The term Fordism emerged between the world wars. At that time, it designated the economic and social system pioneered by Henry Ford. In the last two decades of the nineteenth century engineer Frederick Taylor had developed the techniques of "scientific management," showing how productivity could be increased by closely studying workers' movements and eliminating time-wasting gestures. Ford extended Taylor's methods from the individual laborer to the "collective worker" on the moving assembly line at his Highland Park, Michigan, factory. In January 1914, Henry Ford introduced the unprecedented wage of five dollars for eight hours of work—more than twice the going rate in the automobile industry at the time.
The retail sale price of Ford's Model T fell from $950 to $490 between 1909 and 1914, and in the same period Ford went from being just one among hundreds of automobile companies to controlling 48 percent of the automobile market. Admirers of Ford used the term Fordism to refer to a system they found baffling, due to its combination of a "constant reduction of prices" with "powerfully superelevated wages" (Gottl-Ottlilienfeld, p. 3). The tradeoff for these high wages, however, was a relentless increase in the pace of production. Manufacturing workers had been paid a survival wage in the nineteenth century; the Ford workers were paid enough that they could to purchase their own product. Ford also meddled in his workers' private lives, although he was by no means the only capitalist to do so at the time. Workers received the full five-dollar wage only if inspectors from the company's "Sociological Department" determined that their personal life met certain standards of sobriety, cleanliness, and adherence to an "American" lifestyle. These traits were seen as the basis for efficiency in the workplace. Ford's Sociological Department vetted prospective employees, inspected workers' homes, and taught workers to become Americans. For example, in 1916 Ford rented the largest public meeting hall in the city. On the stage stood a replica immigrant ship and in front of it a giant kettle, a "melting pot." The ceremony literally stripped the worker of his past identity and gave him a new one: "Down the gangplank came the members of the class dressed in their national garbs … [then they descended] into the Ford melting pot and disappeared." Teachers used long paddles to "stir" the pot. Before long, "the pot began to boil over and out came the men dressed in their best American clothes and waving American flags" (Zieger and Gall, p.17).
In 1919 Ford began moving his workforce to the new Rouge Plant in Dearborn, Michigan, which embodied another element that came to be seen as central to Fordism: the horizontal integration of the production process. The Rouge was composed of "sawmills, blast furnaces, foundries, body and glass departments, a power house," and more (Bucci, p. 48). Ford soon opened factories in Canada, Latin America, Europe, and the Soviet Union, and two rubber plantations in Brazil.
Some of Ford's social interventions during the Great Depression constituted a sort of corporate alternative to the New Deal in the Detroit area. Ford created commissaries in towns with large concentrations of his workers, selling food at low prices, and provided loans to keep his unemployed workers off public welfare. Ford bailed out the bankrupt Detroit suburb of Inkster, where many of the company's African American workers lived, and offered loans and construction help to workers who wanted to improve their homes. Although Ford hated the New Deal, a Detroit politician claimed that Ford's relief programs "became the model for Harry Hopkin's WPA [Works Projects Administration] in President Roosevelt's New Deal recovery program" (Gomon, box 10, p. 34). This points toward the centrality of the welfare state in postwar Fordism. Ford's involvement in the improvement of his employees' homes related to another dimension of Fordism: its effects on urbanism. Like many other industrial metropolitan areas that emerged in this period, Detroit was not so much a city as "a series of buildings held together by transportation and communications" (Bucci, p. 11). Detroit became the quintessential low-rise city, with high rates of working-class home ownership.
During the prewar and interwar period the term Fordism typically referred to the combination of mass production on the assembly line, rationalization of the labor process, comparatively high wages, and efforts to shape working-class culture to fit the requirements of industry. Because Ford resisted labor unions and was the last Detroit automaker to recognize the United Auto Workers after a 1941 sit-down strike at the Rouge plant, socialists and unionists used Fordism as a label for the company's fierce repression of unions and relentless increases in productivity. The lasting theoretical contribution to this interwar discussion is an essay called "Americanism and Fordism" by Antonio Gramsci, written during his imprisonment in fascist Italy. Gramsci suggested that recent developments in the United States could be characterized as constituting a novel form of social "hegemony"—a word Gramsci used to mean not simply leadership or the use of force, but a web of informal and formal persuasive devices located not just in the state but also in the interstices of civil society, and within families, bodies, and psyches. These loosely coordinated devices, he argued, combine to stabilize and reproduce capitalism . He argued that Ford's "so-called high wages" were necessary to "maintain and restore the strength that has been worn down by the new form of toil" and that these wages made possible "a larger internal market" and "a more rapid rhythm of capital accumulation" (pp. 310, 291). This made it necessary to forge a more disciplined type of worker who was able to tolerate the strenuous monotony of the assembly line. Frederick Taylor's experiments had already determined that only a small proportion of workers could keep pace with the rationalized process. Gramsci interpreted Prohibition and campaigns for monogamy in this light.
