Contradictions and prospects
Mine Eder
The first argument is that, contrary to conventional wisdom, the pressures for globalization had the effect of ‘strengthening’ the national level at the expense of the international with respect to the labour movements. Globalization of capital did strengthen the national labour organizations as these organizations came to terms with new global economy. In effect, it was not the erosion of state’s power, which would have presumably pushed for global labour networks that created this impetus for ‘national unionism’, but rather the unions that were the first to suffer from globalization. Defensive response to the challenge of globalization came in the form of identifying the national level, where labour was relatively better orga- nized, as the most ‘feasible’ site for struggle. The strengthening of national labour movements, however, has come at the expense of global responses.
Another reason behind the weakness of global labour solidarity lies in the fact that globalization has not changed but rather reinforced the discrepancy between core and the periphery both at the national as well as global level (Hirst and Thompson 1996; Hoogvelt 1997). Such a polarization has made the cooper- ation between the advanced industrial country unions and the labour organizations in the periphery extremely difficult. As most economic geogra- phers argue, regions still matter in defining globalization patterns. Global capital has not fully deterritorialised (Storper 1997; Scott 1998). Despite all the discus- sion of multinationals as global supply oligopolists, local labour markets, existing social relations of production in a given territory still affect the investment flows and how firms transnationalize. Globalization and localization occur at the same time. As such, the lure of peripheral regions for the TNCs emerges as a signifi- cant challenge for the labour movements in core countries.
It is thus not surprising that dominant unions in the advanced industrialized countries often become ‘agents of globalization’ themselves cooperating with corporations and state’s strategies internationally so as to strategically position themselves domestically. As Herod (1997b: 190) argued, for instance:
portraying capital as the only active agent in the production of global uneven development, however, represents an un-dialectical approach to understanding the process, for it conceives of uneven development as arising simply of the internal logic of capital. Instead by seeing workers as actively engaged in the process of uneven development, it becomes possible to link workers’ social practices to develop particular spatial fixes of their own, which they perceive to be advantageous to themselves at specific historical junctures.
One can indeed argue that dominant labour organizations in most advanced industrial states have actually contributed to the politics of exclusion and indi- rectly exacerbated the uneven effects of globalization.
Another negative impact of globalization on global labour ties is that the mobility of capital coupled with technological development and emphasis on flexible labour markets have pushed the unions to focus on ‘bread and butter’
issues and to avoid larger political roles.
From the viewpoint of capital, the ideal position is one in which economic class struggle is confined within the limits of the market relation and the political class struggle is confined within the limits of bourgeois parliamentarism. There would be a clear division between trade union struggles concerned with wages and conditions and political struggles to promote social reforms through parlia- mentary majorities and mobilization of public opinion (Jessop 1978: 29).
The increasing depoliticization of labour movements particularly in the core countries has come as a result of the effects of improved working conditions, which has brought a clear embourgeoisment of the workers. Facing the break- down of the class compromise which has led to increased workers’ rights and better living conditions throughout the postwar era, the unions in advanced industrialized countries became increasingly defensive in their strategy and focused on wage issues and job security.
Not having gone through the same improvement in their lives, the workers in the newly industrializing countries adopted an entirely different strategy. Instead of exclusively focusing on bread and butter issues, even though they faced even lower and declining wages than their industrialized counterparts, they joined forces with other social movements and broadened their agenda. The labour movements in South Africa, Brazil and more recently in South Korea built cross- cutting alliances with various religious groups, women’s groups and political parties and became a credible voice in pushing for democratization and overall opening up of their country. The divergence of goals, aims and strategies of the core country unions from that of the developing country unions creates yet another barrier to the creation of international ties.
The final but perhaps the most important reason as to why building cross- national labour solidarity proves so difficult lies in the very diversification and differentiation of production processes, industrial relations and forms of work.
The widely acknowledged shift to post-Fordism and its associated social relations of production coupled with technological changes suggest that corporations and workers are constantly re-structuring their strategies in order to adapt to the increasing ‘market discipline’. The creation of global commodity chains, to use Gereffi’s terminology, the emergence of various institutional forms at the micro- level so as to remain competitive, the co-existence of divergent firm strategies (that combine lean production, for instance, with Fordism) have created signifi- cantly different social relations at the shop floor. Despite some similarities in terms of labour control strategies, such divergences have led to very different work experiences which systematically undermine the strength of labour move- ments not only at the international but also at the national level.
