Notes on Forging Global Fordism

A review of 'Forging Global Fordism', by Stefan J. Link.

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Details

Author(s): Stefan J. Link

Published: 2020

Genre: Economics, History, Industrialisation, Institutions

Summary: ‘Forging Global Fordism’ provides a new look at the interwar period as an era not of isolationist nationalism, but of antagonistic development competition that saw post-liberal states like the USSR, Germany, and Japan engage in technology transfers and emulation of Fordist mass production to supersede America. Ultimately, this struggle for the world order would define the post-war period.

Notes

What was Fordism?

3 main definitions:

  • Not coined by Henry Ford but by his followers.
  • '[[Fordism]]' popularised in the 1970s-1980s (the owl of minerva flies at dusk?).
  • 1st definition: [[Gramsci]] - 'Americanismo e fordismo' as a new phase of capitalist development. Assembly lines transformed the social, cultural, and psychophysical constitution of the working class. Ford's agents' intrusions into the personal lives of workers (progressive puritanism/prohibition/anti-smoking, etc) showed the recalibration of social life to develop worker discipline for assembly lines. Gramsci's hegemony is this system of social and cultural imperatives.
  • 2nd definition: Fordism as a shorthand for American [[modernity]]. '[[Americanisation]]' through a consumer-based economy dependant on high wages and [[mass production]].
  • 3rd definition: the dissemination of signature practices in firms (assembly lines, one-product policies, high wages, open shop floors, etc). However, these were adopted piecemeal by non-American firms.

Other definitions:

  • Fordism often mentioned in the same breath as [[Taylorism]] (top-down managerialism).
  • German economic historian [[Friedrich von Gottl-Ottlilienfeld]] helped to create Ford-ism. Fordismus was not just a system of production but a historical shift in the relationship between economy and society.
  • Soviets - fordizm as the American organisation of production at large.
  • American Unions - quasi-fascist regime of shop floor oppression.
  • All these definitions matter.
Fordism's spread
  • In the interwar period, Europe could never import this as they lacked the 'command consumption' structures that enabled American society to keep consuming. Marketing as a social technology was pioneered by the Americans, probably to this effect.
  • Fordism spread with American empire after WWII, embedded with liberalism and cold war internationalism as [[Pax Americana]]. Contrary to popular narratives, the interwar period was not a disruption of this spread but an acceleration of [[industrial competition]], culminating in 1945 and spreading out across the world.
  • 'Fordism' fell out of fashion between 1945-1970s, resurrected by the European Left (e.g. the French, like [[Michel Foucault]]). Capital required distinct regimes of [[accumulation]], each with their specific pattern of social and political regulation. Fordist postwar mass production required strong unions, demand-stimulating welfare states, and cultural reformation to turn workers (producers) into consumers.
  • Fordism entered a crisis after the 1970s because of [[inflation]], [[industrial decline]], and unemployment. Post-fordism had begun. Some looked to 'regionally-based, technologically sophisticated reinvigoration of craft-based on flexible specialisation'. Others rejected that Fordism was ever dominant - different organisational forms in firms, profit strategies, etc to respond to unpredictable market environments. These scholars moved the conversation from political economy to microeconomics. Sequential Fordism --> Post-Fordism narrative fell out of fashion, as industry declined in the West and rose in the East.
3 Main Arguments
  1. Common narratives take two things for granted:
    1. That the second Industrial Revolution culminating in automobile mass production and the consumer economy;
    2. That America would lead this
      1. This '[[whig narrative]]' of [[modernisation]] that development stages are set by the West, and that successful modernisation would converge towards the model of 'high mass consumption'.
      2. Mass production cut against 19th century development in America (defined by extraction and producer goods); subversive of economic hierarchies (by fiannce and industrial capital); and Ford's own defeat as the post-war period repudiated his populist vision of mass production.
      3. Ford's contrarian politics are also a reason why post-liberals were attracted to him.
      4. tl;dr Ford's social, economic, and political programme were not part of a linear narrative but created an alternative branch.
  2. Was the interwar period a hiatus from Fordism?
    • No disruption in national attempts at emulating American production. Command consumption failed (industrial development required curbing consumption). Preparation for war constituted its own form of demand that led to development of Fordist production. Civilian and military use can't be bracketed. Engineers who adopted Fordism to run arms production went back to civilian industries after WWII. Depression and war accelerated the spread of Fordism.
    • Competitive [[industrial]] development in the interwar period was driven by the rise of America.
    • Detroit was the capital of the 20th century, attracting post-liberal modernisers from all around the world. The Ford factory River Rouge was the focal point, where modernisers aimed to learn flow production [[automobile]] manufacturing and conduct wholesale technology transfer to their home countries. The Gorky Automobile Factory ('Gaz') in Soviet Russia (1932), Volkswagen in Nazi Germany, and the Koromo plant in Japan (1938), Fiat (Italy) (1939), attempted to emulate Fordist production across the post-liberal world.
    • The interwar period was not a period of retreat and isolation from globalisation, but attempting to reorder it (on the terms of each party involved). [[Technological transfer]] occurred on a hitherto unseen level as engineers, planners, and businessmen from Detroit to Tokyo travelled back and forth.
  3. How to accommodate Nazi Germany and Soviet Russia in the global history of Fordism?
    • Fordism's association with peacetime liberal capitalism is challenged because of Fordism's spread to post-liberal polities.
Revolt Against America
  • Answers to above questions lie in two events in the interwar period:
    • American ascendancy
    • [[Great Depression]]
  • European warnings about the American danger came as early as the late 19th century. After WWI, America was the world's industrial powerhouse and bank.
  • Weimar Germany depended on American loans. Italy had to export lemons, textiles, and wine to buy American grain for workers and still had to borrow on Wall St to balance payments.
  • USSR's repudiation of Tsar's debt in 1918 cut them off from global capital, but in 1924 stabilised the ruble to qualify for American commercial credit.
  • American automobile exports diminished other nations' chance to secure foreign exchange to pay off American loans as they couldn't match American exports to generate capital.
  • Liberal internationalism was fatally undermined by the Great Depression, disintegration of global credit relations, and gold standard's fall. Balance of payments crisis struck the world hard; deeply indebted, couldn't export, and had to conduct brutal austerity.
  • Domestic coalitions rose to reorient national economies away from Britain and America and challenge the global division of labour.
  • These countries needed their own vast internal markets just like America had. Autarky would reorient trade to neoimperial 'backyards'. Japan invaded Manchuria in 1931, Italy invaded Ethiopia in 1935, and Germany across eastern Europe after 1937 (Austrian Anschluss, etc).
  • Autarky was a response to the failure of international liberalism, not a product of political nationalism. Even Britain and America retreated behind tariffs. [[Comparative costs]] theory was meaningless with depleted foreign exchange reserves so nations couldn't import.
  • Autarky helped the state control the economy, and resources could be shifted from agriculture/light industry to CapEx and rearmament. Industrial growth was vigorous in the 1930s.
  • 'Blood and soil fascists' were marginal. Neoagrarian self-sufficiency was never a serious cause. Autarkists desired industrialised, militarily capable, and technologically sophisticated imperial economies.
  • To achieve this, technology transfer was necessary. Autarkic nations first had to turn to America to achieve long term economic independence. The automobile industry became one of the key focal points of imitation. Even as trade and foreign investment collapsed, technology transfers intensified. The spread of Fordism was driven by antagonistic development competition.
Transformation of America's Political Economy
  • German and Soviet visitors to midwest factories were most impressed with Ford's Rouge factory, particularly its flow production (fließfertigung/potochnoe proizvodstvo). Automation enabled the production of complex devices in quantity without having huge capital outlays, large labour forces, and expensive products. The Rouge enabled [[economies of scale]] unlike ever before; produce huge quantities at lower costs.
  • Between the turn of the century and 1937, the American economy shifted from coal, oil, steel, railways, finance, and 'slaughtering and meatpacking' as the largest industries, to automobile manufacturing centred on the Midwest. Automobile manufacturing created a 'second great divergence' that allowed America to move from 19th-century economies of raw materials, resource extraction, and translantic commerce to a 'domestically anchored industrial preoponderance' based around 20th-century automobile manufacturing.
  • In 1937, 18mln+ people of 129mln were employed in automobile manufacturing (and related supply chains). 14% of the entire population.
  • In 2020, 13.89 million people of 329.5 million were employed in the whole American private sector manufacturing industry. 5%ish total.
