Price and Economic Citizenship: Henry Ford and the Morality of Standard Prices

• In Event: Markets with Meaning: Emotion, Morality, and Justification in Economic Life

Abstract

Analyzing the case of Henry Ford’s attempt to set standard prices for hospital care, this paper takes on developing a theory of standard prices as a social and moral institution. The idea of standard prices, i.e. that each commodity should have one price regardless of who buys it, has been a key moral tenet in market economies, to the point that economists call the setting of different prices to different people “price discrimination.” Yet sociologists have hardly analyzed the consequences and meanings of standard prices. In the 1910s, the Henry Ford Hospital in Detroit introduced a novel model of standard healthcare pricing: every treatment that the hospital provided had a fixed price, and the hospital provided the patients it admitted with estimates on how much their care would cost. Behind the idea was a liberal, anti-charity morality that Henry Ford was very eager to promote: every patient, regardless of class, should pay the exact price that represents the cost of the services they receive. The model survived with various changes until WWII, when it began eroding until its ultimate collapse in the 1960s, which paralleled the collapse of Fordism. The case speaks to the moral meaning of market prices: their assumption of a nominally equal economic citizenry, which in effect excludes all non-members.

Author

• Roi Livne, University of Michigan-Ann Arbor