purpose. This process involves extraordinary responsibilities.
There are many works which tried to foresee the future of mankind. Some pessimistic, even frightening, others optimistic or prudent. Of these, I mention only the book “Mankind at crossroads”, of M.Mesarovic and E.Pestel32, due to a high degree of validity in time. But even with all the equations being taken into account, many times the forest is not foreseeable due to the trees, reality delays those terms. New phenomenons, of substance, specific processes determine the development of economic life without being among those estimated. Let us just consider global terrorism!
The theme of our work seems, at a first glance, a lapalisade33 for most economists: so often the terms “globalization” and “tourism” are being used these days! Undertaken research confirms this. But it has also brought into analysis and reflection unsuspected aspects, some of which we will submit to you now.
We shall stop to consider only three of them:
1.3 Fordism: The dawn of a new economy
Economic theories are not born from nothingness. Most of them start from past or contemporary realities. Others wish to connect today’s reality for a better tomorrow. Few are purely theoretical, “art for art”. And theory has several issues when applied into practice.
The great geographical conquests (better transport and different trading, basis of enrichment, of accumulation, including for the queen of England, which would set the foundations for a giant empire, still alive by the existence of the Commonwealth), were doubled during the industrial revolution by harsh exploitation of their own populace, for which an entire literature stands testimony. One thing is certain: in all that time, the economy was still in a patriarchal state;
despite large production in several manufactures and intense commerce (Romans as well had workshops with thousands of slaves, mines or harvesting grounds, which were not very different from modern factories). Two arguments:
- If you needed pottery, you thought of a potter, a glassworker or iron craftsman. If you wanted to travel, you would visit the local transporter. Even if production was no longer home made, but created in factories! You bought what you found, and if it were to break, usually you would have to buy it whole again.
- Primitive accumulation, whether in Antiquity, the Middle Ages or the Industrialization age was based on a simple equation: the employer paid as much as the worker needed in order to survive and to feed his family. This ratio was closely watched.34 Without any “waste” for the worker.
Basically everything was hand made, even if maybe with the help of machines. And this lasted for 800 years of the past millennium. A manufacture the size of General Motors would have been completely without sense for Napoleon in 1812 or Wilhelm the Conqueror in 1066.
But the European Americans, restless and inventive, supported by the U.S government, have passed from the construction of vehicles of great precision to fabricating weapons with changeable part, being identical to the originals35. Colt pistols gained American trust. The English quickly adopted the system. Mass production was born!
31 see also Georgescu N. Roegen - Legea entropiei şi procesul economic, Ed. Politică, Bucureşti, 1996.
32 See also, for the same idea…“Galaxia Gutemberg” by M. McLuhan, “Megatendinţe”a by J. Naisbitt etc. till a Tofler, etc.
33 Lapalisade: obvious fact. It comes from French, from the text on the Knight Lapalisse’s cross, with an obvious meaning: "Lapalisse the lord died just here, One moment before he passed away, the Senior was still alive"
34 see also classic theory starting with W. Petty
35 Hounshell, H – From the American System to Mass production, 1800-1932”
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The quality jump, although only a technical one, had to be doubled by a quantity jump. The precision of crafting machines became so great, that in Detroit, producers were stepping on each other’s toes, with hot minds, in order to become rich. The manufacturing of bicycles was booming. Henry Ford joined the auto industry, still in an incipient stage at that time, since 1890.
He gathered a good team around him. In 1906, he takes control of the entire factory and produces the N Model which he wanted to sell for 500 USD. But requests were low, middle class income was low. The fabrication rhythm was also insufficiently developed for mass production. The assembly-line idea was taken from slaughterhouses in the area and needed some time before it could be put into effect. In 1913, in a top secret fashion, the enterprise reached a 10 car simultaneous capacity on their assembly line. On April 30th 1914, there were 1212 cars assembled in eight hours of work, meaning an average of 1hour and 33 minutes. And the snowball was rolling: 168200 cars in 1914, 248307 pieces in 1915 and 1.8 million cars in 1923. The T model, at 260USD/car. The middle class was given access to a car. Ford had put America on wheels. Ford does not admit to have been inspired by taylorism, but these would have been known to him.
