Look to Henry Ford, not Barack Obama, to End Unemployment

Money for President Obama's new jobs bill will have to come from somewhere else, whether in the form of higher taxes or higher debt.  Productive jobs pay taxes, but taxes do not create productive jobs.  As for taking on more debt, the private sector would already be borrowing money at today's very low interest rates to create jobs that fill a genuine economic need.  Social Security is already struggling to remain solvent, so a payroll tax cut that is not balanced by increased taxes elsewhere is simply not realistic.  The summer jobs for disadvantaged youth would create themselves if there were a demand for whatever goods or services they might produce.  Green and renewable energy jobs would create themselves if they could meet a genuine need instead of a self-serving ideology.  Most people understand this, so it comes as no surprise that the Dow Jones Industrial Average reacted to Mr. Obama's speech with a nosedive of more than 300 points the next day.

As shown by Mr. Obama's long trail of failures in so-called green jobs (e.g., Solyndra), the government is far less qualified than the free market to distribute resources efficiently and effectively.  To this may be added his ongoing calls for taxes or cap-and-trade mandates on fossil fuels, both of which would drive up the cost of energy to make American goods even less competitive in the world marketplace.  This president is clearly not qualified either by education (political science, law) or experience (politics) to lead the United States back to affluence and prosperity.  We should look instead to the person who not only helped make the United States the wealthiest and most powerful nation on earth, but also left us a legacy of books that describe how he did it.

Henry Ford wrote not for MBA students, but for front-line production workers who might not have even finished high school.  His books combined the fundamental principles of organizational and human behavior (specifically the need for a square deal in every transaction) with industrial efficiency methods that developed and are now known as the Toyota Production System.  Ford identified and practiced what we now know as, among other things, green and sustainable manufacturing, just-in-time (JIT) manufacturing, and porous organizational structures as later advocated by W. Edwards Deming and Tom Peters.

Ford Ideals (1922), which Ford wrote during or shortly after the postwar depression that followed the First World War, includes "'No Help Wanted:' An Untrue Sign," and it applies to our country's condition today (emphasis added):

The "No Help Wanted" sign is a limited statement addressed only to the job seeker, and to him it does not mean "No Help Wanted" at all; it means "We Have No Help To Give You." ... Suppose you are a man out of a job. You see a shop which says "No Help Wanted" and you know, of course, that the sign means that the shop needs help before it can give any. Have you an idea that will start another wheel turning? Have you any help to give that shop? Can you open any channel for the outflow of its product? Can you serve as an ignition point in its organization?

The Post Office is a very simple example of a shop that needs help as opposed to more full-time employees.  Businesses like drugstores and groceries have begun to provide that help by serving as branch Post Offices that can sell postage and accept packages for shipment.  The business eliminates the overhead associated with a Post Office branch while maintaining roughly the same level of service for customers.  This exemplifies Ford's question -- "Have you any help to give that shop?" -- and it should guide our country's thinking in terms of restoring economic competitiveness.

There is no such thing as a free lunch, and the only way labor can have high wages (or a business higher profits) is to deliver more value.  Almost every job on earth contains substantial waste (muda to the Japanese), the removal of which yields more value for everybody involved.  Waste includes for example walking, whether by workers in a factory or nurses in a hospital.  Ford therefore stated that no job should require a worker to take more than one step in any direction to get or move parts or tools.  A Ford worker who placed a nut or bolt did not tighten it, for even the motion of picking up and putting down a tool for each fastener is non-value-adding exertion.

Waste often hides in plain view.  Ford observed during his early years in agriculture that farmers would carry buckets of water every day instead of installing a length of pipe to make the water carry itself.  He also saw rust in a pile of slag outside his steel mill and realized immediately that the mill was not capturing all the iron.  Even the transportation of water in green wood constituted waste, so Ford had wooden parts dried prior to shipment.  Waste wood from his lumber operations was distilled into wood chemicals like methanol, and the remaining charcoal sold for backyard barbecues (Kingsford Charcoal today, but originally Ford Charcoal).  Ford's ability to recognize waste on sight, and to teach this skill to his workforce, multiplied his productivity and profits enormously, which in turn allowed him to create more jobs and pay higher wages.

Ford also identified in Moving Forward (1930) one of the biggest problems with our country today: "There is no profit and loss account staring a government in the face.  There is no check on high prices or poor service, such as customers can exercise upon private concerns.  A government can monopolize a service and thus compel one to use it, it can under-serve and over-charge and make one pay a deficit in the form of taxes."  This is a very stern warning against letting any government run anything, including health care.

Ford's My Life and Work (1922) is, with the exception of the chapter "Things in General" and its anti-Semitic content that Ford later repudiated, probably the best business book ever written.  The copyright has expired, so it can be read online for free.  A reprint of Today and Tomorrow (1926) is available, and used copies of Moving Forward should be available.  Ford Ideals (1922) also is in the public domain.  It is past time for America to stop reinforcing Mr. Obama's failures, and to embrace instead the legacy of the man who proved that affluence and prosperity are achievable despite almost any odds.

 William A. Levinson, P.E. is the author of several books on business management including content on organizational psychology, as well as manufacturing productivity and quality.

