy the fundamental of service. (2) That thinking first of money instead of work brings on fear of failure and this fear blocks every avenue of business—it makes a man afraid of competition, of changing his methods, or of doing anything which might change his condition. (3) That the way is clear for any one who thinks first of service—of doing the work in the best possible way. Open in Kindle
CHAPTER III STARTING THE REAL BUSINESS Open in Kindle
Everybody knows that it is always possible to do a thing better the second time. I do not know why manufacturing should not at that time have generally recognized this as a basic fact—unless Open in Kindle
Ask a hundred people how they want a particular article made. About eighty will not know; they will leave it to you. Fifteen will think that they must say something, while five will really have preferences and reasons. The ninety-five, made up of those who do not know and admit it and the fifteen who do not know but do not admit it, constitute the real market for any product. The five who want something special may or may not be able to pay the price for special work. If they have the price, they can get the work, but they constitute a special and limited market. Of the ninety-five perhaps ten or fifteen will pay a price for quality. Of those remaining, a number will buy solely on price and without regard to quality. Their numbers are thinning with each day. Buyers are learning how to buy. The majority will consider quality and buy the biggest dollar’s worth of quality. If, therefore, you discover what will give this 95 per cent. of people the best all-round service and then arrange to manufacture at the very highest quality and sell at the very lowest price, you will be meeting a demand which is so large that it may be called universal. Open in Kindle
The most economical manufacturing of the future will be that in which the whole of an article is not made under one roof—unless, of course, it be a very simple article. The modern—or better, the future—method is to have each part made where it may best be made and then assemble the parts into a complete unit at the points of consumption. Open in Kindle
It is extraordinary how firmly rooted is the notion that business—continuous selling—depends not on satisfying the customer once and for all, but on first getting his money for one article and then persuading him he ought to buy a new and different one. Open in Kindle
Among the requirements for an agent we laid down the following: (1) A progressive, up-to-date man keenly alive to the possibilities of business. (2) A suitable place of business clean and dignified in appearance. (3) A stock of parts sufficient to make prompt replacements and keep in active service every Ford car in his territory. (4) An adequately equipped repair shop which has in it the right machinery for every necessary repair and adjustment. (5) Mechanics who are thoroughly familiar with the construction and operation of Ford cars. (6) A comprehensive bookkeeping system and a follow-up sales system, so that it may be instantly apparent what is the financial status of the various departments of his business, the condition and size of his stock, the present owners of cars, and the future prospects. (7) Absolute cleanliness throughout every department. There must be no unwashed windows, dusty furniture, dirty floors. (8) A suitable display sign. (9) The adoption of policies which will ensure absolutely square dealing and the highest character of business ethics. Open in Kindle
This was the famous Selden Patent suit. Open in Kindle
CHAPTER IV THE SECRET OF MANUFACTURING AND SERVING Open in Kindle
What I am trying to emphasize is that the ordinary way of doing business is not the best way. I am coming to the point of my entire departure from the ordinary methods. Open in Kindle
The temptation to stop and hang on to what one has is quite natural. I can entirely sympathize with the desire to quit a life of activity and retire to a life of ease. I have never felt the urge myself but I can comprehend what it is—although I think that a man who retires ought entirely to get out of a business. There is a disposition to retire and retain control. Open in Kindle
The universal car had to have these attributes: Open in Kindle
(1) Quality in material to give service in use. Open in Kindle
(2) Simplicity in operation—because the masses are not mechanics. (3) Power in sufficient quantity. Open in Kindle
(4) Absolute reliability—because Open in Kindle
(5) Lightness. Open in Kindle
(6) Control—to Open in Kindle
(7) The more a motor car weighs, naturally the more fuel and lubricants are used in the driving; the lighter the weight, the lighter the expense of operation. Open in Kindle
The less complex an article, the easier it is to make, the cheaper it may be sold, and therefore the greater number may be sold. Open in Kindle
It is strange how, just as soon as an article becomes successful, somebody starts to think that it would be more successful if only it were different. There is a tendency to keep monkeying with styles and to spoil a good thing by changing it. Open in Kindle
The salesmen were insistent on increasing the line. They listened to the 5 per cent., the special customers who could say what they wanted, and forgot all about the 95 per cent. who just bought without making any fuss. Open in Kindle
