Portrait of Henry Ford (ca. 1919) (Photo credit: Wikipedia)
The left has been arguing for some time now that Henry Ford increased his employees’ wages so that they could buy the cars they built (see the Huffington Post, Daily Beast, etc.). They believe that Ford’s doubling of the average employees’ wage to $5 per day in 1914, which was followed by a period of tremendous growth, vindicates their argument that raising individual incomes through government fiat by increasing the minimum wage will make Americans wealthier and combat “inequality” without negative effects.
However, a book out last year titled “The Dao of Capital: Austrian Investing in a Distorted World,” written by hedge fund manager and ardent free-marketeer Mark Spitznagel, argues that the true lesson of Ford’s doubling of wages was not about enabling employees to buy Model T’s.