Post-Fordism
Encyclopedia
Post-Fordism is the name given to the dominant system of economic production
, consumption
and associated socio-economic phenomena, in most industrialized countries since the late 20th century. It is contrasted with Fordism
, the system formulated in Henry Ford
's automotive factories, in which workers work on a production line
, performing specialized tasks repetitively. Definitions of the nature and scope of Post-Fordism vary considerably and are a matter of debate among scholars.
Post-Fordism is characterized by the following attributes:
Instead of producing generic goods, firms now found it more profitable to produce diverse product lines targeted at different groups of consumers, appealing to their sense of taste and fashion. Instead of investing huge amounts of money on the mass production of a single product, firms now needed to build intelligent systems of labor and machines that were flexible and could quickly respond to the whims of the market. The technology originally associated with flexible production was the numerical controller, which was developed in the United States in the 1950s; however, the CNC, developed in Japan, later replaced it[2]. The development of the computer was very important to the technology of flexible specialization. Not only could the computer change characteristics of the goods being produced, but it could also analyze data to order supplies and produce goods in accordance with current demand[3]. These types of technology made adjustments simple and inexpensive, making smaller specialized production runs economically feasible. Flexibility and skill in the labor was also important. The workforce was now divided into a skill-flexible core and a time-flexible periphery[4]. Flexibility and variety in the skills and knowledge of the core workers and the machines used for production allowed for the specialized production of goods. Modern just in time manufacturing is one example of a flexible approach to production.
Likewise, the production structure began to change on the sector level. Instead of a single firm manning the assembly line from raw materials to finished product, the production process became fragmented as individual firms specialized on their areas of expertise. As evidence for this theory of specialization, proponents claim that Marshallian "industrial districts," or clusters of integrated firms, have developed in places like Silicon Valley, Jutland, Småland, and several parts of Italy.
(also known as Long Waves). The theory holds that a "techno-economic paradigm" (Perez) characterizes each long wave. Fordism
was the techno-economic paradigm of the fourth Kondratiev Wave, and post-Fordism is thus the techno-economic paradigm of the fifth, which is dominated by Information and Communication Technology (ICT).
Notable Neo-Schumpeterian thinkers include Carlota Perez
and Christopher Freeman
, as well as Michael Storper and Richard Walker.
has both a tendency towards crisis, change and instability as well as an ability to stabilize institutions, rules and norms. The theory is based on two key concepts. "Regimes of Accumulation" refer to systems of production and consumption, such as Fordism and post-Fordism. "Modes of Regulation" refer to the written and unwritten laws of society which control the Regime of Accumulation and determine its form.
According to Regulation theory, every Regime of Accumulation will reach a crisis point at which the Mode of Regulation will no longer support it, and society will be forced to find new rules and norms, forming a new Mode of Regulation. This will begin a new Regime of Accumulation, which will eventually reach a crisis, and so forth. Proponents of Regulation theory include Michel Aglietta
, Robert Boyer, Bob Jessop
, and Alain Lipietz
.
, the consumers began to be viewed as different groups pursuing different goals who could be better served with small batches of specialized goods Mass markets became less important while markets for luxury, custom, or positional good
became more significant. Production became less homogeneous and standardized and more diverse and differentiated as organizations and economies of scale were replaced with organizations and economies of scope.
The changes in production with the shift from Fordism
to post-Fordism were accompanied by changes in the economy, politics, and prominent ideologies. In the economic realm, post-Fordism brought the decline of regulation and production by the nation-state and the rise of global markets and corporations. Mass marketing
was replaced by flexible specialization, and organizations began to emphasize communication more than command. The workforce changed with an increase in internal marketing, franchising, and subcontracting and a rise in part-time, temp, self-employed, and home workers. Politically, class-based political parties declined and social movements based on region, gender, or race increased. Mass unions began to vanish and were instead replaced by localized plant-based bargaining. Cultural and ideological changes included the rise in individualist modes of thought and behavior and a culture of entrepreneurialism. Following the shift in production and acknowledging the need for more knowledge-based workers, education became less standardized and more specialized. Prominent ideologies that arose included fragmentation and pluralism in values, post-modern eclecticism, and populist approaches to culture.
