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What is meant by Post Fordism? Critically assess the extent of it relevance to Dynamic Economic Development. The term Fordism come from the system that Henry Ford developed in 1914, in which mass consumption and mass production became closely related. He invented the First assembly line in Ford’s Model T plant in highland Park, Michigan. This system increased labour productivity and allowed huge price cuts of his cars from $780 in 1910 to $360 in 1914. The term however was not used until Antonio Gramsci an Italian Marxist writing in the 1930s coined the term ‘Fordism’ in reference to a new lifestyle in the ‘American Way’. Today Ford is still a large part of the worlds largest manufacturing industry however things have changed greatly and we are now in an era of Post Fordism. Fordism was originally based on the impact of Ford like systems of production and techno management. Assembly line processes would control the pace of production. It would usually be large scale, and standardised that would allow mass production and mass consumption. These were fed with a large amount of semi and non-skilled workers who would work under hierarchical bureaucratised central management fitting the parts in a controlled time. This allowed economies of scale, efficiency improved and production costs were reduced.
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The nature of Fordism was that there was the steady growth of macroeconomics in relatively closed protected economies. There was the separation of ownership and control in large corporations, monopoly pricing, union recognition, and state intervention in managing conflicts between capital and labour. Fordism became not just the way of organising industry but also of organising society. The state invested in transport and housing and with a well-paid workforce they were able to afford the mass-produced cheap products. This was regulation theory; Fordism was an accumulation regime, a macroeconomically coherent production, distribution, and consumption relationship. This allowed simultaneous growth of productivity and consumption, and formed the general basis of Western industry in to the 20th Century. This system of Fordism promotes the use of a Keynesian welfare state whose goal it is to promote full employment. Fordism demand that the state play a role and this is that it manages wage in relation to the labour market, and guides aggregate demand. Thus it helps to balance the supply and demand of labour. The state also promises to promote stable growth and smooth economic fluctuations that allows Fordist firms to secure increasing returns of scale. In addition the state invests in transport and housing infrastructure a Fordist mass consumption society. Fordism aswell as post war booms did help to achieve this full employment. Post Fordism thus became a movement beyond the failure of Fordism, and signifies the beginning of a new economic era associated with contemporary dynamic economic development. It is necessary in order to create better dynamism in advanced industrialist countries that due to the global market have found it increasingly difficult to compete on the price of manufactured goods alone. This decline became apparent during the 1960s and 70s, and efforts to maintain a Fordism economy were deemed failures, this was especially true in American and the UK. Hence a new system had to be used based on a flexible form of economic organisation and production. This means that the movement to Post Fordism includes many complex changes not just in industry but society aswell. |
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Post Fordism therefore becomes flexible production prices based on flexible systems and an appropriately flexible welfare. Its crucial machinery becomes microelectronics based information and communication technologies. It is based on the dominance of flexible and permanently innovative pattern of accumulation. This flexible rather than rigid production under the Fordist system allows for rising incomes of more skilled workers, as the increased profits come from technological rather than other innovations. In addition, the demand and consumption comes from a larger freer global market rather than the demand from within a closed economy. Thus industry finds itself being demand rather than supply driven. Instead of mass-producing products cheaply it competition arises from non-price factors such as the quality and performance of the product, and the responsiveness to the customer. The backing of this industry will be dominated by private and rootless bank credit that circulates internationally rather than internally, or from the state. Because there has been a movement to a post Fordist era the state ceases to be Keynesian and changes to an Schumpetrain workfare state. |
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