Henry Ford Invented the Modern World... Then Got Left Behind

Summary

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Business History Podcast: "Henry Ford Invented the Modern World... Then Got Left Behind"

Pushkin Industries | Hosts: Jacob Goldstein & Robert Smith | March 4, 2026

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Episode Overview

This episode explores the life and legacy of Henry Ford, focusing on how he revolutionized manufacturing and brought cars to the masses, only to ultimately fall behind as the market shifted around him. Goldstein and Smith use Ford’s story to illustrate broader themes about innovation, entrepreneurship, and the transformation from artisanal to mass production in American industry.

“Henry Ford invented mass production, actually called it Fordism, but he never understood mass production consumption. And that is why, in the end, Henry Ford got beat.”
– Jacob Goldstein (04:29)

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Key Discussion Points & Insights

1. Early Life and Spirit of Tinkering

(05:10–09:49)

• Ford’s dislike for manual labor and fascination with machines developed on a farm in Michigan.
• Early exposure to primitive farm machinery sparked his desire to innovate.
• Built his first internal combustion engine in a shed behind his house.
  “He loves to play. And for him, this is play. He’s in a flow state, we might say.”
  – Jacob Goldstein (09:26)

Notable Moment:

• On Christmas Eve 1893, while Clara Ford cooked dinner, Henry burst in to demonstrate his first engine, bolted to the kitchen sink—a moment blending obsession and home life.
  “There arose such a clatter. This is like the night before Christmas for industrialists.”
  – Robert Smith (09:14)

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2. The Detroit Scene & First Failures

(13:30–18:43)

• Detroit became the car capital largely by chance, with several innovators clustered there due to the region’s industrial legacy.
• Ford’s first attempt, the Detroit Motor Company, failed due to perfectionism and failure to release a market-ready product. “This is, in a way, a classic mistake. Right. Not getting to market fast enough, running out of money before you get to market.”
  – Jacob Goldstein (18:17)
• His next company, the Henry Ford Company, also failed after Ford was ousted for focusing too much on racing.

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3. Turning Point: Success in Racing & Foundation of Ford Motor Company

(18:45–22:58)

• In 1901, Ford restored his reputation by winning a crucial car race against Alexander Winton, generating enough attention to attract new investment.
• This publicity led to the founding of Ford Motor Company in 1903—the start of Ford’s lasting business.

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4. The Vision: Cars for the Masses

(22:58–24:35)

• Ford recognized the potential in targeting a broader, less wealthy audience. “There are a lot more poor people than wealthy people. We’ll just build one car for the poor people.”
  – Robert Smith, quoting Ford (23:33)

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5. Manufacturing Innovation: From Artisanship to Mass Production

(28:00–37:52)

• Early models (Model A) were still expensive, built artisanally with no economies of scale.
• Ford’s obsession with interchangeable parts reduced costs and enabled true mass production. “We are making 40,000 cylinders... 10,000 of every part that goes into the car all exactly alike.”
  – Robert Smith (Trade ad quote, 31:41)

Birth of the Assembly Line

• Workers specialized in one task, boosting efficiency.
• The moving assembly line was inspired by meatpacking plants’ “disassembly” lines.
• Dramatic reduction in labor hours: final assembly dropped from 12 man-hours to 93 minutes. “They get to a point pretty quickly where they have reduced the time for final assembly from 12 man hours before the assembly line to 93 minutes, an hour and a half.”
  – Jacob Goldstein (37:17)

Efficiency Over Variety

• Ford insisted on uniformity: “Any customer can have a car painted any color that he wants, so long as it is black.”
  – Jacob Goldstein, quoting Ford (38:12)

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6. The $5 Day and Sociological Controls

(39:29–47:48)

• Wretched working conditions and monotony led to high turnover (380% in 1913).

• In 1914, Ford more than doubled the daily wage to $5 to stabilize his workforce—stunning the business world. “Overnight, we will more than double the entry level wage for all of our workers. This is unheard of...”
  – Jacob Goldstein (41:29)

• Both capitalists (e.g., Wall Street Journal) and communists (e.g., John Reed) condemned the move, each for opposite reasons. The WSJ called it economic “blunders, if not crimes”; Reed called it a menace to capitalism (42:50–43:57).

Strings Attached: The Corporate Nanny State

• To earn the $5, workers had to adhere to Ford’s moral expectations, monitored by his “sociological department.”
• Inspectors visited workers’ homes, enforcing rules against drinking, financial mismanagement, and domestic violence (45:14–46:54). “It feels strange, wildly inappropriate by our norms today, but not any different than drug testing in a factory.”
  – Jacob Goldstein (47:11)

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7. Vertical Integration & Fordism

(50:13–53:49)

• Ford controlled every aspect of production, from raw materials (mines, forests, rubber plantations) to finished goods.

• Waste elimination led to innovations—e.g., the founding of Kingsford Charcoal out of sawdust by-products.
  “He’s touring the factory and looking at the sawdust being like on the floor... That’s perfectly good sawdust.”
  – Robert Smith (51:15)

• The River Rouge factory was a model of total industrial integration; “Fordism” became synonymous with mass production.

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8. Social and Cultural Impact & Ford’s Downfall

(53:49–56:17)

• Mass production made Ford a symbol of innovation and wealth (“Ford’s Billion breaks World Record.” NYT, 53:55)

• But Ford’s legacy was tainted by virulent anti-Semitism; his newspaper, the Dearborn Independent, published “The International Jew”—a series embraced by Hitler. “Stick with the business in the factories, Henry Ford. I wish he...”
  – Robert Smith (54:55)

• As the 1920s progressed, Fordism shaped everything from vacuum cleaners to radios; but Ford did not understand changing consumer desire for variety and credit, leaving him susceptible to rivals.