Some of Ford's other activities fit the definition of hegemony as a process of generating consent through persuasion rather than force. Some U.S. employers in this period sowed racial hatred in order to weaken labor unity. Although Ford was the first Detroit automaker to pay equal wages to whites and blacks, the latter typically worked in the foundry or in janitorial jobs. In the 1930s, Ford built separate schools in black and white districts in towns west of Dearborn. Ford's Greenfield Village, a collection of historic structures established in 1933 in Dearborn, celebrated a rural America that his cars and factories were helping to destroy. Ford also established a Motion Picture Department in 1914, "the first of its kind at a major commercial company," and began producing short documentaries and longer historical and educational films. By 1920 these Ford films "were shown in a minimum of 4,000 theatres and were seen by approximately one-seventh of the weekly motion picture audience in the United States" (Grieveson). The mass culture that played a central role in analyses of postwar Fordism was represented here in microcosm.
Gramsci's essay was rediscovered in the 1970s, when the socioeconomic crisis led European theorists to speculate on the sources of the prosperity during the preceding decades. Fordism had developed in the meantime and differed in part from the Fordism of the first half of the century. What remained was the virtuous cycle between mass production and mass consumption, grounded in a disciplined working class. The postwar model encompassed a much more elaborate system for stabilizing labor relations through agreements like the Treaty of Detroit in the U.S. auto industry or the neocorporatist practices that emerged across Western Europe. Unions offered to control their members' militancy in exchange for increased benefits and participation in managerial decisions and wages that were pegged to profits. This new social contract was buttressed by a welfare state and Keynesian fiscal policies that buffered workers' incomes during cyclical downturns in the economy, illness, accident, and retirement. Workers' ability to develop longer time horizons led to increased levels of home ownership and raised aggregate demand for manufactured goods. In geographic terms Fordism concentrated economic circuits within the boundaries of the nation-state while partly evening out regional inequalities. Another signal feature of postwar Fordism was the pervasiveness of middle-brow culture, broadcast through the mass media. Although French social theorist Michel Aglietta followed Gramsci in situating (postwar) Fordism in the United States, others argued that northwestern European countries such as Sweden and West Germany represented the model's apotheosis, whereas Fordism in the United States (and the United Kingdom) was less complete due to the relative underdevelopment of social insurance there.
Those who reintroduced the concept of Fordism were associated with regulation theory, an approach that presents Fordism as a model of organizing and governing society that allows continuing increases in profitability despite the intrinsically contradictory dynamics as capitalist economies, that is, the adversarial interests of business and labor. Fordism was understood as a "mode of regulation," that is, as a cluster of economic, political, and social institutions that undergirded economic growth and permitted social relations to perpetuate themselves, at least for a limited period of time. In contrast to traditional Marxist theories, regulation theory does not assume that capitalist systems will automatically find a solution to every socioeconomic crisis; prolonged economic stagnation and social chaos are distinct possibilities. The institutions and practices that made up Fordism were not necessarily invented with that mode of regulation in mind, but arose instead from a variety of disparate historical contexts and were subsequently woven together into a temporary social structure. For example Keynesian economic theory was developed with the aim of promoting economic growth, while the nuclear, male-breadwinner family was the product of very different interests, but both institutions played a central role in postwar Fordism. Like postmodern social theory, regulation theory emphasizes accident and causal contingencies in the creation of new social forms. Regulation theory also traces the emergence of postmodern culture itself to the decline of Fordism and to the rise of new, post-Fordist social conditions. The new social movements of the 1960s and the scientific culture of the 1950s have also been explained in terms of specific features of Fordism.
Since the late twentieth century social theorists have realized that the category of Fordism is best suited for analyzing the period before 1980. The 1980s marked the beginning of a rollback of the welfare state and a decline in unionization; a spiraling increase in economic and regional inequalities; a focus within industry on just-in-time production and flexible specialization; production for niche rather than mass markets; and the ascendance of neoliberalism as a dominant economic ideology. Centers of Fordist manufacturing, such as Detroit and the German Ruhr Valley, suffered massive disinvestment, leaving the vast hulking ruins of factories in their wake. Some theorists analyzed the emergent social formation as "post-Fordism" and tried to specify its contours, whereas others suggested that regulation theory could not be extended to eras other than the Fordist one. In Europe many right-wing extremists based in the disempowered working class attributed their plight to immigrants and looked back nostalgically at an idealized Fordist era of prosperity, equality, and national homogeneity. Left-wing critics targeted post-Fordism and globalization as the culprit.
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