Firing up the grill is one of the highlights of celebrating Independence Day. And, while the 4th of July is about a whole lot more than grilling, those charcoal briquettes surprisingly represent some of the benefits of the liberty, entrepreneurship, innovation, and progress that's driven by economic freedom.
What does charcoal have to do with liberty and economic freedom? As it turns out, a whole lot actually.
The Kingsford Company — one of the most recognized companies in America — was started by the famous Henry Ford as the Ford Charcoal company, as an effort to cut costs for his customers. Today, Kingsford ships nearly a billion pounds of charcoal briquettes (Kingsford spells it briquets) every year. Here’s the story:
Henry Ford’s wildly successful Model T, introduced in 1903, required a lot of wood — even the wheels were made out of wood! The production process also produced a lot of wood scraps. But, Henry Ford didn’t become a wealthy entrepreneur by wasting valuable resources; even the fractional costs of leftover wood scraps began to add up.
Ford needed a way to repurpose those wood pieces piling up in his scrapyard in a profitable way, meaning, he needed to find a way to use them to produce something of value to consumers. This was something that Ford was – but not always – exceedingly good at it. A good entrepreneur not only delivers what people say they want, but also has the foresight to identify needs they may not even know they have yet. Ford famously quipped, “If I had asked people what they wanted, they would have said faster horses.”
Ford found a way to use those discarded wood scraps by adopting a process for turning waste wood into something customers wanted: charcoal briquettes. The product was a hit and the Ford Charcoal eventually became the Kingsford Company, named to honor a relative of Ford.
So, the iconic bag — sitting at the forefront of Lowes and groceries stores across the U.S. this weekend — represent a beautiful story of entrepreneurship operating in a free market. Through the capitalist process, entrepreneurs, in the pursuit of profit — yes, that’s not a dirty word — constantly strive to innovate and create products that improve our lives.
And the good news is, this process is only speeding up in today’s modern economy. While it took over 60 years for most U.S. household to adopt automobiles as an ordinary household good, new technologies like the computer and cellphones took just 15-20 years: Cellphones, introduced in the 1980s, cost thousands of dollars to produce. However, the profits encouraged new businesses to enter into the business and engineers quickly found ways to cut costs to make cellphones affordable to the vast majority of people.
Economic freedom and liberty foster innovation, entrepreneurship, and progress. So much, in fact, that we take for granted many of the simple innovations that improve our lives on a nearly day-to-day basis. Unfortunately, that also means we may begin to take the economic freedom, which enables these products, for granted as well. We’ve actually seen a drastic decline in economic freedom recently in the U.S. And a new report by the Mercatus Center finds that this doesn’t bode well for future entrepreneurship and economic prosperity.
Yes, the rise of King (Char)coal is due to the economic liberty our Founding Fathers fought for and I hope this little history lesson inspires Americans to recognize the full significance of Independence Day in 1776. As Americans fire up their grills this weekend, hopefully they will take the moment to appreciate the countless blessings that economic freedom has provided to the U.S. including longer life expectancy, economic opportunity, and yes, charcoal briquettes as well.