The Crisis Of Fordism Essay Example | Topics and Well Written Essays - 3500 words

The Crisis Of Fordism - Essay Example The above mentioned process results to a phenomenon of mass worker, controlled in bureaucratic trade unions, which negotiate common wages that increase in relation to the production levels. The common consumption patterns indicate the homogenization of the working class and this leads to a market with homogeneous commodities and a match between demand and supply (Lipietz, 1984, p. 20). Notably, the balance between the supply and demand is achieved through the Keynesian macroeconomic policies, while the balance between wages and profits is obtained through collective bargaining power. The challenges of Fordism are economic, technical and social. To begin with, the technical challenges are characterized by the exhaustion of the increasing productivity by gaining economies of scale, intensifying labor and de-skilling of the workers. Secondly, the economic limits are characterized by declining rate of profits, which is as a result of falling productivity growth or limited market for the homogeneous consumer goods while the income rises. Finally, the social limits are characterized by the rapid growing pressure on managerial prerogative, profitability and on the public financed enhanced by the rising demands of the mass workers (Lipietz, 1984, p.30). From the year 1940 to around 1965, most of the industrialized countries took the advantage of the continuous growth and rapidly increasing rates of wages and profits in a parallel mode.... However, unlike in the earlier economic recessions, the above mentioned Fordist strategy did not help. Rather, the industrialized countries encountered a period of currency instability, continuous inflation and rapid growing rate of unemployment. Notably, the failure in the economic policy in the industrialized nations was caused by the globalization of production. For instance, the European, Japanese and American countries had been for a period of over thirty years expanding in order to gain economies of scale on a global level. In absence of any control by national governments, the international trading system practiced by the multinationals was coordinated by the global financial markets. As a result of the decline of the fixed exchange rates, the global competition among various currencies determined the internal economic principles of the international industrialized nations. For instance, reflation in one country was controlled by balance of payment crises, which in turn forced a rapid return to the deflationary policies (Frieden, 2007, p.120). After the governments of the industrialized nations lost control over their economies, the complete circle of increasing consumption and production was discontinued. Rather, the workers in the industrialized nations began to incur cuts in social benefits, mass rate of unemployment and stagnant money wages. As a result of the recurrence of the social difficulties of the past, new ways had to be implemented in order to solve the deepening crisis of Fordism. The Fordist crisis was an over accumulation crisis caused by the rapid spread of the various Fordist productions methods to the Japan and Western Europe, leading to a decline of profit rate and saturation of the global markets in the