Are the cross-national labour movements thus doomed for good?
Paradoxically, the prospects for such global labour ties are also embedded in the globalization process (Waterman 1998; Waterman and Munck 1999). The fact that globalization and localization occur simultaneously in the global economy suggests that workers can still play an important role by reasserting the power of the local, to use Kevin Cox’s (1997) title. It is only by building upon such local strengths and continuing to ‘take on’ the state as well as the national unions, if Constraints on labour internationalism 169
necessary, that a global labour network can be slowly formed. National unions, particularly in the advanced industrialized countries, may also come to realize that they cannot fight or manage the challenges of globalization alone.
The first part of this chapter elaborates on the ambiguity of the concept of globalization and argues that how globalization is defined is crucial both for understanding its impact on labour and for developing effective strategies for labour organizations in coping with its challenges. The second part will expand on the impact of globalization in labour in general. The third part specifically elaborates on the challenges globalization brings for international labour move- ments and union strategies and why the existing strategies have not worked so far. The chapter ends with a discussion of prospects of future international labour movements.
The ambiguity of globalization
Within the burgeoning literature of globalization, the definitions, causes, conse- quences and variations of the term have multiplied exponentially. Some scholars have equated globalization with the inevitable advances in production technolo- gies, and unprecedented and unstoppable integration of worldwide product and capital markets (Dunning 1994, 1997; Ohmae 1995). Though not necessarily new in kind, the intensity and speed of capital flows largely driven by technolog- ical advances in telecommunications and transportation, these theorists argued, are unprecedented and mark a qualitative break with earlier global capitalism.
The International Monetary Fund (1997b: 45) has described globalization as
‘the growing economic interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the more rapid and wide- spread diffusion of technology’. What makes this globalization different from that of the nineteenth century, then, is the degree of transnationalism, the degree to which the bulk of economic activity transcends territory and crosses bound- aries. This ‘market-centered explanation’ of globalization, as Woods (1998) called it, also sees increasing global competition and further integration of markets coupled with improvements as likely to improve global welfare and pros- perity in the long run, despite short-run adjustment costs.
Another aspect of this market-centred argument has been the declaration of the end of the nation-state and the suggestion that globalization has made the role of the state in economic development redundant if not irrelevant (Reich 1991; Ohmae 1995). Accordingly, technological changes and global markets have placed significant constraints on what the state can or cannot do, and have in fact overwhelmed the capacity of the states. The major de-linking of money from territory and the emergence of supraterritorial production and markets through global business organizations, companies, strategies alliances and cross- border networks, the argument went, have largely undermined the capacity of states to control the flows of persons, goods, weapons, technology information and commodities.
As in all debates, the response to these market-centred explanations has ushered arguments based on the persisting legacy of the state and how it is the state choices that has made globalization possible (Hirst and Thompson 1996).
According to the state-centred explanations, even though globalization does bring in someconstraints on domestic choices, these constraints are usually used as scapegoats by politicians aiming to legitimize their policies (Garrett 1998b). It is not the technological advances that have driven globalization but rather the technological advances have been made in areas in which state policies opened up new possibilities. That is why the globalization of finance, for instance, corre- sponded to the abolishing of capital controls (Helleiner 1996). This idea is clearly not new. Karl Polanyi (1946) has long argued in his analysis of the ninteenth-century economy, that liberalization is not simply a result of techno- logical and market developments and markets but was in fact ‘made’ by states.
So globalization, according to this view, has not overwhelmed state choices but separated instead those states that could define the terms of their participation to the global economy and those that could not.
Similarly, Wade (1996: 66) argued that national economies are still dominant in world economy. ‘The share of trade in GDP’, he wrote, ‘is still quite small in all but the smallest countries. Exports account for 12 percent of GDP or less for the US, Japan and the single-unit Europe, and the Asian, Latin American aver- ages are well below 10 percent. This means that 90 percent or more of these economies consist of production for the domestic market and that 90 percent of consumption is produced at home’. This approach also made a clear distinction between internationalizedeconomy with high levels of investment and trade versus a transnationalisedeconomy defined above (Weiss 1998). As such, both the degree of the openness in contemporary global economy and the magnitude of changes, have been exaggerated and fall short of undermining the reality of
‘national political economy’. Globalization is simply not enough for social
‘uncaging’ of the state namely to eliminate state’s capacity to nationalize social life (Mann 1993, quoted in Weiss 1998).
