Fordism

Fordism, named after American automaker Henry Ford, is a term in economic history for the efficiencies and economic impact of mass production, following the model Henry Ford developed in the 1910s and 1920s. Fordism is closely related to Taylorism, which is the process of reducing waste by looking for inefficient worker activity and improving workshop organization based upon scientific studies of human efficiency and incentive systems, as developed by American engineer Frederick Winslow Taylor. "Post Fordism" is a Marxist term for what comes after Fordism.

Fordism in U.S.

In the U.S. Fordism is the economic philosophy that widespread prosperity and high corporate profits can be achieved by high wages that allow the workers to purchase the output they produce, such as automobiles. With high wages the employer has the pick of the most stable and most efficient employees, who have low turnover. They are more easily trained into Taylorite work practices that increase the factory's productivity.

"Fordism" was coined about 1910 to describe Henry Ford's successes in the automobile industry. Ford improved mass production methods and developed the assembly line by 1910. He sold 10 million inexpensive Model T automobiles, and made a vast fortune, while his employees became the highest paid factory workers in the world. As promoted internationally by the proponents of Fordism, Detroit served as a model of urbanism placed in the service of optimized industrial production.

As a technological fix, Fordism was part of the Efficiency Movement which characterized the American Progressive Era. After the Great Depression began, American policy was to keep wages high in hopes that Fordism would reverse the downturn. (It did not do so.)

Fordism Worldwide

Maier (1970) shows that Taylorism attracted European intellectuals after 1900, by its demonstration that workers did not have to work harder to be work smarter and be more productive. Taylor's ideas influenced especially German and Italian industry. After 1918, however, the goal of Taylorist labor efficiency thought in Europe moved to "Fordism", that is, reorganization of the entire productive process by means of the moving assembly line, standardization, and the mass market. The Great Depression blurred the utopian vision of American technocracy, but World War II and its aftermath revived the ideal.

Ford itself opened plants across Europe, and sold cars in major cities. As Bonin, Lung, and Tolliday (2003) show, the Ford model influenced every major country in Europe.

Ford's image transfixed Europeans, especially the Germans, arousing the "fear of some, the infatuation of others, and the fascination among all". Germans who discussed "Fordism" often believed that it represented something quintessentially American. They saw the size, tempo, standardization, and philosophy of production demonstrated at the Ford Works as a national service - an "American thing" that represented the culture of United States. Both supporters and critics insisted that Fordism epitomized American capitalist development, and that the auto industry was the key to understanding economic and social relations in the United States. As one German explained, "Automobiles have so completely changed the American's mode of life that today one can hardly imagine being without a car. It is difficult to remember what life was like before Mr. Ford began preaching his doctrine of salvation" For many Germans, Henry Ford himself embodied the essence of successful Americanism.

Austria

In Austria, for example, in the late 19th century, "American" became synonymous with modernity and most Austrian observers admired American technical progress and machinery. From the turn of the century, the writings of Taylor and his productivity models were in vogue in Austria until they were eclipsed during the 1920s by interest in Henry Ford's system of mass production. After 1927, however, ideological differences and waning interest in the American rationalization model caused a reduction in educational travel to the United States. Only after World War II, with the Allied occupation of Austria and the genesis of the Marshall Plan, did Austrian emulation of American productivity models resume and the number of government-funded study tours increase.

Germany

In Germany the "Reichskuratorium für Wirtschaftlichkeit" (RKW) was founded in 1921 by Carl Friedrich von Siemens and Carl Köttgen in order to introduce Taylorism and Fordism. Most recent research has identified forms of organized capitalism that include significant input from organized labor along with state and industry as the most "modern" forms. While these efforts stagnated and eventually failed under the Weimar Republic, they are still seen as the origin of a characteristic and successful postwar model of organized capitalism. Acknowledging that this view is accurate, Shearer (1997) draws attention to the alternate model of the RKW, which strove to implement technical and organizational measures of industrial and economic efficiency using state funding but avoiding significant input from organized labor. This variation of German organized capitalism emerged from the more traditional, self-regulating patterns of the late 19th century. It persisted through the Weimar Republic, through World War II, and into the postwar era. Less helpful toward explaining the character of the RKW are models from the 1970s Cold War era, which elaborated a strongly symbiotic version of organized capitalism between state and big business that allegedly subordinated efforts of big business to state interests.

