The global footloose proletariat and the financial crisis: reflections on the contradictions of export-oriented industrialisation in India

(by Alessandra Mezzadri)

Over three decades of neoliberal policies had a severe effect on labour, in developed and developing regions alike. In developed regions, neoliberalism managed to crash the resistance of organised labour, significantly curtailing its institutionalised power and splintering the ‘industrial citizenship’ that characterised the Keynesian era. As increasing shares of manufacturing production migrated towards developing regions, where the new development paradigm increasingly turned towards export-oriented strategies, armies of sweated labour were recruited to be deployed in the context of transnationalised production regimes.

The logics of export-oriented industrialisation have been ferocious with labour in the so-called Global South. Simply reconceptualised as ‘comparative advantage’, here labour has been exposed to harsh patterns of commodification. As illustrated in many empirical studies focusing on global production networks, the exploitation of various informal institutions and deeply-rooted structural differences, such as gender, caste, ethnicity, mobility or geographical provenience has fuelled a ‘race to the bottom’ functional to the reproduction of labour as a flexible, disposable and ‘cheap’ commodity.

Unions and the Crisis: Ways Ahead?

(by Gregory Albo)

The political and economic setting facing the union movement today is, perhaps, the most difficult since the Great Depression. Unions had already confronted two decades of unrelenting assault from neoliberal policies of labour market flexibility, austerity and political conservatism. Then, the global financial crisis ripped across the entire world market.

The tally of financial losses is quite staggering. The US government alone has already committed $9 trillion to its financial sector in various forms to maintain solvency. The sheer magnitude of the debt means that depressed economic conditions are likely to be long-lasting, and the distributional struggles very intense over how the bad debt – ‘toxic assets’ is the euphemism of the day to disguise the massive market failure and incompetency of the financial sector – is destroyed, socialized or inflated away.
The financial chaos is causing untold damage to workers. The ILO has suggested that global job losses could reach as high as 51 million for 2009.

Profits, banks, and the state: How to get investment going again

(by Engelbert Stockhammer)

The world is still experiencing the worst economic crisis since the 1930s. While the economic forecasts have brightened up recently, the overall picture is still gloomy. The collapse has been stopped, but the recovery is likely to be muted. This is for three reasons. First, US households, which have been the most dynamic source of demand in the past decade, are deeply in debt – and their houses, the biggest part of their wealth, are worth a lot less. Thus they are not likely to resume spending in the near future. Second, the banks are still in a lot of trouble. The big bank crash after Lehman Brothers has been avoided, but their balance sheets are still loaded with dubious assets and most make their money from trading, i.e. speculating, rather than from extending credit to businesses. It will be hard to get credit for a while. Thirdly, government expenditures that have prevented the meltdown are being rolled back. After the panic of late 2008, normalcy has returned to economic policy making. And in a neoliberal world it is considered normal that states have to balance their books, rather than help the economy or the poor. In short, while the worst is over, the bad is still to come. In particular, unemployment is still rising and will continue to do so.

The Crisis of Social Democratic Trade Unionism in Western Europe

Martin Upchurch

The end of the second world war in Western Europe ensured political settlements generally inclusive of trade unions. Britain saw a consolidation of the relationship between the Labour Party and trade unions, while in Germany the SPD entrenched its position as the social democratic ‘party of labour’. The political events that shaped the settlements varied. In France and Italy the Communist Party had gained credibility in the resistance to German occupation and many workers looked to the Communist Party rather than the reformist Socialist Party. The relationship between a social democratic party and unions was strongest in Sweden, with the SAP and LO forming a stronghold on the political trajectory of that country for many years. Exceptions were Spain and Portugal, where fascist dictatorships lingered on until the 1970s.

Don’t waste the crisis: The case for sustained public investment and wage-led recovery policies

Frank Hoffer

Returning to the pre-crisis world after timely, targeted and temporary government interventions as advocated by the OECD and others is risky and a waste of public funds. Structural changes in income distribution, taxation and capital markets are needed to address the fundamental causes of the crisis and put social justice and decent work at the centre of a crisis response.

Root Causes of the Global Economic Crisis

In recent decades, wages and transfer incomes have not grown in line with productivity in most countries. In fact, institutional and legal capital and labour market changes, combined with aggressive, short-term profit-maximisation strategies enabled the owners of private enterprises and financial capital to appropriate most of society’s productivity gains. Moreover, threats of relocation or disinvestment resulted in labour market deregulation and casualisation of employment. Such global capital mobility led to the rise of tax havens, transfer pricing and tax competition, reducing the ability of governments to tax capital, thus driving down tax rates and regulation levels. Meanwhile, the high profit rate in the financial industry put pressure on the real economy to produce similar results for shareholders. Thus, the profits of the financial bubble economy became the benchmark for the real economy.