. The First Italy included the areas of large-scale mass production, such as Turin
, Milan
, and Genoa
, and the Second Italy described the undeveloped South. The Third Italy, however, was where clusters of small firms and workshops developed in the 1970s and 1980s in the central and northeast regions of the country. Regions of the Third Italy included Tuscany
, Umbria, Marche, Emilia-Romagna
, Veneto
, Friuli
, and Trentino-Alto Adige/Südtirol. Each region specialized in a range of loosely related products and each workshop usually had five to fifty workers and often less than ten. The range of products in each region reflected the post-Fordist shift to economies of scope. Additionally, these workshops were known for producing high quality products and employing highly skilled, well-paid workers. The workshops were very design-oriented and multidisciplinary, involving collaboration between entrepreneurs, designers, engineers and workers.
changes in production in Japan
that caused post-Fordist conditions to develop. First, there were changes to company structure, including the replacement of independent trade unions with pro-management, company-based unions; the development of a core of permanent male multi-skilled workers; and the development of a periphery of untrained temporary and part-time employees, who were mostly female. Second, after World War II, Japan was somewhat isolated because of import barriers and foreign investment restrictions, and as a result, Japan began to experiment with production techniques. Third, as imported technologies became more available, Japan began to replicate, absorb, and improve them, with many improvements deriving from modifications for local conditions. Fourth, Japan began to concentrate on the need for small-batch production and quick changeover of product lines to serve the demand for a wide range of products in a relatively small market. Because of informal price-fixing, competition was based not on price but rather on product differentiation. As a result, production became less standardized and more specialized, particularly across different companies. Fifth, Japan began to build long-term supply and subcontracting networks, which contrasted with the vertically integrated, Fordist American corporations. Sixth, because small and medium-size manufacturers produced a wide range of products, there was a need for affordable multipurpose equipment as opposed to the specialized, costly production machinery in Fordist industries in the United States
. Technology for flexible production was significant in Japan and particularly necessary for smaller producers. The smaller producers also found it necessary to reduce costs. As a result, Japan became one of the main users of robots and CNC. Over time, these six changes in production in Japan were institutionalized.
industry has combined Fordist and post-Fordist strategies, using both mass production and flexible specialization. Ford introduced flexibility into mass production, so that Fordism could continue to evolve. Those who advocate post-Fordism, however, note that criticism that focuses primarily on flexible specialization ignores post-Fordist changes in other areas of life and that flexible specialization cannot be looked at alone when examining post-Fordism. Another criticism is that post-Fordism relies too heavily on the examples of the Third Italy and Japan. Some believe that Japan is neither Fordist nor post-Fordist and that vertical disintegration
and mass production go hand in hand. Others argue that the new, smaller firms in Italy didn’t develop autonomously, but are a product of the vertical disintegration of the large Fordist firms who contracted lower value-added work to smaller enterprises. Other criticisms argue that flexible specialization is not happening on any great scale, and smaller firms have always existed alongside mass production. Another main criticism is that we are too much in the midst to judge whether or not there really is a new system of production.
The term "post-fordism" is gradually giving way in the literature to a series of alternative terms such as the "knowledge economy", "cognitive capitalism", the "cognitive-cultural economy," and so on. This change of vocabulary is also associated with a number of important conceptual shifts.
Production, costs, and pricing
The following outline is provided as an overview of and topical guide to industrial organization:Industrial organization – describes the behavior of firms in the marketplace with regard to production, pricing, employment and other decisions...
, consumption
Consumption (economics)
Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined in part by comparison to production. But the precise definition can vary because different schools of economists define production quite differently...
and associated socio-economic phenomena, in most industrialized countries since the late 20th century. It is contrasted with Fordism
Fordism
Fordism, named after Henry Ford, is a modern economic and social system based on industrial mass production. The concept is used in various social theories about production and related socio-economic phenomena. It has varying but related meanings in different fields, as well as for Marxist and...
, the system formulated in Henry Ford
Henry Ford
Henry Ford was an American industrialist, the founder of the Ford Motor Company, and sponsor of the development of the assembly line technique of mass production. His introduction of the Model T automobile revolutionized transportation and American industry...
's automotive factories, in which workers work on a production line
Production line
A production line is a set of sequential operations established in a factory whereby materials are put through a refining process to produce an end-product that is suitable for onward consumption; or components are assembled to make a finished article....
, performing specialized tasks repetitively. Definitions of the nature and scope of Post-Fordism vary considerably and are a matter of debate among scholars.
Post-Fordism is characterized by the following attributes:
- Small-batch production.
