Fordism is an expression that became into existence between the 1920s and the 1930s and still maintained its popularity after World War II. Fordism can be defined in three contexts. Firstly, Fordism can be taken to be the technique of production which entirely relies on a specific technology; it was actually a system of arranging the production activities with regard to a specific line of assembly that is attached to a single unit of production. Therefore in this case, Fordism entailed a mass production initiated by mechanical technology and supported by an engineered industrial unit. Secondly, Fordism referred to a growth system; that is to say, it was a model of economics that was based both on mass production and mass consumption (De Grazia 2005). A common assumption in this definition was that the level of consumption grew with the increase of consuming population. New investments were initiated by the possibility of mass production, that is, mass production increased the supply of goods which in turn lowered the prices of goods and made consumption easier and cheaper. Thus, it is true to say that Fordism is both a factory system and a link between production and consumption. In the third scenario, Fordism is taken to imply both the social and political system. In this case, the political system provided support to both mass production and consumption. Labour was made accessible by the relevant institutions and public authorities (Hounshell, 1984). The main relevance of labour was to allocate wealth and spread it over the social classes that existed for the sake of consumption. The welfare of the labourers was safeguarded by Fordism, that is, they were provided with healthcare services, good housing facilities, and sufficient social protection (Mead, 2004).
The Main Features of Fordism
Fordism as a model had various features that outlined its functionality. One of the features was the virtuous succession of economies of scale (Holden, 2005). Henry Ford, who is considered as the founding father of Fordism believed that the prices of goods in the market could only be reduced by increasing the level of production. Lower prices attract a good number of customers, hence boosting sales and generating more income to the producer. Economies of scale, therefore comes with the mass production of goods to be consumed by the willing consumers who pay a considerable price for the goods. Thus, in the Fordist system, an increase in the production system will lead to a proportionate decrease in price of the vehicles that are produced. A representation of this was the capability of the manufacturers to take over the control of the market as a result of their strong technical back up. The manufactures were able to build and enlarge their markets by increasing their production with the main aim of finding and retaining new customers .This was a strategic move because in these new markets, only what was really needed by the customers were sold or traded (Spode, 2004).
The second feature of Fordism was industrial hugeness. The Fordist factory represented a gigantic plant of production. The industrial plants grew so much in size as time went by in order to match the increasing level of production and the changing customers’ needs and preferences. The kind of architecture that housed the Ford industries was designed to leave an ample space for expansion. Due to his, some of the Ford companies became the biggest industrial plants in the world, for instance, the River Rouge plant that was constructed in Detroit employed about 105,000 employees. The outstanding distinguishing factor between Fordism and the previous industrial systems was that in the previous industrial systems, much of the production wad done from outside the company while the components were put together inside the factory; on the other hand, in the Fordist system of production, all the production processes were done from inside the factory. The Ford factories were self independent as they produced their own energy that was used in the production process (Pietrykowski, 1995).
Centralization of the production process was the third distinct feature of Fordism. The production plants were organized in a system of a vertical hierarchical structure where instructions flowed from the highest point of the hierarchy to the lowest point of the hierarchy. The workers were expected to stick to a given code of behaviour lest they face punitive actions. Presently, this strategy is considered advantageous, but then it was considered to be disadvantageous to the workers (Antonio & Bonanno, 2000). The fourth feature of Fordism was the rapid expansion of the system of production through vertical integration. For instance, Ford Company merged with other subsidiary companies that manufactured other vehicle spare parts that they did not produce so as to avoid incurring unnecessary extra costs that were not wanted (De Grazia, 2005). Vertical integration is a strategic move that is adopted by various companies in order to maximize from the services or goods offered by the subsidiary companies without paying additional costs. Both the political and institutional characteristics were the fifth feature of Fordism. The systems of production in the Fordist industries were governed by both political and social regulations which were not to be violated or overlooked during the production process. These basic rules were meant to streamline the production process and integrate it with the various requirements of the society. Due to this many Ford Companies are located in enclosed areas which are surrounded by high perimeter walls and are heavily guarded (Banta, 1993). The products of the Ford Companies were suited to meet the national needs of the consumers. This move was necessary because other different countries had their own vehicle manufacturing industries, for instance, Volkswagen in Germany, Peugeot and Renault in France, Fiat and Lancia of Italy, among others. Therefore, it was very imperative for Ford Company to maximize from the local market before targeting the other regional markets.
Social and Cultural Aspects of Fordism
The social and cultural aspects of Fordism are attributed to the role of social welfare by the company to the society. The government came up with a mechanism to foster the positive sustenance of the society in various aspects. Thus, for the Fordist approaches to improve, the social relations had to be developed in a controlled and independent manner. Regulation was done by the provisions of both the welfare and the social programs. The government had a task of redistributing wealth equally among the people. This redistribution function by the government was seen in terms of provision of basic necessities to the workers which included provision of healthcare services, provision of education services, provision of efficient housing, and provision of efficient pension program to the workers who had retired from their work. The government regulated the social relations between the company and the society in order to avert unnecessary conflicts with the other sections of the production sectors (De Grazia, 2005).
