The politics of globalisation
Globalisation has had a profound impact on labour worldwide. But what, exactly, has this impact been? Enthusiastic proponents of globalisation in its heretofore dominant form argue that it levels the playing field between developed and developing countries, creating employment in the latter and enabling them to pull themselves out of poverty (cf T.Friedman 2005). Diametrically opposed to them are the passionate proponents of de-globalisation, who see globalisation as synonymous with inequality and oppression, and advocate disabling the World Trade Organisation (WTO), International Monetary Fund (IMF), World Bank and transnational corporations (cf. Bello 2000).
The economic crisis, which started in the US in September 2008 and swept through the world, left the first camp in disarray. With financial institutions collapsing, millions of jobs being lost, GDP shrinking and world trade contracting (Wade 2009), even Thomas Friedman (2009) had to admit that the market was ‘hitting the wall’. The opposite camp, predictably, was triumphant: ‘The current global downturn, the worst since the Great Depression 70 years ago, pounded the last nail into the coffin of globalization,’ proclaimed Walden Bello (2009).
However, there is a third position, which represents the majority of workers throughout the world. They have been fighting a losing battle for jobs, better employment conditions and social security for over three decades, a struggle that has become more desperate since the downturn. While it is clear that the model of globalisation pursued so far has been a disaster for them, de-globalisation would mean a further loss of jobs for workers in exporting countries, and raise both costs of production for companies using their products and the cost of living for consumers. Dissatisfied with both these positions, international unions have advocated building workers’ rights into the new global order (cf. ICFTU 1999), but this has yet to emerge as a concrete alternative.
This book argues that it is not globalisation as such but the dominant neoliberal model of it, alongside traditional authoritarian labour relations, that have exerted downward pressure on labour standards. It attempts to put flesh on the bones of the third alternative by looking at workers’ responses to globalisation: responses which indicate that labour is ‘a social force which is central to the development of the international political economy and international relations’ (Harrod and O’Brien 2002a: 8).
One year after the bankruptcy of Lehman Brothers, there were superficial signs of recovery; but a closer look at unemployment, poverty rates and foreclosures in the US showed that there was no end in sight for the suffering of ‘regular people’, while the banking sector and Wall Street continued to act in a manner which ensured that ‘The causes of the financial crisis continue unabated and in some cases have worsened’ (Weissman 2009). While the prognosis in other countries might not have been so dire, the downturn was far from over. The crisis has made it more urgent for the labour movement to craft a viable response to globalisation, but also, paradoxically, has made it easier to question the previously dominant model, given that it led to such a catastrophe.
The impact of globalisation on labour has been complex, even contradictory. Trade union movements firmly anchored in national history and legislation found it difficult to cope with global integration and the vastly increased mobility of capital; one consequence of this was the decline in the proportion of the labour force organised in unions over the last three decades of the twentieth century, which weakened the bargaining power of workers (Harrod and O’Brien 2002: 10-11). Yet in the two decades between 1975 and 1995, the global labour force doubled (Munck 2002: 8), making it potentially much stronger as a social force. This book argues that recovery from the crisis depends, to a large extent, on the judicious use of this power by workers worldwide.
The secular expansion in employment coexisted with drastic declines in some sectors, including highly unionised ones. Large-scale industrialisation in some of the former colonies and the end of the Cold War resulted in key East European and developing countries emerging as attractive markets and investment destinations for global capital, thus intensifying competition for jobs among workers who were formerly insulated from such competition. Yet these very same events removed obstacles to solidarity between unions in former colonies and imperialist states, and between unions on opposite sides of the Iron Curtain. Convergence between employment conditions in different parts of the world made it easier for workers from widely differing backgrounds to identify with one another, potentially making global solidarity an achievable goal. Technologies that facilitated the mobility of capital and global competition for jobs at the same time provided workers with a means of spreading the consequences of a local dispute around the world at rapid speed (Herod 2002).
Thus the negative fallout of globalisation for workers is accompanied by developments that create the potential for counteracting those disadvantages and, indeed, building an even stronger labour movement than before. But that would require, firstly, a rigorous definition of globalisation, so that the impact of changes in the nature of capitalism – such as the revolution in Information and Communication Technologies (ICT) – can be disentangled from the neoliberal assault on workers’ rights. Secondly, it would entail a drive to reverse the decline in union density, either by undertaking a drastic overhaul of existing unions, or by creating new models of unionism, such as social movement unionism in South Africa, Brazil and South Korea (Moody 1997: 201-226, Munck 2002: 122-25), and employees’ unionism in India (Chapter 5 of this book). This drive would have to include special measures to tackle the rapid spread of informalisation, which creates employees without legal status or rights. The extra-legal character of this sector breeds child labour, slave-like conditions, and all manner of abuses, which are exacerbated by the preponderance of disadvantaged workers in it: women, ethnic and religious minorities, migrants, indigenous people, and so on.