  • U.S. manufacturing employment has declined...from around 28% in 1960 to 8% in March 2017. Manufacturing employment has fallen from 17.2mln persons in December 2000 to 12.4mln in March 2017...even as the population ballooned from 220mln to 330mln.
  • Colossal hemorrhaging of industrial knowledge and the productive base of the country, in less than a century. They didn't just disappear - they went to Germany and Japan, and now China.
  • Detroit was the centre of this new American economy, surpassing New York, Philadelphia, Boston, and Chicago in per capita wages.
  • These wages allowed workers to become consumers, whose purchasing power rivaled capital investment in shaping growth patterns.
  • In 1937, 5.1/6.3 mln cars (globally) were produced in America, x10 the nearest competitor (UK).
  • The automobile was a creation of French and German tinkerers, and the US was a copycat adopter.
  • America pioneered the consumer economy thanks to this: Automobile's economies of scale --> higher wages x lower cost of goods --> consumption economy
  • Historical narratives treat this transition as a 'natural emergence' of Hegelian narratives; automobile manufacturing was a necessary, emergent phenomenon driven by the momentum of capitalist transformation.Actually, this was a big departure and divergence from the norm.
    • Narrative of technological progress: tech and organisational innovation converged on large corporations with professional managers for a less rapacious and rational capitalism
    • Corporate consolidation against emancipatory grassroots populism and/or labour self-organisation - Fordism as a weaponised strain of Taylorism to oppress labourers
  • Both narratives are overdetermined and end in corporate hegemony, for good or bad.
  • Automotive mass production was not preordained but the outcome of struggles over the terms of economic development; how the social and political orders would be shaped, what norms and values would govern the distribution of material rewards, what human organisation would oversee this institution, etc.
  • The political history of mass production is buried by these two narratives. It goes beyond capital and labour. Workers vs management conflicts shouldn't be given ontological primacy, even if they were one area of deep contestation in the emergence of this mode of production. Other actors include mechanics and migrants, proprietors and investors, a new managerial class, and old financial elite - all who battled for the terms of the new economic order.
  • Understanding this period of history requires an understanding of how the diverging views of social orders and economic development clashed and negotiated the new order.
Why Detroit?
  • The political economy and populist commitments of the midwest made Detroit a prime location.
  • The agro-industrial revolution of the late 19th cenury connected machine shops and foundries with commercially oriented farms. They were not successive stages of development but symbiotic industries. This goes against the spatial logic of global supply chains which separated agricultural surpluses from industrial production.
  • The economic geography of the midwest had populist farmers and middling manufacturers and machine shop proprietors rally against integrating independent producers into the circuits of east coast capital.
  • This 'producerist' philosophy believed that the nation's source of wealth was productive labour, and material affluence was their prerogative.
  • Henry Ford didn't have access to local capital which wanted expensive status symbol cars, not mass manufactured utility vehicles. Ford put together a 'rag tag' group of investors to capitalise Ford Motor Company, giving it independence from the financial elites.
  • Ford's work to mass manufacture vehicles was a social provocation against the established order.
  • Automotive mass production wasn't economically necessary or technologically imperative; Ford went against market demand.
  • Ford's novel factory automation allowed the mass manufacture of complex goods while employing unskilled labour, enabling the spread of wealth to non-skilled migrants and even women. This was an act of [[social engineering]].
  • In narratives of industrialisation, Fordism and [[Taylorism]] are treated as siblings; a managerial attack on craft traditions and labour self organisation. However, there are two differences:
    • Taylorism focused on physiological and psychological capacities and incentives, a 'biopolitical radicalisation of the piece rate system'. Fordism focused on factory processes and machines, transforming industrial metabolism by training the untrained, and turned unskilled workers into a productive resource.
    • The pioneers of mass production were not white collar, college educated engineers but mechanics with little formal schooling. They apprenticed in the machine shops.
  • Fordist production relied not on top-down planning but on the bottom-up emergence of skills and traditions from the shop, produced through iteration by trial and error that constantly refined the Fordist process.
  • [[Economies of learning]] were intrinsic to mass production; although the [[institutional memory]] of the mass production shop resided in the skilled core that ran the shops.
  • Soviet and German technological transfer focused on grafting themselves on to this [[genealogy of ideas]] by hiring ex-Ford workers to work in or even run their factories in Europe.
Social Engineering
  • Ford was against patents, adopting an open source stance that saw Ford's blueprints furnished upon request by any party, even foreign (German and Soviet). This spread Fordist production more widely.
  • FMC introduced the five-dollar day in 1914, more than doubling the wage for unskilled workers, and cut the working day to 8 hours.
  • Disqualifiers included people who were married, did not drink or smoke, and did not accomodate boarders.
  • Ford schools taught migrant workers English and American customs, with the graduation ceremony featuring a gigantic melting pot which migrant workers went in with their foreign clothes and came out with American clothes and waving American flags.
  • The new wage massively reduced labour turnover in 2 years, from 370% to 16%. Ford workers saved more, and more got married thanks to their savings.
  • Ford was a believer in social justice, pioneering it with employing the unskilled, raising pay, and enforcing stricter social mores.
  • Ford believed the purpose of companies was not to raise wages but to increase profits - and workers would receive them as 'dividends'.
  • Producer populism harnessed corporate organisation and financial accumulation for the benefit of labouring producers.
  • Wall St heavily criticised the wage raise, probably afraid of the trends it would encourage.
  • Ford and his mechanics saw Ford as a cooperative of scale and power, with social obligations inseparable from work commitments.
  • Inflation and eventually the Great Depression poured cold water on Ford's philosophy. A theory of continual growth and technological advancement was untenable because it rested on demand.
  • By the 1930s, the post-Depression 'New Deal' of an empowered regulatory state and unionisation were also inimical to Ford's vision. Ford's lack of political acumen and connections saw competitors like GM (focused on Taylorist managerialism, and returns on investment) surge ahead.
Post-War Transformation of Mass Production
  • Mass production ideologically reformed into the vocab of American hegemony: democracy, consumerism, internationalism, etc.
  • 'Politics of productivity': class conflict overcome through consensus around growth of mass production and consumption economy.
  • War victory also translated into new social balance at home; govt, industry, and labour cooperating in the 'New Deal'. Mass production was an explanation for American victory and also its new purpose in the world: to export it.
  • Fordism died by the end of WWII. His producerist populism had no space for collective bargaining, interest politics, or a muscular federal state. His 'open source' ideology also came into conflict with America's interests: mass production became an article of export.
  • Peter Drucker on Ford: mass production created industrial civilisation, but created large organisations whose problems were of meaning, not engineering. Mass production was not a technical principle but a social organisation principle - corporations and management.
  • Henry Ford II reformed Ford along these lines (copying GM). Sr. vision was of labor and machines; Jr. vision was of 'the organisation'. An enlightened managerial elite.