Anyway, the assembly line obliged decomposition by phases, by simple tasks which a worker may learn fast, in order to use the large mass of immigrants in the area, but also to maintain the rhythm for the assembly lines, at which over 30000 workers were used. The fluctuation was enormous, the keyword was “faster”, in English, Polish, Italian, German. A solution had to be found.
But it was not the assembly line which changed the foundations of world economy today, making a mark on world economics. On January 5th 1914 Ford makes a decision which will infuriate his rivals, but which will reshape economy: he increases his workers’ wages at 5 USD/day, which allows a worker to also buy a car, this being the equivalent of 52 working days.
In our opinion, this was the element which created mass production in the U.S.A, and then Europe. The worker did not receive as a wage only for buying bare necessities, but also a substantial plus which artificially increased his purchasing power compared to the past. Paying over the simple equivalent of labor force reproduction lead to the calming of social tensions, which lead to a standard of living above the traditional level of the industrial age and before, which lead to mass consumption. The worker did not had to be pushed to work, he did it alone, in order to quench his greed and pride. And mass brought maximum profit, but this time as mass.
Ford became a legend as Bill Gates is today. Maybe the “Ford Method” would have been a solitary accomplishment. Ford’s genius, or that of those close to him, made him prevail. Even now there is an anecdote regarding Ford’s answer to the question regarding his success recipe: “his horse” was J.B. White: the Detroit office chief of the Wall Street Journal36! Precisely the usage of the press, which had already reached mass production due to the rotary press, brought newspaper prices to a mere nothing: it was this that spread and fueled the American spirit, transforming the average American into a mass consumer; being nomads, the car replaced the horse. The example will be followed by Alfred Sloane and GM under the motto “for every pocket and every need”. And from here on, all the rest that followed: oil, roads and highways, tourism, and later the consumption society.
The fordist theory is known. So far, we have not found the precise element which generated the quality leap of fordism: the deliberate growth of the purchasing power. In Annex 5 we offer the main characteristics of fordism, in Walter Briggs’s vision (2000): mass production, national state, vertical hierarchy, social classes, standardization, planning, rules – in one word, certainty.
A new impulse will be given in 1951, when Diners Club will launch the “credit card”
(since 1950 both Diners Club and American Express launched the “debit” card, expense card) for 200 clients which could use them in 27 restaurants in New York!?, which will later amplify, as a snowball, the credit in American and later, world economy. So, in developed countries, one may spend over 10 times his normal amount of money. Add symbolic financial means to this, which
36 picked up from the Ford Museum of Highland Park, Detroit.
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travel on major information networks of financial markets. The situation is grossly similar to that of ’29, but far graver, because symbols nowadays have a smaller coverage in real economy, as a solvable demand. Furthermore, symbol economy begins to become independent and to have its own entropy. Ergo, the “available” funds of the population increase, but also “investment funds”:
and as a result: expansion – among others – of the tourist activity connected to developed countries.37
And the new economy’s snowball effect, set in motion after the war, against Keynes’s advices, does not stop here. Economists from former socialist states were terrorized by the size of industry stocks, one of the causes which “maintained” planned economy at a standstill. The same element was illustrated by western commentators in order to show the market economy’s superiority. Stocks mean wasted work, wasted low entropy. A closer look on numbers in the American economy or other developed economies, with mass consumption, reveals gigantic stocks in distribution networks, from supermarkets to convenience stores. Without actually seeing them, numbers remain numbers! If regarding alimentation products we are being faced with pure waste, despite industrial outputs of aliments which surpass the short warranty time span, industrial goods are harder to recycle and to “recuperate”, especially due to higher values. Still, what happens to these giant stocks? The solution would be: move them towards the population, purchasing over needs and purchasing power levels, finally, throwing them at the greedy consumer, able to work hard, in order to satisfy his pleasure to buy, only to throw away afterwards. What remains is
“pleasure”. The phenomenon is harder to notice, although it has the same Ford idea: payment surpasses needs, mass consumption, and maximum mass profit, as a mass (quantity).
