That other 90% doesn't drop off the planet. It goes to a company that splits it into profit and expense. Both are spent by different people, but all the cash goes back into the economy.

The profits might be spent on luxuries, the costs on materials. Once again it split up. Every time a small fraction goes to the government, or to Henry Ford.

His point is that he wants all business in America to be vibrant, not just his own (because his businesses would die if it weren't part of an ecosystem)

Of course his employees are not his entire business model. But it sure improves margins, increases volume so economies of scale work better etc.

Note the evangelical nature of his argument - it all works better if everybody else does it too. He understood that perfectly.

It's effectively pure fascism. It works fine so long as you treat your workers decently and they don't revolt.

I mean, say what you like about fascists, but their factories always run at high capacity.

Maybe, but I'm not surprised to see that they failed around the same time the notion of a large corporation took off. The goal of a large corporation is to reduce liabilities while increasing profits, not the other way round. Company towns probably just weighed these companies down while they tried to turn their attention to a national infrastructure.

Almost completely. I don't know if Disney counts.

You could argue that the ~10 miles surrounding any Wal-Mart Super Center are company town-ish (company suburb?); I bet most of the money paid out comes back in from employees returning to buy staples (figuratively).

Company housing was very, very common in Europe when the Industrial Revolution really got started.

Many German towns which got a train connection early on have these typical big red brick houses were the workers lived, probably the most visible reminder of that practice.