Money for President Obama's new jobs bill will have to come from somewhere else, whether in the form of higher taxes or higher debt.  Productive jobs pay taxes, but taxes do not create productive jobs.  As for taking on more debt, the private sector would already be borrowing money at today's very low interest rates to create jobs that fill a genuine economic need.  Social Security is already struggling to remain solvent, so a payroll tax cut that is not balanced by increased taxes elsewhere is simply not realistic.  The summer jobs for disadvantaged youth would create themselves if there were a demand for whatever goods or services they might produce.  Green and renewable energy jobs would create themselves if they could meet a genuine need instead of a self-serving ideology.  Most people understand this, so it comes as no surprise that the Dow Jones Industrial Average reacted to Mr. Obama's speech with a nosedive of more than 300 points the next day.

As shown by Mr. Obama's long trail of failures in so-called green jobs (e.g., Solyndra), the government is far less qualified than the free market to distribute resources efficiently and effectively.  To this may be added his ongoing calls for taxes or cap-and-trade mandates on fossil fuels, both of which would drive up the cost of energy to make American goods even less competitive in the world marketplace.  This president is clearly not qualified either by education (political science, law) or experience (politics) to lead the United States back to affluence and prosperity.  We should look instead to the person who not only helped make the United States the wealthiest and most powerful nation on earth, but also left us a legacy of books that describe how he did it.

Henry Ford wrote not for MBA students, but for front-line production workers who might not have even finished high school.  His books combined the fundamental principles of organizational and human behavior (specifically the need for a square deal in every transaction) with industrial efficiency methods that developed and are now known as the Toyota Production System.  Ford identified and practiced what we now know as, among other things, green and sustainable manufacturing, just-in-time (JIT) manufacturing, and porous organizational structures as later advocated by W. Edwards Deming and Tom Peters.

Ford Ideals (1922), which Ford wrote during or shortly after the postwar depression that followed the First World War, includes "'No Help Wanted:' An Untrue Sign," and it applies to our country's condition today (emphasis added):

The "No Help Wanted" sign is a limited statement addressed only to the job seeker, and to him it does not mean "No Help Wanted" at all; it means "We Have No Help To Give You." ... Suppose you are a man out of a job. You see a shop which says "No Help Wanted" and you know, of course, that the sign means that the shop needs help before it can give any. Have you an idea that will start another wheel turning? Have you any help to give that shop? Can you open any channel for the outflow of its product? Can you serve as an ignition point in its organization?

The Post Office is a very simple example of a shop that needs help as opposed to more full-time employees.  Businesses like drugstores and groceries have begun to provide that help by serving as branch Post Offices that can sell postage and accept packages for shipment.  The business eliminates the overhead associated with a Post Office branch while maintaining roughly the same level of service for customers.  This exemplifies Ford's question -- "Have you any help to give that shop?" -- and it should guide our country's thinking in terms of restoring economic competitiveness.

There is no such thing as a free lunch, and the only way labor can have high wages (or a business higher profits) is to deliver more value.  Almost every job on earth contains substantial waste (muda to the Japanese), the removal of which yields more value for everybody involved.  Waste includes for example walking, whether by workers in a factory or nurses in a hospital.  Ford therefore stated that no job should require a worker to take more than one step in any direction to get or move parts or tools.  A Ford worker who placed a nut or bolt did not tighten it, for even the motion of picking up and putting down a tool for each fastener is non-value-adding exertion.

Waste often hides in plain view.  Ford observed during his early years in agriculture that farmers would carry buckets of water every day instead of installing a length of pipe to make the water carry itself.  He also saw rust in a pile of slag outside his steel mill and realized immediately that the mill was not capturing all the iron.  Even the transportation of water in green wood constituted waste, so Ford had wooden parts dried prior to shipment.  Waste wood from his lumber operations was distilled into wood chemicals like methanol, and the remaining charcoal sold for backyard barbecues (Kingsford Charcoal today, but originally Ford Charcoal).  Ford's ability to recognize waste on sight, and to teach this skill to his workforce, multiplied his productivity and profits enormously, which in turn allowed him to create more jobs and pay higher wages.

Ford also identified in Moving Forward (1930) one of the biggest problems with our country today: "There is no profit and loss account staring a government in the face.  There is no check on high prices or poor service, such as customers can exercise upon private concerns.  A government can monopolize a service and thus compel one to use it, it can under-serve and over-charge and make one pay a deficit in the form of taxes."  This is a very stern warning against letting any government run anything, including health care.

Ford's My Life and Work (1922) is, with the exception of the chapter "Things in General" and its anti-Semitic content that Ford later repudiated, probably the best business book ever written.  The copyright has expired, so it can be read online for free.  A reprint of Today and Tomorrow (1926) is available, and used copies of Moving Forward should be available.  Ford Ideals (1922) also is in the public domain.  It is past time for America to stop reinforcing Mr. Obama's failures, and to embrace instead the legacy of the man who proved that affluence and prosperity are achievable despite almost any odds.

 William A. Levinson, P.E. is the author of several books on business management including content on organizational psychology, as well as manufacturing productivity and quality.