Trade Unions, Class Struggle and Development

Ben Selwyn [1]

How do class relations contribute to processes of capitalist development? Can workers’ struggles generate more progressive forms of human development, in the form of improved working and non-working conditions, rising pay and active social movements that bring workers’ concerns to the fore? Within much thinking about development the principal debate over the past 30 years or so has been between advocates of state-led and market-led development. For these advocates either state allocation and generation of resources or market-efficiency generates a growing pot of social wealth which trickles down, at some indeterminate point in the future, to the labouring population. Advocates of these approaches often support labour-repressive measures (ranging from opposition to minimum wages and worker welfare to support for dictatorial regimes that outlaw trade unions, raise the rate of exploitation and repress labour) as a means to kickstart the ‘development’ process of capital accumulation. From these perspectives capital and the state come first and receive political priority, and labour comes a distinct second, if at all.

Renaissance of Pay Clauses in German Public Procurement and the Future of the ILO Convention 94 in Europe

Thorsten Schulten

Public procurement is of high economic importance. In many countries it covers up to one fifth of the annual national GDP. Public authorities have always used their market power as a contracting entity to promote certain social and labour standards. The ILO had even adopted a separate Convention on Labour Clauses in Public Contracts (Convention 94 from 1949). In order to promote fair competition and to avoid downward pressure on wage and working conditions in the tendering process, the ILO Convention 94 wants to ensure that workers hired in contracting companies do not receive less favourable conditions than those laid down in the appropriate collective agreements.

More recently, however, the European Court of Justice (ECJ) made a rather contested assessment which sets some serious limitations on the use of pay clauses in public procurement. According to the so-called Rueffert judgment (C-346/06) from April 2008, which dealt with the public procurement law of the German federal state of Lower-Saxony, public authorities are no longer allowed to oblige companies under public contract to pay their workers at least the rates set by collective agreements. The ECJ ruled that such a provision would be in breach of the freedom to provide cross-border services as laid down in the EU treaty. Following a rather narrow interpretation of the European Posted Workers Directive (96/71/EC) the court pointed out that public authorities can only impose labour provisions on foreign companies if they are based either on statutory regulation or on extended collective agreements. In the case of German public procurement laws, however, reference was made to collective agreements which were not generally applicable. Despite the ECJ ruling, in practice pay and other social clauses have nonetheless seen a broad renaissance in Germany in public procurement.

The Microfinance Delusion

Milford Bateman

The optimistic beginning

Thirty years ago, it was widely thought that the perfect solution to unemployment and poverty in developing countries had been found in the shape of microfinance, the provision of tiny microloans used by the poor to establish an income-generating activity. Microfinance is most closely associated with the US trained Bangladeshi economist and 2006 Nobel Peace Prize recipient, Dr Muhammad Yunus. By celebrating self-help and individual entrepreneurship, and by implicitly discrediting all forms of collective effort, such as trade unions, social movements, cooperatives, public spending, a pro-poor ‘developmental state’ and – most of all – collective moves to ensure a more equitable redistribution of wealth and power, neoliberal policy-makers in the international development community fell in love with microfinance. The World Bank, USAID and other agencies began to aggressively push forward the concept and, in order to reduce the need for subsidies, also insisted microfinance be turned into a for-profit business. Microfinance soon became the international development community’s highest profile, most generously funded and supposedly most effective economic and social development policy.