THE FORD MOTOR COMPANY INCIDENT

Albion W. Small
American Journal of Sociology
March 1914

Editorial

Out of all the publicity given to the plan of the Ford Motor Company for distributing its profits, only one clearly demonstrated proposition emerges, viz., the scheme illustrates on a large scale the much-disputed commonplace that, even in business, men act from mixed motives, not solely from desire for gain.

We might put the most cynical interpretation upon the facts.  We might assume that in Mr. Ford's calculation, a voluntary contribution of ten million dollars to the annual wage of the help in his concern will in the end buy more than its equivalent, in advertising, and in the loyalty and efficiency of his employees.  Even if that were the whole story, the case would remain a spectacular exhibition of the play of consideration for fellow-workmen, as a factor in the pursuit of profits in a single instance.

We are far, however, from accepting this ungenerous interpretation.  We believe that Mr. Ford's motives are as unselfish as they appear.  We are heartily in sympathy with his apparent purpose.  We believe it is a move in a direction which corporate management will ultimately take.  At the same time it is prudent for academic theorists to reflect that such a variation from custom must for a long time rate as on trial before an incredulous world.  There is certainly room for candid doubt whether Mr. Ford's method of carrying out praiseworthy intentions was the wisest which further consideration might have suggested.  Although the parallel is by no means close, the accounts of the Detroit program thus far published have actually reminded us of those early philanthropic orgies in which Tolstoi scattered coins indiscriminately among street crowds.

The social problem which Mr. Ford confronted reduces to this:  Under the present workings of our technical equipment, together with the legal, economic, and moral institutions within which the equipment operates, a yearly dividend is credited to our stock which makes the wages of our help look small.  Is the contrast something that is caused wholly by the unalterable nature of things or partly by something in the legal, economic, or moral system under which we are working?  If the latter factors have any share in the result, what is there about them that might be changed if only we thought so, and that we should agree upon the necessity of changing it if we got a more correct view of industrial relations?  Assuming that these questions have received specific answers, to the effect that the actual contrasts in distribution are to a certain extent real anomalies, and that these anomalies would be reduced or removed if certain changes were made in our fundamental business assumptions and practices, what is the wisest method on the whole of readjusting ourselves to our own convictions about the situation?

Taking the Ford program at face value then, in contrast with the supposition which we have dismissed, the alternative chosen amounts to this:  Without waiting to convince anybody else, without being halted by the bogey of possible disturbing effects of our action upon market conditions in general, without allowing ourselves to be held up by thought of conceivable evil consequences, for a large body of workmen, of a sudden change in fortune, which will make them exceptional in their several divisions of labor, we will at once, in our own business, put into effect the conclusions which we have reached about a proper scheme of distribution.  We think our stock has a legal claim to at least ten million dollars a year which belongs morally to our help.  We will accordingly relinquish our legal claim to that sum, and divide it among the employees as justly as possible.

If Mr. Ford had waited for preliminary demonstrations of the effects of all possible alternatives, upon all the interests affected, neither he nor his children nor his children's children would have had the proofs at hand which would have justified any innovation at all.  Nobody knows, and nobody can know until experience has presented the facts as something already in the past, all the effects of a modification such as Mr. Ford has adopted.  In the same way no one could be sure in advance of the detailed and total effects of a Wilson tariff or currency bill.  The moral from this fact is that men of affairs have incessantly to choose between letting things alone and running a measure of risk in attempting improvement.

It is an old and frequent saying that there can be no such thing as social science, because there can be no social experimentation in the scientific sense.  This is a mere fraction of a truth.  The social scientist cannot put persons into a test tube, as chemists can manipulate matter.  On the other hand, human life is incessant experimentation, conscious or unconscious, intended or unintended.  Whenever a man and a woman mate, whenever two men form a partnership, whenever a legislature enacts a law, whenever voters elect an official, an experiment is performed which may have precisely the same degree of value as a scientific datum as any experiment in the laboratory.  The detail that the scientific observer in the former instances may have no control over the experiments does not signify, so far as their evidential value is concerned, provided only that the observer admits no mistakes into his calculations of the conditions under which the experiments were performed.  The social observer simply has a different kind of task, and a more difficult one, from that of the laboratory observer.  The extra difficulty is principally connected with this more complicated task of checking up the conditions.

On the other hand, the experimentation which it is the social scientist's task to generalize is of a much less artificial sort than the experiments of the laboratory.  When men try to run a political machine, or a religious sect, or an academic organization, they are trying to make means serve ends in the actual medium in which their purposes must succeed, if they succeed at all. Such experiments are consequently the most searching and instructive tests of the means, or of the ends, or both.  If they succeed, or if they fail, the success or failure at the same time does more to indicate the reasons for success or failure, and to demonstrate conditions in which success or failure is probable, than is the rule with laboratory experiments.

Regardless of its philanthropic phase then, and from the purely scientific standpoint, the Ford experiment is as commendable in its way as an attempt to discover an antitoxin for a baffling disease.  From this same standpoint, too, the experiment can hardly be worthless.  It will surely lead to results that will change, in one way or another, the state of the evidence about a good many industrial relations.  Even if it should turn out to be a disappointment to some or all of the parties directly concerned, they and the rest of the world should be wiser for the experience.  It is certainly to be hoped that a program with so much in its favor, on the side of human fellowship, will yield a large surplus of good over bad results.