The Fordist Model of Economic Development
At the beginning of the twentieth century, the advantages of the frontier were fading away, but the US was able to react and began since 1908 to benefit from the Fordist model of development. This concept, which I introduced in 2002, is derived from Gramsci’s concept of Fordism, but it is mainly focused on its potential macro-economic aspects. In the 1910s and in a great part of the 1920s in the US, there were a rapid growth in GDP and a big and enlarging market; large economies of scale; a rapid rise in productivity; a growth in sales; and a reduction in relative prices of important mass-consumption goods such as automobiles, electric domestic appliances, and related sectors, like steel and gasoline. The companies, therefore, had the possibility of conceding higher unit wages and of raising employment. Total wages, consumption, investment, technical progress, knowledge, aggregate demand, and GDP could widely increase. In the US, this model worked up to the great depression and again in the 1950–1973 period, while during the great depression, it worked backwards.
KeywordsFordism Fordist model of development American growth in the Fordist phase
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