[Militant International Review, No. 43, Spring 1990, p. 33-37]
The theory of ‘Post-Fordism’ denies that socialism is the next progressive stage in the development of the productive forces. Michael Roberts examines the arguments.
The theorists of modern capitalism have latched onto the collapse of Stalinism in Eastern Europe to proclaim the permanent triumph of capitalism. Unlike the ‘rigidities of the command economy’, Capitalism is a flexible system that continually adapts to new circumstances and thus can take society forward. Even prior to the momentous events east of the Berlin Wall. many bourgeois economists argued that modern capitalist economies had undergone a qualitative change in the 1980’s. The information technology revolution had altered fundamentally the process of industrial production and marketing. Consequently, capitalism has changed its spots, and even evolved into a different animal altogether.
This new theory of industrial change is called ‘Post-Fordism’. Post-Fordism has been latched onto by certain Labour leaders like Bryan Gould and by other pundits to justify revisions of some of the basic tenets of socialism.
In particular, a stream of writers for Marxism Today, the journal of the so-called Communist Party of Great Britain, has embraced post-Fordism to propose that socialism cannot be achieved through the mass action of the working-class, and that class struggle is no longer, if it ever was, the central feature of capitalist society.
How does the theory of ‘post-Fordism’ support those in the movement who want to ditch socialism and to deny the role of the working-class in achieving it?
The concept of ‘post-Fordism’ comes from a group of semi-socialist academics who have tried to identify qualitative changes in the nature of modern capitalist society. According to these theorists, in the early part of the 20th century, Capitalism became Fordist. By Fordism they meant that capitalism adopted mass production through giant factories concentrating its workforce in large numbers, often on assembly-line principles in a way supposedly pioneered by Henry Ford in his US motor company in the 1920s.
Under Fordism the machine became dominant and old handicraft skills gave way to semi-skilled assembly line work. The high concentration of workers inspired the growth of trade unions in the workplace, along with collective bargaining and a growing class consciousness, leading to heightened industrial struggle, and even political parties and collective action. Commodities produced by capitalism became more and more standardised so that mass production stimulated mass consumerism. Competitive capitalism gave way to monopolies who increasingly regulated the markets they operated in, controlling prices and production. The capitalist state also became a centralising force for the maintenance of capitalist profit and markets through subsidies, and the trade unions were integrated into this ‘corporatist state’ through the welfare state and reformist governments. Thus capitalism became a regulated and relatively stable system. particularly after World War II. (Some of the academic post-Fordists are thus called ‘regulation theorists’).
But, so these academics argue, in the more recent period (it is not clear exactly when), this Fordist system broke up. Now we are in the post-Fordist era of capitalism. Mass production has given way to ‘flexible specialisation’ where commodities are no longer produced on assembly lines. but in small batches. New factories are no longer large but are small high-tech units with relatively tiny highly skilled ‘core’ full-time workforces, alongside a growing unskilled part-time mainly female periphery or a self-employed sector. Products are varied continually to meet specific consumer needs so that mass consumption of standardised commodities has disappeared. As Robin Murray in Marxism Today (October 1988) graphically put it: “if the Ford plants at Halewood and Dagenham represented late industrialism, Centre Point and Habitat are the symbols of the new age”. Bryan Gould declared that post-Fordism meant socialism as its founders had seen it was out of date because “the new terrain is that of high technology, of small firms, computers and information technology. It is a future of diversity and flexibility, of internationalisation on the one hand and specialist production on the other”, Guardian 25 August 1988.
Consequently, there is a weakening of the large monopolies, contrary to Marx’s predictions about the development of capitalism. Correspondingly, the working-class, as Marx described it, is also tending to break up into small atomised groups with divergent interests; between full-time and part-time workers; between skilled and unskilled; between employed and self-employed. Collective action through trade unions has already been weakened, trade unions are in permanent and irreversible decline, and it is doubtful if socialists can really talk of a working-class or of class struggle and class issues any more.
If Hall, Jacques, Hobsbawm and other post-Fordists are right, then clearly socialists would have to abandon Marxism, and above all abandon any hope of socialism. But is this theory of Fordism and post-Fordism correct?
There will be no room in this article to deal with the political conclusions of the post-Fordists about the existence or otherwise of a working-class or of the power of trade unions and mass action, which will have to wait for another article. However let us consider their analysis of modern capitalism, from which their political conclusions flow.
Was 1920s capitalism Fordist? Firstly, it is not true that at any time the capitalist production process was entirely by assembly lines in large factories. That was certainly the overriding tendency that Marx identified in his analysis of modern industrial capitalism. But even by the 1920s less than one-third of British manufacturers used assembly lines and only half of those were automated in any way. According to the OECD, even by 1980 the USA still had more people employed as bookkeepers using manual techniques than were employed in all the computer-related industries.