No business can improve unless it pays the closest possible attention to complaints and suggestions. If there is any defect in service then that must be instantly and rigorously investigated, but when the suggestion is only as to style, one has to make sure whether it is not merely a personal whim that is being voiced. Open in Kindle
Salesmen always want to cater to whims instead of acquiring sufficient knowledge of their product to be able to explain to the customer with the whim that what they have will satisfy his every requirement—that is, of course, provided what they have does satisfy these requirements. Open in Kindle
“Any customer can have a car painted any colour that he wants so long as it is black.” Open in Kindle
“How soon will Ford blow up?” Nobody knows how many thousand times it has been asked since. It is asked only because of the failure to grasp that a principle rather than an individual is at work, and the principle is so simple that it seems mysterious. Open in Kindle
We were, almost overnight it seems, in great production. How did all this come about? Simply through the application of an inevitable principle. By the application of intelligently directed power and machinery. Open in Kindle
CHAPTER V GETTING INTO PRODUCTION Open in Kindle
If a device would save in time just 10 per cent. or increase results 10 per cent., then its absence is always a 10 per cent. tax. Open in Kindle
it is not the employer who pays wages. He only handles the money. It is the product that pays the wages and it is the management that arranges the production so that the product may pay the wages. Open in Kindle
while to-day we have skilled mechanics in plenty, they do not produce automobiles—they make it easy for others to produce them. Our skilled men are the tool makers, the experimental workmen, the machinists, and the pattern makers. They are as good as any men in the world—so good, indeed, that they should not be wasted in doing that which the machines they contrive can do better. Open in Kindle
That is one of the troubles with extensive records. If you keep on recording all of your failures you will shortly have a list showing that there is nothing left for you to try—whereas it by no means follows because one man has failed in a certain method that another man will not succeed. Open in Kindle
Then, too, a record of failures—particularly if it is a dignified and well-authenticated record—deters a young man from trying. We get some of our best results from letting fools rush in where angels fear to tread. Open in Kindle
None of our men are “experts.” We have most unfortunately found it necessary to get rid of a man as soon as he thinks himself an expert—because no one ever considers himself expert if he really knows his job. A man who knows a job sees so much more to be done than he has done, that he is always pressing forward and never gives up an instant of thought to how good and how efficient he is. Thinking always ahead, thinking always of trying to do more, brings a state of mind in which nothing is impossible. The moment one gets into the “expert” state of mind a great number of things become impossible. Open in Kindle
If some man, calling himself an authority, says that this or that cannot be done, then a horde of unthinking followers start the chorus: “It can’t be done.” Open in Kindle
CHAPTER VI MACHINES AND MEN Open in Kindle
Now a business, in my way of thinking, is not a machine. It is a collection of people who are brought together to do work and not to write letters to one another. It is not necessary for any one department to know what any other department is doing. If a man is doing his work he will not have time to take up any other work. It is the business of those who plan the entire work to see that all of the departments are working properly toward the same end. It is not necessary to have meetings to establish good feeling between individuals or departments. It is not necessary for people to love each other in order to work together. Too much good fellowship may indeed be a very bad thing, for it may lead to one man trying to cover up the faults of another. That is bad for both men. When we are at work we ought to be at work. When we are at play we ought to be at play. There is no use trying to mix the two. The sole object ought to be to get the work done and to get paid for it. When the work is done, then the play can come, but not before. Open in Kindle
And so the Ford factories and enterprises have no organization, no specific duties attaching to any position, no line of succession or of authority, very few titles, and no conferences. We have only the clerical help that is absolutely required; we have no elaborate records of any kind, and consequently no red tape. Open in Kindle
The work and the work alone controls us. That is one of the reasons why we have no titles. Most men can swing a job, but they are floored by a title. The effect of a title is very peculiar. It has been used too much as a sign of emancipation from work. It is almost equivalent to a badge bearing the legend: “This man has nothing to do but regard himself as important and all others as inferior.” Open in Kindle
The health of every organization depends on every member—whatever his place—feeling that everything that happens to come to his notice relating to the welfare of the business is his own job. Open in Kindle
