A Different Globalization for Labor

It is commonly acknowledged among scholars and activists who identify as “progressive,” “liberal,” or otherwise left-leaning that globalization is bad in many ways for workers in developed countries such as the United States. While there is always tension between the interests of capital and labor, there have been moments when the economic interests of the two somewhat converged in specific contexts. In the case of “globalization” as currently practiced, with its “just in time” production, the outsourcing of manufacturing, and increasingly service, jobs, and free trade agreements conceptualized primarily in terms of free movement of goods and services (but not of workers), this is very much not the case. Rather, the interests of labor and capital (or corporations or “the economy”) are in some ways becoming highly divergent in developed nation contexts. (See also my recent posts on these topics: How Unique or Radically New is Our Current Situation Today?; Three Things Karl Marx Didn't See Coming; The "Sameness" of Republicans and Democrats)

Another common assumption is that such globalization processes are also bad for labor in the developing nation contexts that manufacturing and service jobs are being outsourced to, e.g. promoting sweat shop labor conditions. Robert J. Flanagan has recently published an important book on this topic, Globalization and Labor Conditions (Oxford University Press, 2006). Flanagan closely examines the available data on labor conditions around the world. He is clearly sympathetic to critiques of globalization, but comes to the conclusion that overall, globalization has led to improved conditions for labor in much of the world. He in no way implies that globalization processes make things wonderful for workers in developing countries. As he documents, there are things like sweatshop labor associated with globalization, but there are more overall jobs and fewer jobs with the worst labor conditions in more open developing economies – hardly what I’d consider a ringing endorsement, but still having more lousy jobs available might be better than having fewer or no lousy jobs available, even while still not good.

The argument Flanagan makes that I find most interesting is that workers in poorer countries would be well served by an even more open trade regime, one more open to the movement of labor. He writes (p. 181):

“Few people actively support poor labor conditions; many advance proposals for improving them. How should one sort through the flow of proposals to decide which ideas deserve serious attention? A very useful first principle of policy choice is to favor policies that expand, rather than contract, opportunities for target groups. The mechanisms of globalization fare very well by this criterion. The evidence developed and presented in this book and reviewed in the early part of this chapter shows how international trade, international migration, and multinational companies contribute to improved working conditions and labor rights. Contrary to the indictment of globalization outlined in the first chapter, the world’s workers would gain from fewer restrictions on these mechanisms of globalization. This conclusion applies most strongly to the world’s poorest workers. Relaxing barriers to international migration offers the most promising opportunity for expanding the positive impact of globalization on labor conditions, but prospects for international action to promote the international movement of labor seem dim at the beginning of the twenty-first century.”

Freer movement of labor (which wouldn’t have to mean unregulated or unmonitored) would benefit labor by allowing tools such as modern transportation technology to benefit labor as well as capital. As Flanagan suggests, this would most benefit the poorest workers, but by helping the cheapest labor not be stuck in place, easier movement would indirectly aid other workers as well by making the strategy of chasing the cheapest labor via outsourcing a little less effective.

As Flanagan also points out, international action to promote freer (and regulated) movement of labor is unlikely soon. For starters, it’s not in the interests of capital (though having some available undocumented immigrant labor to mercilessly exploit in developed nation contexts is in capital’s interests). Second, freer movement of labor is understandably resisted by labor in developed countries – more immigrants are more competition for jobs that are already being reduced through outsourcing.

A recent commentary in The Nation (May 7, 2007, p. 8) by Deepak Bhargava and Angelica Salas makes a case for immigration reform, including regulated but freer movement, being in the interests of all labor and a worthy progressive cause. Freer, but documented and regulated immigration could contribute to eliminating the abuses of undocumented laborers and the problems for resident laborers in terms of wage competition. Also, as argued above, a move towards a free trade regime that emphasizes not just free movement of goods and services but of labor as well would most benefit the poorest, but would indirectly benefit labor in general by reducing capital’s ability to locate and fix in place the cheapest labor (because those laborers could simply move elsewhere for higher wages, contributing to upward pressure on wages in general).

Like it or not, we’re stuck with capitalism and globalization. That’s simply not going to change anytime soon. We’re not so clearly stuck with the precise details of capitalist globalization as it now functions. For those of us seeing ourselves as progressives, it makes sense to contribute to efforts at modifying globalization so that it serves the interests of labor as much as capital.

Three Things Karl Marx Didn't See Coming

Karl Marx is rightly regarded by many as one of history’s most brilliant thinkers on society and political economy, while for many, including for many who regard him as an important foundational thinker for the social sciences, he has an image problem associated with the things done in his name in the 20th century.

There’s another problem for more orthodox Marxism (where Marxist-Leninism and Maoism are clearly unorthodox Marxisms) – namely that its predictions of a worldwide communist revolution have simply not come to pass. It’s possible we’re just not thinking with a long enough timeframe. Marx argued that the revolution won’t occur until all the contradictions of the capitalist mode of production have been developed and worked out, and it’s possible that that simply hasn’t happened yet – some of the phenomena associated with globalization, such as the outsourcing of manufacturing jobs as capital chases the cheapest labor in a global labor market alongside the attempt to cultivate those same outsourced workers as consumers of products now produced by cheaper labor in China or elsewhere, could fit right into the orthodox Marxist framework of the contradictions of capitalist production being worked out.