- Economies of scopeEconomies of scopeEconomies of scope are conceptually similar to economies of scale. Whereas 'economies of scale' for a firm primarily refers to reductions in average cost associated with increasing the scale of production for a single product type, 'economies of scope' refers to lowering average cost for a firm in...
. - Specialized products and jobs.
- New information technologies.
- Emphasis on types of consumers in contrast to previous emphasis on social class.
- The rise of the service and the white-collarWhite-collar workerThe term white-collar worker refers to a person who performs professional, managerial, or administrative work, in contrast with a blue-collar worker, whose job requires manual labor...
worker. - The feminization of the work forceFeminisation of the workplaceIn response to the pressure from feminism and cultural trends highlighting characteristics in workers which have culturally been associated with women, feminisation of the workplace is a label given to the trend towards greater employment of women, and of men willing and able to operate with these...
.
Theories of post-Fordism
Post-Fordism can be applied in a wider context to describe a whole system of modern social processes. Because Post-Fordism describes the world as it is today, various thinkers have different views of its form and implications. As the theory continues to evolve, it is commonly divided into three schools of thought: Flexible Specialization, Neo-Schumpeterianism, and the Regulation School.Flexible Specialization
Proponents of the Flexible Specialization approach (also known as the neo-Smithian approach) to post-Fordism believe that fundamental changes in the international economy, especially in the early 1970s, forced firms to switch from mass production to a new tactic known as Flexible Specialization. Factors such as the oil shocks of 1973, increased competition from foreign markets (especially Southeast Asia) due to globalization, the end of the post-World War II boom, and increasing privatization made the old system of mass producing identical, cheap goods through division of labor uncompetitive.Instead of producing generic goods, firms now found it more profitable to produce diverse product lines targeted at different groups of consumers, appealing to their sense of taste and fashion. Instead of investing huge amounts of money on the mass production of a single product, firms now needed to build intelligent systems of labor and machines that were flexible and could quickly respond to the whims of the market. The technology originally associated with flexible production was the numerical controller, which was developed in the United States in the 1950s; however, the CNC, developed in Japan, later replaced it[2]. The development of the computer was very important to the technology of flexible specialization. Not only could the computer change characteristics of the goods being produced, but it could also analyze data to order supplies and produce goods in accordance with current demand[3]. These types of technology made adjustments simple and inexpensive, making smaller specialized production runs economically feasible. Flexibility and skill in the labor was also important. The workforce was now divided into a skill-flexible core and a time-flexible periphery[4]. Flexibility and variety in the skills and knowledge of the core workers and the machines used for production allowed for the specialized production of goods. Modern just in time manufacturing is one example of a flexible approach to production.
Likewise, the production structure began to change on the sector level. Instead of a single firm manning the assembly line from raw materials to finished product, the production process became fragmented as individual firms specialized on their areas of expertise. As evidence for this theory of specialization, proponents claim that Marshallian "industrial districts," or clusters of integrated firms, have developed in places like Silicon Valley, Jutland, Småland, and several parts of Italy.
Neo-Schumpeterianism
The Neo-Schumpeterian approach to post-Fordism is based upon the theory of Kondratiev WavesKondratiev wave
Kondratiev waves are described as sinusoidal-like cycles in the modern capitalist world economy...
(also known as Long Waves). The theory holds that a "techno-economic paradigm" (Perez) characterizes each long wave. Fordism
Fordism
Fordism, named after Henry Ford, is a modern economic and social system based on industrial mass production. The concept is used in various social theories about production and related socio-economic phenomena. It has varying but related meanings in different fields, as well as for Marxist and...
was the techno-economic paradigm of the fourth Kondratiev Wave, and post-Fordism is thus the techno-economic paradigm of the fifth, which is dominated by Information and Communication Technology (ICT).
Notable Neo-Schumpeterian thinkers include Carlota Perez
Carlota Perez
Carlota Perez is a Venezuelan scholar and expert on technology and socio-economic development most famous for her concept of Techno-Economic Paradigm Shifts and her theory of great surges, a further development of the Kondratieff waves.-Career:...
and Christopher Freeman
Christopher Freeman
Christopher Freeman was an English economist, the founder and first director of Science and Technology Policy Research at the University of Sussex, and one of the most eminent modern Kondratiev wave and business cycle theorists...
, as well as Michael Storper and Richard Walker.
