Written by: Liam Selfors
Ford's Automotive Revolution
The Economic Impact of Henry Ford's Assembly Line
In 1913, Henry Ford began producing automobiles in mass quantities using a conveyor belt assembly line system. This more efficient production method allowed automobile production to improve by not only significantly speeding up the process which allowed the industry to supply more automobiles, but also limiting the production costs, and simplifying jobs. The affordable car revolutionized the world, redefining how houses were designed (with a garage), inspiring artists and entertainers with the assembly line and the modern car, and destroying unemployment creating jobs in factory management, civil engineering, road working, and car maintenance.
When considering Henry Ford’s implementation of the assembly line from a supply and demand point of view, the explosive and speedy production of automobiles increased the supply of automobiles significantly, which greatly increases the nation’s GDP while decreasing the price of cars. According to history.com (http://www.history.com/this-
Side note: To put the whole $300 price tag into perspective, you may be thinking: “Wow, $300 is not a lot of money at all! But, I know that because of inflation money went a lot further back then.” While you are right, I think you will definitely be surprised to hear that when adjusted for inflation, Ford’s model T assembly line cars would sell for about $3500 today. Brand new. I don’t know about you, but I would jump on that price any day.
With cars available at unbeatable prices, everyone began financing cars. Although this did play a role in creating the debts that drove the nation into the great depression, it shaped the early 20th century and still defines our modern society. Houses were now designed with garages to protect the cars. Gasoline became a necessity for everyone. Travel was becoming more affordable and practical. Horses were becoming obsolete. Time that was spent walking was freed by speedy automobiles which allowed peoples’ time to be spent more efficiently and economically. Automobiles modernized shipping and trading. Without automobiles our world would look entirely different.
Ever heard the name Charlie Chaplain? One of his most famous short films, The Assembly Line, (can be viewed here:https://www.youtube.com/watch?
Flash forward to modern day, we don’t use exactly the same system as Henry Ford used to revolutionize the world. In 1980, we adapted Japan’s improved manufacturing system called “lean manufacturing” which basically followed the same idea as the assembly line, but minimized production costs and maximized economic benefit. Overall, the incredible production surge of automobiles, enabled by the assembly line, not only created a massive amount of economic growth in 1913 America, but also affected the global economy and indirectly created jobs for the next century to come. Additional sources: http://mitpress.mit.edu/books/
The simple invention of an assembly line drastically increased the output of whatever was being produced. Meaning cost where saved workers could be eliminated and time was saved. so it increased the supply decreased the cost overall it was much more efficient to use an assembly line then to manually produce each part individually.
ReplyDeleteI loved learning about topics like this and the industrial revolution back in US History so I'm really glad I read this one. We often focus on how this assembly line brought forth great improvements to production world wide but over look the devastation this whole industrial movement brought to some Americans. Many people were out of jobs very suddenly and had troubles finding jobs that weren't already replaced by machines. This makes me think of the solving deficit problem practices we have been doing where decisions are hard to make in the government because you can't please every with actions like tax cuts or increased government spending. Similar to this, the industrial revolution was a difficult transition as it didn't always please everyone but it resolved in advancing our nation in many ways.
ReplyDeleteBut, it wasn’t just the car industry that changed due to the production line, many items we use now are created by a production line. Today, it’s taken a step further by replacing manual labor with machines. While this helps the companies and consumers economically, what once created jobs is now leaving people without the necessary skills to work in any other field. This job field is now almost obsolete and has created rampant structural unemployment.
ReplyDeleteThe industry that centers around automobiles and motor vehicles and the process of their manufacturing has taken a number of erratic turns over the past century. While the assembly line is often overlooked as an innovation brought on by the industrial revolution because it is common in modern society. Efficiency came with the price of unemployment as those who had previously worked in factories lost their jobs.
ReplyDeleteThis is an awesome topic! Very interesting. My brother actually just did a speech on the progression of cars and what the future holds. I think a big reason prices have gone up so much is because consumer reliance on cars as blown through the roof. The average amount of time people spend in their car each day has increased. According to www.gov.uk, "The average distance people travel per year has increased by 49%", since the early 1970s. I see Teah's point about increased structural unemployment but I think the progress of technology has also provided a lot of jobs in the areas of research and technology development, the jobs are just placed differently. Great topic Liam!
ReplyDeleteYour topic is super interesting and I know a lot of us learned about Henry Ford in history class, but never really looked at it in an economic perspective. I agree with Olivia, consumer reliance on cars is huge. I know that most of our parents rely on their cars to go to work, to take their kids everywhere, to go out with friends, and even for family vacations. I know that I rely on my car a lot to go to work and to hangout with my friends. I think that the car industry is huge in our economy because of consumers and it does open up a lot of opportunities for jobs and technology development as Olivia also mentioned.
ReplyDeleteWow, I never thought of it like that. But if you think about it there are so many cars just even in the student parking lot; we rely on them so much to get us to practice, home, job, and other places. I also agree with Olivia when she said consumer reliance is extremely important at least in Wisconsin when our jobs are "far" away from our homes where having a car in maybe New York City isn't that big of a deal. Although in past years the car industry was down I think that as our economy gets stronger the car industry will also get stronger as well.
ReplyDeleteYour post does bring some interesting points to mind. Cars are a massive and very important part of our lives. I also agree with Maya and Olivia that consumer reliance is extremely important. Having lived in California, cars weren't put on such an emphasis because you could longboard or walk anywhere because of the weather. Here in Wisconsin the weather is very unpredictable and the need for a vehicle is important making people not only buy cars but cars that can withstand the cold.
