The Expanded and Annotated My Life and Work

Borrowing (and Government Subsidies) 
Cannot Cure Bad Business
The following material is equally applicable to government bailouts and 
government subsidies. Solyndra’s receipt of a half-billion dollar federal 
loan guarantee did not keep the company in business because federal sup-
port could not make up for the inadequacies of the company’s product 
and/or processes.
The Chevy Volt also is an example of a product that cannot stand on its 
own feet or, in this case, wheels without government assistance. Krebs (2012) 
reports that the Volt requires 12 years to pay back its premium price (the dif-
ference between its price and that of an equivalent gasoline-only vehicle) 

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Money and Goods  •  145
if gasoline is at $4 a gallon. “The premium charged for hybrids and EVs 
[electric vehicles] takes time for consumers to recover in fuel savings—often 
a long time, maybe even longer than they intend to own the car.” Note also 
that payback does not account for the time value of money which, despite 
today’s relatively low interest and dividends, is still substantial for 12 years.
These observations lead us squarely back to Ford’s original position. The 
producer must get the price down and the value up to the point where the 
consumer will buy the product or service. As stated below, “People buy 
what helps them just as naturally as they drink water.”
* * *
Money is only a tool in business. It is just a part of the machinery. You might 
as well borrow 100,000 lathes as $100,000 if the trouble is inside your busi-
ness. More lathes will not cure it; neither will more money. Only heavier doses 
of brains and thought and wise courage can cure. A business that misuses 
what it has will continue to misuse what it can get. The point is—cure the 
misuse. When that is done, the business will begin to make its own money, 
just as a repaired human body begins to make sufficient pure blood.
Borrowing may easily become an excuse for not boring into the trouble. 
Borrowing may easily become a sop for laziness and pride. Some business 
men are too lazy to get into overalls and go down to see what is the matter. Or 
they are too proud to permit the thought that anything they have originated 
could go wrong. But the laws of business are like the law of gravity, and the 
man who opposes them feels their power.
Borrowing for expansion is one thing; borrowing to make up for mismanage-
ment and waste is quite another. You do not want money for the latter—for the 
reason that money cannot do the job. Waste is corrected by economy; misman-
agement is corrected by brains. Neither of these correctives has anything to do 
with money. Indeed, money under certain circumstances is their enemy. And 
many a business man thanks his stars for the pinch which showed him that his 
best capital was in his own brains and not in bank loans. Borrowing under cer-
tain circumstances is just like a drunkard taking another drink to cure the effect 
of the last one. It does not do what it is expected to do. It simply increases the 
difficulty. Tightening up the loose places in a business is much more profitable 
than any amount of new capital at 7 per cent.
The internal ailments of business are the ones that require most attention. 
“Business” in the sense of trading with the people is largely a matter of filling 
the wants of the people. If you make what they need, and sell it at a price 
which makes possession a help and not a hardship, then you will do business 
as long as there is business to do. People buy what helps them just as natu-
rally as they drink water.

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146  •  The Expanded and Annotated My Life and Work