In the free-market theory of economics, everything is naturally drawn to a mutually beneficial equilibrium as if by gravity. Workers unhappy with their pay or working conditions will find a new job. Customers unhappy with their cell phone provider’s pricing or customer service will switch to another provider. An employer who wants to stay in business will raise wages or improve conditions if she’s losing too many workers, and cut prices or invest in better service if she’s losing too many customers. It’s all very clean and elegant.

Supporters of this idea could point to Henry Ford’s Crystal Palace as evidence. When we left Ford, he was trying to solve the horrendous turnover problem caused by his debut of the assembly line in 1913—workers were so miserable that he couldn’t keep the Crystal Palace staffed, and it was crippling production. So in 1914, Ford announced the famous five-dollar day—a raise in wages to nearly twice what you could make elsewhere in Detroit.

There’s a lot of mythology about why he did this; anything attributing it to Ford being a nice guy or something is pure bullshit. Know this: Ford had to offer five dollars a day to make it worthwhile to put up with the miserable conditions of the Crystal Palace.

But the markets worked—Ford’s turnover problem vanished. Other factories around Detroit—and soon the rest of the country—had to raise wages to compete for the best workers. A comfortable middle class started to form. The free market worked.