We have only started on our development of our country
— we have not as yet, with all our talk of wonderful progress,
done more than scratch the surface. The progress has been wonderful
enough — but when we compare what we have done with what there
is to do, then our past accomplishments are as nothing. When we
consider that more power is used merely in ploughing the soil than
is used in all the industrial establishments of the country put
together, an inkling comes of how much opportunity there is ahead.
And now, with so many countries of the world in ferment and with
so much unrest every where, is an excellent time to suggest something
of the things that may be done in the light of what has been done.
When one speaks of increasing power,
machinery, and industry there comes up a picture of a cold, metallic
sort of world in which great factories will drive away the trees,
the flowers, the birds, and the green fields. And that then we shall
have a world composed of metal machines and human machines. With
all of that I do not agree. 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
[2]
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. Power and machinery, money and goods,
are useful only as they set us free to live. They are but means
to an end. For instance, I do not consider the machines which bear
my name simply as machines. If that was all there was to it I would
do something else. I take them as concrete evidence of the working
out of a theory of business, which I hope is something more than
a theory of business — a theory that looks toward making this
world a better place in which to live. The fact that the commercial
success of the Ford Motor Company has been most unusual is important
only because it serves to demonstrate, in a way which no one can
fail to understand, that the theory to date is right. Considered
solely in this light I can criticize the prevailing system of industry
and the organization of money and society from the standpoint of
one who has not been beaten by them.
As things are now organized, I
could, were I thinking only selfishly, ask for no change. If I merely
want money the present system is all right; it gives money in plenty
to me. But I am thinking of service. The present system does not
permit of the best service because it encourages every kind of waste
-- it keeps many men from getting the full return from service.
And it is going nowhere. It is all a matter of better planning and
adjustment.
I have no quarrel with the general
attitude of scoffing at new ideas. It is better to be skeptical
of all new ideas and to insist upon being shown rather than to rush
around in a continuous brainstorm after every new idea. Skepticism,
if by that we mean cautiousness, is the balance wheel of civilization.
Most of the present acute troubles
[3]
of the world arise out of taking on new ideas without first carefully
investigating to discover if they are good ideas. An idea is not
necessarily good because it is old, or necessarily bad because it
is new, but if an old idea works, then the weight of the evidence
is all in its favor. 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.
I am now most interested in fully
demonstrating that the ideas we have put into practice are capable
of the largest application — that they have nothing peculiarly
to do with motor cars or tractors but form something in the nature
of a universal code. I am quite certain that it is the natural code
and I want to demonstrate it so thoroughly that it will be accepted,
not as a new idea, but as a natural code.
The natural thing to do is to work
— to recognize that prosperity and happiness can be obtained
only through honest effort. Human ills flow largely from attempting
to escape from this natural course. I have no suggestion which goes
beyond accepting in its fullest this principle of nature. I take
it for granted that we must work. All that we have done comes as
the result of a certain insistence that since we must work it is
better to work intelligently and forehandedly; that the better we
do our work the better off we shall be. All of which I conceive
to be merely elemental common sense.
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. He is the sort of man who would tear up a whole shirt
because the collar button did not fit the buttonhole. It would never
occur to him to enlarge the buttonhole. This sort of re-
[4]
former never under any circumstances knows what he is doing. Experience
and reform do not go together. A reformer cannot keep his zeal at
white heat in the presence of a fact. He must discard all facts.
Since 1914 a great many persons
have received brand-new intellectual outfits. Many are beginning
to think for the first time. They opened their eyes and realized
that they were in the world. Then, with a thrill of independence,
they realized that they could look at the world critically. They
did so and found it faulty. The intoxication of assuming the masterful
position of a critic of the social system — which it is every
man's right to assume — is unbalancing at first. The very
young critic is very much unbalanced. He is strongly in favor of
wiping out the old order and starting a new one. They actually managed
to start a new world in Russia. It is there that the work of the
world makers can best be studied. We learn from Russia that it is
the minority and not the majority who determine destructive action.
We learn also that while men may decree social laws in conflict
with natural laws, Nature vetoes those laws more ruthlessly than
did the Czars. Nature has vetoed the whole Soviet Republic. For
it sought to deny nature. It denied above all else the right to
the fruits of labour. Some people say, "Russia will have to
go to work," but that does not describe the case. The fact
is that poor Russia is at work, but her work counts for nothing.
It is not free work. In the United States a workman works eight
hours a day; in Russia, he works twelve to fourteen. In the United
States, if a workman wishes to lay off a day or a week, and is able
to afford it, there is nothing to prevent him. In Russia, under
Sovietism, the workman goes to work whether he wants to or not.
