Fordism and the US Economy Essay Example | Topics and Well Written Essays - 2500 words

Fordism and the US Economy - Essay Example The decline of Fordism was not an abrupt one; rather it was a gradual but inevitable process which can be attributed to three major factors: Advancement in technology, particularly in information and communication, the emergence of a new capitalistic model and the rise of the globalized economy. In order to understand how the Fordism came to an end, it is necessary to evaluate its significant attributes. Fordism, considered by scholars as a second type of industrial revolution, as typified in reference to Henry Ford's system of production which delineated specialization in mechanical techniques in the assembly line (Nadesan 259). The era also brought forth the rise of corporations and speedy growth in consumer culture giving rise to American consumerism. In its abstraction, Fordism is mainly the mechanization of production. It is also marked by protectionist market policies, oligopolistic competition, integration of the banking and finance business with the state and considerable focus on capital (Amin 1-40). Hence, it is safe to refer to Fordism as the ideal type Western Capitalism which puts emphasis on production techniques and organizational process as these were deemed the most effectual and profitable (Mead-A 53-61). Fordism initially transformed simple production tec hniques to a more complex mass production system which spawned the economics of scale and scope. This in turn brought about the proliferation of massive industries and organizations' emphasis on advanced plant equipment, organized production lines and higher output of production which reduced unit costs of products. Fordism also introduced a 'more doable' organizational structure in industries composed of functional units such as accounting and personnel management schemes in order to reduce cost in manufacturing. It led the reformation of industrial systems and practices as well as helped effect public policies and institutional regulations to temper the effects of market failures (Polanyi, 73). These practices included careful division of labor and standardization of components, parts and processes of a product which were easy to produce and repair. Others refer to this as to 'Fordize' or to standardize certain goods and mass manufacture them so as to make them affordable to the c ommon man (Abernathy, 57). The result of this was the total vertical integration of an industry as for instance the integration scheme of the leading car manufacturer of that period, Ford Motors, which manufactured parts needed for its own production (Chandler 77). This results to big number of employees and workers that were needed to be hired and included in the hierarchal system. This system of production, however, was not spared from criticism. Aglietta for instance, claimed that the rapid growth of production outpaced demand for consumption resulting to economic discrepancy (43). In the 60's productivity slowed down as the Fordist model of production reached its limitations as wages failed to increase and capital began to wane, worsened further by workers' fallout and union demand. Other scholars such as Gramsci argued that the crisis brought about by the Fordist form of production should be understood in its political and socio-cultural significance as this system of production was institutionalized by political legislations through which regulations with regards worker's union, wages and labor benefits were put into effect (110). This has been