After World War I Taylorism and Fordism influenced modernist German architects especially Walter Gropius, Eric Mendelsohn, Peter Behrens, Lazlo Moholy-Nagy, Marcel Breuer, Hannes Meyer, and Ernst May. They sought to reform and modernize German culture and housing by using more efficient building techniques, but criticism was sparked by the resulting standardization - exemplified by low-cost mass-produced apartments called "Wohnfords" - and there was a backlash against the influence of "Americanism" on German culture.

Denmark

In Denmark, a variant of Fordism called "productivism" was expounded by Danish economists in the 1920s. The law of increasing returns appeared in contemporaneous journals on economic theory, and it revealed the connections and contradictions between mass production, employment, wages, and economic growth in both society and the business community. Productivist ideas spread to the political parties, unions, and employers' associations. Productivism and Fordism promised economic growth and prosperity for all, but workers and employers accused each other of enriching themselves at the expense of the others. There was a movement toward consensus about productivism in the late 1920's, and productivism was adopted in the party program of the Social Democrats in 1927. The onset of economic world crisis halted further debate, but by 1943-45 the idea of productivism was broadly accepted by all political parties. Due to the so-called "Danish Model," the labor market was regulated without participation of the state. The political ideas of productivism thus could not succeed without a labor market compromise. This compromise was achieved by the creation in 1946-47 of shop committees ("samarbejdsudvalg"), where rationalization and cost reductions could be discussed. The transparencies of the rationalization process were thought to reduce distrust and create a situation in which both employers and employees could reap the benefits of rationalization.

Soviet Union

Hughes (2004) has detailed how the Soviet Union in the 1920s and 1930s enthusiastically embraced Fordism and Taylorism, importing American experts in both fields as well as American engineering firms to build parts of its new industrial infrastructure. Ford himself set up a major auto plant and sent in engineers and skilled mechanics. The concepts of the Five Year Plan and the centrally planned economy can be traced directly to the influence of Taylorism on Soviet thinking. Stalin himself said:

American efficiency is that indomitable force which neither knows nor recognises obstacles; which continues on a task once started until it is finished, even if it is a minor task; and without which serious constructive work is impossible . . . The combination of the Russian revolutionary sweep with American efficiency is the essence of Leninism. (Hughes 2004, 251)

Peripheral Europe

Similar developments and timing in Spain, Portugal, and Greece over the past 50 years arose from similar historical and economic backgrounds. Fordism, in terms of the modern system of mass production and consumption, came later to these semiperipheral countries than to the core countries of Western Europe. Once economic growth had brought a modern class system and class conflict, vertical control through state corporatism became obsolete; in 1974-75 dictatorships ended, societal corporatism - horizontal organization - replaced state corporatism, and "socialist" governments took power. Needing middle class support and under constraints of austerity, they were much more social democratic than socialist and furthered the consolidation of corporate liberalism.

Australia and New Zealand

Rolfe (1999) shows that both Australia and New Zealand were willing importers of Fordism, most especially in the fields of manufacturing, management, advertising, distribution, sales, and suburbanization. These ideas were transmitted through institutional networks - chambers of commerce and employers' and manufacturers' associations. Leaders of this trend moved easily between business and government. Successful assimilation of Fordism also required the co-optation of labor leaders. New Zealand acquired some ideas indirectly through Australia, whereas Australia went directly to the U.S. for its models and ideals. Australia also relied more heavily on loans for industrial development, many of which supported expansion and modernization of American firms. Rolfe finds little American cultural imperialism in either country.

Resistance came from both labour unions and management, especially in Britain, where craft-dominated trade unions controlled the shop floor and prevented management from introducing Fordist methods of work organization and an associated pattern of regulation. The introduction of mass standardized production on the Fordist model was less than successful during the post-WW2 period yet employee resistance appears less significant than employer resistance and the structural impact of British markets.

