Introduction

Henry Ford worked as an apprentice in different Michigan machine shops and in later
years as a qualified engineer for the Edison Illuminating Company.[2] Here he received
the first hand knowledge of how industries were being run. Although Henry Ford was not
the inventor of the automobile, he developed unprecedented methods of production and
marketing that made the automobile accessible to the American working class. Ford
wanted to make cars that his workers could afford.[3] He created the Ford Motor
Company, which was one of a dozen small automobile manufacturers that emerged in the
early 20th century.[4] After three years of production, he introduced the Model T, which
was simple and light, yet sturdy enough to drive on the country's primitive roads.[5] Henry
Ford's success and revolutionary techniques of production were termed Fordism.[6]

What is Fordism?
Fordism is "the eponymous manufacturing system designed to spew out standardized,
low-cost goods and afford its workers decent enough wages to buy them".[7] It has also
been described as "a model of economic expansion and technological progress based on
mass production: the manufacture of standardized products in huge volumes using special
purpose machinery and unskilled labour".[8] Although Fordism was a method used to
improve productivity in the automotive industry, this principle could be applied to any
kind of manufacturing process. Major success stemmed from three major principles:

• The Standardization of the product

• The use of Special-purpose tools and/or equipment via the assembly line
• The Elimination of skilled labour in direct production, while simultaneously
paying the worker higher wages.[9]

These principles coupled with a technological revolution during Henry Ford's time
allowed for his revolutionary form of labour to flourish. It is true that his assembly line
was revolutionary, but it was in no way original. His most original take was with his
decomposition of complex tasks into simpler ones with the help of specialised tools.[10]
This allowed for a very adaptable flexibility allowing the assembly line to change its
components if need be, or whenever the vehicle in production evolved enough to warrant
a change.[11] In reality, the assembly line had already been around before Ford, but not in
quite the same effectiveness as Ford would create. His real accomplishment was
recognizing the potential, breaking it all down into its components only to build it back
up again in a more effective and productive combination.[12] The major advantages of
such a change was that it cut down on the man power necessary for the factory to operate,
not to mention that it deskilled the labour itself, cutting down on costs of production.[13]
There are four levels of Fordism as described by Bob Jessop.[14]

[edit] The history behind Fordism

Ford cars (Model T shown), became a symbol of effective mass production. Efficiency
both decreased the price of the cars and allowed Henry Ford to increase the workers'
wages. Hence, common workers could buy their own cars.

The Ford Motor Company’s success occurred because of the introduction of a very tough
and compact vehicle named Model T. The mass production of this automobile lowered its
unit price, making it affordable for the average consumer. Furthermore, Ford
substantially increased its workers' wages,[15] giving them the means to become
customers. These factors led to massive consumption. In fact, the Model T surpassed all
expectations, because it attained a peak of 60% of the automobile output within the
United States.[16]

Henry Ford revolutionized a system, which consisted of synchronization, precision, and

specialization within a company.[17] These innovative ideas led to Fordism, and as
mentioned below, this concept helped increase economic prosperity in the United States
in the 1940s to 1960s.[citation needed]

[edit] Fordism in the United States

In the United States, Fordism is the system of mass production and consumption
characteristic of highly developed economies during the 1940s-1960s. The idea of
Fordism was to combine mass production with mass consumption (high wages) to
produce sustained economic growth and widespread material advancement. The 1970s-
1990s have been a period of slower growth and increasing income inequality. During this
period, the system of organization of production and consumption has, perhaps,
undergone a second transformation, which when mature promises a second burst of
economic growth. This new system is often referred to as the "flexible system of
production" (FSP) or the "Japanese management system." On the production side, FSP is
characterized by dramatic reductions in information costs and overheads, Total Quality
Management (TQM), just-in-time inventory control, and leaderless work groups; on the
consumption side, by the globalization of consumer goods markets, faster product life
cycles, and far greater product/market segmentation and differentiation.

Henry Ford was once a popular symbol of the transformation from an agricultural to an
industrial, mass production, mass consumption economy. Aldous Huxley's Brave New
World (1932), for example, styles the modern era AF—after Ford. Although partly myth,
there is some merit to this attribution. Ford was the creative force behind the growth to
preeminence of the automobile industry, still the world's largest manufacturing activity.
As Womack, Jones, and Roos (1990: 11) explain: "Twice in this century [the auto
industry] has changed our most fundamental ideas about how we make things. And how
we make things dictates not only how we work but what we buy, how we think, and the
way we live."