Car production has never been Fordist in the sense that companies produced only one standardised model. Manipulating and creating demand i.e. flexible marketing in the post-Fordist sense with several models, regular product changes and new launches has always been a feature of ‘Fordist’ production.
In the Fordist era, many consumer goods were produced with little mechanisation. On the other hand, heavy capital goods industries have continued to develop intensively mechanised processes using robots etc. in our apparently post-Fordist era. Modern capitalist production has generally been characterised by some important and key industries being heavily mechanised and automated, while others continue to be labour intensive, often requiring craft skills. The qualitative change in capitalism from Fordism to post-Fordism that our theorists claim to have discovered is highly exaggerated at the very least.
Also, the development of monopoly capitalism did not end competition as the regulations theorists suggest. On the contrary under imperialism there was increased competition for markets nationally and internationally. Monopoly enterprises cannot hold prices and profits up indefinitely against any superior new technology employed by competitors. The lower costs generated by better techniques will eventually allow competitors to undermine monopoly control of a market. That is why British industry eventually lost markets to the USA and Germany before 1914 and why US industry has lost ground to Japan and West Germany since 1945. The Marxist analysis of monopoly never suggested that small firms would steadily disappear. As Rosa Luxembourg explained: “small capitalists play in the general course of capitalist development the role of pioneers of technical change … the struggle of the average sized firm against big capital cannot be considered a regularly proceeding battle in which the troops of the weaker party continue to melt away directly and quantitatively. It should be rather regarded as a periodic mowing down of the small enterprises which rapidly grow up again, only to be mowed down once again by large industry”, Reform or Revolution.
Price competition is still a crucial battleground for the multinationals, and there is a continual drive to lower costs through improved technology and scientific management of production and the labour force. The regulation theorists have ignored these vital features of monopoly capitalism.
Blinded as they are by what they call these ‘New Times. as the CP likes to describe the post-Fordist era, the post-Fordists are also not troubled by features of capitalism in the 1980s that do not fit into their categories.
The major capitalist industries which provide the bulk of the surplus-value appropriated and accumulated by the capitalist class worldwide are just those sectors which require large investments of capital, sizeable plants and well concentrated workforces, assembly line production i.e. Fordism e.g. motor vehicles, chemicals, electronics and agricultural production. And those industries which are dominated by small firms specialising in certain crafted products can only survive because they depend on components and machines that have been produced on mass production Fordist lines.
New technology has created conditions in which workers can be physically separated in the production process while communicating by computer networks, but that has created even greater dependency between units of production. Small component suppliers are now even more dependent on the large firms for their business and through information technology are increasingly integrated into the production cycle of the larger firm. In the motor industry the number of small component firms is declining as long-term contracting work for one large motor company expands. Japanese industry particularly resembles this model of modern capitalist production.
Computerised planning, robots, and high-tech communications technology enable firms to produce commodities in short production runs which can be geared to specific markets. But this change from old style mass assembly on long production cycles does not mean the destruction of large firms as the post-Fordists claim. Batch production of diversified products is being carried out by just those big Fordist firms that are supposed to be on their last legs. The bigger the firm, the greater the scope of products that it can produce, the more it can spread its overheads and use the costly capital equipment on various products. The larger firm can afford much more easily to reprogram its expensive capital equipment than the smaller supplier. New technology means shorter design cycles, lower stock levels through the use of ‘just-in-time’ computerised inventory programs, shorter production runs and quicker response to changing demand. But the cost of investing and developing the technology for these production benefits is consequently so high as to increase the tendency towards larger firms, not weaken it.
As one Japanese expert put it in the Financial Times, 16 February 1989: “the lifespan of any one product has become much shorter: the typical audio set is used for anywhere from six months to one year. This means that manufacturers must be able to put a wide range of products on the market and must keep producing new ones very quickly, to keep pace with changing demand and to create new demand. Success depends on heavy investment in research and development. With products changing at such frantic pace, a wide and efficient distribution network also becomes crucial. In all these respects, the larger manufacturer has a definite advantage over small and specialised companies”.
Research and development costs have accelerated in the last 5 years. In the car industry the cost of designing and developing a new model has risen to over $1bn and according to the Investors Chronicle, 31 March 1989, it will rise to over $10bn in the next 10 years.
