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“Toyotism” vs. “Volvoism”
11/12/2012, 19:08
Filed under: Economics, Politics

I just learned Volvo is a Swedish company. No wonder the educated upper-bourgeoisie love them. Did I mention how much I adore Volvo?

But in all seriousness, I just finished reading and article from the early 90s, entitled, “The Economics of Job Protection and Emerging New Capital-Labour Relations.” In it, French economist Robert Boyer details the Fordist approach to job protection and capital-labour relations, questions the radical neoclassical call for complete flexibility, and proposes that we are faced with a choice: either “Toyotism” or “Volvoism.”

Of course, Toyotism and Vovloism refer to the job protection and capital-labour relations of each companies’ respective home nations, Japan and Sweden.

Lately, I’ve had to read an unusual amount of writing on labour markets from the early 90s for a doctoral comprehensive exam I’m studying for. It’s astonishing how fast things can change in the worlds of economic theory and and labour market policy. For example, Japan used to be a big deal.

Both the economies of Japan and Sweden collapsed not long after Boyer put his proposal to the policy makers of his day. Japan never really recovered. Sweden, on the other hand, made an astonishingly rapid recovery.

(Source: World Bank, Google Public Data)

Sweden’s recovery was astonishing in contrast to Japan’s persistent economic woes—the ten years spanning the late 90s and early 2000s being sometimes refered to as that nation’s “Lost Decade.” Sweden performed a similar feat after the dot-com boom and bust of the late nineties, and again since the onslaught of the 2008 “Great Recession.”

In fact, today, things are mostly peachy in Sweden and a handful of other Scandinavian countries. The resilience of Iceland in all of this—remember, they dropped the financial regulation ball leading up to the the crisis and all but went bankrupt—could be paradigm shattering.

20 years after Boyer’s proposition, “Toyotism” or “Volvoism,” policy makers throughout North America and Continental Europe are still struggling to settle on a post-Fordist approach to employment protection and capital-labour relations that works.

In an era that has seen Sweden bounce back from economic calamity and economic calamity, and Standard & Poor set the credit ratings of the United States and a handful of other leading OECD countries below theirs, is all this struggling still justified, or are we just in denial?

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