There used to be a lot of advice given to officials not to hide behind their titles. The very necessity for the advice showed a condition that needed more than advice to correct it. And the correction is just this—abolish the titles. A few may be legally necessary; a few may be useful in directing the public how to do business with the concern, but for the rest the best rule is simple: “Get rid of them.” Open in Kindle
Since we do not take a man on his past history, we do not refuse him because of his past history. I never met a man who was thoroughly bad. There is always some good in him—if he gets a chance. That is the reason we do not care in the least about a man’s antecedents—we do not hire a man’s history, we hire the man. If he has been in jail, that is no reason to say that he will be in jail again. I think, on the contrary, he is, if given a chance, very likely to make a special effort to keep out of jail. Open in Kindle
Men will work with the idea of catching somebody’s eye; they will work with the idea that if they fail to get credit for what they have done, they might as well have done it badly or not have done it at all. Thus the work sometimes becomes a secondary consideration. The job in hand—the article in hand, the special kind of service in hand—turns out to be not the principal job. The main work becomes personal advancement—a platform from which to catch somebody’s eye. This habit of making the work secondary and the recognition primary is unfair to the work. It makes recognition and credit the real job. And this also has an unfortunate effect on the worker. It encourages a peculiar kind of ambition which is neither lovely nor productive. It produces the kind of man who imagines that by “standing in with the boss” he will get ahead. Open in Kindle
This is easy enough to do, for there is always work, and when you think of getting the work done instead of finding a title to fit a man who wants to be promoted, then there is no difficulty about promotion. The promotion itself is not formal; the man simply finds himself doing something other than what he was doing and getting more money. Open in Kindle
CHAPTER VII THE TERROR OF THE MACHINE Open in Kindle
The average worker, I am sorry to say, wants a job in which he does not have to put forth much physical exertion—above all, he wants a job in which he does not have to think. Open in Kindle
When you come right down to it, most jobs are repetitive. A business man has a routine that he follows with great exactness; the work of a bank president is nearly all routine; the work of under officers and clerks in a bank is purely routine. Indeed, for most purposes and most people, it is necessary to establish something in the way of a routine and to make most motions purely repetitive—otherwise the individual will not get enough done to be able to live off his own exertions. Open in Kindle
And even if the will be present, then the courage to go through with the training is absent. One cannot become skilled by mere wishing. Open in Kindle
What this generation needs is a deep faith, a profound conviction in the practicability of righteousness, justice, and humanity in industry. If we cannot have these qualities, then we were better off without industry. Open in Kindle
No man had to do the work unless he wanted to. But they all wanted to. It kept time from hanging on their hands. They slept and ate better and recovered more rapidly. Open in Kindle
One cannot have morale without cleanliness. We tolerate makeshift cleanliness no more than makeshift methods. Open in Kindle
CHAPTER VIII WAGES Open in Kindle
No question is more important than that of wages—most of the people of the country live on wages. The scale of their living—the rate of their wages—determines the prosperity of the country. Open in Kindle
The moment a man calls for assistance in his business—even though the assistant be but a boy—that moment he has taken a partner. Open in Kindle
When they pull and haul against each other—they simply injure the organization in which they are partners and from which both draw support. Open in Kindle
If men, instead of saying “the employer ought to do thus-and-so,” would say, “the business ought to be so stimulated and managed that it can do thus-and-so,” they would get somewhere. Because only the business can pay wages. Certainly the employer cannot, unless the business warrants. Open in Kindle
But by no means all employers or all employees will think straight. The habit of acting shortsightedly is a hard one to break. What can be done? Nothing. No rules or laws will effect the changes. But enlightened self-interest will. It takes a little while for enlightenment to spread. But spread it must, for the concern in which both employer and employees work to the same end of service is bound to forge ahead in business. Open in Kindle
There will never be a system invented which will do away with the necessity of work. Nature has seen to that. Idle hands and minds were never intended for any one of us. Work is our sanity, our self-respect, our salvation. So far from being a curse, work is the greatest blessing. Exact social justice flows only out of honest work. The man who contributes much should take away much. Therefore no element of charity is present in the paying of wages. The kind of workman who gives the business the best that is in him is the best kind of workman a business can have. And he cannot be expected to do this indefinitely without proper recognition of his contribution. Open in Kindle
The man who does not get a certain satisfaction out of his day’s work is losing the best part of his pay. Open in Kindle