The third task would be to formulate a global strategy for labour. This does not mean abandoning the local or national as an arena for struggle. But it does mean thinking globally even when acting locally, because local action – or inaction – that allows workers’ rights to be undermined in some distant part of the world results in an assault on one’s own rights. For example, protectionist policies aimed at protecting and expanding domestic employment at the expense of workers elsewhere ultimately have a negative effect everywhere (Stevis 2002: 146). Global solidarity in this sense has become a condition for survival, and it demands a much greater knowledge of developments in other countries than ever before. It also demands a fundamental change in the strategic orientation of unions, which has hitherto been centered on the nation-state. Even the largest international confederation, the International Confederation of Free Trade Unions (which merged in 2006 with the World Confederation of Labour to form the International Trade Union Confederation) was ‘a confederation of national trade union centres, which means that its governing bodies are composed of representatives of organizations accustomed to think and act within the confines of the nation-state’ (Gallin 2002: 238). The alternative is not necessarily a monolithic global organisation, but, rather, a global movement unified by its goals, and developing its strategies through debates across all the borders that divide workers.
The central argument of this book, then, is that globalisation itself cannot be reversed, any more than the industrial revolution could have been reversed, but the politics of globalisation constitutes terrain that can and must be contested by workers and unions if the world economy is to emerge from deep crisis. Therefore a global strategy for labour would require workers not to oppose globalisation, but to fight for their own politics, based on global solidarity and democracy, to shape the process.
The importance of the local
It is a paradox of globalisation that ‘the greater interconnectedness of the global economy…which high-speed telecommunications and transportation technologies have augured mean that the consequences of any particular event can be transmitted much further and much faster than ever before’ (Herod 2002: 87), and consequently local events become global ones. In other words, ‘the growing extensity, intensity and velocity of global interactions may also be associated with a deepening enmeshment of the local and global such that the impact of distant events is magnified while even the most local developments come to have enormous global consequences’ (Held et al. 1999: 15). If this is true of a particular event, it is even more true of labour relations in a whole country: the lowering of barriers to trade and capital movements not only exposes a country’s labour force to influences from the global economy, but also exposes the rest of the world’s labour force to the influence of a particular country’s economy. Recognition of this on the part of trade unions resulted in the campaign for a social clause in WTO trade agreements upholding core labour rights. China has understandably received a great deal of attention because of the size of its labour force, the ubiquitousness of its products, and an authoritarian political system that bans independent unions. But there is a curious lack of interest in India, given that it follows closely on the heels of China in terms of the size of its labour force and its growing importance within the global economy.
One reason for this difference could be the perception that labour relations in China constitute a bigger threat to workers in other countries than labour relations in India, but this is not necessarily true. In China, the pre-liberalisation social contract, guaranteeing job security and extensive welfare benefits for workers, created such a strong sense of entitlement that the government had to replace it with a labour law promising workers’ rights and social security in order to counter massive social unrest, with millions of workers per year involved in riots and demonstrations between 2003 and 2005 (Lee 2007). In India, by contrast, the overwhelming preponderance of informal workers in the labour force meant the absence of either social or legal contracts promising workers’ rights to them; the sense of entitlement and thus scale of protest were correspondingly much smaller.
Both Chinese and Indian workers have gained employment from offshoring and outsourcing. But the Chinese model of attempting to deny workers’ rights cannot easily be replicated in countries with a different legal system, whereas the Indian model, where the bulk of the labour force is not even registered or accorded legal status as workers, is far more insidious, and has, in fact, spread rapidly to countries where it was rare or unknown before. On the other hand, India has suffered less from the crisis than the US or EU. Although stock markets plunged as Foreign Institutional Investors withdrew their funds, its well-regulated banking sector, with a negligible exposure to toxic assets, stood firm (Ram Mohan 2009). And while tens of thousands of jobs were lost in sectors producing for export, the overall increase in unemployment and consequent loss of consumer spending power were mitigated by the National Rural Employment Guarantee Scheme (see Chapter 8), which was up and running before the crisis and was allocated more funds after it began. Furthermore, the decline in membership among traditional trade unions was offset by the establishment and growth of a dynamic new federation of independent unions. Thus there are both positive and negative lesson to be learned from the Indian experience, and workers and unions in other countries cannot afford to ignore them.
In July 1991 the Congress government, headed by Narasimha Rao, had foreign exchange reserves sufficient for just a fortnight’s imports. To deal with the crisis, it began to implement the stabilisation and structural adjustment programmes that had already been recommended by the IMF and World Bank in the late 1980s. This included the abolition of licensing procedures for manufacturing investment (which had popularly come to be known as a corruption-ridden ‘license-permit raj’), reduction of the high import tariffs on most goods (but not consumer goods), liberalising terms of entry for foreign investors, and liberalising capital markets. Although Rajiv Gandhi had initiated a process of piecemeal liberalisation in the mid-1980s, the changes introduced in 1991 were much broader in scope and scale (Balasubramanyam and Mahambare 2001).