Setup for Next Episode

• General Motors, under Alfred Sloan, would soon surpass Ford by embracing consumer choice and installment buying. “Ford had created this era, but he didn’t really understand it. And because he didn’t understand it, he was going to get left behind.”
  – Jacob Goldstein (55:30)

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Notable Quotes & Memorable Moments

• On Ford’s Tinkering:
  “Ford Cannot stop tinkering with this delivery wagon to the point where the guys funding the company are like, come on, let’s start selling something.”
  – Jacob Goldstein (17:34)

• On the Assembly Line Breakthrough:
  “And now we get to the Model T. In 1909, the Model T comes out. The Model T is going to be the thing that changes everything.”
  – Jacob Goldstein (32:03)

• On the $5 Day Reaction:
  “They write that Ford has committed economic blunders, if not crimes, they may return to plague him and the industry he represents as well as organized society.”
  – Wall Street Journal quoted by Robert Smith (42:50)

• On Corporate Oversight:
  “...Ford actually sent inspectors to workers’ houses to make sure they were living the way Ford thought they should live.”
  – Jacob Goldstein (45:23)

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Timestamps for Important Segments

• 03:43 – Opening on Henry Ford’s significance
• 09:49 – Ford’s tinkering is “play,” not work
• 13:30 – Meeting with Edison and early business failures
• 18:43 – Racing victory that revived Ford’s career
• 22:58 – Foundation of Ford Motor Company
• 28:00 – The artisan model vs. mass production
• 32:03 – Model T and assembly line innovation
• 39:29 – Workers, monotony, and the $5 day
• 41:29 – Decision to double wages
• 45:14 – Ford’s intrusive sociological department
• 50:13 – Vertical integration and Kingsford Charcoal origins
• 53:49 – Fordism’s cultural impact and Ford’s anti-Semitic publications
• 55:30 – Ford fails to adapt to consumer-driven market

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Episode Tone & Style

• Conversational, witty (Midwestern humor, “grease it up, Henry!”)
• Deeply researched, using vivid anecdotes and “flow state” storytelling
• Reflective on both the brilliance and the flaws of Ford’s approach
• Unafraid to address Ford’s racism and its continuing relevance

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Summary Takeaway

Henry Ford’s story encapsulates the rise of modern consumer culture: technical genius and visionary business strategies remaking the world, but also the dangers of rigidity, perfectionism, and social blindness. Ford changed how the world made and bought things—yet couldn’t see when the world moved on.

Stay tuned for the next episode: How Alfred Sloan and General Motors overtook Ford by understanding what mass production—and its new consumers—really wanted.

Transcript

[Jacob Goldstein]

Foreign.

[Robert Smith]

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[Jacob Goldstein]

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[Jacob Goldstein]

Robert Smith. Today we're going to the Mount Rushmore of business history.

[Robert Smith]

Let's do it.

[Jacob Goldstein]

Henry Ford.

[Robert Smith]

Amazing.

[Jacob Goldstein]

Invented the assembly line as we know it. Transformed cars from toys for rich people to tools for the masses. Created the Model T, the car that turned cars from toys for rich people into tools for everybody. Which would have been enough to make him one of the all time greats. But he did much more than that. Henry Ford invented modern mass production. He drove this shift from a world where manufactured goods were expensive and scarce to the world we live in now where manufactured goods are everything. Abundant, cheap. We're tripping all over him. And yet Ford didn't really understand the magnitude of this transformation. He didn't understand that once you teach people to buy stuff, they just want to keep buying more. Henry Ford invented mass production, actually called it Fordism, but he never understood mass production consumption. And that is why, in the end, Henry Ford got beat. I'm Jacob Goldstein.

[Robert Smith]

And I'm Robert Smith. And this is Business History, a show

[Jacob Goldstein]

about the history of business. This is the first of two episodes we're doing about Ford, General Motors, and the invention of the modern consumer.

[Robert Smith]

A car race, if you will.

[Jacob Goldstein]

I will. First thing to know about Henry Ford, in some ways, the man was a slacker. Give us this paragraph from his autobiography.

[Robert Smith]

I was born on July 30, 1863, on a farm at Dearborn, Michigan. And my earliest recollection is that considering the results, there was too much work on the place. And that is the way I still feel about farming.

[Jacob Goldstein]

And this is actually going to be important. And fortunately for him, he was born at a moment when people were figuring out that machines could do work, could do farm work. And Ford gets into tinkering with these machines when He's a teenager on the farm. There are these primitive farm machines that are basically like steam engines on wheels that you can roll over to your farm and use them to power a sawmill or a thresher. I actually had to look up what a thresher was.

[Robert Smith]

Do you know separates the wheat from the chaff.

[Jacob Goldstein]

Yes.

[Robert Smith]

And the chaff is like the stem and all the other stuff you don't want.

[Jacob Goldstein]

It's the part of the wheat that you don't want.

[Robert Smith]

Yeah.

[Jacob Goldstein]

So Ford grows up tinkering, gets married, starts farming, runs a sawmill. He's there, you know, in Dearborn, Michigan, seeming destined for this very ordinary life. But he's restless. And when he's 28 years old, he and his wife Clara leave the farm and Ford gets a job working in Detroit at the Edison Illuminating Company.

[Robert Smith]

Shout out, Edison.

[Jacob Goldstein]

Shout out to our Edison series.

[Robert Smith]

How many careers did that man launch?

[Jacob Goldstein]

It's a fun question. How many did he destroy? So Ford is a brilliant machinist. He's good at his job, he loves to tinker, but he's still kind of a slacker. He still doesn't want to just go punch the clock every day and work for the man. Don't actually know if people punched clocks yet. At this point, one of Edison's proteges

[Robert Smith]

had to invent the time clock. Yeah.

[Jacob Goldstein]

Henry Ford finds this basement room across the street from the Edison shop where he can go during the workday and slack off with his buddies and tinker.

[Robert Smith]

To be clear, a lot of us might just go to the bathroom and spend an extra 10 minutes in there, but we're actually building things.

[Jacob Goldstein]

Ford also has this, basically a shed behind his house where he's tinkering at night and on weekends. And so this is the 1890s. And if you're into tinkering with machines in the 1890s, you are going to get into cars. It is this kind of Cambrian explosion of kind of model cars. You know, people are building them in garages and they're steam powered cars and they're electric cars and there are internal combustion engines coming along. There is a new car magazine title, the Horseless Age.

[Robert Smith]

Oh, beautiful.

[Jacob Goldstein]

Still published today, the horseless age is now called Automotive Industries. I wish it was still called the horseless age. It's horselessless is somebody doing driverless age. This is why we call them now autonomous instead of driverless cars. Right.

[Robert Smith]

Oh, nice.

[Jacob Goldstein]

And Ford goes to the 1893 Chicago World's Fair and sees Otto Daimler's gasoline buggy. Daimler of you know, Daimler Benz, because

[Robert Smith]

at this time he had worked mostly with steam engines. And so the gasoline engine is an innovation.

[Jacob Goldstein]

Yeah, yeah. This car has two cylinders, top speed 11 miles an hour. It is a little buggy with a little gas engine on it.

[Robert Smith]

To be clear, you couldn't go faster on a bicycle.

[Jacob Goldstein]

Yeah. And this was around the time of the bicycle boom. Right. There was a bike boom at this time that we talked about in the Sears show. Ford gets inspired by Daimler's gasoline engine. So he goes home and he starts tinkering in the little shed behind his house on this little toy gas engine he's building from spare parts. And on Christmas Eve 1893, as his wife Clara is cooking the Christmas Eve dinner, he busts into the kitchen with this little toy gas engine he built. And he's like, look, honey, I built an engine. He bolts it to the kitchen sink and he asks Clara to slowly trickle a gas into the engine. He's turning, I guess, the flywheel and it doesn't work. And he's messing with it. And then it comes on, it runs and it's shooting flames out the back. And it breaks after 30 seconds. But Henry Ford has built an internal combustion engine.