When we are all in the business working together, we all ought to have some share in the profits—by way of a good wage, or salary, or added compensation. And that is beginning now quite generally to be recognized. Open in Kindle
A great deal of inequity creeps into wage rates unless both the employer and the employee know that the rate paid has been arrived at by something better than a guess. Open in Kindle
A determined man can win almost anything that he goes after, but unless, in his getting, he gains good will he has not profited much. Open in Kindle
It was a sort of prosperity-sharing plan. But on conditions. The man and his home had to come up to certain standards of cleanliness and citizenship. Nothing paternal was intended!—a certain amount of paternalism did develop, and that is one reason why the whole plan and the social welfare department were readjusted. Open in Kindle
The man with the larger amount of money has larger opportunity to make a fool of himself. Open in Kindle
If you expect a man to give his time and energy, fix his wages so that he will have no financial worries. It pays. Our profits, after paying good wages and a bonus—which bonus used to run around ten millions a year before we changed the system—show that paying good wages is the most profitable way of doing business. Open in Kindle
CHAPTER IX WHY NOT ALWAYS HAVE GOOD BUSINESS? Open in Kindle
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. Open in Kindle
any man who can give to the consumer the highest quality at the lowest price is bound to be a leader in business, whatever the kind of an article he makes. There is no getting away from this. Open in Kindle
Concentrating on prices instead of on service is a sure indication of the kind of business man who can give no justification for his existence as a proprietor. Open in Kindle
Take the industrial idea; what is it? The true industrial idea is not to make money. The industrial idea is to express a serviceable idea, to duplicate a useful idea, by as many thousands as there are people who need it. Open in Kindle
There are short-sighted men who cannot see that business is bigger than any one man’s interests. Business is a process of give and take, live and let live. It is cooperation among many forces and interests. Whenever you find a man who believes that business is a river whose beneficial flow ought to stop as soon as it reaches him you find a man who thinks he can keep business alive by stopping its circulation. He would produce wealth by this stopping of the production of wealth. The principles of service cannot fail to cure bad business. Which leads us into the practical application of the principles of service and finance. Open in Kindle
CHAPTER X HOW CHEAPLY CAN THINGS BE MADE? Open in Kindle
No one will deny that if prices are sufficiently low, buyers will always be found, no matter what are supposed to be the business conditions. That is one of the elemental facts of business. Open in Kindle
Unduly high prices are always a sign of unsound business, because they are always due to some abnormal condition. A healthy patient has a normal temperature; a healthy market has normal prices. High prices come about commonly by reason of speculation following the report of a shortage. Although there is never a shortage in everything, a shortage in just a few important commodities, or even in one, serves to start speculation. Or again, goods may not be short at all. An inflation of currency or credit will cause a quick bulge in apparent buying power and the consequent opportunity to speculate. Open in Kindle
No matter how short the supply of an article is supposed to be, no matter if the Government takes control and seizes every ounce of that article, a man who is willing to pay the money can always get whatever supply he is willing to pay for. Open in Kindle
People do not stay put. That is the trouble with all the framers of Socialistic and Communistic, and of all other plans for the ideal regulation of society. They all presume that people will stay put. The reactionary has the same idea. He insists that everyone ought to stay put. Nobody does, and for that I am thankful. Open in Kindle
However, there is a belief, and a very strong one, that business consists of a series of profits and losses, and good business is one in which the profits exceed the losses. Therefore some men reason that the best price to sell at is the highest price which may be had. That is supposed to be good business practice. Is it? We have not found it so. Open in Kindle
When prices are going up it is considered good business to buy far ahead, and when prices are up to buy as little as possible. Open in Kindle
We have carefully figured, over the years, that buying ahead of requirements does not pay—that the gains on one purchase will be offset by the losses on another, and in the end we have gone to a great deal of trouble without any corresponding benefit. Open in Kindle
The only way to keep out of trouble is to buy what one needs—no more and no less. That course removes one hazard from business. Open in Kindle
I happened to be riding in the Lanchester passing through a New York town and when the reporters came up they wanted to know right away why I was not riding in a Ford. “Well, you see, it is this way,” I answered. “I am on a vacation now; I am in no hurry, we do not care much when we get home. That is the reason I am not in the Ford.” Open in Kindle
