In Forging Global Fordism Stefan J. Link gives a fascinating account of the ascent of Henry Ford and his famous automobile company, of the alternate fortune of the various concepts of Fordism, and of the significant influence that the mass-production methods of Ford's giant River Rouge factory had in the 1930s on the Nazi economy in Germany and on the Soviet economy under Stalin.
As a mechanical engineer with an anti-liberal and anti-financier approach, Ford created and consolidated a motor company producing a large number of affordable automobiles. He pioneered flow-production methods in the automobile industry and employed a vast number of unskilled or semi-skilled workers under the supervision of a core of engineers and skilled workers, introducing an almost continuous stream of technical and organizational innovations. The very high labour turnover and major social tensions in Ford's factories, due to the high division of labour and the repetitiveness, intensity, and alienation of work at the assembly lines induced Ford in January 1914 to double wages to $5 a day and reduce the length of the working day from nine to eight hours. This led to a fall in labour turnover and made it possible to prevent labour unions gaining a foothold at the Ford Company until 1941. Moreover, moving from two to three shifts every twenty-four hours led to a great productivity increase, though at the cost of more demanding night work. Technological progress and massive economies of scale more than compensated for higher wages. The enormous productivity gains permitted a large reduction in the price of automobiles, and led to rapid growth in demand for cars in the 1910s and 1920s, both in the US market and in other countries (including Canada, UK, Germany, and Argentina) where Ford had invested massively. The rise in employment and wages in the automobile industry and in related sectors (steel, oil, road construction, etc.) contributed to a further increase in US aggregate demand, fostering in particular demand for cars, trucks, commercial vehicles and tractors, steel, and oil products.
In his discussion of the concept of Fordism, Link mentions that, as early as 1923, a Belgian Automobile Club had named its newspaper Le Fordiste; in 1925, in the Soviet Union, N.S. Rozenblit wrote about Fordism as the American productive organization; and, in 1926, the German economist Friedrich von Gottl-Ottlilienfeld coined the term Fordismus. Fordism also had a serious impact on literature and on movies. In 1932, in his famous science fiction novel Brave New World, Aldous Huxley used some of Henry Ford's ideas in the construction of his dystopian world state, and the book referred to Henry Ford as a sort of deity. In the novel, years were counted not from the birth of Christ but from 1908, the date of the production of the first Ford T automobile. In 1936, Charlie Chaplin's Modern Times gave a comical, extremely vivid, representation of work at an assembly line in a Fordist industry.
According to Link, Henry Ford's cultural roots were deeply associated with Midwestern populism. In the 1920s, Ford contributed to the dissemination of anti-Semitism through The International Jew – a set of booklets originally published and distributed by a company owned by Ford. Ford gave a vision of his ideas on industry and life in two very influential books, My Life and Work (1923) and Today and Tomorrow (1926). Both were translated into a number of languages and had a significant impact in several countries, particularly among the German post-liberal right of that period.
The most influential contribution to the debate on Fordism was made by Antonio Gramsci, the Italian Marxist intellectual and heterodox communist leader who, in the 1930s, while in a fascist prison, wrote Americanismo e Fordismo (Americanism and Fordism). In this, Gramsci advanced the idea that mass production and the assembly line had led to a broad transformation of working conditions, of the working-class cultural and psychophysical constitution, and of the social and political arena. Mainly confined to internal Marxist debates until the 1960s, Gramsci's contribution inspired the writings of the French Regulation School in the 1970s and 1980s. Authors such as Aglietta, Boyer, Mistral, and Lipietz revisited and extended Gramsci's concept of Fordism and applied it to the historical phase of Western countries in the post-war period from the 1950s to 1969. In the 1970s and 1980s, the crisis of Fordism in Western countries led to a vast literature on post-Fordism, later largely superseded by debates on globalization, global value chains, and the deep changes in the international division of labour associated with the ascent of large emerging economies such as China and India.
Aiming to fill a gap in the history of Fordism, Link focuses mainly on the 1930s and on the impact of Ford's ideas on Germany in the Nazi period and on the Soviet Union under Stalin. Fordism and its key elements, such as the assembly line and massive flow production, were decisive not only for US economic history since 1908 and for the rapid growth and consumption boom seen in Western Europe in the 1950s and 1960s, but also for the construction of huge automobile and truck plants in Germany and the Soviet Union in the 1930s. These plants used Fordist large-scale flow-production methods and were built or enlarged partly in response to pressure from activist states preparing for World War II. During the war, the Ford and Volkswagen plants in Germany and the GAZ plants in the USSR were reconverted to produce the war vehicles, trucks, tanks, airplanes, and bombs essential for the war efforts of the two countries. Link illustrates how several German and USSR technicians and experts learned flow-production methods at Ford's great River Rouge plant when visiting Ford's factory in the 1930s. Many of Ford's skilled workers, often American citizens of German origin, were then hired by German automobile firms, and others, often of Russian origin, were hired by USSR companies. Their know-how, together with the imitation of modern assembly lines and the import of specialized US capital goods, powerfully contributed to increasing the productivity and technological level of German and Soviet automobile and truck companies. The introduction of Fordist mass production techniques thus strongly contributed to the war efforts of the Nazis and the Soviet Union.