When the WTO was established on 1 January 1995, India was a member from the start. This involved new pressures, for example to eliminate quantitative restrictions on imports, simplify and reduce tariffs, reduce export constraints, reduce the number of activities reserved for the public sector and small-scale sector, further liberalise the Foreign Direct Investment regime, and address the fiscal deficit. The process of integrating India more closely into the world economy has been more or less continuous since 1991, despite changes of government. This book examines how it is has affected workers and how they have responded, especially in one of India’s biggest industrial centres, Bombay.[1] It makes numerous comparisons with examples from all over the world, drawing out lessons, both positive and negative, for a global strategy for labour.
Chapter 1 outlines the background that led to this research and discusses the research method used,[2] explaining why the method of emancipatory action research is more appropriate in this case than the attempt to be ‘objective’. My theoretical approach is presented so that it is clear where I am coming from and why this analysis was undertaken. Chapter 2 arrives at a working definition of globalisation by examining existing definitions and making a critique of some. The merit of my definition is that it allows for a more nuanced response to globalisation than either embracing it in its neoliberal form or rejecting it altogether. Chapter 3 examines four sources of the economic crisis of 2008, and suggests how three of them can be counteracted. The fourth – the widening gap between rich and poor – can only be redressed by a strong labour movement, and chapters 4 to 9 look at ways in which this can be done. Chapter 4 looks at the trade union movement in India against the background of the worldwide labour movement, examining in particular its relationship with the state. It argues that globalisation reduces the power of individual states to protect labor rights, but creates the conditions for member states of the WTO to protect workers’ rights collectively. Chapter 5 discusses the importance of trade union democracy for the learning process in the labour movement, and defines and examines an important experiment in union democracy, the ‘employees’ unions’ which have been formed spontaneously as an alternative to the party-affiliated national unions in India.
Chapter 6 takes up informal employment, definitions and debates around it, and the conditions of informal workers, arguing that informal labour constitutes the single biggest problem facing the global labour movement in the early 21st century. It examines strategies to confront informal labour suggested by trade unions, informal workers and the ILO. Chapter 7 examines the adverse impact of sexual harassment on women workers, and analyses the gender division of labour at the workplace and in the home. Strategies to defend the equality and dignity of working women are discussed. Chapter 8 argues that massive resources are needed to create employment and support social security and welfare programmes if the world is to emerge from recession, and a struggle by unions against the narrow vested interests promoting militarism can release them.
Chapter 9 looks at international efforts to deal with the effects of globalisation on labour, including international agreements between trade unions and employers, international solidarity action, codes of conduct, and the proposal for a social clause protecting workers’ rights in WTO agreements. It examines the way in which employees’ unions and informal workers in Bombay have used, reacted to, or participated in such efforts, emphasising examples of international solidarity. Their potential for improving workers’ rights globally is evaluated. Finally, Chapter 10 draws out and puts together conclusions arising out of the preceding chapters, which suggest strongly that only a truly global strategy for labour is capable of confronting the challenges of globalisation and crisis.
My hope is that this analysis of global labour from the perspective of a crucially important section of it will contribute to a better understanding of globalisation, and especially to a realisation that workers can and do play a role in shaping the process. This role could be much greater – and indeed must be greater – if the global economy is to recover from the crisis. My argument is that realising this potential depends on the ability of workers throughout the world to build bonds of solidarity across existing divisions, and elaborate a strategy synthesising the interests of all sections of the global labour force.
(This
is my Introduction to Workers, Unions, and Global Capitalism: Lessons from
India, Columbia University Press (New York) and Tulika Books (New Delhi),
2011, pp.1-8.)
Notes
[1] Since the name of the city was officially changed to ‘Mumbai’ in 1997, I should explain why I continue to use the older name. The origin of the name ‘Bombay’ is somewhat obscure, but it has been used for the past four hundred years by most of its multifarious inhabitants. For roughly the same length of time, its Marathi name has been ‘Mumbai’, derived from the Hindu goddess Mumba Devi (‘ai’ is Marathi for ‘mother’). The campaign to change the official name to Mumbai was spearheaded by the Shiv Sena, an extreme Right-wing Hindu and Marathi chauvinist organisation. One plank of its programme was the replacement of ‘Bombay Hindi,’ which has evolved spontaneously as the link language for people from all over India who have settled in Bombay, by Marathi. Another was the stoking of anti-Muslim sentiment. In 1992-3 it was involved in the demolition of the Babri Mosque and pogroms against Muslims in Bombay, and it has at various times carried out brutal attacks on South Indians, Communists, Muslims, Christians and others. I have no objection to the Marathi name being Mumbai, but I and many others feel that the official change of name to Mumbai is associated with an attack on the ethnic, religious and political diversity of the city, and with ethnic cleansing drives against minorities.
[2] This describes my ‘method’ in the broader sense, encompassing philosophical outlook and theoretical framework as well as techniques for collection of material, and not in the narrow sense of techniques alone (Harding 1987).