The payment of high wages fortunately contributes to the low costs because the men become steadily more efficient on account of being relieved of outside worries. Open in Kindle
One big part of the discovery of what is “normal” in industry depends on managerial genius discovering better ways of doing things. If a man reduces his selling price to a point where he is making no profit or incurring a loss, then he simply is forced to discover how to make as good an article by a better method—making his new method produce the profit, and not producing a profit out of reduced wages or increased prices to the public. Open in Kindle
It is not good management to take profits out of the workers or the buyers; make management produce the profits. Don’t cheapen the product; don’t cheapen the wage; don’t overcharge the public. Put brains into the method, and more brains, and still more brains—do things better than ever before; and by this means all parties to business are served and benefited. Open in Kindle
CHAPTER XI MONEY AND GOODS Open in Kindle
My own financial operations have been very simple. I started with the policy of buying and selling for cash, keeping a large fund of cash always on hand, taking full advantage of all discounts, and collecting interest on bank balances. Open in Kindle
Last year the best-liked rumour was that we were down in Wall Street hunting for money. I did not bother to deny that. It takes too much time to deny everything. Instead, we demonstrated that we did not need any money. Since then I have heard nothing more about being financed by Wall Street. Open in Kindle
the laws of business are like the law of gravity, and the man who opposes them feels their power. Open in Kindle
If you make what they need, and sell it at a price which makes possession a help and not a hardship, then you will do business as long as there is business to do. People buy what helps them just as naturally as they drink water. Open in Kindle
when business becomes a mere plantation on which to live, and not a big work which one has to do—then you may expect trouble. Open in Kindle
Is a man more wise with borrowed money than he is with his own? Not as a usual thing. To borrow under such conditions is to mortgage a declining property. Open in Kindle
The time for a business man to borrow money, if ever, is when he does not need it. That is, when he does not need it as a substitute for the things he ought himself to do. If a Open in Kindle
My financial policy is the result of my sales policy. I hold that it is better to sell a large number of articles at a small profit than to sell a few at a large profit. Open in Kindle
Profits belong in three places: they belong to the business—to keep it steady, progressive, and sound. They belong to the men who helped produce them. And they belong also, in part, to the public. A successful business is profitable to all three of these interests—planner, producer, and purchaser. Open in Kindle
To repeat. The place in which to finance is the shop. It has never failed us, and once, when it was thought that we were hard up for money, it served rather conclusively to demonstrate how much better finance can be conducted from the inside than from the outside. Open in Kindle
CHAPTER XII MONEY—MASTER OR SERVANT? Open in Kindle
I cannot too greatly emphasize that the very worst time to borrow money is when the banking people think that you need money. Open in Kindle
War work is rush work and is wasteful work. Open in Kindle
We made that cut by applying the rule that everything and everybody must produce or get out. Open in Kindle
We cut the overhead charge from $146 a car to $93 a car, and when you realize what this means on more than four thousand cars a day you will have an idea how, not by economy, not by wage-cutting, but by the elimination of waste, it is possible to make an “impossible” price. Open in Kindle
They did not suggest putting in an engineer; they wanted to put in a treasurer. And that is the danger of having bankers in business. They think solely in terms of money. They think of a factory as making money, not goods. They want to watch the money, not the efficiency of production. They cannot comprehend that a business never stands still, it must go forward or go back. They regard a reduction in prices as a throwing away of profit instead of as a building of business. Open in Kindle
It required less skill to make a fortune dealing in money than dealing in production. Open in Kindle
Money, after all, is extremely simple. It is a part of our transportation system. It is a simple and direct method of conveying goods from one person to another. Money is in itself most admirable. It is essential. It is not intrinsically evil. It is one of the most useful devices in social life. And when it does what it was intended to do, it is all help and no hindrance. Open in Kindle
When money itself becomes an article of commerce to be bought and sold before real wealth can be moved or exchanged, the usurers and speculators are thereby permitted to lay a tax on production. The hold which controllers of money are able to maintain on productive forces is seen to be more powerful when it is remembered that, although money is supposed to represent the real wealth of the world, there is always much more wealth than there is money, and real wealth is often compelled to wait upon money, thus leading to that most paradoxical situation—a world filled with wealth but suffering want. Open in Kindle
CHAPTER XIII WHY BE POOR? Open in Kindle