Postmodernist Post-ford-ism has other characteristics: production is oriented towards the consumer, globalization, fragmented society, life style, not goods, symbolic value, improvisation, decrease of regulations, uncertainty. But the economic system has the same purpose: maximum profit. See also Annex 5.
Another possible direction to deepen research, in order to illustrate the atypical behavior of a real phenomenon compared to “theory standards” could be the following:
The “productive” systems of the postindustrial society have such a high performance level, that a small number of the population could ensure the needed amount of goods for a plentiful life of the societies of those respective countries, and also a sufficient surplus for exporting, which could cover the normal amount needed for the entire planet. Still, this surplus is physically limited.
Surpassing moral issues, even Christian pity, profit, as an economic imperative, prevails. As such, for example, exploitable agricultural areas in the E.U. are strictly limited in order to maintain an acceptable production output which will not lead to overproduction and thus price collapse, a situation which is hard to control and imagine now, when “symbolic economy” is calculated as a multiple of the “physical economy”. The resulted unemployment must be absorbed, one way or another. The development of the service sector is the required mechanism.
So it has come to situations like this: at the same ranch, a generation keeps track of classical agriculture, highly productive, and the other generation has to head towards services, like agro-tourism. The E.U. dispatches considerable funds for such conversions. Creating “tourist destinations” areas, becomes very laborious but also paramount. An intense persuasion work for the population is closely coordinated. This has begun with inoculating the idea that travel is habitual: in the surroundings (considered that the average trip is a 65 miles range), especially during weekends. A special infrastructure was sustained and developed, which would imply low costs (camping spaces, van spaces, cycle-tourism, walks, trips, etc.). This explains why 80% of tourist circulation is local or national at best38. A major pat of the “available” labor force is employed in order to maintain tourist activity: creating the tourist destinations, utility maintenance, sport and free-time, promotion services, information, guidance, etc.
37 See also Răzvan Şerbu - Utilizarea cardurilor de plată: exigenţe, posibilităţi, efecte, Ed. Continent 2000 38 domestic in the specific language, unlike incoming şi outgoing
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This phenomenon is even more visible in countries with high incomes per capita and developed economies: the Netherlands, Denmark, Sweden, Switzerland, and Great Britain. But these are also countries which make considerable efforts in order to help eastern countries, especially in developing agro-tourism. Agro-tourism incomes are not high, but they allow an acceptable income and especially a permanent occupation for labor force, although tourist circulation is based on seasonal patterns (extra-seasonal periods stand for conservation, modernization, repairing and reopening the facilities). There is a legitimate question here: why this interest and effort, especially from people accustomed to working and profit, for which practical help takes the shape of philanthropy or sponsorship.
We have reached the conclusion that Europe’s demographical evolution has lead both categories of countries to the same position: a decrease of population on the medium and long terms and a growing emigrational pressure, especially from outside Europe. Furthermore, once the E.U. enlargement process has begun, a progressive modernizing process has begun for adherent economies. This means more performing economies, similar to those of Western Europe, which also implies a close future level of unemployment. And of course, we must add, in order to maintain the example, in the agricultural domain, the need for re-conversion, or professional reorientation of a large part of the population. In Romania, nearly 50% of the population inhabits rural areas, and most of their income comes from there as well. Or as, an effect of the integration process, only a small part of the population will have agriculture as an occupation, industrial agriculture to be more precise. For Romania, we could take the following percentage into consideration 50% - 7 – 8% = 42 – 43% of the population will be affected by causes of integration.
