Glossary: Fordism

In its most narrow usage, Fordism refers to Henry Ford's revelation that he could do better business if he paid his workers enough to buy the products of their labor. Of course, Ford's attempt to make good on the slogan in the 1910s completely failed since very few other capitalists were willing to leave behind the liberal period's method of high profits thru high exploitation. And of course, if capitalists actually did pay their workers the full value of their product, there would be nothing left over for profits, so the slogan really can't work in practice under capitalism.

Still, a system that superficially seemed to realize Ford's vision actually did take hold after World War II in the West and Japan, lasting roughly from 1949 to 1973. The architectonic restructuring of the economy that made this possible only emerged, however, thru the desperate struggle to overcome the impersonal violence of the Great Depression and its personalized (tho mechanized) counterpart of the two World Wars.

Both depression and war were symptomatic of the great collapse of the liberal period's mechanisms of self-reproduction, and only a massive restructuring of the global economy could return capitalism to health. The solution that finally emerged after three decades of tortuous conflict was based on the generalization of economic forms of organization that had been developing for many years: large bureaucratic enterprises, assembly-line mass production, rationalization — ie, deskilling — of the work process (Taylorism), production for a consumer mass market, active but domesticated and bureaucratized labor unions, and robust government regulation. All these threads finally came together under the pressures of mobilization for World War II, as the governments of each of the combatants forced reluctant capitalists and workers alike to accept the new system.

The new kind of capitalism was distinguished by a much more balanced and integrated relation among capital, labor, and the state (not to be mistaken, however, for equality). Labor renounced any demand for control over the production process, capital agreed to provide secure jobs with good wages and benefits, the state oversaw the accord and smoothed out its remaining unevenness thru Keynesian regulation and a solid commitment to social insurance and welfare programs. The new regime was also far more focused on the accumulation of capital within national boundaries than the aggressively expansionary capitalism of the late liberal period.

The forms of culture that emerged emphasized homogeneity and conformity. The economic priorities of rationalization, standardization, and planning bled over into all aspects of life, and a vision of steady material progress took hold, projecting a near-term future in which everyone would fit the basic mold of middle-class consumer and producer. This suited a highly bureaucratized economy and society defined by the alliance of big business, big labor, and big government.

In hindsight this culture appears stultifying and narrowly materialistic, but Fordism also had its attractive aspects. In the liberal period a huge section of the population had lived on the margins, suffering severe exploitation in sweatshop factory jobs or, worse, unable to find any kind of employment. Severe racial, ethnic, and class hatreds had flourished between the small bourgeoisie and the working majority, as well as among workers themselves, who battled each other for the scraps extended by the owners. Now the majority finally had access to a basic standard of material welfare, and the dominant culture embraced them rather than denouncing or simply ignoring them. Significant excluded minorities remained — most obviously, blacks in the US — but Fordism seemed to offer the promise of eventual inclusion, even if a mass movement would be required to secure it.

Moreover, Fordism proved extraordinarily successful as an economic system. On every important economic indicator — rates of growth, of employment, of productivity increase, of poverty reduction, and of profits — it performed better than neoliberalism did (even before the crisis). No wonder the 1950s and 1960s are known as the Golden Age of capitalism, even tho — or perhaps because —  market forces had waned to an unprecedented extent.

The same forces that defined Fordism were operative in the so-called Communist countries and other newly independent nations as well. Here the state and nationalism, of necessity, played much larger roles in both reshaping the economy and the culture, as the accumulated capital and disciplined workforce that the advanced countries enjoyed did not yet exist. As in the West and Japan, bureaucracy displaced market forces in the coordination of the economy, and a homogeneous national culture was promoted to replace the myriad divisions and inequalities of the prewar period. As in the advanced economies, economic performance was remarkable, especially in those countries that took these trends to their extremes: the Soviet Union and China.

Despite its success, Fordism generated forms of opposition that leveled fundamental critiques against it — most visibly, the wave of youth rebellion that swept the globe from 1966 to 1968 — as well as economic dysfunctions that finally precipitated its collapse in the protracted economic crisis of the 1970s. There can be no return to Fordism, but understanding it and its relation to neoliberalism may help us find a way out of the current crisis.

More on Fordism:
The rise and fall of national capital
Contrasts in neoliberal and Fordist temporality
Fordism and neoliberalism expressed through their architecture
Fordism: the global political economy of a passive revolution

End of the "recovery" now in sight

The Financial Times reports that yesterday "[t]he White House denied the US was facing a 'jobless recovery'". The number of people who want a job is actually significantly higher than it was when Obama was inaugurated, so the White House couldn't be taking issue with the "jobless" part. But it seems fully justified to deny that this is a recovery.

As I argued two months ago, the failure to address any of the fundamental dysfunctions that caused the crisis mean the only uncertainty we face is whether our economic decline will be gradual or abrupt. The superficial signs of a return to economic health, which for the last half year have been used to justify loose talk about "recovery", are, one by one, falling apart. In May US job growth slumped sharply and the unemployment rate rose to 9.1 percent. The head of the Bureau of Labor Statistics says that this reflects a “general weakening in job growth” rather than the temporary disruptions that have been such popular scapegoats whenever bad numbers come out. (Funny how "temporary disruptions" never seem to get in the way of a period of strong growth.) Manufacturing is deteriorating in the US, UK, and EU alike. Real estate prices have fallen to a post-crash low. Even the one bright spot over the last two years - speculative asset bubbles - might be heading for a crash. The stock market reacted badly to the recent signs of economic weakness, and bank stocks have taken a big hit recently as the government subsidies and accounting tricks that had returned them to profitability have started to run out.

To see the indisputable failure of the "recovery", one needs only look at this chart:

Source

That's the average duration of unemployment in the US. Now at 40 weeks, it's not only at the highest point since the BLS started keeping track, it's actually almost twice as long as at any previous point in the last 60 years.

The big question now is whether a new round of crisis will blow up soon, or whether the pressures will build up over a number of years and give us something much more devastating. On the one hand, as long as the terminal crisis of neoliberalism is held off, there is still hope of making the transition to a new basis for the global economy thru a planned, gradual process that would be far less destructive than a near-term financial collapse, for instance, would be. On the other hand, if we avoid a crash in the short term but can't assemble the political will to make a conscious transition . . . well, remember World War II?