Rise of the Managerial Elite

  • Managerial ideology became how America projected and articulated hegemony.
  • Marshall Plans focused on educating Europeans in management practices, not funding tech transfers and engineering know-how. Human relations more important than technical improvements for productivity - but America didn't do it this way?
  • American social engineering of the world.
  • Ford Foundation became the central promoter of managerial ideology.
  • This has massive implications for today's world; the American NGO complex is one of the key lynchpins of American empire. Think tanks, foundations, media, academia, etc, the 'Cathedral', share an ideology and often share a similar source of funding. American programs targeting young people from around the world to study at specific programmes for education, work, or otherwise, aim to induct them and put them on the payroll.
  • America allowed Europe to export to America and receive loans, in return for multilateral payments and trade, manged industrial competition, and share the financial burden of NATO. West Germany used this for the Wirtschaftwunder.

West Germany Rises

  • America allowed recovery to precede liberalisation to help West Germany's economic development, tolerating the latter's protectionism and capital controls until 1958. They could import raw materials and export high-end manufactures and deal with the balance of payments.
  • 1950-1962: American share of automobile production 80% to 50%. Germany's 3% to 15%. USA imported 1/4 of German vehicles exports.
  • Volkswagen provided 50% of balance of payments surplus by late 1950s.
  • Heinrich Nordhoff who worked under Opel (GM) ran state-owned Volkswagen (1948-1968), helped drive this, but always aware of the balance of payments issue.
  • Volkswagen Beetle design became extremely popular only after WWII.
  • Volkswagen reinvested profits continuously, lowering prices (economies of scale) and raising wages (Ford style).
  • Nordhoff continued sending German engineers to American companies to facilitate tech transfer. Adopting automation, productivity between 1950-1962 was boosted from 6.2 vehicles per worker to 20.8.
  • Interwar German efforts failed, but post-war German efforts wildly succeeded under German auspices.