In the modern telecommunications industry it is ludicrous to talk of small units and small firms. On the contrary, the move is to global multi-national operations, as a firm like BT demonstrates. As Sir John Harvey-Jones, the former head of Britain’s biggest industrial firm, ICL, commented: ‘the speed of supplying a new product to the markets of the world is an important competitive factor. This means having access to a world marketing network … global systems of this sort … require constant feeding with the new. and impose crippling costs on their owners … the sheer cost of research, development, launch and branding … impose burdens which the small guy cannot face up to.” Observer July 1989.
And is it really true that there has been increased product diversity through consumer market specialisation to meet a growingly prosperous population? The affluent readers of Marxism Today may think so as they make their credit card purchases in Benetton, Next etc. (62% of MT readers are professional, they visit wine bars and restaurants at least three times a month, and have two or more holidays a year).
But the truth is different. Agribusiness gets more and more standardised. A recent report showed that world seed production is gradually being reduced to just 150 standardised varieties, with local variants being destroyed by the multinational agrobusinesses at the rate of 10,000 a year. Food quality is steadily declining with the expansion of battery assembly-line production.
Increasingly we find in every shopping centre, the same retail chains with the same products. Coke can be bought anywhere in the world, as can MacDonalds hamburgers. Marxism Today or Guardian readers, buying their special cheeses at the local supermarket may think that there is greater product diversity. But they can only purchase a particular goat cheese because it is no longer produced in the local Mediterranean villages but comes from huge mass production vats in the cities. Modern consumer diversity can therefore mean more standardised production from larger units.
The decisive change in post-war capitalism is not from Fordism to Post-Fordism but from the 1949-73 upswing to a new era of instability
The decisive change that has taken place in post-war capitalism is not that from Fordism to post-Fordism. It is from the post-war epoch of upswing of 1949-73 to a new era of downturn, instability and crisis. This development is a product of the underlying contradictions in the Capitalist process of production through accumulation of capital which Marx identified 130 years ago, not through some mythical post-Fordist break-up of capitalism.
In particular, Marx predicted that accumulation would have a tendency to increase the concentration of capital i.e. firms would tend to employ larger amounts of plant, machinery and labour; and a tendency to increase the centralisation of capital i.e. smaller firms would increasingly be gobbled up by giant firms leading to greater monopolisation of markets.
Contrary to the arguments of the post-Fordists, none of these basic characteristics of capitalism that Marx revealed and predicted have disappeared. It is true that modern capitalist economies have shown a decline in the proportion of workers in production industries like manufacturing and energy. In the UK there were 8.6 million workers employed in those sectors in 1955, 7.3 million in 1977 and only 5.9 million in 1985. But this fall in the UK is much more the result of the terrible cut back in manufacturing capacity during the 1979-81 recession than a long trend away from ‘Fordism’. In Japan manufacturing employment has increased, and the share of manufacturing in total product has risen.
If we look at engineering employment in the UK over the last century, we find that the number of workers is still the same as in 1951 and much larger than in the heyday of British industry in the 19th century. Although there has “been a tendency towards a greater concentration in small firms … even after account is taken of shifts in industry structure” (OECD Employment Outlook 1985 p. 64), the OECD still found that larger firms (with more than 500 employees) overwhelmingly predominate in all the major advanced capitalist countries as employers of labour compared to small firms (with less than 100 employees) in manufacturing and are still important for the whole economy even when services, where small firms and establishments are prevalent, are included. (See Tables in panel).
Internationally, there has been a general stability in employment shares by size of plant. There has been only marginal growth in the small firms’ share, hardly justifying the arguments of the ‘post-Fordists.’ Most of the movement has been due to the shift of employment into services and partly to the last recession hitting larger firms harder.
The UK’s peripheral workforce i.e. part-time, temporary and self-employed,»has remained small in manufacturing and is mainly concentrated in public services and in private sectors like catering and hotels where it has always been. There has been no significantly fundamental post-Fordist change here. What change there has been is more due to the weakened bargaining power of trade unions in the early to mid-1980s under the threat of high unemployment.
Moreover, the growth of self-employment – from 6.8% of workforce in 1965; 8.4% – 1971; 7.7% – 1979 to 12% in 1987 has been generated mainly by subcontracting from large firms and is heavily dependent on them.
Part-time working (less than 30 hours a week) has increased as a proportion of jobs only because full-time jobs have declined, not because there has been a dramatic absolute increase in the number of part-time jobs. The increase in part-time jobs 1979-85 has been 217,000, almost all in the services sector.
The latest estimates show that in the UK as a whole, 71% of all employees work in firms with more than 200 employees (Source: C Hakim Employment Gazette Jan 1989). In manufacturing it is 62.7% and in the service sector including public services it is 75.8%. Thus medium to large firms remain the decisive employing enterprises in the UK economy. Capital remains heavily concentrated as Marx predicted.