Even if only half of it will have to find a new activity, we are faced with impressive numbers; we are talking about millions of citizens. Of course, this process is not instantaneous. There will be, the same way as there have been for other adherent countries, several migration stages, first limited and for short periods, then effective emigration, as economic adjustments take place and a new national economic configuration unfolds. It is however certain that unemployment bonuses will not be used, as the social risk would be to great, etc. The labor force must be kept under pressure, trained for effort.
The deeply rooted idea in Romanian minds is that our country has a natural basis which allows for ecological tourism, but ecological agriculture is false. The standards for including them as “ecological” are too high, unknown by the majority of Romanians and are contradicted by realities. The deterioration degree of bio-systems is far higher than the one in Western countries where ample ecologic activities took place. It is sufficient to remember the high amount of garbage in the vicinity of Romanian roads compared to roads in the West or the cleansing of the Rhine, and the real status of our waters. Here are large open areas for the future unemployed. And the situation, taking differences into account, is similar to other adherent countries. How these activities by will financed? A prime source are communitarian pre-adhesion, adhesion, reconverting funds, etc. (meant to “pay for social peace” and union adherence) to which co-financing will be added. Then, as the new post-integration economy takes shape, it will have to finance the occupation of the “relatively available” labor force in order to avoid an unemployment level not desired by the E.U. Agro-tourism is one of the ways. Another way is the development of bureaucracy, but only if it is an efficient bureaucracy, as it exists, functions and develops in developed countries, ensuring both jobs, so social peace but also the correct potency of the social and economical act, finally maximizing profit and at the same time, maximizing the pleasure of living for the entire population.
We may thus say that integration has causes, operating modes and purpose of which we have not talked about so far. They derive from the intimate unity of Europe, of the European way of thinking and of living, of the requirements of the technical and economic and cultural way of the contemporary society that acts, after an attentive analysis, as a whole. Research may be extended to other domains, with similar results; new visions regarding postfordism, contemporary economy.
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1.4 The complete economy: the peace – war – peace cycle. A horizontal cycle?
“No other subject is as easily ignored by us, those lucky enough to live in peace. After all, we all have our own private wars for survival: earning our daily bread, caring for our family, fighting disease. Still, the way we fight intimate wars, pacific, the way we live our daily lives, is profoundly influenced by real wars, and even imaginary ones, from the present, past or future”39
It comes as a big surprise that the “civil” economic science does not deal with times of war from mankind’s history, or even from contemporary times. Military studies are either ignored or inaccessible to “laic” economists. Or, on a time scale, war periods may be as extended as periods of peace.
History shows us, that the major technical findings are linked by the art of war. We do not know if Homo sapiens first used tools to obtain food or to defend himself. However, it is certain that the last three centuries have been under the sign of Mars, regarding technical progress. Only after they ceased to be a military secret, discoveries were extended to the civil domain. Since the fall of Newton’s apple, the guillotine and then sewing machines; first, steam warships, only after commercial fleets; first military aircrafts, only after that civil flights appeared; first Hiroshima, and only after the electric power-plant, etc. etc. We must mention that the Cold War lead to the NASA program, with a military component, at the actual “star wars” level, more pressing perhaps than scientific research or moon landing – a massive investment whose “research residuum”, applied into civil economics, would change the world: plastic masses, nylon fiber, chemicals, refrigeration techniques, etc. We can only speculate on the effects of the arms race in the USSR, China or Israel.
Classical economic theory analyzes production cycles, with their soaring, maximum development and later, decline phases. There are fewer studies that are concerned with the peace-war-peace cycle. The phenomenon is present since the beginning, but was limited to the existence of a community. Once national states developed, this cycle had to emit from one state to another, where as, due to the two world wars, to become a cycle for the economy at a global level.
The pre-war period was one of changes regarding propriety; governments took control of
The pre-war period was one of changes regarding propriety; governments took control of