Modern industry has established the world- market. . . . This market has given an immense development to commerce, to navigation, to communication . . . and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom – Free Trade. . . . The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.
(Karl Marx and Frederick Engels, Manifesto of the Communist Party, in Karl Marx and Frederick Engels, Selected Works, Moscow: Progress Publishers, 1970, pp. 37–8)
Capital flight and unfair trade
An important aim of the globalization project is to enhance the freedom of cor-porations to operate across national boundaries. This peripatetic nature of con-temporary capitalism is widely deemed a fundamental feature of globalization.
Free trade ensures the largest corporations extract maximum advantage from heightened locational mobility, far from the mutually beneficial interactions
envisaged by those often cited as authorities by neoliberals. Adam Smith’s Wealth of Nations (1776) insisted the market could produce beneficial results
when capital was ‘rooted in place in the locality where its owner lived’, when
‘nobuyerorsellerissufficientlylargetoinfluencethemarketprice’andaslong
as governments did not subsidize economic elites and defend the rich and prop-ertied against the poor. David Ricardo’s 1817 theory of ‘free trade’ maintained that trade between two countries could be mutually advantageous, but only if the participating countries both had full employment, if the total trade was balanced, if capital was prohibited from travelling between high- and low- wage countries, and if the countries could each produce an item at comparative advantage.1
Freetradebenefitsthestrong,whichiswhytransnationalcorporationsenthu-siastically pursue the free- trade agenda through the WTO, which polices the
‘right’ to free trade institutionalized in 1994 by the General Agreement on Tariffs and Trade. Free- trade policies prevent governments imposing tariff bar-riers that would raise the price of imports thereby protecting local industries from market competition and workers from lower- wage competition in other
countries; and discourage governments from subsidizing agricultural production.
In the past, developed countries benefited from protectionist and rural support
policies. These not only protected workers’ wages and conditions but permitted industrial development and economic growth; and kept farmers on the land.
These richer countries now seek, through the WTO, to prevent developing coun-tries from acting likewise. At the huge protest at the WTO meeting in Cancun in September 2003, a Korean farmer stabbed himself to death, carrying a sign saying ‘WTO Kills Farmers’.2
If preventing developing countries pursuing policies historical beneficial to
developed ones is not sufficient hypocrisy, richer nations do not practise what
they nowadays preach. At the time of the Hong Kong meeting of the WTO in December 2005, government support for domestic producers via high tariffs, quotas, producer subsidies and export subsidies provided 18 per cent of farm income in the USA, 33 per cent in the EU and 56 per cent in Japan.3 Free- trade agreements have the potential to cause division between unions in developed and developing countries. Especially in manufacturing, trade unions in developed countries might support free- trade agreements that secure export markets for
‘their’ companies, while trade unions in developing countries might oppose such agreements that would undermine production in theirs.
The hypermobility of capital is not simply an aspiration and aspect of globali-zation but also a corporate weapon of choice: actual or threatened locational freedom is used to subordinate workforces in higher- wage countries. During the post- war boom until the mid- 1970s, the power of workers to withdraw labour counteracted the natural inclination on the part of employers to pay their employees as little as possible. However, increasingly from the 1980s, it has been capital rather than labour that has utilized the threat of its own withdrawal.
Greater capital mobility in the global epoch brought us ‘capital flight’, equi-valent to perpetual potential strike action by capital. More broadly, it embeds and expands neoliberal objectives in countries more liable to desertion by capital: those with better wages and working conditions, stronger welfare systems and stricter environmental protection laws than elsewhere.