The freedom of the citizen has disappeared in the discipline of
a prison-like monotony in which all are treated alike. That is
[5]
slavery. 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. The minor forms of Freedom lubricate the everyday life
of all of us.
Russia could not get along without
intelligence and experience. As soon as she began to run her factories
by committees, they went to rack and ruin; there was more debate
than production. As soon as they threw out the skilled man, thousands
of tons of precious materials were spoiled. The fanatics talked
the people into starvation. The Soviets are now offering the engineers,
the administrators, the foremen and superintendents, whom at first
they drove out, large sums of money if only they will come back.
Bolshevism is now crying for the brains and experience which it
yesterday treated so ruthlessly. All that "reform" did
to Russia was to block production.
There is in this country a sinister
element that desires to creep in between the men who work with their
hands and the men who think and plan for the men who work with their
hands. The same influence that drove the brains, experience, and
ability out of Russia is busily engaged in raising prejudice here.
We must not suffer the stranger, the destroyer, the hater of happy
humanity, to divide our people. In unity is American strength —
and freedom. 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. He
wants to go back to some previous condition, not because it was
[6]
the best condition, but because he thinks he knows about that condition.
The one crowd wants to smash up
the whole world in order to make a better one. The other holds the
world as so good that it might well be let stand as it is —
and decay. The second notion arises as does the first — out
of not using the eyes to see with. It is perfectly possible to smash
this world, but it is not possible to build a new one. It is possible
to prevent the world from going forward, but it is not possible
then to prevent it from going back — from decaying. It is
foolish to expect that, if everything be overturned, everyone will
thereby get three meals a day. Or, should everything be petrified,
that thereby six per cent, interest may be paid. The trouble is
that reformers and reactionaries alike get away from the realities
— from the primary functions.
One of the counsels of caution
is to be very certain that we do not mistake a reactionary turn
for a return of common sense. We have passed through a period of
fireworks of every description, and the making of a great many idealistic
maps of progress. We did not get anywhere. It was a convention,
not a march. Lovely things were said, but when we got home we found
the furnace out. 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." Their return to power is
often hailed as the return of common sense.
The primary functions are agriculture,
manufacture, and transportation. Community life is impossible without
them. They hold the world together. Raising things, making things,
and earning things are as primitive as human need and yet as modern
as anything
[7]
can be. They are of the essence of physical life. When they cease,
community life ceases. Things do get out of shape in this present
world under the present system, but we may hope for a betterment
if the foundations stand sure. The great delusion is that one may
change the foundation — usurp the part of destiny in the social
process. 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.
There is plenty of work to do.
Business is merely work. Speculation in things already produced
— that is not business. It is just more or less respectable
graft. But it cannot be legislated out of existence. Laws can do
very little. Law never does anything constructive. It can never
be more than a policeman, and so it is a waste of time to look to
our state capitals or to Washington to do that which law was not
designed to do. As long as we look to legislation to cure poverty
or to abolish special privilege we are going to see poverty spread
and special privilege grow. We have had enough of looking to Washington
and we have had enough of legislators — not so much, however,
in this as in other countries — promising laws to do that
which laws cannot do.
When you get a whole country —
as did ours — thinking that Washington is a sort of heaven
and behind its clouds dwell omniscience and omnipotence, you are
educating that country into a dependent state of mind which augurs
ill for the future. Our help does not come from Washington, but
from ourselves; our help may, however, go to Washington as a sort
of central distribution point where all our efforts are coordinated
for the general good. We may help the Government; the Government
cannot help us.
[8]
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. Business is
not the reason why the United States was founded. The Declaration
of Independence is not a business charter, nor is the Constitution
of the United States a commercial schedule. The United States —
its land, people, government, and business — are but methods
by which the life of the people is made worthwhile. The Government
is a servant and never should be anything but a servant. The moment
the people become adjuncts to government, then the law of retribution
begins to work, for such a relation is unnatural, immoral, and inhuman.
We cannot live without business and we cannot live without government.
Business and government are necessary as servants, like water and
grain; as masters they overturn the natural order.
The welfare of the country is squarely
up to us as individuals. That is where it should be and that is
where it is safest. Governments can promise something for nothing
but they cannot deliver. They can juggle the currencies as they
did in Europe (and as bankers the world over do, as long as they
can get the benefit of the juggling) with a patter of solemn nonsense.
But it is work and work alone that can continue to deliver the goods
— and that, down in his heart, is what every man knows.
