Globalization: From Fordism to Flexible Accumulation

Now it is time to give an overview of the structure and logic of the global economy, which is needed in order to understand the place/space conflicts of today.

Starting in the early 1970's with the world economic recession, the post war economic boom began to collapse, marking the onset of a radical restructuring of the world capitalist system. As David Harvey details in his book The Condition of Postmodernity, the postwar economic boom period was marked by what he calls a fordist regime of accumulation. This fordist system was built upon the social contract of big buisness, big labor, and the state. The state which was heavily involved in the economy, aimed to avoid the overaccumulative potential of capitalism by ensuring increased industrial production by reciprocating it with increased consumer demand. To do this the state practiced keyenesian economics which

"strove to curb business cycles through an appropriate mix of fiscal and monetary policies. Such policies were directed towards those areas of public investment--in sectors like transportation, public utilities, etc.--that were vital to the growth of both mass production and mass consumption, and which would also guarantee relatively full employment. Governments likewise moved to provide a strong underpinning to the social wage through expenditures covering social security, health care, education, housing, and the like" (Harvey, 135).

Such keynesian state interventions into the economy to ensure decent living conditions to provide the consumer base for increased industrial production, succeeded in raising the countries economic growth rate and incomes. The GDP which rose 4.4% a year in the 1960s in the U.S. was coupled with a dramatic increase in median family income from 14,000$ in1949 to 28,000$ in 1969 (Harvey, 130). It was this postwar boom in which the saying "whats good for GM is good for the U.S.A" held true and helped to create a strong middle class.

Employment in the postwar fordist economy, which was marked by highly unionized, assembly line, manufacturing jobs, was premised on Henry Ford's belief that a "new kind of society could be built simply through the proper application of corporate power. Ford believed that, "the purpose of the five dollar, eight hour day was only in part to secure worker compliance with the discipline required to work the highly productive assemply line system. [But moreover] it was meant to provide workers with sufficient income and leisure time to consume the mass-produced products the corporations were about to turn out in ever vaster quantities" (Harvey, 126).

Unions, which gained considerable leverage in the sphere of collective bargaining, "aquired and maintained these rights in return for [accepting] corporate strategies to increase productivity" (Harvey, 133). Therefore, during the postwar boom not only were the interests of GM and corporate America (increased production) the interests of the U.S. (high wages, union power), but also what was good for workers (high wages, good benefits) was good for corporate America (increased sales).

The postwar period was thus marked by a great deal of stability in which the contradictions of economic growth, between the increased pressure on industry to make production more lean and mean and worker's interest's of full employment, good wages and benefits, were kept under control. However, the conflict of interest between capital and labor became exposed in the late 1960's and early 1970's with the increasing international competition brought about by both the West European and Japanese economies whose postwar recoveries were complete and whose internal markets were saturated pushing them to search for export markets. This increased international competition "forced corporations into a period of rationalization, restructuring, and intensification of labor control" to lower production costs (Harvey, 145). To do this, the best alternative for corporations was to shift production to the third world, particularly South-East Asia, "where the social contract with labour was either weakly enforced or non-existent" (Harvey, 141). But to do this, of course, meant that corporations had to gain more flexibility from the "rigidities" of their domestic fordist economies, where unions had gained considerable power, and where wages and production costs were high. However, "any attempt to overcome these rigidities ran into the seemingly immovable force of deeply entrenched working-class power--hence the strike waves and labour disruptions of the period 1968-1972" (Harvey, 142). This conflict of interests led the way to what David Harvey has called the flexible regime of accumulation, in which for the last two and a half decades corporations have become much more internationally mobile, thanks in part to a globally connected communications network and a financial system with floating exchange rates. Corporations have used this mobility to dismantle the state/labor contract of the postwar fordist economy. Along with corporations increased mobility, they have of course gained incredible flexibility in the work force. In its aim to lower production costs corporations seek to downsize the number of lifetime employees with full benefits and increase the number of subcontracted workers whose jobs are typified by low wages and few benefits. Further, production now is decreasingly situated in large economies of scale where all production is done in one site, and is increasingly decentralizing itself, where a company's product is composed of numerous parts which are made in various places around the world. For instance a label on one product reads, "Made in one or more of the following countries: Korea, Hong Kong, Malaysia, Singapore, Taiwan, Mauritus, Thailand, Indonesia, Mexico, Phillipines. The exact country of origin is unknown" (Barber, 14). Thus production is becoming more spread out, complexly interwining across the globe like a spider web--Japanese cars are made with Korean parts in the United States, U.S. ciggarette companies sell South American tobacco in East-Asia etc.

