Question

What does Henry Ford understand about the American worker and also the American consumer? How does this realization change the relationship between capital (those who own the factories) and labor (those who work at the factory)?

Answer 1

Henry Ford figured that the way to double profit is by making both the workers and the consumers happy. Ford genuinely wanted to help both the consumers as well as workers. He realized that consumers are happy with good quality manufacturing. In order to produce the best quality goods, the workers must be paid well. So, he doubled the wages. He paid two times more than what he was paying. This made the workers happy too. They worked better and produced the best quality product. The workers were happy, the consumers were happy and the factories were earning double profit. The workers were now motivated to work better and this changed the dynamics of the relationship between capital and labor.