[Robert Smith]

There arose such a clatter. This is like the night before Christmas for industrialists. Yeah.

[Jacob Goldstein]

Somebody came to see what was the matter. It was Henry Ford building an engine. We don't know anything about how Christmas Eve dinner comes out.

[Robert Smith]

It was amazing.

[Jacob Goldstein]

Yeah, it was amazing historically, certainly. And so now Ford starts working on a bigger engine with his buddies and he is obsessed with this. But crucially to Ford, I think it doesn't feel like work. He's not a man at a certain level who loves to work. He loves to play. And for him, this is play. He's in a flow state, we might say.

[Robert Smith]

We see this again and again in business history. We saw it with Thomas Edison, we saw it with Warren Buffett. Like these were people who wanted to slack off. And by slack off, mean transform the world.

[Jacob Goldstein]

Yeah. Warren Buffett, slacking off, is taking a train on a Saturday to go knock on the door of an insurance company and talk to the vice president. Yeah. For Henry Ford, it's building a little gas powered buggy in the shed behind his house with his buddies, which he does. And it takes him a few years. It's not like he goes and does this in a week or a month. It's a years long project. And. And finally on June 4, 1896, Henry Ford thinks it's ready. He thinks, I can Build this gas powered quadricycle, they called it. And I can drive it, and I can drive it. So this thing, it's like a four wheel bike. I guess that's why they call it a quadricycle with a little buggy seat in the middle. Apparently there were no brakes, which I love. I don't exactly know how to. It did have a horn, so maybe it's just hog, hog out of the way.

[Robert Smith]

I mean 11 miles an hour, you can just bail.

[Jacob Goldstein]

20. This one goes 20. Okay. Can you bail? I guess you could bail. That is like a bike. It's like a bike when you're going kind of fast. Okay, it's ready. I've built this thing. I'm going to take it for a drive. Problem won't fit out the door. It's like a ship in a bottle. So he takes an axe and knocks the bricks out of the wall so he can get the car out. And it works. It's loud, it scares the horses. But it's a car that he has built. I still got this day job at the Edison Illuminating Company. And a few months after this, he goes to a meeting in New York and meets the man himself, meets Thomas Edison at a dinner. Young Henry Ford, who is a nobody, approximately. And Ford actually talks to Edison. This is like great moments in business history, you know, this meeting. And Edison at this point was interested in electric cars. This was a time when it was not clear sort of what technology is going to win. But Edison is very encouraging. Ford sketches a design of, I guess the engine or the car on the back of a menu.

[Robert Smith]

And to be clear, everyone probably came up to Thomas Edison at this time and said, I got an invention, you got to do the thing.

[Jacob Goldstein]

But Edison to his credit was really encouraging to Ford. It wasn't, go away, kid, you bother me. It wasn't, I'm working on electric and that's going to win. Edison, according to Ford, said, you have the thing, keep at it. And this was huge for Ford.

[Robert Smith]

Well, famously, Edison became sort of Ford's mentor, his dream. And Ford would, would eventually create a replica of Edison's laboratory in Michigan that people could visit.

[Jacob Goldstein]

Have you been there?

[Robert Smith]

I have been there. It's, it's like it's flawless. And in fact, Edison himself saw it and said, it's perfect, except it's too clean.

[Jacob Goldstein]

Grease it up, Henry. Yeah. They would go on these road trips every year that became famous with Firestone, I guess the tire or the rubber magnate. Like one time a president came and joined them on Their road trip, it was partly marketing for cars. Really interesting relationship, and interesting to think about them as innovators.

[Robert Smith]

Edison.

[Jacob Goldstein]

And we did this series about all the different things Edison did. Edison could not stay on one idea. You know, he invented the phonograph and then just bailed. Didn't even make one to sell. He was onto the next thing.

[Robert Smith]

He wouldn't spend a year in a garage.

[Jacob Goldstein]

He wouldn't spend building one thing. He wouldn't spend a month building one thing. He was always building a million things. Ford, as we're gonna hear, he's always into cars. And he will build one car, famously, for 15 years, will be his great thing. So who's the hedgehog and who's the fox? I always get confused. Fox must be many different things, right? Fox is Edison, Ford is the hedgehog is one thing.

[Robert Smith]

Yeah.

[Jacob Goldstein]

So Ford is inspired by this meeting with Edison, goes back to Detroit, and ends up, not long after that, quitting his day job at the Edison Illuminating Company. And on August 15, 1899, Henry Ford creates the Detroit Motor Company.

[Robert Smith]

Now, there are, at this time a number of people building cars in Detroit. It's not just that Henry Ford happened to grow up close by Detroit that Detroit became famous.

[Jacob Goldstein]

So this is an interesting subject. This is functionally, why did Detroit become the car capital of the world in the 20th century?

[Robert Smith]

It's like our Silicon Valley question.

[Jacob Goldstein]

It is, and it definitely seems contingent. So if we step back a little bit, there are hundreds of car companies at this time. You know, we think of a car company as this giant economy of scale thing that hasn't been invented yet. That's what Ford is going to invent later in this episode. At this time, a car company is a few guys in a shop building one car at a time, and it costs a lot of money. And around the Midwest, in particular, across the industrial heartland, really, like in Massachusetts as well. But a lot around the Great Lakes, like in Cleveland, other places, there are little car companies. And there's a few reasons for that. The Midwest, the upper Midwest, has become this kind of industrial heartland.

[Robert Smith]

Part of it because of the Erie Canal. It's all connected to the ocean into New York, and it's connected to coal, which can come into the Midwest, and

[Jacob Goldstein]

iron ore. And there is this interesting history of work on agricultural machinery, like the kind we talked about at the beginning, building stuff for local farmers to, you know, use as simple machines on their farm. So it was very likely that the capital of the car industry was going to be in the upper Midwest somewhere. I don't think it had to be Detroit. You have Ford there around this time, basically because he grew up nearby. David Dunbar, Buick starts Buick in Flint, Michigan, which is nearby. You have Ransom Olds, whose mobile Oldsmobile, I think, started nearby and moved to Detroit. And so partly because in a general way, it was probably gonna be somewhere around there, but in a more specific way, kind of because of happenstance, you get this incredible agglomeration.

[Robert Smith]

But as you're listening to these names, people shouldn't think that there are factories

[Jacob Goldstein]

littering the landscape in a garage.

