Taylorism, Fordism, Toyotism, ILO, and the Euro Explained
Taylorism, Fordism, Toyotism, ILO, and the Euro
Taylorism: Scientific Management
Taylorism is the practice of scientific management. Frederick Winslow Taylor advocated breaking down production into individual tasks. He conducted detailed studies of the factory process to recommend specific changes for efficiency.
Fordism: Mass Production and Consumption
Fordism combines mass production (the factory system where each worker performs a single task in a production chain) with mass consumption (redistribution of income from the wealthy to a broader base of citizens through public programs).
Toyotism: Flexible Production
Toyotism is a system that emphasizes a more flexible form of production. It encourages workers to work in teams, learning a variety of new skills.
The International Labour Organization (ILO)
The International Labour Organization (ILO) promotes social justice, recognizes internationally human and labor rights, and focuses on youth employment, social protection, and decent work within the framework of the 2030 Agenda. Founded in 1919, it became the first specialized agency of the United Nations in 1946. It currently consists of 186 member states.
These labor standards aim to ensure and reaffirm the strategic objectives of the organization, which are:
- Promote and realize standards and rights at work.
- Create greater opportunities for women and men to decent employment and income.
- Enhance the coverage and effectiveness of social protection for all.
- Strengthen tripartism and social dialogue.
Decent Work
Decent work means opportunities for work that is productive and delivers a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives, and equality of opportunity and treatment for all women and men.
The Euro and the European Union
The Euro is the single currency for the citizens of 19 countries in the EU. It has been in circulation since 2002 and is used by 337 million people for their daily requirements, savings, and investments.
The euro was established to:
- Avoid the risk of fluctuation of individual European currencies.
- Stabilize foreign exchange costs.
- Ensure stable prices for consumers.
- Achieve closer economic cooperation between EU countries.
Therefore, the euro can be used everywhere in the euro area.
Advantages of a Common Currency
The establishment of a common currency presents many advantages, such as:
- Elimination of exchange rate risks.
- Removal of transaction costs.
- More stability and price transparency.
- More macroeconomic stability.
- A stronger currency against other currencies.
- No price speculation.
Risks of a Common Currency
However, it also implies many risks, such as:
- Lack of independence for central banks to fix interest rates and define monetary policy for competitiveness and to counteract crises.
- Economic adjustments can only be achieved through public expenditure (limited in the EU), labor mobility (difficult), salaries flexibility, or gaining more competitiveness.
- Countries can receive sanctions if convergence criteria are not met.