Globalization is the term often used to describe the increased flexibility and mobility of capital that has come in the wake of the heightened international competition of the early 1970's. What has resulted from this increased mobility of capital is a radical restructuring of the global economy. The core capitalist countries (U.S., West Europe, and Japan) have experienced a period of deindustrialization as most of their manufacturing jobs were shipped to the third world as corporations began taking advantage of the cheaper labor, cheaper regulations, and hence cheaper production costs there. One major consequence of this restructuring of the international division of labor, notes Edward Soja, is "the intensified territorial competition among government units for new investments (and for maintaining existing firms in place)" (Soja, 186). This increased regional competition to attract and keep capital has resulted in what Barnet and Cavanaugh among others have identified as the "race to the bottom." The race to the bottom signifies the standard lowering drive communities are forced to join if they wish to appear more attractive then the thousands of other communities transnational corporations have to choose from. This has of course been the major reason for the deindustrialization of the core capitalist countries, who couldn't compete with the meager wages and standards of the third world.

This increasing concentration of political and economic power in the hands of transnational corporations has indeed begun to erode modernist ideals of democracy, of power to the people. It has done so by creating a strange twist on modernist's emphasis on universalism. Instead of advocating a universalism of human rights, the modern global economic system, is advocating a universalism, in which any standard or regulation protecting the welfare of a nation's people that gets in the way of "free" trade, is done away with or penalized. For example, if the U.S. proposed a law saying that it wouldn't buy clothes from countries that used child labor, it would be getting in the way of free trade and the World Trade Organization (WTO) would subsequently be able to enforce sanctions on them to get rid of the law. The same logic applies to nearly every standard or regulation (which have usually been created through years of democratic struggle from the people) that attempts to raise the quality of goods it buys, whether for ethical (i.e. tariffs against sweatshop labor), ecological (i.e. tariffs against polluting industries), or health (i.e. bans on certain toxic chemicals like DDT) reasons. This political economic universalism instead of promoting the modernist goals of participatory democracy (there is no public access to WTO hearings) promotes just the opposite. It promotes, as mentioned above, a standard lowering race to the bottom in which democracy is threatened, as people can't enact laws which they feel they need to protect themselves. If a nation does enact such a law, then a private tribunal in Geneva (WTO Headquarters) will decide on whether the law is agreeable with global trade. If it's not, the laws gone.

One of the major impacts brought about by such free trade, is the weakening of the nation state. As one New York Times reporter put it, the nation state in relation to the global economy, "is like a horse and buggy haplessly chasing a sports car." The fundamental structural adjustment brought about by the globalization of the economy has been getting the state out of the economy, thus the buzz words free trade, free market, privatization, deregulation. This is of course far different then the postwar fordist economy where the state was heavily involved in the economy through the use of keynesian fiscal and monetary policies which served to redistribute wealth and re-invest in the domestic economy. As Benjamin Barber points out in his book Jihad Vs. McWorld, most avenues of economic intervention available to the nation, such as the redistributive policies of social welfare, the raising of the minimum wage, tariffs on trade, regulations on industry, etc., are being weakened and limited. And thus the nation-state, which in Barber's view, has "been the most promising host to democracy," is left with the role of reacting to and adapting to the fluctuations of the global marketplace. This according to Barnet and Cavanaugh, puts "the nation state everywhere [in] a crisis of redefinition without a practical ideology that confronts the realities of the emerging global order"(20). "Leaders of nation states," they continue, "are losing much of the control over their territory they once had" (20, 18). It should therefore not come as a surprise that in the United States our presidential elections are widely percieved as "tweedle-dee tweedle-dum" affairs, full of ungrounded rhetoric and promises, in which people, if they vote at all, tend to pick the one who's more charming. Such widespread recognititon of the meaninglessness of elections helps to further illuminate the increasing divergence between modern goals of democracy and the realities of modern capitalist development.

