Fordism - in Regulation Theory

In Regulation Theory

Fordism is a key concept in the theories of the Regulation school, often in contrast to post-Fordism, and is also used in Western Marxist thought.

In Regulation theory, it is a "regime of accumulation" or macroeconomic pattern of growth developed in the US and diffused in various forms to Western Europe after 1945. It consisted of domestic mass production with a range of institutions and policies supporting mass consumption, including stabilizing economic policies and Keynesian demand management that generated national demand and social stability; it also included a class compromise or social contract entailing family-supporting wages, job stability and internal labor markets leading broadly shared prosperity—rising incomes were linked to national productivity from the late 1940s to the early 1970s. At the level of the labor process Fordism is Taylorist and as a national mode of regulation Fordism is Keynesianism.

The social-scientific concept of "Fordism" was introduced by the French regulation school, sometimes known as regulation theory, which is a Marxist-influenced strand of political economy. According to the regulation school, capitalist production paradigms are born from the crisis of the previous paradigm; a newborn paradigm is also bound to fall into crisis sooner or later. The crisis of Fordism became apparent to Marxists in late 1960s.

Marxist regulation theory talks of Regimes of Capital Accumulation (ROA) and Modes of Regulation (MOR). ROAs are periods of relatively settled economic growth and profit across a nation or global region. Such regimes eventually become exhausted, falling into crisis, and are torn down as capitalism seeks to remake itself and return to a period of profit. These periods of capital accumulation are "underpinned", or stabilised, by MOR. A plethora of laws, institutions, social mores, customs and hegemonies both national and international work together to create the environment for long-run capitalist profit.

Fordism is a tag used to characterise the post-1945 long boom experienced by western nations. It is typified by a cycle of mass production and mass consumption, the production of standardized (most often) consumer items to be sold in (typically) protected domestic markets, and the use of Keynesian economic policies. Whilst the standard pattern is post-war America, national variations of this standard norm are well known. Regulation theory talks of National Modes of Growth to denote different varieties of Fordism across western economies.

Fordism as an ROA broke down, dependent on national experiences, somewhere between the late 1960s and the mid-1970s. Western economies experienced slow or nil economic growth, rising inflation and growing unemployment.