Soviet Union Flounders

  • Soviet manufacturing was lagging by a decade compared to America. Tools well kept but old. Automation struggled to take hold. Therefore could not provide standard of living like in America.
  • Stalin repeated mistakes of the interwar period, draining resources from agriculture and consumption to fund military-industrial complex. Resulted in famines even as grain was exported for machinery.
  • Khruschev denounced Stalin when in power, believing nuclear parity put capitalist encirclement at bay and that economic competition to raise living standards was key. Began investments into agriculture and consumer industries. Offered what Stalin didn't and no one rescinded thereafter; anti-famine political contract. Would import food with hard currency after 1963.
  • Soviet automobile production peaked at 500,000 in late 1950s, incomparable to millions produced by America. Automobiles also remained a producerist product for trucks, not consumer vehicles like the Volkswagen or Ford T.
  • Soviet institutional landscape inimical to technological innovation: high end R&D separated from industrial production, enterprise inertia (because no competition), bias for output over quality, weak supply chains.
  • Soviets were not a cordoned-off economic system but participated in the world economy as a subaltern to America.
  • They couldn't translate tech imports and industrial upgrading into competitive exports.
  • Soviets faced the trilemma of:
    • Sustain investment growth
    • Sustain consumption growth
    • Positive balance of payments
  • Stalin sacrificed consumption, while successors sacrificed positive balance.
  • By the 1980s Soviets' import substitution industry resorted to debt loans from America.
On Theories of Modernisation
  • America believed that it could rule through managerialism, guns, and dollars, hence willing to allow the world to manufacture at the cost of American manufacturing.
  • West Germany (and Japan) succeeded with this model. The Soviets couldn't succeed owing to an institutional climate that wouldn't sustain tech innovation and high-end manufacturing and was cut off from the American world order which provided the necessary support for industrialisation.
  • Modernisation theory saw American-style mass consumption as the desirable endpoint of development.
  • Sequentialist thinkers look for national patterns of development, and a theory of causation centred on self-generating forces, e.g. Rostow's dynamic process of productive innovation, or capital accumulation.
  • 21st century renders Hegelian narratives unpersuasive. Cycles of industrialisation <--> deindustrialisation are inseparable from efforts to restructure the global division of labour, that productive dual-use tech is fiercely contested, investment<-->deinvestment cannot be dislodged from this competition, and capital has no autonomous power outside political actors.
  • Little justification in treating post-war Fordism as inevitable; Ford's producer populism and military-industrial states were not antecedents or aberrations. Fordism operates in divergent political and economic arrangements under different ideological framings.
  • Fordism's rise was the result of antagonistic dev-comp for control of the global order. Interwar post-liberal challenges to the American order sought to defeat America by emulating her.
  • Development is always relational. Cannot be understood purely in national terms without understanding fundamental power disparities structuring the global economy.
  • 'Flows' of tech and capital shouldn't be mistaken for competition in the shifting architecture of geoeconomic relations.
  • This development competition will continue to define geopolitics in the 21st century.
20th Century History Beyond Modernisation Theory

Two prevailing analytical approaches to the 20th century:

  1. Dark/illiberal modernity
    • Nazism/Communism exposed contradictions in the Enlightenment projects, with liberal and antiliberal regimes having similar characteristics: [[social engineering]], [[homogenisation]], [[biopolitics]], [[scientism]], etc.
    • Response to this approach insisted on liberal-normative commitments, and these were aberrations, not mimicries of modernity, doomed to failure without liberalism and democracy.
  2. Multiple modernities
    • The interwar period as a global antiglobality, [[hypercompetition]] between states responded to the global challenge of the period.

This books analytical approach:

  • Interwar characterised by vigorous transnational exchanges and antagonistic development competition whose common reference point was America.
  • Tech transfer wasn't just cross-ideological flirtation but necessary to dev-comp. Catch-up dev requires those who pursue it to turn to those they seek to challenge.
  • Dev-comp differed between states. Russia as a vast agrarian producer had to have a different strategy to Germany as an industrialised nation.
  • Interwar period as a struggle over who got to make - or unmake - the architecture of globalisation.
  • Interwar period commonly characterised as a 'development century' from the vantage point of Western efforts to export industrialisation; antagonistic dev-comp reframes this narrative, with state-sponsored Fordism as a self-initiated industrial upgrading was a revolt against American empire.
  • A genealogy of industrial policies connects these states to Hamilton, List, and the Meiji restoration, and forward to East Asian development today. This genealogy is yet to be fully mapped.