Regulation School
The Regulation approach (also called the neo-Marxist or French Regulation School), was designed to address the paradox of how capitalismCapitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
has both a tendency towards crisis, change and instability as well as an ability to stabilize institutions, rules and norms. The theory is based on two key concepts. "Regimes of Accumulation" refer to systems of production and consumption, such as Fordism and post-Fordism. "Modes of Regulation" refer to the written and unwritten laws of society which control the Regime of Accumulation and determine its form.
According to Regulation theory, every Regime of Accumulation will reach a crisis point at which the Mode of Regulation will no longer support it, and society will be forced to find new rules and norms, forming a new Mode of Regulation. This will begin a new Regime of Accumulation, which will eventually reach a crisis, and so forth. Proponents of Regulation theory include Michel Aglietta
Michel Aglietta
Michel Aglietta is a French economist, currently Professor of Economics at the University of Paris X: Nanterre. Michel Aglietta is a scientific counsellor at CEPII, a member of the University Institute of France, and a consultant to Groupama. An alumnus of the École Polytechnique, from 1998 to...
, Robert Boyer, Bob Jessop
Bob Jessop
Bob Jessop is a British academic and writer who has published extensively on state theory and political economy. He is currently Distinguished Professor of Sociology at the University of Lancaster.-Work:...
, and Alain Lipietz
Alain Lipietz
Alain Lipietz is a French engineer, economist and politician, a Member of the European Parliament, and a member of the French Green Party.-Education:...
.
Changes from Fordism to post-Fordism
Post-Fordism brought on new ways of looking at consumption and production. The saturation of key markets brought on a turn against mass consumption and a pursuit of higher living standards. This shift brought a change in how the market was viewed from a production standpoint. Rather than being viewed as a mass market to be served by mass productionMass production
Mass production is the production of large amounts of standardized products, including and especially on assembly lines...
, the consumers began to be viewed as different groups pursuing different goals who could be better served with small batches of specialized goods Mass markets became less important while markets for luxury, custom, or positional good
Positional good
In economics, positional goods are products and services whose value is mostly a function of their ranking in desirability by others, in comparison to substitutes. The extent to which a good's value depends on such a ranking is referred to as its positionality...
became more significant. Production became less homogeneous and standardized and more diverse and differentiated as organizations and economies of scale were replaced with organizations and economies of scope.
The changes in production with the shift from Fordism
Fordism
Fordism, named after Henry Ford, is a modern economic and social system based on industrial mass production. The concept is used in various social theories about production and related socio-economic phenomena. It has varying but related meanings in different fields, as well as for Marxist and...
to post-Fordism were accompanied by changes in the economy, politics, and prominent ideologies. In the economic realm, post-Fordism brought the decline of regulation and production by the nation-state and the rise of global markets and corporations. Mass marketing
Mass marketing
Mass marketing is a market coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer. It is type of marketing of a product to a wide audience. The idea is to broadcast a message that will reach the largest number of people possible...
was replaced by flexible specialization, and organizations began to emphasize communication more than command. The workforce changed with an increase in internal marketing, franchising, and subcontracting and a rise in part-time, temp, self-employed, and home workers. Politically, class-based political parties declined and social movements based on region, gender, or race increased. Mass unions began to vanish and were instead replaced by localized plant-based bargaining. Cultural and ideological changes included the rise in individualist modes of thought and behavior and a culture of entrepreneurialism. Following the shift in production and acknowledging the need for more knowledge-based workers, education became less standardized and more specialized. Prominent ideologies that arose included fragmentation and pluralism in values, post-modern eclecticism, and populist approaches to culture.
Italy
One of the primary examples of specialized post-Fordist production took place in a region known as the Third ItalyItaly
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
. The First Italy included the areas of large-scale mass production, such as Turin
Turin
Turin is a city and major business and cultural centre in northern Italy, capital of the Piedmont region, located mainly on the left bank of the Po River and surrounded by the Alpine arch. The population of the city proper is 909,193 while the population of the urban area is estimated by Eurostat...
, Milan
Milan
Milan is the second-largest city in Italy and the capital city of the region of Lombardy and of the province of Milan. The city proper has a population of about 1.3 million, while its urban area, roughly coinciding with its administrative province and the bordering Province of Monza and Brianza ,...
, and Genoa
Genoa
Genoa |Ligurian]] Zena ; Latin and, archaically, English Genua) is a city and an important seaport in northern Italy, the capital of the Province of Genoa and of the region of Liguria....