There is little chance of an intelligent
people, such as ours, ruining the fundamental processes of economic
life. Most men know they cannot get something for nothing. Most
men feel -- even if they do not know -- that money is not wealth.
The ordinary theories which promise everything to everybody, and
demand nothing from anybody, are promptly denied by the instincts
of the ordinary man, even when he does not find reasons against
them. He knows they are wrong. That is enough. The present
[9]
order, always clumsy, often stupid, and in many ways imperfect,
has this advantage over any other — it works. Doubtless our
order will merge by degrees into another, and the new one will also
work — but not so much by reason of what it is as by reason
of what men will bring into it. The reason why Bolshevism did not
work, and cannot work, is not economic. It does not matter whether
industry is privately managed or socially controlled; it does not
matter whether you call the workers' share "wages" or
"dividends"; it does not matter whether you regimentalize
the people as to food, clothing, and shelter, or whether you allow
them to eat, dress, and live as they like. Those are mere matters
of detail. The incapacity of the Bolshevist leaders is indicated
by the fuss they made over such details. Bolshevism failed because
it was both unnatural and immoral. Our system stands. Is it wrong?
Of course it is wrong, at a thousand points! Is it clumsy? Of course
it is clumsy. By all right and reason it ought to break down. But
it does not — because it is instinct with certain economic
and moral fundamentals.
The economic fundamental is labour.
Labour is the human element which makes the fruitful seasons of
the earth useful to men. It is men's labour that makes the harvest
what it is. That is the economic fundamental: every one of us is
working with material which we did not and could not create, but
which was presented to us by Nature.
The moral fundamental is man's
right in his labour. This is variously stated. It is sometimes called
"the right of property." It is sometimes masked in the
command, "Thou shalt not steal." It is the other man's
right in his property that makes stealing a crime. When a man has
earned his bread, he has a right to that bread. If another steals
it, he does more than steal bread; he invades a sacred human right.
[10]
If we cannot produce we cannot have — but some say if we produce
it is only for the capitalists. Capitalists who become such because
they provide better means of production are of the foundation of
society. They have really nothing of their own. They merely manage
property for the benefit of others. Capitalists who become such
through trading in money are a temporarily necessary evil. They
may not be evil at all if their money goes to production. If their
money goes to complicating distribution — to raising barriers
between the producer and the consumer — then they are evil
capitalists and they will pass away when money is better adjusted
to work; and money will become better adjusted to work when it is
fully realized that through work and work alone may health, wealth,
and happiness inevitably be secured.
There is no reason why a man who
is willing to work should not be able to work and to receive the
full value of his work. There is equally no reason why a man who
can but will not work should not receive the full value of his services
to the community. He should most certainly be permitted to take
away from the community an equivalent of what he contributes to
it. If he contributes nothing he should take away nothing. He should
have the freedom of starvation. We are not getting anywhere when
we insist that every man ought to have more than he deserves to
have — just because some do get more than they deserve to
have.
There can be no greater absurdity
and no greater disservice to humanity in general than to insist
that all men are equal. Most certainly all men are not equal, and
any democratic conception which strives to make men equal is only
an effort to block progress. Men cannot be of equal service. The
men of larger ability are less numerous than the men of smaller
ability; it is possible for a mass of the smaller men to pull the
larger ones down — but in so
[11]
doing they pull themselves down. It is the larger men who give the
leadership to the community and enable the smaller men to live with
less effort.
The conception of democracy which
names a leveling-down of ability makes for waste. No two things
in nature are alike. We build our cars absolutely interchangeable.
All parts are as nearly alike as chemical analysis, the finest machinery,
and the finest workmanship can make them. No fitting of any kind
is required, and it would certainly seem that two Fords standing
side by side, looking exactly alike and made so exactly alike that
any part could be taken out of one and put into the other, would
be alike. But they are not. They will have different road habits.
We have men who have driven hundreds, and in some cases thousands
of Fords and they say that no two ever act precisely the same —
that, if they should drive a new car for an hour or even less and
then the car were mixed with a bunch of other new ones, also each
driven for a single hour and under the same conditions, that although
they could not recognize the car they had been driving merely by
looking at it, they could do so by driving it.
I have been speaking in general
terms. Let us be more concrete. A man ought to be able to live on
a scale commensurate with the service that he renders. This is rather
a good time to talk about this point, for we have recently been
through a period when the rendering of service was the last thing
that most people thought of. We were getting to a place where no
one cared about costs or service. Orders came without effort. Whereas
once it was the customer who favored the merchant by dealing with
him, conditions changed until it was the merchant who favored the
customer by selling to him. That is bad for business. Monopoly is
bad for business. Profiteering is bad for business. The lack of
necessity to
[12]
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. Things were coming too easily. There was a let-down of
the principle that an honest relation ought to obtain between values
and prices. The public no longer had to be "catered to."
