Henry Ford

Between the years of 1900 – 1920 several titans of industry left their indelible impact on the American, and what would one day be considered the global economy. The aim of this blog is to identify Henry Ford as a figure of great import during this time and analyze the various ways in which he influenced economic history.

Often, when grade school students are asked who invented the automobile, they are quick to provide Henry Ford as an incorrect answer. Instead, a closer examination of history would reveal that it was Ford’s implementation off the assembly line which made the Ford Model T available to a more common class of individuals during the 1920’s. Ford was far from the first to participate in the production of cars. In fact, “502 automobile companies were founded between 1900 and 1908.”[1] Rather, it was Ford’s unique and focused economic vision for the production and sale of the automobile which would lead to the creation of an American economy in which 91% of American households owned a car in 2020.[2] The origin of this economic trend can be traced back to the mind of Henry Ford and is best summarized by the Michigan man himself when he proclaimed that he would produce a car for the every man. One that:

Will be large enough for the family but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.[3]

Here, one can see how the vision of Ford would go on to impact not only the automobile industry, but nearly every all production-based consumer good for centuries to come. Furthermore, Ford’s ability to provide an affordable automobile to every day consumer had a significant impact economically, but sociologically as well. Evidence in support of this claim can be found in Jeongsuk Joo’s article, “The Impact of the Automobile and its Culture in the U.S.” when he points out that the 1950s was the period when broad commercialism and suburbanization, the idea of a free world characterized by goods were established as permanent features of American society. No other showpiece better contributed to and symbolized this rise of consumer culture than the automobile.”[4] According to Joo, the automobile industry, initially driven by the vision and innovation of Henry Ford, led to the introduction of “the mass production method and marketing strategy for mass consumption and converting the working-class into consumers.”[5]

Ford’s contribution to the development of an American middle class was not limited to the automobile. In fact, many of Ford’s contemporaries where highly scrutinized for business practices that created work environments defined by low pay, long hour, and unsafe working conditions. Yet, Ford himself was once again able to recognize and create value where others fell short of the mark. In relation to wages, Ford instituted a five-dollar daily wage for his workers. Initially, it was believed that the new payment program would lead Ford Motors to bankruptcy. However, it led to increase in production and interest from perspective workers from around the country. According to Ford, he and his company “We believe in making 25,000 men prosperous and contented rather than follow the plan of making a few slave drivers in our establishment multi-millionaires.”[6] This revolutionary economic attitude towards his workers helped create an entire socioeconomic class in America. One that was at the driven by a to consume products which afforded them a level of personal freedom and autonomy which previously had alluded them.

On top of increasing wages, Ford decreased working hours for his employees. At first glance, these decisions seem as if they would come at a high price to Ford’s bottom line. However, decreasing the hours of his workers allowed Ford to create a third shift and hire more workers. The assembly allowed Ford Motor Company to become a twenty-four-hour operation.”[7] Now, Ford’s forward thinking would enable him to outpace him competitors while creating a work environment capable of increasing not only production and profits but the personal and economic wellbeing of his employees. The success of Ford motors following his market changing innovations set in motion a seismic shift economically across the country. “Fordism”, as it would come to called, an economic philosophy based on better pay, hours, and conditions for his workers was adopted across a wide range of other industries across the country.

In sum, Henry Ford’s economic contributions between the years of 1900 – 1920 changed the trajectory of American and global economic history. His innovations and revolutionary attitudes towards production and profit were, perhaps, only outweighed by his commitment to the true source of prosperity within any successful economy: human beings.

[1] Pietrusza, David. n.d. “Henry Ford and Alfred P. Sloan: Industrialization and Competition - Bill of Rights Institute.”

[2] Valentine, Ashlee. 2024. “Car Ownership Statistics 2024 – Forbes Advisor.

[3] Pietrusza, David. n.d. “Henry Ford and Alfred P. Sloan: Industrialization and Competition - Bill of Rights Institute.”

[4] Joo, J. (2007). The Impact of the Automobile and its Culture in the U.S.

[5] Ibid.

[6] “The Moving Assembly Line.” n.d. Ford Corporate

[7] Ibid.