How Henry Ford's Invention Inadvertently Caused the Depression

In early 20th century America the vast majority ofWe have a seemingly similar situation occurring today.
people living in rural areas eked out a living inWe constantly read headlines about the dying
agriculture. Farms were small, often sharecropped.manufacturing sector in the United States. Politicians
The planting and harvesting was labor intensive andlove to visit deserted factories and decry the decline
horses provided the only source of energy forof manufacturing in a wide range of formerly
mechanized tilling. The vagaries of weather andprofitable industries. And yet, manufacturing in
drought have always made farming difficult. CropsAmerica is setting records for volumes produced,
were mainly grown for consumption by the farmer'sshipped and invoiced. How can this dichotomy exist?
family, with any extra produce bartered for neededAs with the Fordson tractors 1920's introduction to
goods.farmers, today's manufacturing has evolved
We are all aware of the history of Henry Ford anddramatically and created disruptive technologies.
his invention of the production line to mass-produceRobots, software, customized computer models,
Model-T's. Ford did not invent the automobile, hecomputer assisted design and modern
simply invented a method to produce cars in masscommunications mean that we produce ever more
volumes and make them available for virtually anyonesophisticated products, in greater volumes, and at
wishing to purchase a horse-less carriage. He alsolower prices, while needing fewer workers per unit of
revolutionized the agriculture business with totallyproduction. The workers that are needed today
unforeseen consequences.require better education, and skills than the
The Ford Motor Company was always seeking newproduction line workers of yore.
avenues of distribution and business opportunities.When I was growing up in an industrial area of
Ford had grown up in then-rural Michigan and wasAmerica in the 1960's many of my contemporaries
immersed in the farm world of the age. In the 1920'swent to work with their fathers at the local mill or
Ford introduced the first mass-produced farm tractor,factory. These were overwhelmingly union jobs. Each
the Fordson. The machine sold for under $400 andof my buddies at that time thought they would be
revolutionized farming. It quickly became cheaper andemployed for life like their fathers had been. It has
less costly to own and maintain a Fordson tractorworked out that none are where they started, not
than a horse.one.
Farmers quickly gravitated to the Fordson tractor.The displacement is as painful today as it was on the
Crop yield per acre expanded exponentially. Farmersfarm of the 1920's. However, the benefits to society
produced so much crop yield per acre that by theaccruing from modern manufacturing technologies and
middle of the 1920's we were growing far more foodsystems, just like the advances in farming owing to
than the country could consume. Prices plummeted.mechanization, cannot be denied. Only the Luddites of
The need for day laborers declined precipitously andthe 19th century and there modern adherents believe
rural unemployment exploded.life is not more comfortable today and more people
The collapse of crop prices, unemployment, and thehave more access to more goods and services at
Great Plains drought were significant contributors tolower prices that at any time in history.
the start of the Great Depression. The Fordson wasChange is hard and often inconvenient. We live during
an amazing improvement in the productivity andan age of massive change unlike any time in history.
ability of farmers to lead more comfortable lifestyles.The understanding of and acceptance of modern
However, the "Law of Unintended Consequences"realities insure that most people will benefit from
reared its ugly head in this instance. The creativeadvances in technology. Those that do not want to
disruption caused by this product was thrust on achange and accept the new order of things will be
market that could not adjust efficiently or quickly toleft behind.
its significance.