There was even a "public be damned" attitude in many places.
It was intensely bad for business. Some men called that abnormal
condition "prosperity." It was not prosperity —
it was just a needless money chase. Money chasing is not business.
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. Producing
for consumption implies that the quality of the article produced
will be high and that the price will be low — that the article
be one which serves the people and not merely the producer. If the
money feature is twisted out of its proper perspective, then the
production will be twisted to serve the producer.
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. During the boom period the larger effort of
production was to serve itself and hence, the moment the people
woke up, many producers went to smash. They said that they had entered
into a "period of depression." Really they had not. They
were simply trying to pit nonsense against sense?
[13]
which is something that cannot successfully be done. 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.
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. Any scheme looking
to abolishing money is only making affairs more complex, for we
must have a measure. That our present system of money is a satisfactory
basis for exchange is a matter of grave doubt. That is a question
which I shall talk of in a subsequent chapter. The gist of my objection
to the present monetary system is that it tends to become a thing
of itself and to block instead of facilitate production.
My effort is in the direction of
simplicity. People in general have so little and it costs so much
to buy even the barest necessities (let alone that share of the
luxuries to which I think everyone is entitled) because nearly everything
that we make is much more complex than it needs to be. Our clothing,
our food, our household furnishings — all could be much simpler
than they now are and at the same time be better looking. Things
in past ages were made in certain ways and makers since then have
just followed.
I do not mean that we should adopt
freak styles. There is no necessity for that. Clothing need not
be a bag with a hole cut in it. That might be easy to make but it
would be inconvenient to wear. A blanket does not require much tailoring,
but none of us could get much work done if we went around Indian-fashion
in blankets. Real
[14]
simplicity means that which gives the very best service and is the
most convenient in use. The trouble with drastic reforms is they
always insist that a man be made over in order to use certain designed
articles. I think that dress reform for women — which seems
to mean ugly clothes — must always originate with plain women
who want to make everyone else look plain. That is not the right
process. 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. The start ought to be with the article. First we
ought to find whether it is as well made as it should be —
does it give the best possible service? Then — are the materials
the best or merely the most expensive? Then — can its complexity
and weight be cut down? And so on.
There is no more sense in having
extra weight in an article than there is in the cockade on a coachman's
hat. In fact, there is not as much. For the cockade may help the
coachman to identify his hat while the extra weight means only a
waste of strength. I cannot imagine where the delusion that weight
means strength came from. It is all well enough in a pile-driver,
but why move a heavy weight if we are not going to hit anything
with it? In transportation why put extra weight in a machine? Why
not add it to the load that the machine is designed to carry? Fat
men cannot run as fast as thin men but we build most of our vehicles
as though dead-weight fat increased speed! A great deal of poverty
grows out of the carriage of excess weight.
[15]
Some day we shall discover how further to eliminate weight. Take
wood, for example. For certain purposes wood is now the best substance
we know, but wood is extremely wasteful. The wood in a Ford car
contains thirty pounds of water. There must be some way of doing
better than that. There must be some method by which we can gain
the same strength and elasticity without having to lug useless weight.
And so through a thousand processes.
The farmer makes too complex an
affair out of his daily work. I believe that the average farmer
puts to a really useful purpose only about 5 per cent of the energy
that he spends. If any one ever equipped a factory in the style,
say, the average farm is fitted out, the place would be cluttered
with men. The worst factory in Europe is hardly as bad as the average
farm barn. Power is utilized to the least possible degree. Not only
is everything done by hand, but seldom is a thought given to logical
arrangement. A farmer doing his chores will walk up and down a rickety
ladder a dozen times. He will carry water for years instead of putting
in a few lengths of pipe. His whole idea, when there is extra work
to do, is to hire extra men. He thinks of putting money into improvements
as an expense. Farm products at their lowest prices are dearer than
they ought to be. Farm profits at their highest are lower than they
ought to be. It is waste motion — waste effort — that
makes farm prices high and profits low.
On my own farm at Dearborn we do
everything by machinery. We have eliminated a great number of wastes,
but we have not as yet touched on real economy. We have not yet
been able to put in five or ten years of intense night-and-day study
to discover what really ought to be done. We have left more undone
than we have done. Yet at no time — no matter what the value
of crops — have we failed to turn a first-class profit. We
are not farmers — we are industrialists on the farm. The
[16]
moment the farmer considers himself as an industrialist, with a
horror of waste either in material or in men, then we are going
to have farm products so low-priced that all will have enough to
eat, and the profits will be so satisfactory that farming will be
considered as among the least hazardous and most profitable of occupations.
