Such an outcome would bring a number of problems, the most immediate being underconsumption. This is a problem whose relationship to automation is best expressed in a meeting recounted in the Economist article, alleged to have taken place in the 1950s between Henry Ford II and Walter Reuther, leader of the United Auto Workers union. Ford had invited Reuther to examine one of the company’s newly built factories, and as the two began to walk across the shop floor he is said to have pointed at some newly acquired industrial robots, inquiring how such machines would pay their dues to the union. Reuther’s response is reputed to have been immediate: ‘Henry, how are you going to get them to buy your cars?’
This conversation between Ford and Reuther, whether it actually took place or not, demonstrates a paradox central to the future of capitalism. While wanting to all but eliminate workers from production in order to save money, Ford also wanted to maintain demand for the company’s products, now made more eficiently than ever. Simply put, Ford wanted cheap employees but afluent consumers – something which simply wasn’t possible.
His grandfather, the first Henry Ford, knew better. In 1914 he had shocked the industry by announcing that company employees would see their pay doubled to as much as \$5 a day. Behind that decision was the pressing issue of high employee turnover, with Ford viewing decisive action as necessary given the large costs of constantly training new workers.
70
n e w t r av e l l e r s