ReplyDeleteWe learned about this in APUSH a few weeks ago and it's amazing how during the time period it was very productive and economically beneficial for everyone. It increased employment and consumer spending and it also created a demand for a large number of new products. Still, it was also a cause of the Great Depression because of the amount of loans people too out and how they couldn't keep up with the rising interest rate, so I wonder if we ever had a time period that productive again if we would try and slow it down? It's really interesting to see the effect one product can have!
ReplyDeleteIt's interesting to see how much the assembly line transformed production and especially interesting to see how prices have changed over time. As the production of cars became easier through the assembly line, supply increased so it would make sense for cost to decrease right? But as time went on and technology improved, prices continued to increase as well. I agree with you that $3,500 would be great to pay for a new car but as the cost of production went up it would make sense for us to pay these extreme amounts regardless of inflation.
ReplyDeleteIt is hard to believe that a $40k vehicle now, was a $600 car back in the early 1900's. I completely agree with Dom's post about consumer reliance and how that definitely has an impact on how much you sell/ buy the car for,or if you decide to purchase one at all. Many people don't bother purchasing vehicles if they live in the middle of the city or close to everything they need.
ReplyDeleteThis post was very interesting to me because I really like to learn about cars, but I never though about how big of a change their prices went under since the 1900's. It amazes me how even though more and more cars were able to be produced faster ( increasing the supply) the prices still went up, but I guess the advances in technology also have a big part in the big price tag.
ReplyDeleteI agree that Henry Ford was thinking along the right lines when he came out with the Ford automobile. It seemed to do a lot of good for America creating jobs, creating a affordable car, and improving transportation. It is crazy today to think that something that started as one company and one idea is now all around the world and is a everyday item in almost everyone's lives. Today, cars are obviously a lot more expensive then back then, but maybe with our economic crisis today we need to find a way to make cars more affordable and somehow create more jobs with them like Henry Ford did. Nice job!
ReplyDeleteWhat a neat way to tie history into economics! You bring up some interesting points about how the assembly line made cars way more affordable and actually created jobs for people, but I wonder if that success came immediately or if there was some lag time between the invention of the assembly line and its success. Some people probably initially lost their jobs when the assembly line was introduced due to structural unemployment, but after a given period of time, the demand for cars went up and with it came the availability of jobs. This lag between the initiation of a policy and its effect also ties into government's fiscal policy and how sometimes society becomes impatient while waiting for the effect of a policy. Henry Ford's assembly line is a great example of why patience is necessary to wait for the effects of success in the economy -- both with supply and demand, and fiscal policy. Great job!
ReplyDeleteIt is always interesting to see things that you don't normally think of economic related to be economic related! I think that more people needed jobs once there was an assembly line because now instead of one person making the whole car there is 50 people making each part of the car. Although some of the originals may have left because they were no longer making the same money that they would have been making before I think overall this also helped unemployment if there was any at the time. That is a good idea bridget! I am not sure how we could make cars even less expensive at this point but if it was possible then I think that this would help but most people right now are focusing on green cars and things like that. Those types of cars need to be cheaper because of the fact that people want to buy them but they are generally more expensive. Good Job Liam!
ReplyDeleteI agree with the fact that are world would be different without cars. If we didn’t invite the car just like of all the other things that may not have been made like airplanes and all the jobs that would never have been made. The automobile was a more impotent invention then I thought it was.
ReplyDeleteThis was a pretty neat topic. I didn't know how cheap brand new cars we in the "old days". Automobiles are such a big part of our lives today, in some cases it would be impossible to live without cars if their job is a far ways away from home. It is pretty crazy how fast America grew because of the automobile and Henry ford.
ReplyDeleteWho would have known that such a simple idea of a moving assembly line would change the work force for ever. I'm rather surprised that cars were that cheap back then and are still with the inflation rate is only $3500. America seemed to be doomed until automobiles took over the United States... I wonder what our country would be like today if we didn't have such an idea from the genius Henry Ford.
ReplyDeleteIt truly is interesting how you included history into all of this, it is weird to consider where we would be without the assembly line. The industrial revolution changed so much and gave so many jobs to those in need, now we are experiencing the age of technology were people being replaced by machines. The introduction of the assembly line has changed the economy forever. Ford improved the economy greatly by introducing the cheap automobile as well as providing jobs. It would help a lot with the deficit if something like this happened again.
ReplyDeleteThis topic is very interesting. The world would be so different if we didn't have cars. Vehicles are a huge part of our life and it would be super hard to live in a world without them. Because of Henry ford we have cars. If it weren't for him we might not, though I'm sure at some point somebody would have invented them. And because of car assembly lines thousands of people have jobs. Which help boost our economy. Where would we be without Henry Ford and the invention of cars.
ReplyDeleteReiterating some of the points made by Teah, this type of production began to revolutionize all means of corporate productivity and not just automobiles. It's part of the reason why we as Americans are seen as workaholics to the rest of the world; we're always on the move and need things done quickly: fast food, Netflix, Amazon, and so on. Even instantaneous isn't enough for some people! Reduced human capital from machine oriented production has transformed millions of jobs into low skill, easily expendable positions. A cashier doesn't need to be good with numbers to be a decent employee. The register does most of the computing for them and the business doesn't lose a cent from their profits. Our swift transition into machine and AI dominated fields is inevitable, but we should try and use our technological innovations to create jobs elsewhere.
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