Fordist capitalism (and Keynesian State)

A totally controlled and spatially concentrated process

General factors of location for fordist firm

• Labor force;

• Market areas;

• Good level of transport and infrastructures;

• Opportunities to have strong relationship with public

institutions;

• Funds (banks and finance operators);

The best localization is in the larger cities and metropolitan areas

Giant firms and giant cities

Factors of development of the Fordist city:

- Firms can enjoy a great set of economies of agglomeration, i. e. all those advantages that they get localizing close to other firms (including competitors);

- Firms concentrate in cities because they can gain economies of scale (the size of market and of the production);

- Firms localize in cities in order to get the broader benefits called urbanization economies: infrastructure (roads, ports, electricity, sewage, etc.); easy trade in goods, services and information; a huge labor market; a great set of public and private services for businesses and families.

The city supports the growth of industry and, in turn, it is supported in its growth. The localization and the development of a sector, with the creation of jobs and the rise of income produce something like a circular process of growth and subsequent agglomeration, with the location of additional sectors, the development of public and private services, the construction industry, the cultural and religious functions , etc.

• Table 8. Population of 100 Largest Urban Places: 1850

• Source: U.S. Bureau of the Census

• ---------------------------------------------------------------------------------------------------------------

• Rank | Place 1 | Population

• ---------------------------------------------------------------------------------------------------------------

• 1 New York city, NY *................ 515,547

• 2 Baltimore city, MD................. 169,054

• 3 Boston city, MA *.................. 136,881

• 4 Philadelphia city, PA *............ 121,376

• 5 New Orleans city, LA *............. 116,375

• 6 Cincinnati city, OH................ 115,435

• 7 Brooklyn city, NY *................ 96,838

• 8 St. Louis city, MO................. 77,860

• 9 Spring Garden district, PA *....... 58,894

• 10 Albany city, NY.................... 50,763 60

• Table 18. Population of the 100 Largest Urban Places: 1950

• Source: U.S. Bureau of the Census

• ---------------------------------------------------------------

• Rank | Place 1/

• 1 New York city, NY *...... 7,891,957

• 2 Chicago city, IL......... 3,620,962

• 3 Philadelphia city, PA.... 2,071,605

• 4 Los Angeles city, CA..... 1,970,358

• 5 Detroit city, MI......... 1,849,568

• 6 Baltimore city, MD....... 949,708

• 7 Cleveland city, OH....... 914,808

• 8 St. Louis city, MO....... 856,796

• 9 Washington city, DC...... 802,178

• 10 Boston city, MA.......... 801,444

• 11 San Francisco city, CA... 775,357

• 12 Pittsburgh city, PA...... 676,806

http://www.dhr.history.vt.edu/modules/eu/mod01_nature/images/Europe_Urbanization_1914_Large.jpg

The elements of weakness in Fordism and the slow process of transformation and crisis…

Modern Times – 1936

The Images in the movie want to suggest how technologies may reduce costs and improve our live but they can also disaffect us from our humanity.

In the picture, the worker makes the same action over and over again.

The fight for unionization of industries

Labor Union’s protest. A memorial in Detroit

The oil crisis in 1973 – oil embargo imposed by the arab producers (the aim was to boycott US and the West because the supported Israel in the Yom Kippur war against Egipt

The inadequacy of the fordist organization facing the economic crisis of 1973. It’s the end of the giant companies in the “fordist” organization

With seventies:

- High sunk costs and difficulties in adapting to changes and crisis

- Labour self-organization and the strength of unionism

- rising costs of raw materials

• Market demand is unstable, differentiated, qualitative and rapidly changing

• - Decreasing length of products’ “life-cycle” (innovations are small and the innovation process is continuous)

- Raising competitiveness at the global scale and saturation of (traditional) markets

- New technologies that decrease the weight of internal economies of scale and facilitate inter-firm coordination (and out-sourcing)

• - the rising costs of raw materials

Delocalization and metropolitan growth – first evidence in USA

Conti e altri, Geografia dell’economia mondiale, UTET

Metropolitan growth was firstly due to the population, that moved spontaneously towards the empty areas contiguous to the city (from 1940 to 1950 suburban population increases in the U.S. by 35%); this shift depends on the improvement of transport system and on the rising incomes. So many family decided to live in single family houses, which were less expensive and in better environments.Afterward, there was a spatial shift in industrial plants. First in USA and then in Europe, plans slowlymoved to the suburb of the city along the mainroads and the railway lines.

Detroit – industrial corridors and railwaylines

Something is changing. Spatial shift in USA employment(Changes in % between 1968-1978)

North-east 19,7

North-centreEastNorth-west

18.815.427.4

SouthAtlantic RegionsCentral south-eastCentral south-west

32.631.725.840.2

WestInternal StatesPacific Regions

39.757.934.5

Specific difficulties for cities…dis-economies of agglomerationMany unfavorable conditions have been generated by the progressive growth of cities and companies….

- High levels of land prices;

- Reducing levels of accessibility to services and infrastructure;

- Rising levels of salaries and conflicts with labor unions;

- Congestion and pollution;

Two break points in the case of Detroit: 1950 and 1970

Boustan, Bunten, Hearey, NBER Working Paper Series

Boustan, Bunten, Hearey, NBER Working Paper Series