Another variant of this state-centred approach came from Phil Cerny who traced the transition from ‘welfare state’ to ‘competition state’ marking a signifi- cant shift in the quality and quantity of state’s power (Cerny 1995). According to Cerny, this competition state is different from developmentalist or strategic states since it promotes market activities as ‘public good’. Thus, states become commodifying agents themselves. ‘By increasingly promoting both the transna- tional expansion and competitiveness of its industries and services abroad, and competing for inward investment, the state becomes a critical agent, perhaps the most critical agent in the globalization itself ’ (Cerny 1996: 131). Hence the state is a midwife of globalization, not a victim of it (Weiss 1998).
However appealing all these assertions on globalization might be, both the market and the state-centred explanations tend to overlook the fundamental problem of globalization, i.e. its impact on and the role of people, workers, non-state actors and other groups. The market-centred approach projects globalization as an autonomous, apolitical process largely determined by Constraints on labour internationalism 171
technological changes, market forces and increasing mobility of capital and labour. This conception, however, eliminates any room for agency and renders any political action either irrelevant or futile. The result is a purely economistic explanation that fails to recognize both the disjuncture between economic and political institutions and the problems that globalization might raise for democ- racy, citizenship and participation. While the state-centric explanations bring the much-needed contribution of projecting the globalization very much as a political process, they also tend to ignore the civil society, the importance of people’s participation and the impact of globalization on people’s ability to organize and meet the challenges of globalization. The selective bias of state-centric explana- tions has led these theorists to single out the state as the only possible site of contradiction, conflict, and/or cooperation.
A people-centred approach to globalization:
what happens to work and workers?
A ‘people-centred’ analysis of globalization that looks at the impact of both markets and states on people’s lives and the role of people in the globalization process is necessary to address the pitfalls of both market and state-centred explanations. How does globalization affect the workers, working conditions, work life and employment in general? What are the social consequences of glob- alization in terms of equality and welfare? What role, if any, do people play in this process?
At first sight, the picture is not very promising. Income disparities are growing. Thirty years ago, the combined income of the richest fifth of the world’s population was thirty times greater than that of the poorest fifth. Today their incomes are over sixty times greater. With joint assets of $762 billion, just 358 billionaires now own more than the combined annual income of the world’s poorest two billion people (Holdyard et al. 1996). Some one billion workers – one third of the world’s labour force – remain unemployed or underemployed. Of the one billion, 150 million are unemployed and actively seeking and available for work (ILO 1998: 2). Of these 150 million, 10 million have been generated as a result of the 1997 Asian crisis. This is the worst situation since the Great Depression.
The unprecedented increase in unemployment figures that reach as high as 10 per cent in Europe suggest that the recent transformation of the global economy does not create sufficient jobs. Most industrialized economies, particu- larly Europe, suffer from high unemployment. In Britain, for instance, there has been no increase in full-time jobs. The newly created ‘jobs’ tended to be poorly paid casual work. Three out every ten new jobs created in Britain in 1996 were part-time (Guardian11 June 1996). Even though employment levels are higher in the USA, real wage increases have lagged significantly behind the overall productivity growth in the manufacturing sector. ‘This implies a “diabolical dilemma”, which obliges the industrialized countries to choose between mass unemployment and the presence of the working poor’ (Breitenfellner 1997: 532).
In the developing world, the picture is also grim with declining real wages, high unemployment and expansion of the informal sector, which is estimated to employ a total 500 million people. It is estimated that only 15 per cent of the work force in low-income countries is in the formal sector (ILO 1997).
As commonly argued, some of this unemployment is emerging from techno- logical displacement. Although it may be rather premature to declare the ‘end of work’ as described by James Rifkin (1995), automation and technological unem- ployment are a reality. Most of the jobs in the contemporary world economy are indeed being created in the white-collar non-tradable (services) sector rather than in tradable goods (manufacturing). While some companies have adopted these new technologies to respond to the competitive pressures of globalization, others have been motivated in order to limit labour’s power at the shop floor and control labour militancy. Although proving the ‘real’ intent of corporate strate- gies is beyond the scope of this chapter, three related arguments can be developed as a consequence of application of new technologies in production.