Contrary to the arguments of the post-Fordists, there has also been no let up in the centralisation of capital in larger and larger multi-national enterprises which dominate national and world markets. The latest figures hardly justify the claim that there is a break-up of monopoly control.
According to the UK Census of Production Summary Report 1986, the top 100 companies in the UK control 33% of employees in manufacturing, 33.8% of sales in’ manufacturing, 37.7% of net manufacturing output and 45.7% of assets in manufacturing.
A wide range of sources, including Labour’s own Policy Review documents, state that the top 150 UK companies control 60% of GNP.
And recent figures compiled from The Times 1987-8 analysis of the top 1000 companies in the UK show:
Centralisation of capital 1987-8
| sales turnover% | capital | |
| Top 25 companies | 37.3 | 53.6 |
| 50 | 50.0 | 63.7 |
| 100 | 64.2 | 76.7 |
| 150 | 72.6 | 85.0 |
| 200 | 78.1 | 90.9 |
Including those outside the top 1000, it can be calculated that the top 150 companies have 78% of capital and the top 200 84%.
Far from capitalist enterprises diversifying into smaller units and breaking up in this post-Fordist era, the last decade has witnessed an unprecedented orgy of mergers and acquisitions as corporate predators gobble up weaker brethren. In 1979 there 53 takeovers or mergers worth £1.6bn. In 1986 there were 696 mergers worth £14.9bn. But in 1987 this leapt to 1125 takeovers worth £15.4bn, and the last year has seen that record broken.
The new pressures imposed by further integration of the European market in 1992 have already produced a rash of mergers as companies in high tech markets like GEC and Plessey and in consumer retail markets like Rowntree’s, Cadbury’s and Nestle form into even larger conglomerates. According to UNCTAD the world’s top 200 companies now control 60% of world GNP.
And this merger boom has affected just those enterprises which supposedly represent the epitomy of post-Fordism. Robin Murray’s ’symbol of the age’, Habitat. has disappeared into the Storehouse conglomerate along with British Home Stores – a perfect example of growing centralisation in the last haven of the smaller producer – the retail market. Now it is rumoured that the great computer marketing success story, Amstrad, may find a larger ‘partner.’
The post-Fordist arguments that capitalism is now fundamentally different from how Marx analysed it in the 19th century are really nothing new. They follow a long line of preceding theories which seek to deny that socialism is the next progressive stage in the development of the productive forces organised by human society and argue that progress merely depends on some evolutionary changes or reforms in the capitalist system of production.
It was just under 100 years ago that Eduard Bernstein propagated similar views about capitalism as the post-Fordists do now: that capitalism was becoming highly flexible and that small-scale production was increasing at the expense of the giants of industry.
The arguments have not changed and neither has their validity, they are demonstrably wrong.
Tables
The tables below were compiled by the author from OECD Employment Outlook 1985. Tables A and B show what proportion of the workforce in different countries work in large companies (i.e. over 500 employees) and in small companies (i.e. under 100 employees); both by size of company and by size of the factory site. They show the dominance of large firms in manufacturing, with the exception of Japan with its unique reliance on small component subsidiaries to big firms. When the services sector which includes shops, hotels etc. where small firms dominate is added in, then there is higher percentage of workers in small firms – as there has always been.
Tables C and D show the trend since 1970 when post-Fordism is supposed to have been operating. They show that there has been no real change in the proportion of workers in small or large firms either by size of company or by size of factory or workplace.
Table A
For enterprises (i.e. firms or companies) in the whole private sector:
| % of employees in large firms | % in small firms | |
| Austria | 33 | 47 |
| Belgium | 33 | 46 |
| France | 39 | 42 |
| Japan | 27 | 56 |
| USA | 48 | 40 |
Table B
For enterprises in private manufacturing:
| % of employees in large firms | % in small firms | |
| France | 49 | 28 |
| W Germany | 60 | 15 |
| Italy | 46 | 25 |
| Japan | 33 | 46 |
| UK | 66 | 20 |
| USA | 71 | 16 |
Table C
For establishments (plants or factories) in whole economy:
| % of employees in large plants | % in small | |||
| 1971 | 1983 | 1971 | 1983 | |
| France | 42 | 40 | 38 | 40 |
| Japan | 30 | 28 | 55 | 57 |
| USA | 47 | 48 | 41 | 40 |
Table D
For establishments in manufacturing:
| % of employees in large plants | % in small | |||
| 1970s | 1980s | 1970s | 1980s | |
| France | 52 | 50 | 25 | 27 |
| Japan | 37 | 35 | 43 | 45 |
| UK | 72 | 68 | 15 | 17 |
| USA | 71 | 67 | na | 17 |
Source: OECD Employment Outlook 1985.
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