Globalization has been described as a corporate project to achieve ‘downward leveling’ by pitting workers everywhere against each other.4 The most common explanation of the crisis of labour movements, as Silver noted in 2003, was that the hypermobility of capital has created a single labour market in which all of the world’s workers are forced to compete. By moving or just threatening to move production, multinational corporations have brought the competitive pres-sure of unorganized workers to bear on the international labour movement, weakening labour’s bargaining power and unleashing a ‘race to the bottom’ in wages and working conditions.5 In Negri’s words, the continuing process of decomposition of the mass worker in developed countries is facilitated by the relocation of mass industrial production to lower- wage economies.6
Time and again, workers in developed countries are threatened with plant closure or downsizing if wage demands are pressed or union organizing drives undertaken. Known as ‘whipsawing’, such industrial intimidation by which
management extracts concessions from labour is commonplace.7 New York Times columnist Bob Herbert observed in 2005: ‘Workers have been so cowed by an environment in which they are so obviously dispensable that they have been afraid to ask for the raises they deserve, or for their share of the money derived from the remarkable increases in worker productivity over the past few years.’8 It matters not whether company threats are idle. The mere possibility of capital flight creates a climate of labour-force vulnerability that encourages
self- policing of wage demands.9
Whetheractualormerelythreatened,capitalflightisusedtogoodcorporate
effect against both governments and workforces, especially with high unemploy-ment augunemploy-menting this increased bargaining power of capital. It enables corpora-tions to extract incentives such as reduced company taxation and anti- labour legislation from governments at the same time as they intimidate workforces with prospects of relocation if demands are pressed. The Guardian reported that 111 of the top 175 economic entities in the world in 2011 were corporations that straddle the globe like colossi and pressure lawmakers to desist from curbing their territorial ambitions or profit potential: ‘They make menacing virtue of
their multinational structures, threatening uncooperative states with taking their business elsewhere. The result is a source of power that has grown beyond democracy’s reach. In the real- life face- off between the democratic David and the corporate Goliath, David can look puny indeed.’10 Corporations also extract bribes to remain onshore, from governments then unable or unwilling to fund public services to adequate levels. Amongst the countless examples of ‘corporate welfare’ is the ‘multibillion dollar package’ paid from 2002 to 2015 by Austral-ian governments to Mitsubishi to keep its South AustralAustral-ian car operations open.
And to what end? Mitsubishi announced in 2008 it would nonetheless cease pro-ducing cars in South Australia; and at least 500 workers lost their jobs.11
Chapter 8 discusses labour movement responses to marketization, a process encouraged by this manipulation of governments under threat of capital flight.
Silver describes this effect as the ‘indirect impact’ of the hypermobility of capital: the pressure on states to repeal social welfare provision and other fetters onprofitmaximizationwithintheirbordersinordertoavoidbeingabandoned
by investors scouring the world for the highest possible returns.12 The more directimpactofcapitalflightisitseffectonworkers’wagesandconditionsin
higher- wage economies – at the same time as it ruthlessly exploits cheaper labour elsewhere and distorts economic development in poorer countries. The following sections examine labour movement responses to the direct problems caused by enhanced capital mobility and unfair free trade.
The evolution of labour transnationalism
Labour movement internationalism has been with us for more than a century, for example amongst maritime workers.13 In the present era, footloose corporations are starting to be circumvented by new forms of labour organization that encour-age transnational working- class cooperation in a concerted and systematic
fashion. Where international solidarity efforts were once spontaneous, often flamboyantaffairs,theyarenowadayslikelytobesubterraneanandunspectacu-lar, the result of sheer hard work at the grassroots workplace level and within the evolving bureaucracies of transnational labour institutions. Since the late 1980s therehasbeensignificantexpansioninlabourtransnationalismofbothofficial,
institutional kinds and of rank-and-file actions occurring beyond these formal
structures.
The opportunities for labour organization to chase capitalism to the furthest corners of the globe are provided by the forces of globalization. Despite the immense problems for labour created by the mobility of capital, its peripatetic nature also brings with it dangers for its owners. By bringing capitalist produc-tion so forcibly to more parts of the globe, globalizaproduc-tion is developing the basis for international working- class solidarity. The previous chapter has shown how relocation of much production to developing countries encourages working- class formation and composition in those countries. It provides the basis for labour movements in both developing and developed countries to form more meaning-ful linkages at the same time as it makes it necessary for them to do so.