The underlying causes of poverty, as I can see them, are essentially due to the bad adjustment between production and distribution, in both industry and agriculture—between the source of power and its application. Open in Kindle
The cure of poverty is not in personal economy but in better production. The “thrift” and “economy” ideas have been overworked. Open in Kindle
We like to say “waste,” but waste is only one phase of misuse. All waste is misuse; all misuse is waste. Open in Kindle
To teach a child to invest and use is better than to teach him to save. Most men who are laboriously saving a few dollars would do better to invest those few dollars—first in themselves, and then in some useful work. Eventually they would have more to save. Young men ought to invest rather than save. They ought to invest in themselves to increase creative value; after they have taken themselves to the peak of usefulness, then will be time enough to think of laying aside, as a fixed policy, a certain substantial share of income. You are not “saving” when you prevent yourself from becoming more productive. You are really taking away from your ultimate capital; you are reducing the value of one of nature’s investments. Open in Kindle
There is a pathetic faith in what money can do. Money is very useful in normal times, but money has no more value than the people put into it by production, and it can be so misused. It can be so superstitiously worshipped as a substitute for real wealth as to destroy its value altogether. Open in Kindle
It is not at all impossible. What is desirable and right is never impossible. It would only mean a little teamwork—a little less attention to greedy ambition and a little more attention to life. Open in Kindle
Capital that is not constantly creating more and better jobs is more useless than sand. Capital that is not constantly making conditions of daily labour better and the reward of daily labour more just, is not fulfilling its highest function. The highest use of capital is not to make more money, but to make money do more service for the betterment of life. Unless we in our industries are helping to solve the social problem, we are not doing our principal work. We are not fully serving. Open in Kindle
CHAPTER XIV THE TRACTOR AND POWER FARMING Open in Kindle
And anyway, the public was more interested in being carried than in being pulled; the horseless carriage made a greater appeal to the imagination. Open in Kindle
With the automobile on the farms, the tractor became a necessity. For then the farmers had been introduced to power. Open in Kindle
It is important that it shall be cheap. Otherwise power will not go to all the farms. And they must all of them have power. Within a few years a farm depending solely on horse and hand power will be as much of a curiosity as a factory run by a treadmill. The farmer must either take up power or go out of business. The cost figures make this inevitable. Open in Kindle
CHAPTER XV WHY CHARITY? Open in Kindle
Why should there by any necessity for almsgiving in a civilized community? It is not the charitable mind to which I object. Open in Kindle
The trouble is that we have been using this great, fine motive force for ends too small. If human sympathy prompts us to feed the hungry, why should it not give the larger desire—to make hunger in our midst impossible? If we have sympathy enough for people to help them out of their troubles, surely we ought to have sympathy enough to keep them out. Open in Kindle
It is easy to give; it is harder to make giving unnecessary. To make the giving unnecessary we must look beyond the individual to the cause of his misery—not hesitating, of course, to relieve him in the meantime, but not stopping with mere temporary relief. The difficulty seems to be in getting to look beyond to the causes. More people can be moved to help a poor family than can be moved to give their minds toward the removal of poverty altogether. Open in Kindle
The moment human helpfulness is systematized, organized, commercialized, and professionalized, the heart of it is extinguished, and it becomes a cold and clammy thing. Open in Kindle
If the idea of service be kept in mind, then there is always in every community more work to do than there are men who can do it. Open in Kindle
Industry organized for service removes the need for philanthropy. Philanthropy, no matter how noble its motive, does not make for self-reliance. We must have self-reliance. A community is the better for being discontented, for being dissatisfied with what it has. I do not mean the petty, daily, nagging, gnawing sort of discontent, but a broad, courageous sort of discontent which believes that everything which is done can and ought to be eventually done better. Industry organized for service—and the workingman as well as the leader must serve—can pay wages sufficiently large to permit every family to be both self-reliant and self-supporting. A philanthropy that spends its time and money in helping the world to do more for itself is far better than the sort which merely gives and thus encourages idleness. Philanthropy, like everything else, ought to be productive, and I believe that it can be. Open in Kindle
