Fordism And Neoliberalism

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Fordism can be defined as the model by which the capitalist class attempts complete management of the production of wage labour by placing particular emphasis on the relationship between production and the commodity market in which the wage-earners attain their means of consumption. (Aglietta, 1979, p117) This period of economic development occurred from the early 1900’s through the ‘Long-boom’ from 1944-1979 and stems from the practises put in place by the Ford motor company in the early 20th century. This was characterised by a labour process of semi-automatic assembly line production and was used in the production of mass consumer goods for consumption by the burgeoning middleclass wage-earners. Further, the introduction of increasingly …show more content…

It can be assumed that there are two primary tenets of neoliberalism, namely, a theory of income distribution and a theory of aggregate employment determination. Neoliberalism holds true that labour and capital are given value to their true worth, this being determined through the supply and demand process where a supplies ‘relative scarcity’ and productivity are the determinant which regulates both demand and value of capital. In terms of aggregate employment determination, neoliberalism asserts that the free market will regulate all valuable factors of production and the value of capital will adjust ensuring demand. These ideals stem from the Chicago school of monetarism where economies are seen to self-adjust to full employment under a truly free market and belief that the implementation of fiscal policy to reduce unemployment will only generate inflation. . (Palley, …show more content…

While the Fordist model promoted regulation of the labour market through wage regulations, sanctions against the powers of corporations and inflation and consumption in order to drive economic growth, the Neoliberal model favoured de-regulation of the market, shrinking of the state’s power to regulate economy and labour, and promotion of the idea that a completely free market will meet an equilibrium of high to full employment and competitive capital growth through abundant consumption. These two opposing models of economic and capital, both social and monetary, are not without flaws but the primary differences between them are the concepts of big government, pro-regulation and support of the workers’ rights versus small government, de-regulation of the labour and economic market, pro-privatization of all but the key utilities (Military, police, legislative framework, and the guarantee of the value of money) and the weakening of the workers’ rights both individually and in a union. Fundamentally, the focus on human labour capital for productive growth with Fordism, or, focus on capital at the cost of the workers’ rights to protect the profit margins and stay competitive in the global free

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