The first of these transformations was from craft production to mass production. This
helped to create the market as we know it, based on economies of scale and scope, and
gave rise to giant organizations built upon functional specialization and minute divisions
of labor. Economies of scale were produced by spreading fixed expenses, especially
investments in plant and equipment and the organization of production lines, over larger
volumes of output, thereby reducing unit costs. Economies of scope were produced by
exploiting the division of labor—sequentially combining specialized functional units,
especially overheads such as reporting, accounting, personnel, purchasing, or quality
assurance, in multifarious ways so that it was less costly to produce several products than
a single specialized one. It also engendered a variety of public policies, institutions, and
governance mechanisms intended to mitigate the failures of the market, and to reform
modern industrial arrangements and practices (Polanyi, 1944).

Ford workers at the assembly line.

The moving assembly line was instituted by Ford. Through standardization of work and
components, he enhanced mass production.

Ford's main contributions to mass production/consumption were in the realm of process

engineering. The hallmark of his system was standardization—standardized components,
standardized manufacturing processes, and a simple, easy to manufacture (and repair)
standard product. Standardization required nearly perfect interchangeability of parts. To
achieve interchangeability, Ford exploited advances in machine tools and gauging
systems. These innovations made possible the moving, or continuous, assembly line, in
which each assembler performed a single, repetitive task. Ford was also one of the first to
realize the potential of the electric motor to reconfigure work flow. Machines that were
previously arrayed about a central power source could now be placed on the assembly
line, thereby dramatically increasing throughput (David, 1990). Ford did not invent the
assembly line itself, Ransom E. Olds invented the basic concept and started the Detroit
area automobile industry. The moving assembly line was first implemented at Ford's
Model-T Plant at Highland Park, Michigan, in 1914, increasing labor productivity tenfold
and permitting stunning price cuts—from $780 in 1910 to $360 in 1914[18][19] Hence, the
term Fordize: "to standardize a product and manufacture it by mass means at a price so
low that the common man can afford to buy it."

[edit] Fordism in Western Europe

According to historian Charles Maier, Fordism proper was preceded in Europe by
Taylorism, a technique of labor discipline and workplace organization, based upon
supposedly scientific studies of human efficiency and incentive systems. It attracted
European intellectuals — especially in Germany and Italy — at the fin de siècle and up
until World War I.[20]

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 grand appeal of
Fordism in Europe was that it promised to sweep away all the archaic residues of pre-
capitalist society by subordinating the economy, society and even human personality to
the strict criteria of technical rationality.[21] The Great Depression blurred the utopian
vision of American technocracy, but World War II and its aftermath have revived the
ideal.

The principles of Taylorism were quickly picked up by Lenin and applied to the
industrialisation of the Soviet Union.

Later 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 Italian Marxist Antonio 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 attacks on the people in the 1970s. Advances in technology and
the end of the Cold War ushered in a new "neoliberal" phase of globalization in the
1990s. 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.

[edit] Fordism and the Soviet Union

Historian Thomas Hughes (Hughes 2004) has detailed the way in which 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. The concepts of the Five Year Plan and the centrally
planned economy can be traced directly to the influence of Taylorism on Soviet thinking.
Hughes quotes Joseph Stalin:

"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
inconceivable.... The combination of the Russian revolutionary sweep with
American efficiency is the essence of Leninism." (Hughes 2004, 251)

Hughes describes how, as the Soviet Union developed and grew in power, both sides, the
Soviets and the Americans, chose to ignore or deny the contribution of American ideas
and expertise. The Soviets did this because they wished to portray themselves as creators
of their own destiny and not indebted to their rivals. Americans did so because they did
not wish to acknowledge their part in creating a powerful rival in the Soviet Union.

[edit] Other Marxist variations

Mass consumption is the other side of Fordism.

Fordism is also a term used in Western Marxist thought for a "regime of accumulation"
or macroeconomic pattern of growth developed in the US and diffused in various forms
to Western Europe after 1945. It consisted of domestic mass production with a range of
institutions and policies supporting mass consumption, including stabilizing economic
policies and Keynesian demand management that generated national demand and social
stability; it also included a class compromise or social contract entailing family-
supporting wages, job stability and internal labor markets leading broadly shared
prosperity—rising incomes were linked to national productivity from the late 1940s to the
early 1970s. At the level of the labor process Fordism is Taylorist and as a national mode
of regulation Fordism is Keynesianism.