My Conclusion & Further Research

  • The true history of industrialisation in the 20th century has been obscured by two narratives:
    • The preference for corporate-managerial narratives of technological innovation and economic prosperity
    • The ideological narratives that isolate and other-ise industrialisation in post-liberal nations in the interwar period (Nazi Germany, Soviet Union, and Imperial Japan)
    • Hegelian narratives that abuse the benefit of hindsight and argue for the inevitable emergence of industrialisation as part of sequential stages of development
  • Forging Global Fordism (’FGF’) cuts against the grain by challenging all three of these assumptions.
  • It is part of an emerging set of literature that critically re-examines both the processes of industrialisation and the post-facto narratives and justifications for industrialisation.
  • Like Great Founder Theory, Forging Global Fordism rejects Hegelian narratives about the inevitable emergence of automotive manufacturing and its consequences for political power and society.
  • Homogenisation of cities is driven by sharing global industrial patterns of food and medicine production, of construction (modern apartments, highways for cars, etc) and factory life (9-5).
  • The designers of the modern world are few in number - great founders design functional institutions.
  • Industrialisation defines our civilisational epoch, and the knowledge of industrial policy is held by a few people who share a genealogy stretching back into the earliest days of the Industrial Revolution.
  • America --> Germany --> Japan --> South Korea, China, Singapore, etc
  • Corporations ensure transfers of knowledge. Their 'customs' are just as important as legislation and economic designs. 'Dark matter' and proprietary/tacit knowledge is what nations seek to transfer in order to industrialise.
  • America's epochal transformation into an industrial powerhouse was pioneered by automotive manufacturing, primarily by innovative firms like Ford Motor Company, led by Great Founder Henry Ford. His designs not only set the standard for manufacturing but also had deeper social repercussions, such as instigating the rise of the consumption economy, the 9-5, and so on.
  • Automotive manufacturing was deeply contested by states like the Soviet Union, Nazi Germany, Imperial Japan, and others, in the interwar period. These nations feared total industrial dominance by America, and so engaged in 'antagonistic development competition' with America by fostering their own automotive manufacturing sectors.
  • To do this, they relied on knowledge transfers through a furious exchange of ideas, men, and material. Contrary to prevailing narratives about the interwar period as the failure of liberal internationalism and the receding of nations into protectionism and autarky, which helped ignite WWII, nations were engaging in large scale contact and knowledge transfer with each other.
  • Part of the reason WWII happened was because of these deep anxieties about becoming subservient to more powerful industrial powers, mainly America.
  • Industrialisation is one of the focal points of geopolitical competition between states in the 20th and 21st centuries, but is also a means of achieving prosperity and power in the domestic landscape of any state.
  • If a few institutions possess industrial traditions of knowledge, this means that only a few nations are sovereign. To acquire this knowledge is therefore the main objective of any serious rising power.
  • Forging Global Fordism gives us useful case studies to understand how 20th century geopolitical competition was driven by the need to industrialise, and how industrialisation was focused on automotive manufacturing. Henry Ford's Ford Motor Company plays a key role in this story, being one of the institutions that all nations sought to emulate for its production innovation and sheer output.
  • Prevailing historical theories do not adequately explain how automotive manufacturing came about, relying on Hegelian narratives about the inevitability of this industry based on capital accumulation, or the need for managers and capitalists to develop corporate organisations that could repress the shop floor working class. In my notes on GFT, I criticise the idea of grand, sweeping narratives of history, particularly those that rely on linear narratives of (technological) progress. It is in moments of crisis and deep contestation that new social, economic, and political orders are forged. Ford Motor Company was not an inevitable phenomenon, but created a great divergence from the norm.
  • Zooming out, the story of Ford Motor Company and automotive manufacturing is one piece of the puzzle of industrial civilisation. The genealogy of ideas of industrial policy and industrial traditions of knowledge hasn't been fully mapped yet. This knowledge is deeply embedded in a genealogy of ideas that stretch from 21st century East Asia back into the roots of the industrial revolution.
  • We are beginning to see that industrialisation does not simply emerge but requires painstaking emulation and transfer of knowledge from practitioner to practitioner across generations, and more often than not fails.
  • However, this understanding has been largely ignored by historians and economists, who consider the world to be entering a ‘post-industrial era’ defined by ‘knowledge economies’.
  • This fundamental misunderstanding of the true source of prosperity has seen widespread social decline across once-industrialised nations, such as America and Britain, while East Asian nations have ignored western economists’ prescriptions for economic development and have instead pursued industry and manufacturing.
  • In brief, this is why China is rising and why Pax Americana is at risk of disintegration in the near future.
  • If we want to understand prosperity and power, we have to understand the human relationships, the patterns of production, and the ecosystem of knowledge which supports industrialisation and passes its know-how from generation to generation.
  • What is the true source of power in industrial civilisation?
  • Emergent literature is beginning to map out a clearer view of the web of social relations and industrial knowledge that binds all modern nations and really defines what geopolitical competition in the industrial civilisation is based around.
  • Alexander Hamilton and Friedrich List, the Meiji Restoration and Otto Von Bismarck, the Ford Motor Company and interwar fascism and communism, and the rise of China are all connected by a genealogy of ideas around industrialisation and production. This genealogy empowers a nation with the commercial and military ability to outcompete rival states.
  • Industrialisation also reshapes the social and political order of a nation.
  • Understanding the past is key to understanding the future.