[Robert Smith]

Yeah, it's a bunch of small teams

[Jacob Goldstein]

working on this, often making, you know, dozens of cars. So Ford gets into this game. He starts the Detroit Motor Company, which notably, is not the Ford Motor Company, the one we know. In fact, the Detroit Motor Company is the first of two failures he's going to have before he succeeds. Maybe one and a half, depending on how you count it. It is a few guys in a shop making cars one at a time. And the way they make cars is they order parts from other little shops. And the parts are not uniform size. Each part is a little different from every other part. They're largely handmade. And so you take apart. You're building a car.

[Robert Smith]

Yeah.

[Jacob Goldstein]

It doesn't quite fit. And so you have. In fact, the guys doing this are called fitters because the things don't fit. And so they might machine it a little, they might file it a little, and they put it on. They get it to fit and they put it on. And this is artisanal work. This is a skill, kind of an art.

[Robert Smith]

Each car is different.

[Jacob Goldstein]

Each car is a little different. And in fact, people would order bespoke cars. They'd say, like, I want it like this and like this. And you could do that because you're building the cars one by one. But of course, this makes them expensive. You got highly skilled artisans building cars one by one. This is an expensive, fine tool. And it might be an industrial machine that is useful for a business and can pay the high price. It might be a toy for a rich guy. It is definitely not something for the masses. And so Ford's Detroit Motor Company is building an industrial machine. It's building a delivery wagon. Looks kind of like a box, a Cuban wheels, very square. Has a tiller to steer in the back.

[Robert Smith]

Or it just goes.

[Jacob Goldstein]

No, I think it comes like if you're sitting in the driver's seat, it comes from the back and you hold it like if you're on a boat. On a little boat.

[Robert Smith]

Yeah, yeah.

[Jacob Goldstein]

Ford Cannot stop tinkering with this delivery wagon to the point where the guys funding the company are like, come on, let's start selling something. If it was today, they'd be like, minimum viable product. Yeah, ship it. And Ford is like, almost. Almost. There's even this amazing moment when the funders come to the factory and he has the workers actually machine a bunch of parts so that it looks like they're in production, but they're not. He's just fooling the funders. And eventually the funders catch on with people putting up the money for this, and they get tired of it and they say, that's it. Let's just dissolve the company. Let's give up. There's no product. The Detroit Motor Company ceases to exist.

[Robert Smith]

Wow. Because of its perfectionism.

[Jacob Goldstein]

And this is, in a way, a classic mistake, Right. Not getting to market fast enough, running out of money before you get to market. So that's failure number one. Cars are still a big deal. Ford still loves cars, wants to get back in the game, but all he's done is what, waste a bunch of money and not actually sell a car. So the way he decides to get back in the game is to restore his name by winning a car race.

[Robert Smith]

Wow. Yeah. Yeah.

[Jacob Goldstein]

So there's this car race.

[Robert Smith]

To be clear, he doesn't have a lot of experience racing. I guess nobody has experience racing. They've just invented cars.

[Jacob Goldstein]

He's built a few sort of prototype cars. But, yeah, the first. I think the first car race in the history of Michigan is about to happen. And he's like, yes, I'm going to enter this race, and if I win, then I'll be famous again and I'll get money and start another car. So he builds this little race car somehow. I look at it and I think of a cricket. It's made of wood. It's painted green. There's no doors, no windshield. The driver sits up on this little padded perch. There's a steering wheel by this time, not a tiller. It's made of brass. Ford's going to be the driver.

[Robert Smith]

Does he paint Ford on the side?

[Jacob Goldstein]

Don't know. Good question, because that would be the

[Robert Smith]

first racing advertising, right, Pennzoil?

[Jacob Goldstein]

Yeah, Right. He doesn't paint Ford. He paints like Murray's Cheese Shop or whatever, who's actually Penguin. I don't know what he paints on it. Shout out, Maurice Cheese Shop. Great detail about the way race cars worked at this time. There is a second guy who stands on the running board on the side of the car and like, leans out to the side, kind of like they do on sailboats, you know, on a catamaran. Keep it from sliding out on the turns. So day of the race comes October 10, 1901. It's a huge deal. They're running special trains out to the racetrack, and there's still all different kinds of cars. There's a steam car race and an electric car race. Although in the electric car race, apparently the top speed was 15 miles an hour. And the drivers talked to each other as they were going. Electric cars, quiet. But it didn't quite work out then. But the internal combustion engine car is the main event. It's the fastest one. And a bunch of drivers drop out just before the race starts. Cars are hard to build. They don't work very well still. And in the end, there's only two cars in the race. One, Henry Ford's car, the other one built by a guy named Alexander Winton. Winton was from Cleveland, Ohio, also built cars, another kind of Great Lakes car builder. And he was famous because he'd recently set the world speed record for the mile. One minute and 14 seconds, not quite 60 miles an hour.

[Robert Smith]

That's fast. That's a lot.

[Jacob Goldstein]

That's fast. Yeah.

[Robert Smith]

1901.

[Jacob Goldstein]

So Wynton's the heavy favorite world record holder, but Ford is, you know, hometown boy. Detroit's own Henry Ford. And the race starts, and Winton zooms out to a big lead. But after a few laps, Wynton's in the lead.

[Robert Smith]

Here comes Andrea. Ford wins.

[Jacob Goldstein]

Engine starts smoking.

[Robert Smith]

We got smoke coming off the track.

[Jacob Goldstein]

And Ford blows past him. The crowd goes wild. Lady screams, if I had $50, I'd bet it on Ford. Another guy throws down his hat and

[Robert Smith]

stomps on it, which was a thing at the time. People, I always. I don't know if this movies are what. But I always hear about people taking their hats off, throwing it down and stomping on it.

[Apple Card Advertiser]

Yeah, I.

[Jacob Goldstein]

So I guess it was like a culturally sanctioned. Maybe it was like a high five or something. Like a thing you did if you got really excited.

[Robert Smith]

Yeah, that guy must be really excited. That's an expensive hat and he's stomping on it.

[Jacob Goldstein]

Ford wins.

[Robert Smith]

Woo.

[Jacob Goldstein]

He's in all the papers. He's a local hero, and his publicity stunt works. Investors do, in fact, want to give him money. And the month after he wins the race, he creates the Henry Ford Company. So this time the problem is he's got the racing bug. All he wants to do is build another race car.

[Robert Smith]

He should have done the delivery van.

[Jacob Goldstein]

He should have done it. Delivery van seems like a good idea. And building a race car is not a business. And so just three months after that company is founded, Henry Ford gets pushed out of the Henry Ford Company. And so that is a failure for Ford. But the investors keep the company going. And a little while later, they rename it after the founder of Detroit, Antoine de Lamothe. Cadillac.

[Robert Smith]

Cadillac.