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 an 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 and Neo-Fordist. The former implies that global capitalism has made
a clean break from Fordism (including overcoming its inconsistencies), whilst the latter
implies 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.

[edit] Other meanings

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

• It may also be applied to the fictional religion-like ideology described in Aldous

Huxley's novel Brave New World. 'Our Ford', a parody on Our Lord, provides a
centre-point in the religious celebration in Brave New World's society, and the
name is used both as an incantation and source of authority throughout the book.((
As stated above, it is important to recall that Aldous Huxley's book was intended
as a satire and a criticism of Fordism, rather than an advocate of it))

• It often describes the paternalistic "taking care of the worker" - a "family-like"

mentality seen in some companies, e.g., in the auto-industry (Ford) or some 19th
century employers (e.g., Rowntree, Cadbury, Titus Salt, Lever Brothers). The
paternalism could be kindly (providing benefits) or restrictive (for example, Ford
discouraged smoking even off premises).[citation needed]

• In a broader sense, Fordism refers to the classical 20th century consumer society:
high productivity allows for high wages, mass production allows for mass
consumption.
 • Charlie Chaplin in Modern Times, a black and white film that effectively
demonstrates the alienation and stress that the common worker under Fordism is
subjected to. It does so in a light-hearted fashion.

[edit] Post-Fordism
Main article: Post-fordism

Information technology, white-collar work and specialization are some of the attributes of
post-Fordism.

The period after Fordism has been termed Post-Fordist. Fordism as a Regime of
Accumulation (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 economies of western
countries had shifted away from manufacturing and industry and towards service and the
knowledge economy. Meanwhile, industry has moved from the west to second- and third-
world countries, where production is cheaper, and environmental and worker regulations
are less strict (Baca, 2004). The movement of capital has become more fluid, and nation-
states have withdrawn significantly from the economic sphere. Post-Fordism has arisen in
part due to globalization. When Fordism was prominent, the majority of laborers were
unskilled. These laborers joined together to form labor unions, which were able to gain
power as a result of this static capital. Ultimately, consumer demand for individualized
goods increased, and Fordism was not the most efficient method to meet that demand
(Mead, 2004).

Post-Fordism can be characterized by the following attributes:

• New information technologies.

• Emphasis on types of consumers in contrast to previous emphasis on social class.

• The rise of the service industry and the white-collar worker.

• The feminization of the work force.

• The globalization of financial markets.

Instead of producing generic goods, firms now found it more profitable to produce
diverse product lines targeted at different groups of consumers, appealing to their sense
of taste and fashion. Instead of investing huge amounts of money on the mass production
of a single product, firms now needed to build intelligent systems of labor and machines
that were flexible and could quickly respond to the whims of the market. Modern just-in-
time manufacturing is one example of a flexible approach to production.

Post-Fordism is very much driven by information technology. Advancement in computer

technologies allows for just-in-time manufacturing. There is no longer a need to stock-up
on a given product. Products are made and then they are out the door. The key to
production flexibility lies in the use of informational technologies in machines and
operations. These permit more sophisticated control over the production process. With
increasing sophistication of automated processes and, especially, the new flexibility of
electronically controlled technology, far-reaching changes in the process of production
need not necessarily be associated with increased scale of production. Indeed, one of the
major results of the new electronic and computer-aided production technology is that it
permits rapid switching from one part of a process to another and allows - at least
potentially - the tailoring of production to the requirements of individual customers.
Traditional automation is geared to high-volume standardized production; the newer
‘flexible manufacturing systems’ are quite different, allowing the production of small
volumes without a cost penalty. This creates less space needed, which creates less rent.
Modular processes can be taken advantage of to create custom & limited products for
niche markets. Focus is now on the principal task of manufacturing. Companies are
smaller and subcontract many tasks. Likewise, the production structure began to change
on the sector level. Instead of a single firm manning the assembly line from raw materials
to finished product, the production process became fragmented as individual firms
specialized on their areas of expertise. As evidence for this theory of specialization,
proponents claim that clusters of integrated firms, have developed in places like Silicon
Valley, Jutland, Småland, and several parts of Italy.