, and the Second Italy described the undeveloped South. The Third Italy, however, was where clusters of small firms and workshops developed in the 1970s and 1980s in the central and northeast regions of the country. Regions of the Third Italy included Tuscany
Tuscany
Tuscany is a region in Italy. It has an area of about 23,000 square kilometres and a population of about 3.75 million inhabitants. The regional capital is Florence ....
, Umbria, Marche, Emilia-Romagna
Emilia-Romagna
Emilia–Romagna is an administrative region of Northern Italy comprising the two historic regions of Emilia and Romagna. The capital is Bologna; it has an area of and about 4.4 million inhabitants....
, Veneto
Veneto
Veneto is one of the 20 regions of Italy. Its population is about 5 million, ranking 5th in Italy.Veneto had been for more than a millennium an independent state, the Republic of Venice, until it was eventually annexed by Italy in 1866 after brief Austrian and French rule...
, Friuli
Friuli
Friuli is an area of northeastern Italy with its own particular cultural and historical identity. It comprises the major part of the autonomous region Friuli-Venezia Giulia, i.e. the province of Udine, Pordenone, Gorizia, excluding Trieste...
, and Trentino-Alto Adige/Südtirol. Each region specialized in a range of loosely related products and each workshop usually had five to fifty workers and often less than ten. The range of products in each region reflected the post-Fordist shift to economies of scope. Additionally, these workshops were known for producing high quality products and employing highly skilled, well-paid workers. The workshops were very design-oriented and multidisciplinary, involving collaboration between entrepreneurs, designers, engineers and workers.
Japan
There were several post-World War IIWorld War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
changes in production in Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
that caused post-Fordist conditions to develop. First, there were changes to company structure, including the replacement of independent trade unions with pro-management, company-based unions; the development of a core of permanent male multi-skilled workers; and the development of a periphery of untrained temporary and part-time employees, who were mostly female. Second, after World War II, Japan was somewhat isolated because of import barriers and foreign investment restrictions, and as a result, Japan began to experiment with production techniques. Third, as imported technologies became more available, Japan began to replicate, absorb, and improve them, with many improvements deriving from modifications for local conditions. Fourth, Japan began to concentrate on the need for small-batch production and quick changeover of product lines to serve the demand for a wide range of products in a relatively small market. Because of informal price-fixing, competition was based not on price but rather on product differentiation. As a result, production became less standardized and more specialized, particularly across different companies. Fifth, Japan began to build long-term supply and subcontracting networks, which contrasted with the vertically integrated, Fordist American corporations. Sixth, because small and medium-size manufacturers produced a wide range of products, there was a need for affordable multipurpose equipment as opposed to the specialized, costly production machinery in Fordist industries in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Technology for flexible production was significant in Japan and particularly necessary for smaller producers. The smaller producers also found it necessary to reduce costs. As a result, Japan became one of the main users of robots and CNC. Over time, these six changes in production in Japan were institutionalized.
Criticisms
The main criticism of post-Fordism asserts that post-Fordism mistakes the nature of the Fordist revolution and that Fordism was not in crisis, but was simply evolving and will continue to evolve. Other critics believe that post-Fordism does exist, but coexists with Fordism. The automobileAutomobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
industry has combined Fordist and post-Fordist strategies, using both mass production and flexible specialization. Ford introduced flexibility into mass production, so that Fordism could continue to evolve. Those who advocate post-Fordism, however, note that criticism that focuses primarily on flexible specialization ignores post-Fordist changes in other areas of life and that flexible specialization cannot be looked at alone when examining post-Fordism. Another criticism is that post-Fordism relies too heavily on the examples of the Third Italy and Japan. Some believe that Japan is neither Fordist nor post-Fordist and that vertical disintegration
Vertical disintegration
Vertical Disintegration refers to a specific organizational form of industrial production. As opposed to integration, in which production occurs within a singular organization, vertical disintegration means that various diseconomies of scale or scope have broken a production process into separate...
and mass production go hand in hand. Others argue that the new, smaller firms in Italy didn’t develop autonomously, but are a product of the vertical disintegration of the large Fordist firms who contracted lower value-added work to smaller enterprises. Other criticisms argue that flexible specialization is not happening on any great scale, and smaller firms have always existed alongside mass production. Another main criticism is that we are too much in the midst to judge whether or not there really is a new system of production.
The term "post-fordism" is gradually giving way in the literature to a series of alternative terms such as the "knowledge economy", "cognitive capitalism", the "cognitive-cultural economy," and so on. This change of vocabulary is also associated with a number of important conceptual shifts.