[Jacob Goldstein]

Cadillac. Daddy. They start building cars. And as we will talk about in our next episode about GM, they get bought by GM. In 1909, Henry Ford is out of a job again. And so he's got to move now. He builds a race car, wins another race, gets more money. And in 1903, he founds the Ford Motor Company.

[Robert Smith]

The one, the same company we see today.

[Jacob Goldstein]

Yes, yes, Ford. A Ford. And now Ford wants to try something new. And I don't know exactly why you were asking me why now? And I couldn't exactly figure out why now, but we can talk about it. He wants to build a standardized, simple, cheap car for the masses. Really something that would have been for him, for his family when he was a farm kid who thought there was altogether too much manual labor on the farm. And he thinks about it as a business proposition as well. Right here, read this. There's this great quote from Ford about this.

[Robert Smith]

There are a lot more poor people than wealthy people. We'll just build one car for the poor people. And you know, you could see, like, oh, maybe it's principled or something. But, you know, I kind of think with all of these hundreds of car manufacturers, and he's been in the racing world and everything, maybe he just sees that it's a market opportunity. There's too much competition building the race cars and building the rich man's car for sure.

[Jacob Goldstein]

That. And as we'll talk about more, really both today and in the next episode, it does suit him as a person. Like, you're right. It is a good business opportunity. Incredible. But also, Henry Ford does have this values system that is. I think it is almost Victorian. It's very practical and simple and direct. That that certainly is who he is in many ways. And this idea of one simple car for everybody is a great fit with who he is. But it's hard to do. It's obviously a good idea. He's probably not the only one who thought about it.

[Robert Smith]

And he's not the best person for the job at this point. Cause he's a man who can't deliver, a man who wants perfection.

[Jacob Goldstein]

He has failed. He has literally failed time and again. And to succeed, he's not just gonna have to build a car, he's gonna have to invent a whole new kind of manufacturing. That is what we're gonna talk about in.

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[Jacob Goldstein]

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[Jacob Goldstein]

Yeah, the bird looks out of your league.

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[Jacob Goldstein]

And we're back. The Ford Motor Company is a thing in the world. Henry Ford isn't going to squander this one. As we know, he has a whole

[Robert Smith]

team of people trying to come up with a catchy name for his first

[Jacob Goldstein]

car and they call it the Model A.

[Robert Smith]

Brilliant.

[Jacob Goldstein]

We gotta get all the way to T, but we're not gonna talk about everyone, don't worry. The Model A costs $800 for a two seater, 900 for a four seater, which is something like twice what a typical worker makes in a year. So today, what is median wage today? Like 60,000. So that'd be like 120,000 today. Obviously not a car for the masses, but cheap enough that there is a market for it, cheap enough that it is a car you can build and profitably sell. And Ford knows all this. He knows it's too expensive. And the key problem really is that the Model A is still built a lot like the cars that have been built for, you know, a decade. Ford's buying most of the parts from other companies. And at the factory, you'd see like 15 different stations set up around the

[Robert Smith]

floor and a crowd of people around them, I imagine, right?

[Jacob Goldstein]

Like, there's a team at each one, you know, fitting parts one by one.

[Robert Smith]

They're like, oh, we need a door. Somebody walks over to the door pile, brings it back.

[Jacob Goldstein]

Yeah, I guess so. And, you know, it's obvious that this is expensive. Slightly less obvious, but quite interesting and important is there is no economy of scale. If you want to build 10 times as many cars, you basically have to have 10 times as many workers gathered around 10 times as many cars. The marginal car does not get a lot cheaper here. And this fundamentally is the problem that Ford is setting out to solve. He's selling cars now. The Model A works and he's taken all the money plowing it back into the company, trying to get more efficient. Which reminds me a little bit of Amazon. There's that Amazon era where they're doing that. He's coming up with new models, new ways to build cars. And there's a really interesting book about a lot of this that was interesting to me in the context of working on this show. It's called from the American System to Mass Production by a historian named David Hounchell. He talks about this time and he says the Ford Motor Company did not want to make money as much as it wanted to build cars. Henry Ford loved to tinker and now what he's tinkering with is how to make a cheaper car by the time they get to the Model N. Well, on our way. He's really into this idea of interchangeable parts which Hountschal actually writes a lot about in this history book.

[Robert Smith]

It seems obvious now, but there was an actual invention of. This was right when gun manufacturers, I think it started with, started to say, oh, if you could somehow build parts that were identical enough that you could swap parts of a gun or a rifle.

[Jacob Goldstein]

Yes, yes. So before that it wasn't even an idea. Right. The idea that you could take one part and it would fit in every single gun was not a thing. You built guns one by one. And it in fact took a long time. It took in some ways 100 years of people figuring it out and developing new techniques. It's actually quite hard to make everything exactly the same.

[Robert Smith]

And I think we'll do a future show on this, right? Eli Whitney, Samuel Colt, the whole gun thing, Springfield Armory.

[Jacob Goldstein]

The US Government funded a lot of this. Yes. We will come back to it. Put it on the list.

[Robert Smith]

On the list.

[Jacob Goldstein]

So Ford gets interchangeable parts religion, pushes it onto his suppliers, makes them all work to the same gauge. So I don't know what the tolerance was. A quarter inch is a quarter inch for everybody or whatever.

[Robert Smith]

It's not six Sigma at this point, maybe one or two Sigma.

[Jacob Goldstein]

And he brings more manufacturing in house so that he can have more quality control. And just to put a point on what a big new idea interchangeable parts was or were at this point. Ford in fact runs an ad in a trade journal to brag about it.

[Robert Smith]

We are making 40,000 cylinders, 10,000 engines, 40,000 wheels, 20,000 axles, 10,000 bodies, 10,000 of every part that goes into the car all exactly alike.

[Jacob Goldstein]

How, how is it done?

[Robert Smith]

I love that that's an ad. It's not we're different. It's. You don't understand. We're doing something harder than being different. Were being exactly the same.

[Jacob Goldstein]

Think same. And now we get to the Model T. In 1909, the Model T comes out. The Model T is going to be the thing that changes everything. It's going to be the best selling car in the world for what, 60ish years until it gets beat by the Beetle, which we talked about. But in 1909, the Model T isn't all the way there. Yet it costs $950, about what the model A costs. Still too expensive to be Henry Ford's dream car, but he's still obsessed with tinkering his way to a cheaper car. And now, with interchangeable parts, somebody at Ford realizes, like, oh, we don't have to stay with that same system where it's a team of guys building the

[Robert Smith]

whole car with the fitters.

[Jacob Goldstein]

With the fitters. We can have each guy's job be to put on one part. So one guy puts on the carburetor on one car, and then he goes to the next stand where there's another car, and he puts on the carburetor there.

[Robert Smith]

And if you've ever done any sort of repetitive movement, you know, you get better and faster at it. It becomes muscle memory.

