The preservation of peace among nations is held as an ideal toward which it is our high duty to strive. No one can question the undesirability of war. War is destruction. It diverts production from serving the needs of mankind. It puts nothing into the world and takes much from it.
But war is not a cause. It is a result. It is a result of poverty — especially of poverty of thought. Just so long as great masses of people live in poverty, just so long will there be war. The urge to war, springing as it does from the desire to take the fruits of another’s production, will ever be present, until the peoples of the world have learned to produce in abundance for themselves — until it has been proven that it is easier to make than to take.
Agreements not to make war, agreements to arbitrate differences between nations, and all the paraphernalia of diplomacy are of only temporary use in preventing war, because they treat war as a disease — whereas it is only the symptom of a disease. It is, indeed, more than possible that such agreements as expressed in the League of Nations or its adjunct, the World Court, may really be promoters of war by stifling investigation into its real causes. Agreements to limit armament are on a different basis, for they recognize war in a very frank way. They agree to limit for the time being the expense of getting ready for the next war, and thus they set free energy which may be used for production and the eventual alleviation of that poverty which causes war.
Every war has an economic cause. The wars which seem to spring from mere lawlessness may always be traced back to poverty. Poverty has never been eliminated by the repetition of any form of words. No man will today confess to an implicit belief in Aladdin and his Wonderful Lamp, but when we get into politics, our childhood belief returns, and we take it as true that some arrangement of words in a treaty, or a resolution, or a law will create — as the Lamp created. All treaties that have been duly engrossed and signed to date have served to prevent only such wars as no one wanted. Therefore, denouncing war is not very important. Agreeing not to go to war is not very important. That which is really important is the turning away from the treatment of war as a cause, which at the best is a negative treatment, and the turning toward, not the prevention of war or the preservation of peace, but the making of prosperity universal. And prosperity can be made the natural state of being. That has been demonstrated, and the United States has made the demonstration.
The United States most certainly has a mission, but that mission is not to put more words into a situation that already has far more words than it needs. Neither is it our mission to lend money. Every dollar that we lend to Europe only serves to postpone the day of reckoning, only serves to continue the poverty and misery which were acute before the war and are now even more acute. One of the chief functions of the League of Nations to date has been to arrange for the making of loans that postpone the facing of realities. What has heretofore been said about borrowing money in business applies with equal force to the borrowing of money by nations. The nations of Europe do not need money, although they think they do. There is not a single condition in Europe which money alone will remedy. The mission of the United States is not to cultivate a false spirit of internationalism which would merge Europe’s troubles with our own, but to demonstrate by example at home and abroad that the present state of Europe is wholly unnecessary and is due solely to a misconception of the economic system.
It is well enough to talk about internationalism and the damage which narrow nationalism has done to the world. It is utter folly for people, because they are organized under separate governments, to imagine themselves as inevitable enemies. In that sense, nationality has been a hoax. A nation is only a homogeneous economic unit. If it is not homogeneous and cannot be efficiently governed, then it is not a proper unit. Sometimes what ought to be an economic unit is split into two or more parts. We have long since learned that our state lines are not economic boundaries, and we pay no attention to them, but Europe sets up political boundaries and then tries to make economic boundaries out of them with disastrous results — as, for instance, Germany and France.
But to insist on Americanism is not to insist on a narrow nationalism. The essential principles of Americanism are the goal toward which all civilization is striving. This is not said in any bombastic way, for the principles were born before the United States. The United States was created as a nursery in which these principles could be brought to full growth, that all the nations of the earth might see, and seeing know, the practical nature of liberty in all things. The mission of the United States is to give a demonstration to the world of the reality and endurance of certain principles.
War will never be stopped by the pacifists, and peace will never be won by the war makers. As long as there exists on earth the warring type of mind, and it has instruments to execute its purpose, war is possible. But, as was shown in the last war, the military strength of the peaceable, the non-war-making nations, is greater than that of the war-making nations. War, as a method of accomplishing anything, is now resisted, and in the future will be more and more resisted, until even the war-making mind will learn its futility.
Can you imagine the United States starting a war? Can you imagine the United States refusing to crush a war started against it? It is not our well-known inclination to peace that guards us, it is our well-known disinclination to stand for any one disturbing our peace.
Pacifism is an excellent doctrine if preached to those parts of the world where the war-making mind is rampant. To arm the bandits of the world and disarm its law-abiding citizens is not the way to stop international hold-ups. Counseling the decent citizen to disarm himself as an example to the thug indicates unfounded confidence in the thug’s susceptibility to Christian example. It is just a pious fiction.
Militarists are helpless to bring peace. They are specialists in force, just as pacifists are specialists in sentimentality.
