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