The Bedaux system

The Bedaux system was a specific program of rationalization with elements of Taylorism and Fordism. Based on the work of Charles E. Bedaux, the system represented a method of time and motion studies with aspects of both wage management and business management. Regarding wages, Bedaux was a simple premium system based on guaranteed hourly wages. Regarding business management, however, the Bedaux system emerged to be a rather modern system of managing and accounting. Bedaux started as a special system for work measurement and wage determination but turned out to be effective above all as a general system for the management of business organization, manufacturing, and cost controlling. It covered both blue- and white-collar workers, especially of middle management. During the 1920s-1930s there about one thousand companies in 21 countries adopted Bedaux, mainly in the United States but also in Britain and France. In Germany, however, the Bedaux system operated only in the rubber and tire industry, because most German businessmen were reluctant to adopt this new "American system" and preferred the German "Refa" system, ignoring that the rationalization effects of the Bedaux system were much more far-reaching than only the reduction of labor costs. Furthermore there was strong resistance in the German labor movement to the Bedaux system. Continental, the leading rubber company in Germany, was open minded about the system and profited heavily from it, thus surviving the Great Depression relatively undamaged and improving its competitive capabilities.

Marxist Post-Fordism

Under the inspiration of Antonio Gramsci, Marxists picked up the Fordism concept in the 1930s and in the 1970s developed "Post-Fordism." Antonio and Bonanno (2000) trace the development of Fordism and subsequent economic stages, from globalization through neoliberal globalization, during the 20th century, emphasizing America's role in globalization. "Fordism" for Gramsci meant routinized and intensified labor to promote production. They argue that Fordism peaked in the post-World War II decades of American dominance and mass consumerism but collapsed due to political and cultural crises in the 1970s. Advances in technology and the end of the Cold War ushered in a new "neoliberal" phase of globalization in the 1990's. They argue that negative elements of Fordism, such as economic inequality, remained, however, and related cultural and environmental troubles surfaced that inhibited America's pursuit of democracy.

Fordism is also a Marxist term for a "form of production" or "production paradigm" that spread from the US to Western Europe after 1945. It consisted of domestic mass production and stabilizing economic policies that provided national demand and social stability by paying relatively high wages, and it also included various other economic policies. Fordism is related to Keynesianism and also Taylorism. The social-scientific concept of "Fordism" was introduced by the French "regulation school," sometimes known as regulation theory, which is a Marxist-influenced strand of political economy. According to the regulation school, capitalist production paradigms are born from the crisis of the previous paradigm; a newborn paradigm is also bound to fall into crisis sooner or later. The crisis of Fordism became apparent to Marxists in late 1960s.

Marxist regulation theory talks of Regimes of Capital Accumulation (ROA) and Modes of Regulation (MOR). ROAs are periods of relatively settled economic growth and profit across a nation or global region. Such regimes eventually become exhausted, falling into crisis, and are torn down as capitalism seeks to remake itself and return to a period of profit. These periods of capital accumulation are "underpinned", or stabilised, by MOR. A plethora of laws, institutions, social mores, customs and hegemonies both national and international work together to create the environment for long-run capitalist profit.

Fordism is a tag used to characterise the post-1945 long boom experienced by western nations. It is typified by a cycle of mass production and mass consumption, the production of standardized (most often) consumer items to be sold in (typically) protected domestic markets, and the use of Keynesian economic policies. Whilst the standard pattern is post-war America, national variations of this standard norm are well known. Regulation theory talks of National Modes of Growth to denote different varieties of Fordism across western economies.

Fordism as a ROA broke down, dependent on national experiences, somewhere between the late 1960s and the mid-1970s. Western economies experienced slow or nil economic growth, rising inflation and growing unemployment. The period after Fordism has been termed "Post-Fordist" or Neo-Fordist. The former implies that global capitalism has made a clean break from Fordism (including overcoming its inconsistencies) whilst the latter that elements of the Fordist ROA continued to exist. The Regulation School preferred the term After-Fordism (or the French Après-Fordisme) to denote that what comes after Fordism was, or is, not yet clear.

Other meanings

The concept may also refer to some of Ford's idiosyncratic social views:

• Fordism was Aldous Huxley's term for the fictional religion-like ideology described in his highly influential novel Brave New World.
• Fordism can describe the paternalistic "taking care of the worker" - a "family-like" mentality seen first in the auto-industry (Ford). The paternalism could be kindly (providing benefits) or restrictive (for example, Ford discouraged smoking even off premises). Ford had a "sociology department" to help the workers shed traditional behavior patterns and modernize themselves, and vigorously promoted Americanization programs.

See also

• Efficiency Movement
• Progressive Era
• Henry Ford

Bibliography

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• Williams, Karel, Colin Haslam and John Williams, "Ford versus `Fordism': The Beginning of Mass Production?" Work, Employment & Society, Vol. 6, No. 4, 517-555 (1992), stress on Ford's flexibility and commitment to continuous improvements