The Expanded and Annotated My Life and Work

Wages Come before Dividends
The following material is of particular interest to modern companies 
that are concerned with social responsibility. Social responsibility, as 
defined by Ford, consisted merely of a square deal for all participants 
in a supply chain including customers, suppliers, and employees. This 

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150  •  The Expanded and Annotated My Life and Work
square deal benefits all the stakeholders because, as Ford now makes 
clear, they are interdependent.
This discussion also reiterates the scientific element of Ford’s universal 
code. It denounces businesses that “pass all their extra costs down the line 
until the whole burden is borne by the consumer,” i.e., those (in business) 
who do not have enough basic foresight to eliminate the waste inherent in 
their systems.
* * *
If it at any time became a question between lowering wages or abolishing 
dividends, I would abolish dividends. That time is not apt to come, for, as I 
have pointed out, there is no economy in low wages. It is bad financial policy 
to reduce wages because it also reduces buying power. If one believes that 
leadership brings responsibility, then a part of that responsibility is in see-
ing that those whom one leads shall have an adequate opportunity to earn 
a living. Finance concerns not merely the profit or solvency of a company; it 
also comprehends the amount of money that the company turns back to the 
community through wages. There is no charity in this. There is no charity in 
proper wages. It is simply that no company can be said to be stable which is 
not so well managed that it can afford a man an opportunity to do a great 
deal of work and therefore to earn a good wage.
There is something sacred about wages—they represent homes and families 
and domestic destinies. People ought to tread very carefully when approach-
ing wages. On the cost sheet, wages are mere figures; out in the world, wages 
are bread boxes and coal bins, babies’ cradles and children’s education—
family comforts and contentment. On the other hand, there is something just 
as sacred about capital which is used to provide the means by which work 
can be made productive. Nobody is helped if our industries are sucked dry of 
their life-blood. There is something just as sacred about a shop that employs 
thousands of men as there is about a home. The shop is the mainstay of all 
the finer things which the home represents. If we want the home to be happy, 
we must contrive to keep the shop busy. The whole justification of the profits 
made by the shop is that they are used to make doubly secure the homes 
dependent on that shop, and to create more jobs for other men. If profits go 
to swell a personal fortune, that is one thing; if they go to provide a sounder 
basis for business, better working conditions, better wages, more extended 
employment—that is quite another thing. Capital thus employed should not 
be carelessly tampered with. It is for the service of all, though it may be under 
the direction of one.
Profits belong in three places: they belong to the business—to keep it steady, 
progressive, and sound. They belong to the men who helped produce them. 

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Money and Goods  •  151
And they belong also, in part, to the public. A successful business is profitable 
to all three of these interests—planner, producer, and purchaser.
People whose profits are excessive when measured by any sound standard 
should be the first to cut prices. But they never are. They pass all their extra 
costs down the line until the whole burden is borne by the consumer; and 
besides doing that, they charge the consumer a percentage on the increased 
charges. Their whole business philosophy is: “Get while the getting is good.” 
They are the speculators, the exploiters, the no-good element that is always 
injuring legitimate business. There is nothing to be expected from them. They 
have no vision. They cannot see beyond their own cash registers.
These people can talk more easily about a 10 or 20 per cent cut in wages 
than they can about a 10 or 20 per cent cut in profits. But a business man, 
surveying the whole community in all its interests and wishing to serve that 
community, ought to be able to make his contribution to stability.
It has been our policy always to keep on hand a large amount of cash—the 
cash balance in recent years has usually been in excess of fifty million dollars. 
This is deposited in banks all over the country, we do not borrow but we have 
established lines of credit, so that if we so cared we might raise a very large 
amount of money by bank borrowing. But keeping the cash reserve makes 
borrowing unnecessary—our provision is only to be prepared to meet an 
emergency. I have no prejudice against proper borrowing. It is merely that I 
do not want to run the danger of having the control of the business and hence 
the particular idea of service to which I am devoted taken into other hands.