The people are not going to become as soft as pacifists would like to see them, nor as hard as extreme militarists desire; but they are going to excel in the strategy of common sense. The fact that our people are not war-starters is not going to prevent them from being war-stoppers, and such effective war-stoppers that war-starters will hesitate.
What we have most to fear in the lessening of our effectiveness is the taking of political promises as substitutes for thought and work. The largest single cause of poverty in Europe since the war has been the abject dependence upon government to do what government cannot do. The irony of this system is that the government which adopts it must continue to do more and more; and as the demand for more increases, the ability to do anything decreases. For there is nothing in government that does not come from the people; and a people in whom the spirit of self-help is killed contribute less and less to that which they desire until in the end both people and government fall into a common helplessness. When Russia performed that amazing right-about-face and abandoned official communism for a partial return to private enterprise, it simply testified to the indispensability of self-help to any people.
Government can create a monopoly but it cannot create a supply. It can arbitrarily fix prices, but it cannot create buying power. It can apply promise poultices; it cannot enable any business to stand on its own feet.
Legislative action simply gives protection to defects and keeps them in existence.
The strength of the United States lies in the fact that government aid to business and agriculture has never gone far enough seriously to affect the independence of either industry or agriculture. It is fortunate in some respects that so much governmental energy has been given to fighting business — business never had a chance to get soft. We have had, it is true, the tariff, which perhaps was an aid before we had any real business, but it is a noteworthy fact that none of the really great businesses of this country — those which strive to their utmost to render service — have arisen because of the tariff or stand in the slightest need of its protection. Those businesses which claim that they need tariff protection will usually be found to be backward in method, producing poor stuff with ill-paid men; and this is inevitable, because they have not had on them the pressure to do better, and instead of creating markets for their products among their own employees, they have been satisfied to sell to limited markets or to take advantage of the artificial tariff-created, high-priced market at home to sell at lower prices in foreign countries.
One of the great steps which the United States might take would be to wipe out all tariffs on imports. That would be a real contribution to the world, and also it would be a real contribution to American industry. The whole world outside the United States has not the productive capacity to supply our wants. In only a few industries could foreign manufacturers sell below home manufacturers, except where our prices for home consumption are stupidly high. In the cases where it would be necessary for us to make lower prices, we should be benefited, for these are our low-wage industries, and competition would force the reorganization and replanning of these industries, and then, as has been previously explained, they would have to pay higher wages, and this would mean increased purchasing power and consumption. We have now the capacity to absorb almost limitless quantities of well-made, rightly priced goods. The world would be benefited by having to sell to us on a straight competitive basis, for then they, too, would be forced into the volume which makes for high wages.
Industry abroad grew up differently from ours. Great Britain, being the first of industrial nations, could export practically all of its products to the non-industrial nations, and also it built up a great sea transport system, because it had the men to make the ships and sail them. A tariff would only have clogged its operations, and it had no need to create a home market because, being first in the field, it had no competition. When Germany turned into an industrial state, it evolved an elaborate programme of state aid to industry, both by tariff and subsidy, and now, since the war, all the nations of Europe have tried to further their industries somewhat on the German plan. It has been taken for granted everywhere that industry must look for its well-being, not to the people at home, but to markets abroad, and hence the maze of tariff walls, of export and import licenses, of government help and regulation — in fact, one finds abroad everything but production.
The facilities to produce are present, but these facilities are greater than the ability to consume, and there can be no peace on this earth until the ability to consume is brought up and kept up to an equality with the ability to produce. This equality cannot be brought about until what we have called the wage motive replaces the profit motive.
Outside the United States, the wage motive has never gained a foothold. Business is mostly in the hands of financiers and is run for profit and not as a serviceable element in the common social life. No really big business exists outside the United States, and what pass for big business are only unsteady financial pyramids, quite unequipped to give service. It is taken for granted that capital and labour are not engaged in a joint enterprise. The wage motive is not allowed to take hold, for between government regulation and taxes and trades union regulation on output, the opportunity to reorganize does not get a chance. We see labour governments go into power on the pretense of doing something for the workingman, we see capitalistic governments go into power on the pretence of helping capital. But so great is the claptrap of the politicians that we never see governments going into power without quack remedies — going into power under the promise of helping the people to help themselves. No one will face the facts.
Political nostrums cannot help Europe or any part of the world. No division of property can be of the slightest help, because there is not enough property to divide. Salvation has come through the production of more property, but that production also will be ineffective and merely make for turmoil unless with it is raised the power of consumption.