The employment circumstances imposed on workers by globalization makes an internationalist response from unions in the developed world more naturally forthcoming, because this protects their economic interests. There are compel-lingmaterialreasonsforthebetter-paidworkersoftheworldtofighttoraisethe
wages of lower- paid workers. Amory Starr describes the labour movement as the
‘natural leader’ of ‘globalization from below’, because of the threat posed by globalization from above. As assembly lines have stretched across the globe and flexibleproductionprocesseshavemadeiteasytoexchangeoneworkforcefor
another, unions are overcoming the divide that formerly positioned developed world workers’ standard of living as dependent on developing world workers’
cheap labour. Workers are realizing that the logic of ‘international competit-iveness’ drives all wages down. ‘Unions are widely recognizing the need to bring the standards of all workers up in order to make all workers safe.’14
Especially auspicious is the emergence or growth of unions in lower- wage eco-nomies with whom developed world labour movements can collaborate. Growth of organized labour in the new investment sites fosters newfound collaborations across industrial sectors as well as national boundaries. Moody argues:
If capitalism is now more global than ever, so too is the working class it begets. . . . Even within most nations, the world- wide class that is still forming also crosses borders with greater regularity, is more ethnically diverse, and international in nature. . . . Both in the international division of labor and in the geographic movements of working people, a transnational working class has arisen and spread. The material substance of working- class internationalism is at hand.15
The potential for collaboration is enhanced by transnational corporate employ-ment patterns in which an injury to workers anywhere can be resisted by workers
elsewhere. The old labour movement maxim of ‘An injury to one, an injury to all’ must, and now increasingly can, be played out on a global stage.
The global working class in the making is thus better suited to international solidarity than previously. Labour transnationalism involves unions utilizing transnational networks through global union structures and/or directly with each other, and organizing global resistance campaigns by acting across borders. In principle, labour transnationalism is a positive- sum game for the workers of the world, despite corporate rhetoric that suggests workers in developing countries are grateful to work at any price under any conditions and will prosper as a result. In reality, workers in developing countries desire better wages and con-ditions, and are struggling against the odds to attain these goals. Every improve-ment there is manifestly in the interests of workers in the developed world, because it reduces the degree of labour market competition. The general focus of labour transnationalism therefore is the development and enforcement of agreed acceptable standards under which labour is performed anywhere, efforts that are producing more stable and productive alliances between unions in the developed and developing worlds.
Labour transnationalism is becoming distinct from older- style posturing on the part of developed countries’ labour movements about developing countries’
labour standards. This was understandably seen by developing countries as
‘Western protectionism’, as Indian unions put it around the turn of the millen-nium during debates about lobbying of the WTO to include a workers’ rights
‘social clause’. Led by Brazilian and South African union confederations, devel-oping country unions criticized developed world unions for not adequately reflectingtheneedsandaspirationsofworkersmostadverselyaffectedbyglo-balization and argued for a strategy that critiqued the whole development agenda.16 To work towards united rather than opposed positions on work and workers’ rights, labour transnationalism aspires to ensure that the subject of labour transnationalism is Everyworker: not only the unionized worker in a developed economy but also the more vulnerable and marginalized worker wher-ever s/he might labour.
Battles to protect Everyworker are best fought via international collaboration, whether these are general or particular skirmishes. There might be broad- based campaigns to oppose the use of child- labour or unsafe workplaces, for example.
Or a corporate insult or injury offered a group of workers somewhere might be met by solidarity actions elsewhere on the planet. International collaboration might confound typical employer machinations in an industry: if corporations offshore certain operations to lower- wage countries, joint insistence on minimum rates and conditions for performing the same work, regardless of location, can be successful. Especially problematic is the regular corporate strategy of threatened or real relocation of plant to lower- wage economies unless workers accept worse employmentterms.Eachimmediateinstanceisdifficultorimpossibletodefeat;
but ‘reverse whipsawing’ has started to happen, with transnational solidarity connecting workers in weaker positions with those in stronger bargaining posi-tions. The longer- term agenda of labour transnationalism is to raise all workers’
wages and conditions to similar high levels to undermine capital’s remorseless pursuit of cheap labour.