Industrial Competition and China in the 21st century

  • More importantly, but understanding the interwar period as one of intense development competition, and the varying strategies which nations adopted in this competition, we can more accurately understanding the landscape of industrial competition between America and China in the 21st century.
  • Even as American economists, policy-makers, and statesmen have treated this history with ambivalence, China has deeply studied the history of industrialisation to chart its own path and avoid the mistakes committed by now extinct states like Nazi Germany and the Soviet Union. The latter, as a communist entity, is particularly important to the Chinese communist party.
  • Divining China’s strategy and policies towards trade, investment, manufacturing, and its desire not to overthrow America or build a parallel system but to replace America as the core engine of the global economy, can only be done through understanding how other nations tried and failed, and how China will try to succeed.

Live Players

  • The book underscores the deep impact of live players like Henry Ford, who helped to create a new socio-economic order that entrenched America as the world’s workshop and pre-eminent industrial power. From social engineering in Detroit to exporting ideas, engineers, and automobiles to the world, The Ford Motor Company is one of the defining institutions of modern history.

The Rise of Managerialism

  • FMC’s rise and fall in dominance traces how populist producerism failed to respond to new problems, and how Taylorism and corporate managerialism became the dominant post-war ideology, first in America, then exported to the rest of the world.
  • Henry II shifted Ford's focus to managerialism like GM. The Ford Foundation trained many of the post-war third world people, the origins of today's American imperial-foundation complex? Management (American-style) on top, production below. Seems in line with post-war US sentiment on 'managing' and exporting dollars and letting a colonised world produce for them. 'Cost of comparative advantage' being economist sophistry for this new arrangement. Third world scions are trained as loyal American managers and go out to manage production at cheap rates for the empire.
  • This NGO-industrial complex continues to be one of the main ways America acts abroad, with foundations funnelling billions of dollars into various “initiatives” aimed at social engineering, both in America and around the world. Its roots lie in the post-war managerial turn.

Further areas for research:

  • How did America lose its tradition of manufacturing in the post-war period?
  • How did Germany and Japan take over manufacturing in the post-war period when they couldn't in the interwar period?
  • How far does Elon Musk take inspiration from Henry Ford's populism (twitter antics, etc)?
  • What has China learned from this competition for the industrial order - and how will it act going forward? Who are the chief Chinese theorists on this issue?
  • Outside of America, many countries rely heavily on a select few corporations (national champions) to provide most of its industrial knowledge/exports:
    • Japan (Toyota)
    • South Korea (Samsung)
    • Germany (Volkswagen)
    • Saudi Arabia (Aramco)
    • Taiwan (Taiwan Semiconductor Co)

The rules of industrialisation?

  • Technological transfer, not dollar investment
  • Foster corporate champions
  • Identify a specific up-and-coming technology or industry to monopolise