Our company is not without experience in the feasibility of raising the power of consumption, for we have branches, or affiliated companies or associated companies, operating in most parts of the world, and in all of them we use exactly the same methods as we use in our plants in the United States, and in all of them we pay approximately the same minimum wage as we pay in the United States, and the results have in every case been exceedingly interesting. Our wages abroad run from two to three times the usual wages paid, but because we are organized to pay high wages we get cheap production. These foreign plants are not little American settlements. Usually they are set up and started by men who have been trained at Detroit, often by nationals of the country where the plant is located. But once under way, all the employees are drawn from the locality. Our Irish plant is all Irish, our English plant is all English, our plant in Brazil is all Brazilian, and so on over the world. We feel that we could not be of service following any other course.
Take our plant at Cork. My ancestors came from near Cork, and that city, with its wonderful harbour, has an abundance of fine industrial sites. We chose Ireland for a plant because we wanted to start Ireland along the road to industry. There was, it is true, some personal sentiment in it. We began the plant in 1917, but because of the war it was not completed until 1919. Originally, it was designed to manufacture tractors for distribution through Europe, but free production was so hampered by politics that we changed the whole plant into a foundry, which now supplies our plant in England and which will eventually supply other European plants.
Cork has for many years been a city of casual labour and extreme poverty. There are breweries and distilleries, but no real industry. The best that a man could hope for was two or three days a week on the docks, for which he would receive sixty shillings, or fifteen dollars, for the hardest kind of stevedoring. If he went out as an agricultural labourer, he could not expect to get more than thirty or thirty-two shillings a week. None of this work was steady.
The men and their families did not really live. They had no homes — only hovels. No clothing but what they had on. We started our plant with three men from Detroit to direct operations. Now we have under regular employment about eighteen hundred men. They work eight hours a day, five days week — steadily. The minimum wage is two shillings threepence per hour, or eighteen shillings a day. The average wage is two shillings and sixpence an hour, or a sovereign a day — five pounds a week. This is steady money week in and week out — something that few, if any, of the men had ever before known. We have no labour turnover whatsoever, and always have a long waiting list. The Irish are supposed to be temperamental. We have never had a complaint about the repetitive work. The only complaints we ever had were during the first few months, when some of the men found it hard to do without smoking while at work.
The payment of these higher wages had an immediate effect in the homes of the men. You can see it in the wife of a new man. The wives usually bring down lunch for their husbands. For the first few weeks, the wife will be wearing a shawl over her head. Then she will have a hat, and a few weeks later she will be in a frock or a suit. The men no longer spend their evenings handing around grog shops in old clothes and a kerchief. They have clothes in addition to their working clothes, and you will see them in the evening strolling out to see the pictures with their wives, and they are wearing collars and swinging canes. While once it was the custom for a man to get drunk as soon as he got paid, we have no trouble whatsoever with drinking. Where once the men were apt to turn up on Monday morning somewhat the worse for wear, they are now fresh and bright. In spite of the fact that none of the men ever had any previous experience with money, they have quickly learned to buy wisely and to save.
Not the least interesting of the developments at Cork has been the attitude of the work men toward destructive revolution. Our superintendent was several times ordered to turn the plant over to the making of munitions for the Irregulars. He always refused. Then, one day, a motor lorry with fifteen soldiers swung into the plant, and the young lieutenant in charge handed the superintendent a list of machinery that he proposed to take away with him. The superintendent tried to tell him that the machinery would be useless and that one needed more than machinery to manufacture munitions. But the lieutenant had his orders and was going to carry them out — he demanded immediate action. The superintendent said something to this effect:
“We have eighteen hundred good, strong Irish boys working in these shops. I don’t know what they will do if I tell them that you propose to take out some of this machinery, but I think we can both guess what they will do. My advice to you is to get out before there is any real trouble.”
The lieutenant took the advice. Well-paid workers do not go in for merely destructive revolution. Some of our employees already own automobiles. It is only a question of time and the reduction of taxes before most of them will own motor cars, and then the whole standard of living will rise as it has risen in this country.
Much of the labour of England is unionized, and men are held strictly to their crafts. We have no crafts in our industries, and although we are not opposed to unions, we have no dealings with them, because there is nothing that they can furnish to aid us in our management. We pay higher wages than any union could demand for its members generally, we have steady employment, and we are not interfered with.
The standard of living among our employees in England is high, the men do good work, and our costs are low — not as low as in the United States, because we have not the volume production, but we have volume enough to demonstrate that with management attuned to high wages and no individual limits on production, England can be made a high wage and therefore a high consumption country. Every man in the plant is an investor in our certificates.
We first introduced our cars into France in 1907, and we had plans for the erection of an assembly plant when the war broke out in 1914. Shortly, we were called upon to supply cars, first for ambulance uses and then for general uses, so that, in 1916, we opened an assembly plant at Bordeaux, sixty miles from the coast. For three years, this plant served only for war, turning over more than eleven thousand cars to the French Government, most of which are still running, although now for peace purposes. That, however, is not the point. The point is that at the Bordeaux plant we employed 300 men in our usual way, and they fell into our methods of production without difficulty. Now we have a building in Paris, erected on our standard lines with a capacity for assembling 150 cars and trucks a day. As might be imagined, the thrift record of the French workers is exceptional. The industrial workers of France are supposed to be socialists. We have heard nothing of this in our plant.