[Jacob Goldstein]

So they get more efficient out of this. And I should mention that Ransom Olds, the Oldsmobile guy, love that. Had done kind of a less refined version of this a few years before. This idea of workers moving from car to car. But Ford is about to push it way further. They notice that going from car to car takes a little bit of time. And more importantly, there are these traffic jams, if you will, among the workers, where the fast worker catches up to the next car, but the slow worker is still there. And that is inefficient. And so now, you know, I'm rubbing my hands together. The moment we've been waiting for. They think, what if instead of having the guy move to the car, we have the car move to the guy? It's the assembly line.

[Robert Smith]

The assembly line.

[Jacob Goldstein]

And initially, it's not the assembly line you picture. When you close your eyes and picture a car assembly line, it actually takes them. It takes them months to figure that out. They start with individual parts, and it's not exactly clear who comes up with the idea or where it comes from. But also, like a lot of ideas, it kind of comes from everywhere. Like, for sure, at least one guy at Ford had actually been to visit a meatpacking plant in Chicago where they would hang a cow up, I guess, on a hook and, like, push it around the plant, and it would get disassembled piece by piece. It was a disassembly line. And brewers and Millers were doing things with moving the product around the factory. And at Ford, as far as we can tell, the first thing they tried, like this was the magneto, which was a Marvel character, I guess, but is also a thing that spins around to create an electrical current. So a magneto is about as big around as a dinner plate. And one day in 1913, somebody thinks, what if we put like a waist high counter down through the area where the guys build the magnetos? And like the first guy puts a piece of on the magneto and passes it down to the second guy who puts on the next piece and passes it down to the third guy and they just slide it down like that. Previously, it had taken about 20 man minutes to put together a magneto. That first day it took 13. And over the next few months, they kind of tweak the system. They realize they can put the magneto on a continuous chain that just kind of moves it along and they get it down to five man minutes. From 20 minutes to five.

[Robert Smith]

Now, at this point, magnetos are probably starting to build up. You're moving faster than the other parts of the plant. Right. Because that's the thing is once you see it happen in one part of the car, you're like, well, how do we get the rest of the car to catch up with the magnetos? We're not a magneto manufacturer, so.

[Jacob Goldstein]

Right. And this is the summer of 1913 is one of those times that must just be so exciting to be in the middle of because they, they realize this. And so now they do it for the radiator and, and for the engine. And then later that year, the thing we think of as the car assembly line happens. Final assembly, right. They got all the parts. Now they're gonna put together the car. And early on, they do it in this way that is so delightfully kludgy or tinkery or trial and error y or just simple Henry Ford simple. They get to final assembly and remember, they've been doing cars like up on stands, and they think, okay, what if at the beginning of final assembly, we put the, whatever, the chassis, whatever basic thing we have on four wheels.

[Robert Smith]

We do the wheels first.

[Jacob Goldstein]

We do the wheels first. And there are these teams of guys spread out and every so often the foreman blows a whistle and the guys go over to these chassis with wheels and they push it to the next station and they go back and they put the next part on and the foreman blows a whistle and they push it again. It doesn't take them too long to figure out, oh, we could use a chain to pull this half built car through the factory. And the guys could just put the parts on the car as they go by.

[Robert Smith]

I just want to pause for a minute. It is so beautiful. This is such a breakthrough in manufacturing.

[Jacob Goldstein]

And it happens in one time and one place. And they get to a point pretty quickly where they have reduced the time for final assembly from 12 man hours before the assembly line to 93 minutes, an hour and a half.

[Robert Smith]

Huge.

[Jacob Goldstein]

Huge. Now they are getting to this cheap car for the masses. And Ford decides here that they're only gonna make one car, the Model T. Of course, you can get it with two seats or four. You can get a little truck version, but it's basically building the same car

[Robert Smith]

because he's obsessed with efficiency. Like, if you're gonna optimize for the Model T, then build more Model Ts.

[Jacob Goldstein]

And there is this famous quote that you have probably heard from Henry Ford. Another efficiency decision. Around this time, any customer can have a car painted any color that he wants, so long as it is black.

[Robert Smith]

Great Midwestern humor.

[Jacob Goldstein]

My grandfather told me that one, actually. So now, with the assembly line and interchangeable parts and a single car painted a single color, you can optimize everything in the factory. You can build bespoke machines that do exactly what you need. For this one car, at this one stage, there's a machine that puts 24 holes into the engine block at one time. Coming in from three different directions. They're building these gravity slides around the factory, which I think are just like chutes. So, like, one part comes off the assembly line and they put it in a chute and it goes down to some other.

[Robert Smith]

I want to think the magneto comes down and just drops right into the car.

[Jacob Goldstein]

It's almost like a. A Charlie Chaplin movie, I guess. You know Chaplin is around this time, right? I was saying the Bunny cartoon.

[Robert Smith]

Well, right. It became a cultural thing. This idea of the factory and the efficiency of it was delightful.

[Jacob Goldstein]

It was delightful in some ways, but it was not delightful. If you were the guy who used to have this highly skilled, artisan fitter job and were now spending all day turning one bolt one after another.

[Robert Smith]

You know who would have hated that? Henry Ford. Henry Ford would not have wanted to turn one bolt.

[Jacob Goldstein]

No, he would have slacked off.

[Robert Smith]

He would have gone to build his car out back. Yeah.

[Jacob Goldstein]

And so it is immediately apparent at Ford that people now hate their jobs. Absenteeism is high and turnover is through the roof. In 1913, the year Ford makes this incredible breakthrough, turnover at the company is 380%. And I had to pause to sort of think about, what does that even mean? It means the typical worker quits after something like three months. And of course, new workers have to be trained. And so Ford sees this, and in early 1914, he gets together in a room with a bunch of his fellow executives at the company to decide what to do about it. And there's an obvious thing to do if you want your employees to stick around.

[Robert Smith]

Pay them more money.

[Jacob Goldstein]

Give them more money. You and I have talked about, about

[Robert Smith]

people are always doing this. They're always like, I can't find enough workers. You're like, no, you're not paying enough to find workers.

[Jacob Goldstein]

Oh, there's a trucker shortage. Or is there a trucker? Truckers don't get paid enough. Problem. Yes, yes, you could get more workers if you raise their pay. And you can get better workers if you raise the pay. This is clear to Ford and his fellow execs. And also they're making more profits now, so they have more money to go

[Robert Smith]

around, which is a classic thing. If you have efficiency gains in your business or factory, that tends to mean you can increase wages for the workers. And it has been correlated through a lot of U.S. history, not all of U.S. history.

