Fordism and its crisis

  • Created by: sikemi__
  • Created on: 29-05-21 16:07

What is Fordism?

  • Term used to capture economic growth from mid 1930s to late 1970s
  • Seen by many as golden age of economic growth where inequality wasn't as great as today and working people were unable to unionise and make a living wage
  • Term used in three ways:
    • As an era - end of WW2 to mid 1970s, period characterised by high economic growth around norms of industry established by firms such as Ford
    • Socio-economic system - production system, reorganisation of the production system that revolutionized industry (manufacturing, clerical services)
    • Broader system of capitalism and social relations - revived Gramsci's notion of Fordism - as the political economy of capitalism - particular combination of industrial organisation, state policies, and worker representation that characterised the period
  • Fordisms is the term used to describe  the dominance and spread of Fordism in different countries
  • Fordism is a socio-economic system characterised by...
    • Mass production
    • Highly structured labour relations (rise of unions)
    • Mass consumption (workers were making more money and could consumer more)
    • Monopoly or oligopoly power
    • State regulation
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Ford as a paradigm

  • Ford as an exemplar - formed in 1903 in Michigan
  • Business model was about economies of scales
  • Henry Ford and the Model T - cheap and functional
  • Ford was an early, multinational
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What made Ford Fordist?

  • New structures of management and control
    • Taylorism - severe technical and social division of labour to increase worker productivity
  • Moving assembly line started in Highland Park in 1913
    • Dedicated machinery and tasks for each worker
    • Machinery operation deskilled workers
    • Time to make a Model T reduced from 12.5 hours to 93 mins
  • Hierarchical control
    • Centralised all work-floor knowledge into management rather than a skilled workforce
    • Original craftworkers found this troubling as they lost jobs to unskilled workers
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Working at Ford

  • High levels of intensity and stress
    • By the late 1920s, work intensified- pace of the assembly line was constantly increased
    • No talking allowed on the line
    • Constant surveillance - informers and spies in factory, streets and at home
    • Adversarial industrial relations
  • Labour relations
    • High rates of labour turnover, low productivity, labour unrest
    • Forced to introduce profit sharing in 1914 - employees could earn $5/day for 8 hour day, forging link between production and consumption - pay workers enough so they could aspire to buy a Ford themselves, but still little security (no pension, no job security, no social welfare)
    • Extreme paternalism - demands on production and social reproduction (ways in which workers renew themselves for the job and produce the next generation), tied up with class and ethnicity
  • However...
    • Extra pay was conditional - workers (often immigrants) had to display strict discipline' loyalty (anti-union), efficiency (no drinking) and stable family life. They had to be deemed suitable to handle extra money by strict adherence to Ford's do's and don'ts
  • Early expansion of Ford happened with the big, new River Rogue plant which became synonymous with speeding up the line and the fear that workers had
  • Fights against unionisation...
    • Biggest don't was joining the union - enforced by Ford's Service Dept
    • Early attempts to unionise the industry failed - Detroit was the 'graveyard of organisers'
    • 1993 - new Roosevelt administration passed the National Recovery Act, including provision that guaranteed workers the right to organise and bargain collectively
    • 1935 - United Automobile Workers formed by American Federation of Labour
    • First union - 1941 - Ford becomes unionised at Highland Park
    • 1944 - union also accepted at Ford's plant in Dagenham
  • Violence - Battle of the Overpass (1937)
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Understanding Fordism as a production system

  • By the 1950's workers were unionised and commanded a relatively good wage
    • Union contracts ensured that workers shared in the tremendous productivity increases
    • Commanded a 25 fold wage increase and 40% reduction in working hours
    • Allowed workers to consumer industrial products on a mass scale
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Success of Fordism

  • By 1962, Ford alone accounted for approc 1.5% of total nonfarm GDP in US ($8.1 billion in sales)
  • System progressively widespread in other manufacturing sectors
  • Spread to other firms and industries
  • Growth of Fordisms: wide variation found from firm to firm, region to region, industry to industry and country to country
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Fordism as social relations (Detroit)

  • Detroit became somewhat paradigmatic of the particular type of economic/social/cultural growth of workimg class culture
  • Racial history of Detroit...
    • New assembly line techniques required little prior training or education to get a job in the industry
    • Rapid growth in 1920s - workers came from Eastern and Southern Europe
    • Black workers came from US south
    • Racial riots to protest black racism
    • Racialised housing segregation - maintained with redlining (workers couldn't get mortgages in particular neighbourhoods, no matter what their income was
    • Union wasn't welcoming to black workers
    • White population and jobs move to suburban ring
    • Majority black city by 1970s - black mayor in 1974
  • Labour relations systems, which black people became part of much later on were very adversarial. It did however have a relatively stable relationship between labour and management over time.
  • For most years, they were able to negotiate wage increases that were a proportion of the increase in productivity
  • This led to a virtuous cycle or a wage led demand
    • Increased production - unions - increased wages - welfare state and state demand - increased demand
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The role of the state

  • Rise of the welfare state - Keynesian policies to directly stimulate demand (consumer goods, infrastructure, housing, health and education)
    • Welfare state broadens the base of individual consumption and allows govt spending to counter low demand
  • The state directly promotes production
    • Industrial policy/state owned industries (Europe), defence spending (US) or Military Keynesian (Markusen)
  • Oligopoly power - litttle compettiion or differentiatio
  • State institutions structure the market in each country
    • Legal system (disputes, property law, corporate law)
    • Financial system (funds through stock market, parent firms, venture capital)
    • Labour market (minimum wage? part time workers, handling of strikes, public healthcare)
    • Education system (social reproduction of labour)
    • Structure of govt (which level has the power to tax, attratc firms or determine spending)
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Gender and Fordism

  • Based on stable working class - the nuclear family supported by a male breadwinner and women's domestic labour underpinned by Keynsian economic and welfare policies that ensured reproduction of the working class (McDowell)
  • Women increasingly working under Fordism - full and part time - drawn into tight labour markets
  • Women often in bottom of occupational hierarchy in less skilled jobs - paid less
  • 1970 - Equal Pay Act and 1975 - Sex Discrimination Act
  • 1971 - female employment rate  was 53% whilst males was 92%
  • Women 'ghettoised' in female dominated occupations
  • Often part time employment with less security and fewer rights and benefits at work
  • Often forced to leave work/work part time
  • Change facilitated by rise of social welfare (state income support, some childcare, care for the elderly)
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Geographies of Fordism

  • Locally - communities grow up around an industry (e.g. factory)
  • Nationally - Early Fordist production was regionally concentrated in a few industrial centres
    • US - autos in Detroit and the midwest, metal working industries in Milwaukee and steel in Pittsburgh
    • UK - Birmingham, west Midlands specialised in automobiles, aerospace and engineering. Wales dominated by coal and metal manufacturing industries
    • By 1960s, growth of branch plants and spatial division of labour internally (low cost periphery) and internationally
  • Internationally - 1960s: beginnings of off shore production when firms first start to move production overseas to new makets and less expensive countries
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Weakening of Fordism

  • Declining corporate profits and productivity rates
    • Marked the end of the post war boom
  • International character of economic relations
    • New economic competitors
  •  Changing international patterns of trade and investment
    • Increasing importance of imported goods
    • Inflation and rising unemployment
    • Firms laying off workers, closing down, leaving the country
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