On 10/9/07, Michael Nuwer <[EMAIL PROTECTED]> wrote: > From the wider point of view, mass production required mass consumption > and in this sense Fordism might be seen as progressive.
It's true that _if widespread enough_, higher wages can create a domestic market for consumer goods, which can in turn justify the higher wages (though only up to the capacity constraint). This assumes of course, that there are barriers to workers importing from the rest of the world (and there is no capital flight). In 1913, there _were_ such barriers. (This was in the middle of the US protectionist phase for manufacturing.) But I don't think the "Fordist" biz about high wages --> domestic market was strong enough based on the actions of Ford alone. Raising wages may have helped create a market in Detroit and around other auto centers, but that also can cause local inflation (arising because of shipping costs between areas). Mostly, it's _higher labor productivity_ that allows higher wages. The introduction of the assembly line and later automation raises labor productivity. Then, if money wages rise at the rate of growth of productivity (perhaps to minimize turnover, perhaps due to unions, something that Ford resisted like the plague until the late 1930s), labor costs per unit (the ratio between the total money wage bill and output) don't rise. Thus, Ford could either keep its profit margins constant or lower them, attracting business away from other sellers (assuming that _their_ unit labor costs aren't falling). But there's no guarantee at all that the rising wages will be used to buy Fords. If wages for _all_ auto manufacturers are rising in step with labor productivity, then they can all keep their profit margins constant and they can avoid destructive price-cutting competition. (This unified surge in wages was more likely once the UAW was in place, though even before that there was some competition among employers to avoid paying wages that were so low that they drive workers away.) Wages that rise with labor productivity for the whole auto sector also mean that the automobile wage bill (wage*(# of employees)) is growing in step with total auto production (labor productivity*(# of employees)). This _might _ mean that the market for cars rises with production, assuming that workers don't buy other things instead (or that those they do buy from use the revenues to buy cars). The likelihood that this scenario will raise the demand for cars is higher than for the case where only Ford has increased wages. There's a larger market and it's more likely to go for buying cars in general than for buying a single brand of cars. The larger the scope of wage increases in step with labor productivity growth in a country (spreading outside the auto industry), the more higher wages lead to larger markets in that country (assuming imports are blocked -- and assuming nowadays that there is no capital flight in search of lower wages). -- Jim Devine / "The truth is at once less sinister and more dangerous." -- Naomi Klein.