[Jacob Goldstein]

This is the happy story of productivity gains is they are broadly shared and it is usually true, but not always true. And so they're in this room, Ford and the execs, and somebody writes on a blackboard, I think it's Ford, and writes the entry level wage for factory workers at this time, which was $2.34 per day, which was basically the going rate in Detroit. So Ford's like, okay, we're making more money. We can give him a raise. He writes $3 on the board. It's like a 30% raise.

[Robert Smith]

Let's start.

[Jacob Goldstein]

They do the math. There's still plenty of profit to play with. So it starts going up $354.50 a day. And a vice president says mockingly to Ford when he writes, 450, I dare you to do five. And Ford writes five and says, this is what we're going to do. Overnight, we will more than double the entry level wage for all of our workers. This is unheard of. It's going to mean a transfer of $10 million in expected profits to the workers. And the world goes wild.

[Robert Smith]

Yeah, you announced that change. Everyone in Detroit knows this the day after.

[Jacob Goldstein]

And of course, the workers love it. Right now, instead of having this turnover problem, people are lining up in hopes of getting a job at the Ford Motorhome. I can imagine them leaving the other

[Robert Smith]

factories just to get in line because you can double your wage. Amazing.

[Jacob Goldstein]

And what's interesting, it's very interesting to see how this plays in the America of 1914. This was a time when, you know, it's before. For the Russian Revolution there is rising socialism and it's unclear how industrial capitalism is going to develop or even whether it's going to keep being capitalism. And so my favorite Response to Ford's $5 day is from the editorial board of the Wall Street Journal.

[Robert Smith]

Weirdly enough, the same guys who are on the editorial board today, the actual guys, the actual guys, they're like 257. No, no. But the attitude is the same at the Wall Street Journal. I'll read this. They write that Ford has committed economic blunders, if not crimes, they may return to plague him and the industry he represents as well as organized society. They're saying it's the end, the end of the world to pay your workers more.

[Jacob Goldstein]

That he is giving profits that should rightly go to the owners of capital. He's giving them to labor. So Henry Ford is this wealthy capitalist who has made capitalists furious. And you know who loves Ford? The capitalist.

[Robert Smith]

At this moment, I'm guessing the communists.

[Jacob Goldstein]

The communists. The actual communists. John Reed is a journalist who is going to go on to co found the Communist Labor Party of America. And he writes that this $5 a day plan that's giving millions of dollars in profits to the workers, he writes that it may be a real menace to capitalism. Essentially the same view of the Wall Street Journal editorial board. But he thinks it's a good idea.

[Robert Smith]

I picture John Reed reading the Wall Street Journal and being like, no, that's a good thing. The destruction of capitalism is what I'm in for.

[Jacob Goldstein]

They agree on the probable outcome and they're both wrong. And you know, later a communist or you know, far left critique of kind of the center left is its accommodation. If you're giving workers better conditions under capitalism, you're just prolonging capitalism and postponing the communist revolution.

[Robert Smith]

Exactly right.

[Jacob Goldstein]

Worked so far. $5 day is a thing. But you don't just have to be good at your job to get the $5 day. There are these wild, by our contemporary norm, strings attached. And, and these strings are pulled by Ford's sociological department. They have a sociological department that is basically the nanny corporation department, the corporate big brother department. To qualify for the $5 a day, you have to refrain from drinking too much alcohol. You're not allowed to have borders in your house. You have to regularly put money in a savings account. And in what really was a progressive stance for the time, you couldn't hit your wife or children.

[Robert Smith]

And from Ford's perspective, I mean this was Ford's personality. But it was also, these are all things that can interfere with you speeding up the production line.

[Jacob Goldstein]

There is that. And in the same way that when we talked about the idea of the Model T being both a good business idea and reflective of who Ford was, I do think he also had these very, I guess we would call them traditional values that are manifested here. And in fact, he believed in them so strongly that it wasn't just, you know, that you had to sign something agreeing to do this to go to work at Ford. Ford actually sent inspectors to workers houses to make sure they were living the way Ford thought they should live. And this wasn't like a secret. Ford was proud of it. There's this magazine story that captures the back and forth and it has that ring of old magazine stories where it's like, did this really happen or not? But clearly it's some version of what was going on. So in this magazine story, there is a dialogue between a Ford inspector and the wife of a Ford worker when the inspector goes to their house. So let's do the dialogue. Do you want to be the inspector or the wife?

[Robert Smith]

Inspector.

[Jacob Goldstein]

Okay, so it starts with you.

[Robert Smith]

Does Joel Polyanski live here?

[Jacob Goldstein]

Yeah, he lives here. All right.

[Robert Smith]

What does he do in the evenings?

[Jacob Goldstein]

Always home evenings. Goes to bed early.

[Robert Smith]

Does he drink?

[Jacob Goldstein]

No.

[Robert Smith]

What does he do with his money? Does he save any?

[Jacob Goldstein]

Sure, he saves. Some of it he sends to the old country to help old folks. Some of it's in the bank.

[Robert Smith]

This feels like a job interview. Well, now, if Joe should get more wages, what do you think he'd do with it?

[Jacob Goldstein]

Save it and buy a house?

[Robert Smith]

I guess that's the correct answer.

[Jacob Goldstein]

So something like that happened. Maybe it wasn't those exact words, but this is what was going on. I'll mention that exchange was reprinted in this recent Ford biography called the People's Tycoon by Stephen Watts. So this feels strange, wildly inappropriate by our norms today, but not any different

[Robert Smith]

than drug testing in a factory.

[Jacob Goldstein]

Interestingly similar to drug testing or in

[Robert Smith]

white collar work, you know, looking at your Twitter feed back years and years to when you were a college student firing people based on that?

[Jacob Goldstein]

Yes. Okay, I'd buy it.

[Robert Smith]

I'm not saying it's good. I'm just saying to this day, people take an interest in the personal lives of their workers.

[Jacob Goldstein]

More than an interest, demand certain behaviors outside of work. And people went along with it then as now. So now by 1914, everything is in place. The Model T, the factory, the assembly line, the $5 day. And Ford is about to go parabolic.

[Robert Smith]

And everyone will drive a Model T forever after.

[Jacob Goldstein]

That's after the.

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[Jacob Goldstein]

Hey, everyone, check out this guy and his bird. What is this, your first date? Oh, no.

[Liberty Mutual Advertiser]

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[Jacob Goldstein]

Yeah, the bird looks out of your league anyways.

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[Jacob Goldstein]

Liberty.

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[iHeart Advertiser]

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[Jacob Goldstein]

hey, earners, what's up?