More importantly, I think, is that capitalism turned out to be more stable and resilient to revolutionary resistance than Marx envisioned. To be fair, this is largely due to factors that developed after Marx’s development of his basic ideas, so it’s more the case that capitalism turned out to be more stable and resilient than Marx could have envisioned and more stable than it actually was at the time Marx’s ideas were developing. There are three things in particular which Marx didn’t see coming that provided much greater stability to capitalist production – the limited liability stock corporation, a rapprochement between labor and capital, and a blurring of the distinction between capital and labor.

Before the legalization and establishment of limited liability stock corporations, initially in the U.K. and U.S., investors in a corporation not only risked the money they had invested in stock but also took on the risks of the corporation and any debts it might acquire in the case of failure. This placed a limit on the number of potential investors and on the variety of ventures that those investors would be willing to invest in; it also meant that personal fortunes were easily ruined along with the failing of a corporation. As a result, capital and capitalism were in fact highly unstable and susceptible to resistance at the time Marx was developing his ideas. The limited liability stock corporation, by making investors only liable for the specific amount of money they had invested, changed all of that. It didn’t guarantee the stability of a particular corporation, but did shore up the stability of capitalist production as a system.

Another thing that Marx didn’t seem to see coming was a rapprochement between labor and capital, especially in the U.S. by the early 20th century, but also elsewhere. The economic interests of labor and capital remain opposed, but the trade union movement realized it could achieve greater standing for labor by foregoing any attempt to radically transform the capitalist mode of production as the cost for acquiring a larger percentage of the surplus value produced in the form of wages. To be sure, more radical or revolutionary elements of labor, whether in the form of the I.W.W. wobblies in the U.S. or Bolshevik revolutionaries in Russia, greatly contributed to capital’s willingness to give concessions to less revolutionary trade unionists (just as the enhanced position of capital in the current globalizing context diminishes capital’s willingness to give concessions), but the mutual agreement of labor and capital to commit to capitalism and restrict their fight to the proportional share of the spoils gave capitalism a greater stability and resilience than Marx or anyone else in the 19th century could be expected to have imagined.

Finally, the division between capital and labor is blurred as never before. The opposition between the interests of capital as capital and labor as labor are as contradictory as ever, but for many individuals this now means that their own interests contradict, because to varying degrees they are both. Over the past century, the effects of capitalist production under limited liability stock corporations and in the context of a rapprochement between labor and capital have created a setting where more and more workers are also limited capitalists, primarily in the form of owning stock as part of retirement packages, tying individual worker’s interests to the interests of capital as never before.

The "Sameness" of Republicans and Democrats

There is a common lament, in particular by liberals and other leftists, that the U.S.’s two major political parties are all the same. One of the benefits of the Bush Administration is that it has taught us how far from true that claim is. Certainly fewer still engage in this lament than before 2000 (to maintain the claim is tantamount to thinking that the events of the last six years would have gone essentially the same under a Gore Administration), but it’s still a common enough sentiment. While I do regard as patently ridiculous any claim that the Republican and Democratic parties are virtually identical (which doesn’t mean that I think either party is particularly great), I do think that they are more similar than is healthy for the representation of a broad range of interests and perspectives in a fully functioning democracy.

There are several reasons for this, some of which are widely familiar: both parties are heavily lobbied and largely represent corporate and other monied interests, and this has become more true as campaign financing has become a more and more important part of federal and state and some local politicking.

There is another factor that produces some convergence between the parties that reflects a feature of the relationship between labor and capital for the last century in American capitalism. An article in the February 24, 2007 issue of The Economist (p. 37), “The Environment: Green Sums,” discusses different reasons why passing new legislation to tighten emissions caps for automobiles will have trouble passing through Congress. Not only will Republicans, or Democrats, who routinely represent the interests of the automobile and/or oil industries be reluctant to pass on such legislation, but so will those Democrats who rely on the support of labor, and in particular auto workers who see more stringent emission standards as threatening the standing of manufacturing jobs by threatening the standing of American auto corporations.

There has always been, and always will be, an opposition in the interests of labor and capital that is a structural element of capitalism (even while there has been a blurring of the line between who is labor and who is capital, via things like stock holdings as a now fairly standard part of retirement packages for workers fortunate enough to have retirement packages). While there is a perennial tension between capital and labor, there has been for a century or so a limited rapprochement between the camps in the U.S., with the labor movement in the U.S. for a long time now emphasizing a stable stake within the capitalist system rather than any sort of revolutionary transformation.

Globalization has enhanced the bargaining position of capital while greatly diminishing labor’s bargaining position and ability to hang on to a stable piece of the capitalist pie. So far at least, labor has responded not by radicalizing (and this smartly so – globalization has greatly weakened the structural position of labor anywhere, even while benefiting those same workers as consumers in some ways) but by conservatively attempting to hang on to what it has. It might never have been the case that what is good for General Motors is necessarily good for labor, and that certainly can’t be taken for granted today, but it is very much the case that what is bad for General Motors is bad for labor. One result is that Democrats who do genuinely try to represent the interests of labor on some issues end up converging with politicians who more clearly represent the interests of capital.