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.
The way to attain low-priced, high-volume
production in the factory or on the farm ¾ and low-priced,
high-volume production means plenty for everyone — is quite
simple. The trouble is that the general tendency is to complicate
very simple affairs. Take, for an instance, an "improvement."
When we talk about improvements
usually we have in mind some change in a product. An "improved"
product is one that has been changed. That is not my idea. I do
not believe in starting to make until I have discovered the best
possible thing. This, of course, does not mean that a product should
never be changed, but I think that it will be found more economical
in the end not even to try to produce an article until you have
fully satisfied yourself that utility, design, and material are
the best. If your researches do not give you that confidence, then
keep right on searching until you find confidence. The place to
start manufacturing is with the article. The factory, the organization,
the selling, and the financial plans will
[17]
shape themselves to the article. You will have a cutting, edge on
your business chisel and in the end you will save time. Rushing
into manufacturing without being certain of the product is the unrecognized
cause of many business failures. People seem to think that the big
thing is the factory or the store or the financial backing or the
management. The big thing is the product, and any hurry in getting
into fabrication before designs are completed is just so much waste
time. I spent twelve years before I had a Model T — which
is what is known to-day as the Ford car — that suited me.
We did not attempt to go into real production until we had a real
product. That product has not been essentially changed.
We are constantly experimenting
with new ideas. If you travel the roads in the neighbourhood of
Dearborn you can find all sorts of models of Ford cars. They are
experimental cars — they are not new models. 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.
Our big changes have been in methods
of manufacturing. They never stand still. I believe that there is
hardly a single operation in the making of our car that is the same
as when we made our first car of the present model. That is why
we make them so cheaply. The few changes that have been made in
the car have been in the direction of convenience in use or where
we found that a change in design might give added strength. The
materials in the car change as we learn more and more about
[18]
materials. Also we do not want to be held up in production or have
the expense of production increased by any possible shortage in
a particular material, so we have for most parts worked out substitute
materials. Vanadium steel, for instance, is our principal steel.
With it we can get the greatest strength with the least weight,
but it would not be good business to let our whole future depend
upon being able to get vanadium steel. We have worked out a substitute.
All our steels are special, but for every one of them we have at
least one, and sometimes several, fully proved and tested substitutes.
And so on through all of our materials and likewise with our parts.
In the beginning we made very few of our parts and none of our motors.
Now we make all our motors and most of our parts because we find
it cheaper to do so. But also we aim to make some of every part
so that we cannot be caught in any market emergency or be crippled
by some outside manufacturer being unable to fill his orders. The
prices on glass were run up outrageously high during the war; we
are among the largest users of glass in the country. Now we are
putting up our own glass factory. If we had devoted all of this
energy to making changes in the product we should be nowhere; but
by not changing the product we are able to give our energy to the
improvement of the making.
The principal part of a chisel
is the cutting edge. If there is a single principle on which our
business rests it is that. It makes no difference how finely made
a chisel is or what splendid steel it has in it or how well it is
forged -- if it has no cutting edge it is not a chisel. It is just
a piece of metal. All of which being translated means that it is
what a thing does — not what it is supposed to do —
that matters. What is the use of putting a tremendous force behind
a blunt chisel if a light blow on a sharp chisel will do the work?
The chisel is there to cut, not to be ham-
[19]
mered. The hammering is only incidental to the job. So if we want
to work why not concentrate on the work and do it in the quickest
possible fashion? The cutting edge of merchandising is the point
where the product touches the consumer. An unsatisfactory product
is one that has a dull cutting edge. A lot of waste effort is needed
to put it through. The cutting edge of a factory is the man and
the machine on the job. If the man is not right the machine cannot
be; if the machine is not right the man cannot be. For any one to
be required to use more force than is absolutely necessary for the
job in hand is waste.
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. I have striven toward manufacturing
with a minimum of waste, both of materials and of human effort,
and then toward distribution at a minimum of profit, depending for
the total profit upon the volume of distribution. In the process
of manufacturing I want to distribute the maximum of wage —
that is, the maximum of buying power. Since also this makes for
a minimum cost and we sell at a minimum profit, we can distribute
a product in consonance with buying power. Thus everyone who is
connected with us — either as a manager, worker, or purchaser
— is the better for our existence. 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:
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.
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.
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.
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.
How all of this arose, how it has
worked out, and how it applies generally are the subjects of these
chapters.