In Copenhagen, where we established a plant in 1919, we met for the first time a labour government which regulated hours, wages, and conditions of work, and practically made union regulations a part of the law of the land. We hired barbers, preachers, blacksmiths, plumbers, unskilled labourers, and whoever applied, and put them to work, side by side, on the machines — as has been our custom everywhere. We paid a minimum wage of what corresponded to $5.25 in the United States, with some of the men getting as much as a dollar more.
Our superintendent was asked to classify the plant according to law. Each shop had to have a classification and go under a certain scale — we were paying far above the ordinary scale. We could not classify — we could not qualify as a blacksmith shop, which was the nearest classification! And then, too, the men who were not blacksmiths objected to being forced out of good jobs.
Our plant was put there to serve and does serve, but it could not have served had it been forced into an academic classification.
Our experiences at Antwerp, at Rotterdam, at Barcelona, and at Trieste have been quite the same as in other parts of Europe. We have found everywhere men willing to work consistently for the wages we pay — to work so well that we get cheaper and better results than do those in the same territory who pay lower wages. And everywhere a higher standard of living has come with the higher wages. But everywhere the governments step in to put many of the products of the worker above his purchasing power. For instance, our touring car sells in one country, solely owing to government charges, for about two and one half times the price in the United States. Such taxes not only stifle consumption, but they create an army of non-producers.
Our branches in South America tell the same story, of wages and progress, except that most of these branches have gone into territory that never before had other than the crudest of industry, and hence we had to draw our workers from unskilled peons, with the exception of the branch at Buenos Aires. Our other South American branches are at Santiago, Chile; São Paulo, Brazil; Pernambuco, Brazil; and Montevideo, Uruguay. We cannot pay our full standard Ford wage in any of these countries, because the high purchasing power of the dollar would make wages as paid in the United States grotesque. We shall raise wages as the countries build up.
Paying regular wages to people in countries which are entirely new to industry was an interesting experiment, and more interesting still has been the watching of what the automobile is doing to such countries. For while Brazil takes up one-fifteenth of the earth’s surface and has extraordinarily rich natural resources, it has not had the transport facilities for development. A country develops only according to the ease of transport, and most of Brazil has only six months of transport by motor because, during the other six months, the roads are too heavy for any car to force through.
Our branch is hardly more than a year old, but already the high wages — the wages are higher than they seem, for they are steady — are beginning to have an effect. The workers have not yet made much change in their housing conditions but they are buying more clothing, they are buying a few furnishings, and they are saving money. They do not yet quite know what to do with their incomes, but they do not quit work because they have more money than they need — which was what we were afraid of — nor have they developed spendthrift habits. Soon they will begin to develop more needs, and the process of material civilization will start. The automobile will make a great nation out of Brazil. The natives, though totally unused to machinery of any kind or to discipline of any kind, fell very quickly into the work of assembly and repair. They seem to learn quickly — probably because they can see good reasons for learning.
The Orient, too, is awakening in many directions and, as had been said in a former chapter, we have no more ardent students at Detroit than those who come from India and China. These men see that the only salvation of their countries lies in the introduction of power so that a home consuming market can be built up. They resent, and rightly, attempts to exploit their starvation labour by foreign capital, but they are anxious indeed to learn how to do for themselves. We can help the Orient only by establishing industrial institutions on modern lines, which means that these institutions will create their own markets through the payment of high wages. Road building goes on everywhere. The automobile is the greatest modern source of roads. The formula for getting good roads is, first get your automobiles. It is not good roads that have brought automobiles, but automobiles that have forced good roads. It has always been said that the caste system in India is an absolute bar to development, but in our schools we have Indians of all castes, and they work side by side, apparently forgetting that they ever heard of caste. What they may do when they return to India is another matter, but if they can forget caste while working for us, then cast, is not as powerful as it is represented.
But of what concern are these comparatively trivial incidents of work? They have about them no pomp or circumstance. What difference does it make to suffering humanity if a man in Cork who used to wear a kerchief about his neck is now wearing a collar? Changing from a kerchief to a collar is only a symbol. But it is an important symbol. It denotes that one man has been assisting in production — that he has helped to bring something into the world — that he has made the world a mite richer. Political action cannot construct — it can start destruction or it can try to hold things as they are — which is only destruction by slow process, for life cannot be made to stand still.
What the world chiefly needs today is fewer fervent diplomats and politicians and more men advancing from kerchiefs to collars.