How to Do the War on Poverty Right
Fifty years ago, LBJ launched a "War on Poverty." It has failed horribly. But fifty years before LBJ, on January 5, 1914, another man launched his own "War on Poverty" that was a dazzling success. That was the day Henry Ford announced that he would pay his workers $5 per day, twice the average factory wages at the time, and that the workday would be reduced to eight hours. Ford also offered workers profit-sharing plans.
Ford was a hardheaded and self-made businessman who understood that paying high wages to productive workers was good business. Turnover at his plants dropped dramatically. Workers were able to afford his Model T, the cheapest and best car in the world at the time, and quickly they became solid middle-class homeowners.
Excellent wages encouraged the best workers to stay with the best companies, and it also influenced his competitors, who also had to pay good wages to their workers in order to keep them from working for Ford. The explosion in productivity transformed America and awed the rest of the world. In Aldous Huxley's Brave New World, the chronology of human affairs was calculated based upon Ford -- A.F. was "After Ford."
Henry Ford insisted that his workers lead honest and upright lives. His "Sociological Department" intruded into the lives of his workers, demanding that they fill out long questionnaires describing how they live. Young men who wanted the new high wage levels had to be married. Drunken wastrels were ineligibles for the $5 a day. His employees' homes had to be neat and clean. He did not tolerate immoral behavior from his employees.
Ford Motors did, however, offer help to employees with problems. Without the whip of government, Ford used a private-sector carrot and stick to make sure that his employees had nuclear families, good homes, and wholesome lives. This was the other part of Ford's war on poverty.
Both arms of Ford's war on poverty worked. The muckraking journalist Ida Tarbell went to Michigan to "expose" this "oppressive" corporate behavior, but he instead came back with high praise.
Henry Ford showed how the private sectors, without using a nickel of the taxpayers' money and without using the coercive power of Washington, could transform the lives of the poor. Part of his success was paying workers very well for hard work and company loyalty, and the other part was insisting that workers accept his own private moral values in their own lives. Although the federal government would soon be trying to stem the social disaster of alcoholism with Prohibition, with calamitous results, Ford as a businessman was encouraging sobriety without the lash of government. And it worked.
The contrast between these two anniversaries of private-sector and public-sector wars on poverty is stark. The "Great Society" of LBJ did not work, and its successor leftist utopian nostrums have also failed miserably. The sheer cost of these programs is breathtaking. The residue of the nanny state in fatherless children, in savage and decaying welfare neighborhoods, in awful public schools that teach less and less, and social welfare programs that hobble rather than help the poor -- all the raw sewage that is leftist government in practice -- has failed absolutely and completely to help the poor at all.
Hard-headed and eminently practical Henry Ford -- along with other common men raised to the heights of business by grit and gumption and gambling -- working without using other people's money, without laws and regulations from government, and in pursuit of enlightened self-interest lifted millions of Americans into the middle class and beyond by determining what actually worked and then using that as the path to success.
Ford was hardly alone. The whole army of so-called "Robber Barons" comprised men like Ford: men who came from poor homes and who had little formal education and who were very practical and very diligent and very resilient. These were the sort of men whom Obama mocked in his infamous "You didn't build that business" comments during the 2012 presidential race.
Our dim bulb in the Oval Office, as always, does not know what he is talking about. While he flushes a few trillion dollars down the drain in hapless pursuit of shovel-ready government-propped jobs, and while we lament the grim legacy of LBJ and his War on Poverty, we ought to be recalling what Henry Ford did one hundred years ago. He launched a war on poverty in the name of private profit. What he did worked.