Feb. 12th, 2005

Fordism

Feb. 12th, 2005 12:20 pm
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Fordism/consumerism is a system that is generally good for people but bad for everything else. Given time, its lack of concern for the environment will be its downfall unless reforms are made.

Henry Ford saw that corporations needed to spend money on two main things: making as many products as possible, so as to realize economies of scale; and paying their workers, not just enough to survive, but enough to allow the working population to buy all those products. A consumer society would have been impossible without this diffusion of wealth, which is only partially attributable to the efforts of unions.

However, Ford ignored two other necessities for the perpetuation of the consumer society: maintaining the sources of renewable natural resources, for example by preventing urban sprawl that eats up farmland; and establishing efficient recycling systems for nonrenewable resources, principally metals and petroleum products, to prevent them from running out. Obviously, a power grid based on the irreversible consumption of fossil fuels doesn't fit these requirements. Somewhat less obviously, population growth can't be sustained under this system because of the upper limits to the production rates of renewable resources and the total extractable quantities of nonrenewable ones.

Corporations tend to assume that they can leave these issues to governments, but as any economist will tell you, internalizing these externalities into the market system is the best way to make sure that they are handled efficiently.

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