Lecture Week 2
From the notes, we learn that Fordism is characterized by integrated firms, scientific management, economies of scale among others. In other words, Fordism acted as a form of transformation from a world of agriculture to mass production, industrial as well as mass consumption of the economy. Fordism is evident to have helped develop markets given its character of economies of scale and scope. However, the fact that Fordism acted a creative force which propagated the automobile industry raises questions. For instance, can it be concluded that all the success gained from Fordism resulted from the use of force since the existence of industrialization changed peoples’ fundamental ideas in the sense that they were dictated in all they did? Their buying behavior, thinking, and living were all controlled. While the notes talk of economies of scale, facts such as the use of fixed expenses to reduce unit costs is questionable. Looking at the Golden Age of Capitalism and its relativity to Fordism, it is asserted that these practices led to the rise of the welfare state, decline in inequality as well as political representation of labour. As much as all this seemed effective in promoting the economy, Fordism gave rise to crises such as the issue of oil in 1974. The decline of Fordism led to post-Fordism which is evident to be defined by job stability, low-cost, high wages among other factors. However, the model of post-Fordism is blamed for having had limited chances for improvement given the fact that advantages that came from competition could be exercised by others too. This fact is questionable in the sense that if competitive advantages could be copied with others, then it means that economies ought to have significantly improved. If all people copied something that benefited others, then this leads to positive changes. However, the twist in this fact is that post-Fordism led to the decline of production as well as the regulation of international markets as well as corporations. This decline can be said to be the reason behind the introduction of flexible specialisation which replaced mass marketing. Availability of mass marketing implied the need for flexible, intelligent systems that could bring positive responses to market whims. This was through the use of technology which could create adjustments suitable in running the economy. A point to note regarding flexible specialization is that the change in the workforce was as a result of the emphasis on communication as opposed to the earlier act of command. Through the use of communication, there was an increase in franchising, self-employment, internal marketing as well as people working from home. Mass unions started disappearing paving the way for localized bargaining which was plant-based.
Further changes that have been left out in the notes are the ideological as well as cultural changes which led to entrepreneurialism culture developed from individualist modes of thinking and acting. In other words, people had the freedom to specialize in whatever product or job available. As learned in class, post-Fordism led to flexible specialization which began initially in the car industry before spreading to other sectors. The vehicles manufactured were based on the market demand, and companies started employing systems that favored customers as in the likes of Toyota having embraced the Kanban system.
Lecture Week 3
The push for industrialisation in the 20th century was characterized by the rise in new political parties, end of colonialism, capital accumulation among other things. This fact is best explained through the use of the dependency theory which asserts thatdependency is an issue that affects growth and productivity. For instance, developing countries which depend on foreign aid can never better their economy unless they break from these chains of dependency. This is looked at from the logic of ISI which provide that the only way for developing nations to better themselves is through moving away from the international division of labour. Using domestic goods to replace imported manufactured products can be helpful for developed countries but not those which are still developing. The issue arising from this fact is that import substitution Industrialisation for developing nations can be so hectic and challenging given the fact that for a product to be entirely manufactured, it has to go through production channels which need resources. This is an issue on its own since developing nations lack adequate resources and finances, and that is why they mostly depend on financial aid. Therefore, it is factual that as much as ISI can be the only solution for developing nations to save their economies, comparative advantages can play a better role in solving the dependency issue. For instance, at first, Latin America embraced ISI policies which greatly benefited this region after having successfully created self-sufficiency through the development of new markets, protecting tariffs, controlling trade exchange among others. However, ISI policies still seemed unbearable to Latin America and other countries which turned away slowly in years of the 1980s and 1990s. The issue behind ISI policies is that if it aimed at bettering developing countries, why then did these nations move away after theliberalisation of global market concept that rose from structural adjustments of International Monetary Fund programs? Isis policies pressurized nations which worked on a small scale and highly depended on imports is the best answer to this question.
Similar to import oriented industrialization is the export form which aimed at increasing or rather speeding up the process of Industrialisation through exporting products. Countries such as Japan through “Miracle,” “Keiretsu,” and “the Flying Geese” embraced this strategy which led to growth in the economy not only in this region but in the continent of Asia as a whole after WW2. For instance, it is asserted that the growth of the Japanese economy was 55 times the years of 1953 to 1976. However, the issue to look at from this fact is that Export-Oriented Industrialisation limited export opportunities as a result of exchange rates which were overvalued. This implies that the growth in the economy for Japan was only for a short period as itdid not last for long. A fact to consider is that the presence of the already existing import substitution led to Home Market Bias in terms of export promotion. Another point to note is that the introduction of high tariffs in nations that were much developed affected those other nations that were least developed. The high costs of goods to be exported favored developed countries only since they could afford to advertise, investment in packaging as well as Research and Development (R&D).