The Fordist elements were introduced in different ways in the two countries, however. While in Germany, the Ford Motor Company and its rival General Motors (GM) had a direct and relevant presence, in the Soviet Union Ford could sell only technology, capital goods, and know-how, helping to build a large state-owned motor company, GAZ. In Germany, GM acquired a leading presence after the acquisition in 1929–1931 of Opel, while Ford had already had some operations since 1912, and in 1930–1931 it built a large factory near Cologne producing trucks and small automobiles. By 1938, it was the fourth largest seller in the German automobile market after Opel, Mercedes-Benz, and DKW. Link shows that the Nazi government refused to allow profits earned by Ford and Opel in Germany to be repatriated to the US; instead, it encouraged their reinvestment in the German operations of the two companies. Ford and Opel could therefore continue to acquire new American technologies and increase their production of cars and trucks. Later, during World War II, this would become important for the German army. Moreover, Germany could profit from the valuable foreign currency earned from the exports of the two firms to other countries.
Until the outbreak of World War II, Henry Ford had good relations with the Nazi regime, partly due to his anti-Jewish and populist right-wing ideas, partly because of the profits earned through his sales of components, capital goods, and technologies to Ford in Germany. In 1938, the Nazi regime awarded him the Grand Cross of the German Eagle.
In the post-war period, the mass production techniques introduced at Ford in Germany also proved effective in fostering West Germany's economic recovery and the rapid economic growth seen in the 1950s and 1960s. From 1938 to 2003, over 21.5 million Volkswagen Beetles, designed by Ferdinand Porsche in the 1930s at the request of Hitler, were produced. In post-war Europe, the VW Beetle became a symbol of a people's car and of mass production and mass consumption as much as the Ford T had been a symbol of American industrial success from 1908 to the 1920s. In the United States, the Beetle also became popular in the 1960s and 1970s as an affordable compact car.
Although Link's book gives a well-documented and comprehensive overview of Fordism, I want to raise three issues. First, Ford's own approach in peacetime was based intrinsically on economies of scale, and therefore on the size of the United States economy. Mass production of automobiles needs mass consumption, primarily depending on the size of the internal market and the possibility to export cars to external markets with enough buying power. At the beginning of the twentieth century, the United States already was developing into the largest economy in the world and its economy was rapidly outpacing the major European powers and Japan. Therefore, when, in the 1910s and even more in the 1920s, international trade was limited by relatively high tariffs and other barriers, the United States was the only country that could profitably adopt the Fordist model on the basis of its potentially immense domestic market. Ford's genius was to recognize this economic potential. He chose not to produce expensive luxury cars for the happy few, as his competitors did, but smaller, simpler, affordable cars, while substantially increasing the wages of Ford workers after 1914. By using flow-production methods, he was able to reduce the price of his Model T touring car from $850 in 1908 to about $300 in 1925, i.e. from about eighteen months of average wages to about four months. As I have described elsewhere, it was not until the 1950s and 1960s that the same happened in Western Europe and Japan. It had been possible to adopt some elements of the Fordist model of development in China and other industrial sectors only since the 1980s (and for automobiles since the late 1990s) and in India since 1992, when the rapid increase in per capita GDP and the reduction of automobile prices in these countries created large enough markets of people who could afford them.Footnote 1
Second, there were large differences in the use of Fordist elements during wartime and in peacetime, and in the role of authoritarian versus democratic governments. Fordism can operate fully in peacetime, when private-sector demand requires large volumes of production with large economies of scale. The case in wartime, when production for the private sector has to be significantly curtailed, is very different. The necessities of war require a great deal of productive capacity to be converted to military use (tanks or trucks, airplanes, bombs, and munitions, rather than cars). The situation in a democratic market, with a mixed economy, like that seen in Britain and France in the 1930s, is also different from that of economies with an authoritarian right-wing government, like that seen in Italy under fascism and Germany under Nazism, or from a planned authoritarian economy such as the Soviet Union. In authoritarian right-wing economies, private firms could operate, but priorities in the investment and consumption structures, wages dynamics, and labour relations were strongly influenced by political directives. In Soviet-type planned economies, state firms were dictated to by the party state, and the production and supply of their products, and the prices paid for them, were predetermined by the quantitative objectives of the plans. In the Soviet Union, even in the post-World-War-II period, the availability of cars for private use was rationed through the maintenance of very high prices and long waiting lists, severely hindering economies of scale, larger production volumes, and improvements in productivity and quality.
My final point regards an important methodological issue. Link states: “If there is a clear lesson from this history, it is that development is always relational. It cannot be understood in national terms and without attention to the fundamental disparities that structure the global economy.” Although this is absolutely true, sufficient attention must also be paid to the national differences in economic size and in political institutions in the different historical periods. For example, the path of China in relation to the global dominance of the United States in the twenty-first century will be different from the paths Germany, or the Soviet Union, took in the twentieth century.