The best instructors obtainable are on the staff, and the text-book is the Ford plant. It offers more resources for practical education than most universities. The arithmetic lessons come in concrete shop problems. No longer is the boy’s mind tortured with the mysterious A who can row four miles while B is rowing two. The actual processes and actual conditions are exhibited to him—he is taught to observe. Cities are no longer black specks on maps and continents are not just pages of a book. The shop shipments to Singapore, the shop receipts of material from Africa and South America are shown to him, and the world becomes an inhabited planet instead of a coloured globe on the teacher’s desk. In physics and chemistry the industrial plant provides a laboratory in which theory becomes practice and the lesson becomes actual experience. Open in Kindle
want all our jobs to be good for the men who take them. But there is no string tied to the boys. They have earned their own way and are under obligations to no one. There is no charity. The place pays for itself. Open in Kindle
We leave for private interest too many things we ought to do for ourselves as a collective interest. We need more constructive thinking in public service. We need a kind of “universal training” in economic facts. The over-reaching ambitions of speculative capital, as well as the unreasonable demands of irresponsible labour, are due to ignorance of the economic basis of life. Nobody can get more out of life than life can produce—yet nearly everybody thinks he can. Speculative capital wants more; labour wants more; the source of raw material wants more; and the purchasing public wants more. A family knows that it cannot live beyond its income; even the children know that. But the public never seems to learn that it cannot live beyond its income—have more than it produces. Open in Kindle
In clearing out the need for charity we must keep in mind not only the economic facts of existence, but also that lack of knowledge of these facts encourages fear. Banish fear and we can have self-reliance. Charity is not present where self-reliance dwells. Fear is the offspring of a reliance placed on something outside—on a foreman’s good-will, perhaps, on a shop’s prosperity, on a market’s steadiness. That is just another way of saying that fear is the portion of the man who acknowledges his career to be in the keeping of earthly circumstances. Fear is the result of the body assuming ascendancy over the soul. The habit of failure is purely mental and is the mother of fear. This habit gets itself fixed on men because they lack vision. They start out to do something that reaches from A to Z. At A they fail, at B they stumble, and at C they meet with what seems to be an insuperable difficulty. They then cry “Beaten” and throw the whole task down. They have not even given themselves a chance really to fail; they have not given their vision a chance to be proved or disproved. They have simply let themselves be beaten by the natural difficulties that attend every kind of effort. Open in Kindle
This rude, simple, primitive power which we call “stick-to-it-iveness” is the uncrowned king of the world of endeavour. Open in Kindle
People are utterly wrong in their slant upon things. They see the successes that men have made and somehow they appear to be easy. But that is a world away from the facts. It is failure that is easy. Success is always hard. A man can fail in ease; he can succeed only by paying out all that he has and is. It is this which makes success so pitiable a thing if it be in lines that are not useful and uplifting. Open in Kindle
Become a freeman in the place where you first surrendered your freedom. Win your battle where you lost it. And you will come to see that, although there was much outside of you that was not right, there was more inside of you that was not right. Thus you will learn that the wrong inside of you spoils even the right that is outside of you. Open in Kindle
Let every American become steeled against coddling. Americans ought to resent coddling. It is a drug. Stand up and stand out; let weaklings take charity. Open in Kindle
CHAPTER XVI THE RAILROADS Open in Kindle
The men who know railroading have not been allowed to manage railroads. Open in Kindle
It is inevitable that any one who can borrow freely to cover errors of management will borrow rather than correct the errors. Open in Kindle
Lawyers, like bankers, know absolutely nothing about business. They imagine that a business is properly conducted if it keeps within the law or if the law can be altered or interpreted to suit the purpose in hand. They live on rules. Open in Kindle
But wherever it is possible a policy of decentralization ought to be adopted. We need, instead of mammoth flour mills, a multitude of smaller mills distributed through all the sections where grain is grown. Wherever it is possible, the section that produces the raw material ought to produce also the finished product. Grain should be ground to flour where it is grown. Open in Kindle
The chief injustice sustained by the farmer to-day is that, being the greatest producer, he is prevented from being also the greatest merchandiser, because he is compelled to sell to those who put his products into merchantable form. Open in Kindle
It is one of nature’s compensations to withdraw prosperity from the business which does not serve. Open in Kindle
CHAPTER XVII THINGS IN GENERAL Open in Kindle
Keep on with your engine. If you can get what you are after, I can see a great future. Open in Kindle
He believes that all things are possible. At the same time he keeps his feet on the ground. He goes forward step by step. He regards “impossible” as a description for that which we have not at the moment the knowledge to achieve. He knows that as we amass knowledge we build the power to overcome the impossible. That is the rational way of doing the “impossible.” The irrational way is to make the attempt without the toil of accumulating knowledge. Open in Kindle