The first is new management strategies known as Toyotism or flexible specializa- tion, which have changed the nature of labour–management relations at the shop floor. The second is the unprecedented white-collarization of the work force, which raises new barriers and questions for labour movements. The third is the widening gap between low-skilled and high-skilled workers.
As Ernest Mandel (1980) has long argued, changes in hard technology are inevitably associated with soft technology, i.e. how technology is applied on the shop floor and the resulting labour–management relations. As Noble (1979: xxii) suggests, technology is very much a social process; it is ‘always more than infor- mation, logic or things. It is people themselves undertaking various activities in particular social and historical contexts with particular aims and interests’. Some of these changes in soft technology were hailed in the mid-1980s as the ‘second industrial divide’ (Piore and Sable 1984). The new labour–management relations and ‘lean’ production techniques that are emerging on the shop floor largely as a response to the preceding dominant production method known as Fordism, it was argued, mark a new era in global capitalism. Just-in-time, multi-skilling (or rather multi-tasking), job rotation, teams, quality management, functional flexi- bility, all the different aspects of lean production, the argument went, increase productivity at the shop floor by integrating workers’ skills and by providing more autonomy and responsibility to the worker. Hence, all these practices clearly differ from mass production methods based on hierarchical supervision, standardization of production and the division of labour.
The diffusion of these so-called best manufacturing practices at the shop floor made it clear, however, that these new production methods did not radically alter labour–management relations. Instead, they replaced the typical Taylorist managerial supervision embedded in Fordism with ‘management by stress’, since they involved cost reduction including reducing labour, job loading and time pressures on the existing workers. In short, this shift to flexible accumulation has increased the insecurity of the workers. With it has come ‘downsizing, re- engineering and elimination of middle management. In 1994, for instance, Constraints on labour internationalism 173
corporate America eliminated more than half a million jobs: a year when profits rose 11 per cent’ (The Economist, 16 December 1995: 83). The average number of management layers in large British companies decreased from seven in 1986, to fewer than five in 1996. In the USA, 18.6 per cent of all positions phased out since 1988 came from middle management (ILO 1997:2).
While many white-collar jobs have disappeared since 1980s, there was also a significant white-collarization of the work force. As most of new job creation shifted to the service, non-tradeable sector, the traditional blue-collar working- class profile began to change significantly, particularly in the developed countries. As Zolberg (1995) explains, increased living standards of the manufac- turing sector in these countries coupled with the class compromise based on the welfare state in the aftermath of the Second World War have established signifi- cant securities for workers but has diluted the traditional working class identity and undermined the prospects of collective action. Conversely, this argument can also explain why labour militancy persists in the newly industrializing coun- tries where living standards are visibly lower and the concentration of workers in various industrial districts are considerably higher.
Finally, technology and the emerging information society (Castells 1997) have helped create dual markets and widened the gap between skilled and unskilled labour in terms of income and demand. The demand for low-trained labour has decreased considerably in the advanced industrialized countries, dropping by 20 per cent between 1960–90 relative to skilled labour (Wood 1994: 11). This gap is also at the centre of debates concerning the effects of trade liberalization on labour markets. Despite ongoing disagreements on the scale and scope of impact that trading with countries with abundant unskilled labour might have on labour markets, the overall consensus among economists has been that international influences widen the skill premium and contribute to wage inequality. These divided labour markets also lie at the core of the disputes on labour’s response to trade liberalization. The extent to which cheap and unskilled labour from the developing world imposes a ‘race to the bottom’ in terms of wages and unem- ployment in the developed world, however, is highly controversial. Over two-thirds of the work force in most industrialized economies is employed in predominantly non-tradable service sector (Krugman 1986). In the developing world, by contrast, the bulk of employment is still in rural subsistence and in the urban informal sector. On average, only 12–15 per cent of jobs in these economies are in the tradable, modern sector activities (Lee 1996: 492).
The dual labour markets and increasing wage inequality are also directly linked to the difference between the degree of capital and labour mobility. The ease with which MNCs can move across the borders does not have its labour equivalent, even though labour migration is still significant. Thus, ‘the world has become a huge bazaar with nations peddling their work forces in competition against one another, offering the lowest prices for doing business. The customers, of course, are the multi-national corporations’ (US Department of Labor 1994: 47, quoted in Rodrik 1997: 16). The generation of pools of cheap labour in both peripheral countries and peripheral regions of advanced capitalist societies, the fragmentation of the