This increasing loss of soveriegnty and local autonomy to the placeless global economy has intensified the persistent dilemma which has run throughout modernism, which Heidegger was reacting to, between localism and globalism, between differentation and homogenization, between rooted place and rootless space, and ultimately between being and becoming. In Jihad Vs. McWorld Benjamin Barber explicity explores these dilemmas. Barber describes the homogenizing effects of globalization, namely the rise of a global pop culture which erodes boundaries and traditions, and all the multivarious reactions and resistances to it. Whether Islamic fundamentalists, the IRA, the Christian Right, or Hindi traditionalists, Barber describes this phenomena of resistance which he labels Jihad, as "identity politics and multicultural diversity. What ends as Jihad may begin as a simple search for a local identity, some set of common personal attributes to hold out against the numbing and neutering uniformities of industrial modernization and the colonizing culture of McWorld" (9). The dialectic between the search for some kind of individual/collective identity to distinguish oneself from the "neutering uniformities" of boundaryless, valueless capitalist culture, coincides and couples the search for securing place in the increasingly placeless "geography of nowhere" created by globalization. The following passage from Marshall Berman helps to illustrate that such a dilemma has been a consistently present aspect of modernism. This dilemma is composed of

"....the contradictory forces and needs that inspire and torment us: our desire to be rooted in a stable and coherent personal and social past, and our insatiable desire for growth--not merely for economic growth but for growth in experience, in pleasure, in knowledge, in sensibility--growth that destroys both the physical and social landscapes of our past, and our emotional links with those lost worlds; our desperate allegiances to ethnic, national, class, and sexual groups which we hope will give us a firm 'identity', and the internationalization of everyday life--of our clothes and household goods, our books and music, our ideas and fantasies--that spreads all our identities all over the map; our desire for clear and solid values to live by, and our desire to embrace the limitless possibilities of modern life and experience that obliterate all values...." (35).

These paradoxical responses to modern development, whether the premodern fundamentalism of Jihad seeking something solid to hold onto in in the midst of intensifying flux and uncertainty, or whether the postmodern rootless nihilism of exploring the extropy and endless possibilities which our technologically advanced, globally connected world has to offer, all deal with the issue of the identity and stability situated in a place, versus the freedom and new experiences found in boundaryless space.

To better clarify how these Jihad and McWorld deal with the idea of place and space, and how both in turn can be argued to be unbalanced, I borrow the following passage from Yi-Fu Tuan

"Space is a common symbol of freedom in the Western world. Space lies open; it suggests the future and invites action. On the negative side, space and freedom are a threat. A root meaning of the word "bad" is open. To be open and free is to be exposed and vulnerable. Open space has no trodden paths and signposts. It has no fixed pattern of established human meaning; it is like a blank sheet on which meaning may be imposed. Enclosed and humanized space is place. Compared to space, place is a calm center of established values. Human beings require both space and place. Human lives are a dialectical movement between shelter and venture, atachment and freedom. In open space one can become intensely aware of place; and in solitude of a sheltered place the vastness of space acquires a haunting presence. A healthy being welcomes constraint and freedom, the boundedness of place and the exposure of space" (Space and Place, 54)

As is evident in Yi-Fu Tuan's definitions there is a certain complimentary relationship between place and space which should be balanced and not denied. Such an emphasis is lacking in the Jihad Vs. McWorld pre-modern post-modern polemics against modernism. Such a balance seems to be lacking in other discussions on modernism, as in the aesthetics/ethics, image/text, desire/rationality debates which will be discussed later on. Again, if we are truely to move post-modernism then some system of thought and practice has to be created which works toward balance. Postmodernism can be critiqued in this light as serving as an extreme polarized reaction to modernism. This has led its critics to dismiss it as nothing more then another variant of "anti-modernism."