The task for labour transnationalism is immense. It is far easier for corpora-tionstoglobetrotatthewhimofprofitability,playingworkersoffagainsteach
other, than it is for workers’ organizations to collaborate to prevent or reduce adverse impacts on wages, conditions and employment levels. Nonetheless labourtransnationalismhasmadesignificantprogressinthepastquartercentury,
indicating the aspiration of labour movements internationally to counter capital’s attemptstodivideandruleworkersonatrulyworldstageforthefirsttimein
history. Marx and Engels’ prescient description of the spread of capitalism around the globe concluded with their famous rallying call for workers of all countries to unite. For nine years from 1864 the International Working Men’s Association attempted, with some successes, to put these principles into practice, to begin to bring about ‘the eternal union of the proletarians of all countries’.17 By the close of the twentieth century, commentators were drawing attention to the much greater possibilities for Marx and Engels’ internationalist vision to be realized in the globalizing epoch.18 Ronaldo Munck argued in 2002 that the
‘national period’ in labour history was over; workers were developing a sense of common interest and new ways of organizing that transcend national boundaries.19
Unionists on the ground agreed. In 1997 New Zealand Footwear and Clothing Workers Union secretary Robert Reid enthused about increasing transnational labour activity and the international trade union movement policy to develop the international solidarity of workers and trade unions, to ‘build a counter- power’
to that of the big trade organizations and corporations.20 Unions adapted organ-izational structures to conform to the transnational spirit of the times. For instance, in 2004 the SEIU launched its Global Partnerships Unit on the grounds that the union needed to move global ‘as capital has done’.21 Kate Bronfenbren-ner’s 2007 collection of studies of Global Unions described the innovative strat-egies and alliances starting to be used to mount cross- border campaigns against powerful transnational corporations such as Walmart and Exxon Mobil.22
Institutionalized forms of labour transnationalism became more integrated at the highest level, aided by the demise of the Soviet- backed World Federation of Trade Unions and the ending of the Cold War, which enabled the International Confederation of Free Trade Unions (ICFTU), the international peak federation of unions with social- democratic leanings founded in 1949, to emerge during the 1990sasanunrivalledpeakconfederationwithanincreasingnumberofaffili-ates. By the mid- 1990s it could claim to represent 125 million workers in 206 national trade union centres in 141 countries. In 1996 the ICFTU declared that it
‘aims to be at the centre of a worldwide social movement’.23
Wasthislikely?GerardGreenfieldpointedtotheproblemofthe‘politicsof
compromise’ advanced at this time by the ICFTU leadership and national union leaders that sought to displace alternative forms of action, including attempts to build class- struggle unionism or social- movement unionism.24 Social- movement unionism,atitshighpointaroundthistime,hadstronginternationalreflections.
Much transnational labour movement activity, as Moody stressed in 1997, was
‘rank-and-file internationalism’ – international exchanges, networks and cross-
border solidarity campaigns taking place outside official union hierarchies.25 There were tensions between institutional labour transnationalism and rank- and-file ‘new labour internationalism’ in both the developed and the developing
world.26 Peter Waterman and Jane Wills documented the ‘new labour interna-tionalism’ of the 1990s that was more than the old- style trade union internation-alism reflected in the ICFTU. Their edited collection provides examples from
around the world of rank-and-file transnational union initiatives organizing
global resistance campaigns.27
Clearly taking cues from the anti- capitalist movement in its heyday at this time, the ‘new labour internationalism’ was about new ways of organizing solid-arity, eschewing the bureaucratic, hierarchical and centralized methods embod-ied in the ICFTU, in favour of momentary, fluid, horizontal, decentralized
structures with open decision making. It emphasized mobilization and campaign-ing and the need to build coalitions and networks with other social movements.
And for ‘new labour internationalism’, the subject of labour transnationalism was certainly the marginalized worker of the global South as much as the estab-lished unionized worker of the global North.28 The ICFTU and the other
And for ‘new labour internationalism’, the subject of labour transnationalism was certainly the marginalized worker of the global South as much as the estab-lished unionized worker of the global North.28 The ICFTU and the other