In the Fordist model, the workers were employed regularly for a longer period of time within the Ford Company, thus, no workers were employed on a contract basis. This was seen as a social benefit of Fordism to the community .Most of the workers were unskilled or semi skilled, thus, there was no much thinking required for work to be done since the work was so simple to perform. The workers were paid about five dollars a day. Any worker who deviated from the normal behaviours that were stipulated by the company’s rules and regulation were disciplined accordingly. The collective agreement that was introduced by the company worked to the great advantage of the workers because of the fact that collective agreements fostered the stability of the organizational structure of the company. The behaviour of the workforce was further steadied by the collective agreements. The collective agreements enabled the workers to know and understand the roles they were required to do, the agreements also enabled the workers to understand their rights pertaining to the contracts that they had signed (De Grazia, 2005).
The industrial production was majorly absorbed by the markets. The labourers had come to terms with the working conditions that came with Fordism. Many agricultural labourers left their agricultural fields with the aim of securing a job in the Ford Companies. Later, the market became highly flooded and the labourers ceased from observing the stipulated rules which were put in place to govern their operations .These rules were meant to unite the workers and make them work together at the same speed and dedication and once these rules were flawed, the production process was greatly interfered with. Therefore, as the workforce grew bigger and bigger, a lot of things were at stake, thus, several measures were imposed in order to deal with the short coming. For instance, the company resorted to job cuts or introduced technologies in production that never required a lot of labour force (Hounshell, 1984).
The Fordist model was well versed with the risks and challenges that were expected in the entire production process, thus, measures to avert or control the risks were therefore much in place. In addition, measures to offer damage control were also instrumental in the entire process of production (Hounshell, 1984). It was, however, noted that due to the inflexibility or rigidity of Fordism, the system was in danger of collapse. The capitalism world of Fordism time was majorly modernized by the financial meltdown of 1929. It was characterized by major social, economic, and political revolution. The economic crisis of 1929 was perceived to be a consequence of Fordism in one way or the other. One of the consequences of Fordism that led to the financial crisis of 1929 was the expansion of the industrial productivity; Fordism necessitated the rise in total output by the relevant industries. This was due to the fact that at this time, the productivity of each single worker was on the rise, as well as the collective productivity of the entire work force within the industries. Another consequence of Fordism that contributed to the economic crisis of 1929 was the disbandment of elderly workers or trade unions. As a result of this, the bargaining power of the workers was greatly interfered with, thus there was no more organization and effective distribution of the entire work force to their correct job areas. This act caused major social and cultural consequences to the workers in that professional capability was totally destroyed. The company resorted to recruiting workers who had no basic skills or qualifications with regard to their line of production. Anybody who was spotted looking for a job was hurriedly picked up without assessing his potentials (De Grazia, 2005).
The aftermaths of the financial crisis of 1929 posed serious economic ramifications to the workers of the company. The disbandment of the trade unions meant that the workers were treated casually, their wages were drastically reduced yet production increased. This further resulted to an unbalanced distribution of wealth among the people. Wealth was concentrated at the hands of a few rich individuals who invested it in the stock exchange rather than investing it to create more employment opportunities for the people. As a result of this, there was a massive gap between the rich and the poor. The purchasing power of the rich was sustained while the purchasing power of the poor was seriously decreased (De Grazia, 2005).
The surplus wealth was controlled by a smaller portion of the population. This was viewed as the primary cause of the financial crisis of 1929. As a result of the unfair allocation of wealth, national wealth was severely destroyed and this further affected the purchasing power of the rich too; their purchasing power also dropped so hugely as a result of great decline in prices and inability to invest. On the other hand, the poor had begun to suffer due to the fact that their purchasing power had dropped to minimum and thus were no longer capable of affording to buy anything in the market. Because of this, the financial crisis further deepened. The inability of the people to understand the cause of the financial crisis made it so impossible to come up with adequate solutions to the crisis. The solutions came about as a result of the major political transformations that had occurred (De Grazia, 2004).
Fordism system mainly relied on full employment of resources in order to meet the production targets. Everybody’s efforts played a bigger role toward the shaping and the development of the relevant industries. There was a positive relationship between the growth in the level of production and the volume of employment of workers; the more number of workers in the factory meant that production was greatly increased. This was also the basis of gauging the strength of the company; the more employees the company had, the stronger the company was seen to be and vice versa. There have been various changes with regards to production systems, and this has led to an even and flexible economic system. Capital mobility has been perceived as extremely instrumental in bring together all the transformations that had taken place in the market (Spode, 2004).
Another social consequence of Fordism is the maturity of the markets. However, market maturity has contributed to the dismal growth of the markets. The growth of the markets encompasses the various discrepancies with regard to the employment models. As a result of this, the labour market became disjointed because much attention was not given to the development and building up of the employees. Market maturity was seen as a building block for market independence, thus, the market was without interference from the government or the authorities. The forces of demand and supply were left to take their course towards the liberalization of the market system (Spode, 2004).
It is very evident that Fordism brought about more social and cultural repercussion than economic consequences. The social consequences were seen in terms of creation of jobs, expansion of production, growth of the markets, social interaction of economic agents during trade, maturity of the market, improvement of the welfare of the workers, among others. Consequently, the economic ramifications of Fordism included the financial crisis in 1929, which was majorly caused by overproduction of goods and underpaying the labourers. Other economic consequences of Fordism included loss of jobs, reduction of salaries of the workers, market saturation, and also the unequal distribution of wealth. The unequal distribution of wealth led to the concentration of wealth on the hands of a few rich people who invested all of the wealth into the financial market, rather than reinvesting it in order to create more employment opportunities for the labourers who had lost their jobs. It is, therefore, true to say that it is the social and cultural consequences of Fordism that is more significant than its economic aspects.