Toyota is the best-selling car brand in the world, and the Toyota Corolla is the best-selling model in the world. This is the improbable story of how a 19th century book by a Scottish author fueled Toyota’s global dominance in the car industry.
The Toyota story belies the deceptive message of Bernie Sanders and other politicians like him who proclaim that corporations put the drive for short-term profits above all. This populist lie has been told so often that many Americans believe the falsehood that workers’ interests are in conflict with corporate profits.
Japanese inventor Sakichi Toyoda is the grandfather of the Toyota company. In his book How Toyota Became #1, David Magee explains how Toyoda, born in 1867 into a working-class family, “watched his mother and other women in the community struggle daily with the physically taxing hand-operated wooden looms.”
A relentless inventor, Toyoda “spent his days observing the women and put in long hours at night working to solve the problems he observed by developing better and continually improved machinery.” In his lifetime, Sakichi Toyoda patented over 100 inventions.
Studying Western business was not a common undertaking in 19th Century Japan. Yet Toyoda traveled to Europe to gain exposure “to Western business principles and philosophies.”
Toyoda, according to Magee, was “particularly captivated” and “heavily influenced” by Scottish author Samuel Smiles.
Smiles explained his doctrine of personal responsibility in his 1859 best-selling book Self-Help. Smiles’ Self-Help is the only book on display at Toyoda’s Memorial House.
“Nothing creditable,” Smiles wrote, “can be accomplished without application and diligence; that the student must not be daunted by difficulties, but conquer them by patience and perseverance; and that, above all, he must seek elevation of character, without which capacity is worthless and worldly success is naught.”
Through study of Smiles’ work, Toyoda developed a philosophy of “contributive business”: “Inventors and industrialists changed the course of society by blending ingenuity with a focus on bettering humankind through the workplace.”
Customers benefit from the company’s improved efficiency as employees “improve the quality of their own lives and those of their coworkers.”
Kiichiro Toyoda was the son of Sakichi Toyoda. In 1935, Kiichiro built the first Toyota automobile.
Carefully instructed in his father’s philosophy that “workers are the treasure of the factory,” Kiichiro codified his father’s philosophy with operating principles such as:
Be ahead of the times through endless creativity, inquisitiveness, and pursuit of improvement.
Be kind and generous; strive to create a warm, homelike atmosphere.
Be reverent, and show gratitude for things great and small in thought and deed.
Magee writes that “The secret to Toyota’s success” begins “with an underlying focus on ‘respect for people.’” Magee explains:
By maintaining a focus on one very lofty ideal, and by implementing and maintaining a business structure that encourages every employee to be actively engaged in pursuing the company’s goals, Toyota is developing into a self-regenerating internally combustive enterprise.
Jim Press is a former president of Toyota Motor North America. Press told Magee that he did not watch stock prices because “it leads to bad decisions.” Magee observes that Toyota’s “business mantra is not so much about quarterly earnings and net profit as it is about striving each day to develop people.”
Human beings can continually improve. As Smiles wrote, “The spirit of self-help is the root of all genuine growth in the individual; and, exhibited in the lives of many, it constitutes the true source of national vigour and strength.”
By respecting and enabling that human improvement process, Toyota grew too. Magee found that,
Toyota places so much emphasis on its employees’ acceptance of the company’s primary principles that getting a job at the company is an accomplishment in itself. To be considered for employment, one must subscribe to the belief that anything, from a loom to an automobile and the processes used to make them, can be improved, and that humans have the capacity to do so when they apply their efforts to the proper pursuits. Such talk would sound like mere public relations spin were it not entirely true.
In contrast, Bernie Sanders delivers a message of oppressed workers in conflict with corporations. Like many career politicians, Sanders knows nothing of the business practices of successful businesses.
Sanders found inspiration in Karl Marx and has praised Communist governments. Most recently Sanders defended the record of Fidel Castro.
Toyota gained success by practicing the teachings of Samuel Smiles and developing the gifts of their workers.
Samuel Smiles and Sakichi Toyoda would say Bernie Sanders's view of the world is dangerously mistaken and threatens America’s prosperity.
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Barry Brownstein is professor emeritus of economics and leadership at the University of Baltimore. He is the author of The Inner-Work of Leadership. To receive Barry's essays subscribe at Mindset Shifts.