The man who is too set to change is dead already. The funeral is a mere detail. Open in Kindle
Of course, some men get rich out of war; others get poor. But the men who get rich are not those who fought or who really helped behind the lines. No patriot makes money out of war. No man with true patriotism could make money out of war—out of the sacrifice of other men’s lives. Until the soldier makes money by fighting, until mothers make money by giving their sons to death—not until then should any citizen make money out of providing his country with the means to preserve its life. Open in Kindle
There is a power within the world which cries “War!” and in the confusion of the nations, the unrestrained sacrifice which people make for safety and peace runs off with the spoils of the panic. Open in Kindle
fortunes date from the World War. Nobody can deny that war is a profitable business for those who like that kind of money. War is an orgy of money, just as it is an orgy of blood. Open in Kindle
A country becomes great when, by the wise development of its resources and the skill of its people, property is widely and fairly distributed. Open in Kindle
Foreign trade is full of delusions. We ought to wish for every nation as large a degree of self-support as possible. Instead of wishing to keep them dependent on us for what we manufacture, we should wish them to learn to manufacture themselves and build up a solidly founded civilization. When every nation learns to produce the things which it can produce, we shall be able to get down to a basis of serving each other along those special lines in which there can be no competition. Open in Kindle
When its rich natural resources are exploited for the increase of the private fortunes of foreign capitalists, that is not development, it is ravishment. Open in Kindle
The human race cannot forever exist half-exploiter and half-exploited. Until we become buyers and sellers alike, producers and consumers alike, keeping the balance not for profit but for service, we are going to have topsy-turvy conditions. Open in Kindle
We learn more from our failures than from our successes. Open in Kindle
An able man is a man who can do things, and his ability to do things is dependent on what he has in him. What he has in him depends on what he started with and what he has done to increase and discipline it. An educated man is not one whose memory is trained to carry a few dates in history—he is one who can accomplish things. A man who cannot think is not an educated man however many college degrees he may have acquired. Thinking is the hardest work any one can do—which is probably the reason why we have so few thinkers. Open in Kindle
You cannot learn in any school what the world is going to do next year, but you can learn some of the things which the world has tried to do in former years, and where it failed and where it succeeded. Open in Kindle
But the best that education can do for a man is to put him in possession of his powers, give him control of the tools with which destiny has endowed him, and teach him how to think. Open in Kindle
You may fill your head with all the “facts” of all the ages, and your head may be just an overloaded fact-box when you get through. The point is this: Great piles of knowledge in the head are not the same as mental activity. A man may be very learned and very useless. And then again, a man may be unlearned and very useful. The object of education is not to fill a man’s mind with facts; it is to teach him how to use his mind in thinking. And it often happens that a man can think better if he is not hampered by the knowledge of the past. Open in Kindle
Merely gathering knowledge may become the most useless work a man can do. What can you do to help and heal the world? That is the educational test. If a man can hold up his own end, he counts for one. If he can help ten or a hundred or a thousand other men hold up their ends, he counts for more. He may be quite rusty on many things that inhabit the realm of print, but he is a learned man just the same. When a man is master of his own sphere, whatever it may be, he has won his degree—he has entered the realm of wisdom. Open in Kindle
CHAPTER XVIII DEMOCRACY AND INDUSTRY Open in Kindle
The exploitation of dissatisfaction is an established business to-day. Its object is not to settle anything, nor to get anything done, but to keep dissatisfaction in existence. And the instruments used to do this are a whole set of false theories and promises which can never be fulfilled as long as the earth remains what it is. Open in Kindle
That is very much like asking: “Who ought to be the tenor in the quartet?” Obviously, the man who can sing tenor. Open in Kindle
CHAPTER XIX WHAT WE MAY EXPECT Open in Kindle
The business of life is easy or hard according to the skill or the lack of skill displayed in production and distribution. It has been thought that business existed for profit. That is wrong. Business exists for service. It is a profession, and must have recognized professional ethics, to violate which declasses a man. Business needs more of the professional spirit. Open in Kindle
Everything is possible … “faith is the substance of things hoped for, the evidence of things not seen.” Open in Kindle