Rise of Fordism

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Rise of Fordism

The rise of Fordism can be attributed to the desire to reorganize the entire production process through mass market, standardization and movement of the assembly line. It managed to make use of technological advances thereby eliminating rudimentary practices that were common in precapitalistic society.  Thus, its dominance became evident after World War II during the mass consumerism era of the 1930’s. It is a macroeconomic growth pattern that specialized in mass production of industrial products for the large consumption of people, domestically as well as internationally (Harvey 23). Therefore, it relied on product standardization, state-o-the-art equipment and payment of higher wages for workers to make its adoption successful. The principle of higher wages was formulated to prevent turnover and absenteeism of employees, which had reached alarming levels. Hence, the labor force was motivated to rejoin industrial complexes due to the promise of better working conditions and higher pay. In return, they were required to meet certain targets on a daily basis and produce goods that satisfied certain specified criterias. This helped to organize the production process in an efficient manner thus leading to a rise in profitability of the firms that embraced Fordism.

The era of Fordism had witnessed a rapid increase in the demand for same-type products thereby leading to a reduction in their unit prices (Stiglitz 7). This high demand for the merchandise in the market forced companies to adjust their modes of operations to reflect the changing nature of doing business. As a result, the authorities developed policies that favored the manufacture of certain products within their locations. They regulated the number of licensed vendors who would be allowed to operate within their jurisdictions in the domestic markets as a way of controlling the demand and supply curve of the various transactions. Furthermore, this was one of the mechanisms used to address the problem of production and realization of surplus in the market.

Similarly, laws were enacted that recognized the rise in business transactions and thus sought to boost employee earnings by fixing the minimum wage. Unions were formed to address labor relations and workers were encouraged to join these organizations in order to have legal representation for their grievances.  Likewise, the federal government increased its coordination with the different states, as it emerged that these businesses generated a lot of revenue in form of taxes (Stiglitz 20). However, some regions became known for certain products due to the presence of skilled labor and raw materials for their industries. This led to the creation of special economic zones in various geographical areas that specialized in specific industries. For example, automobile manufacturers were based in Michigan. Nevertheless, there was a widespread demand for products by consumers that even workers of the various corporations became interested in owning some of the merchandise that came off their assembly lines. For instance, the simplified production method used in the making of cars leading to their lower retail prices made it possible for automotive workers to purchase these vehicles. In fact, the higher wages increased the amount of disposable income leading to consumers adopting certain spending habits that were not experienced before the war. In addition, the technological advances that took place led to the creation of learning centers that focused on the transfer of skilled knowledge to large section of the population. As a result, it became the norm for employees to be paid according to their level of skills (Harvey 56).

Works Cited:

Harvey, David. The Enigma of Capital: And the Crises of Capitalism. Oxford, England: Oxford University Press, 2010. Print.

Stiglitz, Joseph. Globalization and Its Discontents. New York: W.W. Norton, 2002. Print.

 

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