[Earn Your Leisure Host]

Look, money is something we all deal with, but financial literacy is what helps turn income into real wealth. On each episode of the podcast, earn your leisure, we break down the conversations you need to understand money investing and entrepreneurship. From stocks and real estate to credit, business and generational wealth wealth. We translate complex financial topics into real conversations everyone can understand. Because the truth is, most people were never taught how money really works. But once you understand the system, you can start to build within it. That means ownership, smarter investing, and creating opportunities not just for yourself, but for the next generation. If you want to learn how to build wealth, understand the markets, and think like an owner, Earn your leisure as the podcast for you. Listen to earn your leisure on the iHeartRadio app, Apple Podcasts, or wherever you get your podcast.

[Jacob Goldstein]

We're back from the ad. It's time for Ford to take off.

[Robert Smith]

Let's do it.

[Jacob Goldstein]

In 1914, Ford sells 260,000 Model Ts.

[Robert Smith]

260,000.

[Jacob Goldstein]

In 1923, they sell 2 million.

[Robert Smith]

Amazing.

[Jacob Goldstein]

Amazing. More than half of all the cars and trucks sold in America are Model T Fords. And the price, by the way, has continued to fall. The car costs like 60% less at this point than it cost in 1914. And Ford is just pushing this efficiency thing further and further. He gets really into vertical integration at this point. Buys coal Mines in Kentucky, tries to start a rubber plantation in Brazil.

[Robert Smith]

Fordlandia.

[Jacob Goldstein]

Fordlandia. There's a book about this. And closer to home, he enlists a guy named Edward Kingsford to help him buy a forest and set up a sawmill in Michigan. So they got this sawmill going. I guess a lot of wood went into the body of the Model T. And Ford notices that there is all this sawdust that they're not using. Cause it's just sawdust I love.

[Robert Smith]

He's touring the factory and looking at the sawdust being like on the floor.

[Jacob Goldstein]

Yes, waste. That's perfectly good sawdust. And somebody figures out that just around this time someone had invented a way to make charcoal briquettes out of sawdust and I think tar and a couple other things. And so Ford's like, let's make a charcoal briquette factory. And to build this factory next to the sawmill in Michigan, he gets Thomas Edison.

[Robert Smith]

His old buddy Thomas Edison's like, sure, charcoal. I was working on this other thing, but let's go to the charcoal.

[Jacob Goldstein]

So they get this charcoal briquette factory going and they start making Ford brand charcoal briquettes and selling them at Ford dealers A while later. Some years after this, they end up spinning off the Ford charcoal business. Somebody later is like, why are we in the charcoal business? But this charcoal business keeps going on its own. And it is named for the guy who helped Ford set up the mill in the first place, Edward Kingsford.

[Robert Smith]

Kingsford. Still buy it to the.

[Jacob Goldstein]

Still the leading, I think, brand of charcoal in America, if I have it right. So anyway, Ford is now profoundly vertically integrated. He's got all these raw materials and he builds the biggest factory in the world on the River Rouge in Dearborn, Michigan.

[Robert Smith]

And we've talked about this before. The River Rouge plant, which is more like a small city, 2,000 acres. You bring in a iron ore in one end and cars roll out the other end. It's got power plants.

[Jacob Goldstein]

Yeah. A railroad inside. It's 20th century mass production in one place. But this term, mass production, it's a little bit of an anachronism applied to this time. People aren't really using it as a phrase yet. They don't call it mass production yet. They call it Fordism. Forwardism. And the 1920s are this era, famously when mass produced consumer products are booming. RCA is using Fordism to make radios for the masses. And Hoover's doing it with vacuums. And Ford's name is literally describing the main economic force of the era. The man himself is world famous. At this point, he writes an autobiography that's popular. He runs for Senate, although he refuses to campaign.

[Robert Smith]

Too busy in the factory.

[Jacob Goldstein]

Very old fashioned. It doesn't win. Aldous Huxley publishes Brave New World, a book well read in high school, you know, about a dystopian consumerist society around this time. And in that book, the society. In that book they start their calendar with the introduction of the Model T, the year of our Ford.

[Robert Smith]

Clever, very clever.

[Jacob Goldstein]

The New York Times runs a special section with this banner headline about the

[Robert Smith]

net worth of Henry Ford. It says, Ford's Billion breaks world Record. No man in history ever had wealth as vast as his racism. Rockefeller, his nearest rival, now ranked far behind.

[Jacob Goldstein]

Ford's next move, a billionaire move we have become familiar with in recent years, gets into the media business, buys this struggling newspaper called the Dearborn Independent and starts paying to distribute it nationally as a way to disseminate his ideas. It's why a lot of billionaires get into the media business. And this we also talked about in our Volkswagen story because the most famous thing by far that the paper published under Ford's ownership was a series called the International Jew, which sounds bad.

[Robert Smith]

Sounds bad, yeah.

[Jacob Goldstein]

They publish it as a book and they called it the International Jew, the world's foremost problem.

[Robert Smith]

Foremost problem.

[Jacob Goldstein]

Not just a problem. It wasn't among the world's foremost problems.

[Robert Smith]

And as we mentioned, Hitler loved this book.

[Jacob Goldstein]

Hitler loved the.

[Robert Smith]

And put a picture of Henry Ford on his wall. Stick with the business in the factories. Henry Ford, I wish he.

[Jacob Goldstein]

Yeah, I wish he had done that. But in the 1920s, you can publish this book and it can be not the main thing about you. You can be Henry Ford, industrial genius, who just happens to believe that the Jews are the world's foremost problem. So as the 1920s are going on, the companies who are selling the other

[Robert Smith]

half of cars in America, Ford's competitors, Chrysler and General Motors, we'll talk about next week.

[Jacob Goldstein]

They are of course, adopting Fordism. They're adopting mass production. And Also in the 1920s, this new era of mass production is transforming consumption. It's changing the way Americans think about stuff and buying stuff and, and borrowing money to buy stuff. It is in some ways the first great era of mass consumption. And Ford had created this era, but he didn't really understand it. And because he didn't understand it, he was going to get left behind. Next week on the show, how Alfred Sloan and General Motors beat Henry Ford.

[Robert Smith]

Thanks everyone for sending notes to us about the show with suggestions of episodes you want to hear we got an episode suggestion about the ancient world which we would love to tackle.

[Jacob Goldstein]

Yeah, Railroads is another one that we will definitely do more than one episode and it does really make me happy reading these emails. Please keep writing to us. We're BusinessHistoryUshkin FM and I'm on Twitter acobgoldstein and I'm also on LinkedIn.

[Robert Smith]

I'm @radiosmith in most places.

[Jacob Goldstein]

Today's show was run and edited by one Ryan Dilley, produced by Mr. Gabriel Hunter Chang and engineered by Ms. Sarah Bruguerre.

[Robert Smith]

Nice. I like the honorifics.

[Jacob Goldstein]

I'm Mr. Jacob Goldstein.

[Robert Smith]

I am Sir Robert Smith.

[Jacob Goldstein]

Thanks for listening.