Harry Ferguson: Mechanical Genius Part III

Enlarge Image Image Gallery The 200,000th "Little Grey Fergie" produced at Banner Lane.

In the final installment of a three-part series, Jane Brooks concludes her look at the life and times of Harry Ferguson. In the early 1940s, the brilliant inventor turns his energies to international economics – but soon enough faces challenges close to home. Read part I. Read part II. 

With the lawsuit behind him, and his American plant continuing to produce the TO-20, Harry Ferguson abandoned the life of a nomad and returned to the tranquil setting of Abbotswood, his Cotswolds haven. After his epic fight, Ferguson was finally able to concentrate on the business of tractor manufacture and promote his rather naive view of international economics.
He was very interested in the potential impact of farm mechanization on reducing poverty and hunger. In 1943, he spoke at the first United Nations Conference on Food and Agriculture, held in Hot Springs, Va. "I know many of you represent countries where the farms are very small," he told conference attendees. "The smaller the farm, the more urgent the need for mechanization. The small farmer has a life of slavery and poverty. This is all wrong. Agriculture should have been the first industry to be modernized and not the last."

Belief in low prices
In 1947, Ferguson outlined his solution to the problem in a paper titled The Price Reducing System. "My whole economic philosophy and all my efforts are guided by the knowledge that the best way to improve the total economy will be through cutting the costs of production of agricultural products, which control the cost of living," he explained. "There must be implements of an altogether new type which will produce, for the first time in history, enough food to feed all the people of the world. And, also, produce from the land – the source from which all wealth comes – a new wealth to enrich the world.
"Our plan for prosperity, security, and peace can be stated in two simple propositions," he wrote. "Make the good earth produce more than enough to keep its whole population in comfort and contentment. And what is equally vital, produce ‘more than enough' at prices which the people of the world can afford to pay. That is our ambition. That is the course to which I am wholly dedicated."
With a belief that inflation caused worldwide unemployment and poverty, which led to the rise of Communism, Ferguson's solution was lower prices, which he believed would lower inflation starting with agriculture. By mechanizing agricultural production, he reasoned, food prices would fall, reducing want and poverty and halting the rise of Communism. 
In Britain, the Labour government started a program of nationalization. American aid was vital to post-war recovery efforts. Ferguson opposed nationalization of the steel industry and, in 1949, wrote to each member of Parliament and every Conservative and Liberal peer, lobbying for his position. However, it was generally accepted that Ferguson was an idealist and his system doomed to failure. Ultimately, the only place his price reducing system was adopted was in his own company.
Ferguson's faith in his pricing system affected the company's performance, although demand for his tractors was good enough to sustain any price rises caused by additional production costs. But such increases were not passed on to the customer, resulting in insufficient profits to build up a safety net of working capital.