Grounding Globalization

Labour in the Age of Insecurity

Edward Webster, Rob Lambert, Andries Beziudenhout

• Publisher: Wiley-Blackwell
• Year: 2011
• Print ISBN: 9781405129145, 9781405129152
• eBook ISBN: 9781444399844
• Edition: 1
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

*Winner of the 2009 Distinguished Scholarly Monograph Prize, awarded by the American Sociological Association Labor and Labor Movements section*

Claims have been made on the emergence of a new labour internationalism in response to the growing insecurity created by globalization. However, when persons face conditions of insecurity they often turn inwards. The book contains a warning and a sign of hope. Some workers become fatalistic, even xenophobic. Others are attempting to globalize their own struggles.

• Examines the claim that a new labour internationalism is emerging by grounding the book in evidence, rather than assertion
• Analyzes three distinct places – Orange, Australia; Changwon, South Korea; and Ezakheni, South Africa – and how they dealt with manufacturing plants undergoing restructuring
• Explores worker responses to rising levels of insecurity and examines preconditions for the emergence of counter-movements to such insecurities Highlights the significance of 'place' and 'scale', and demonstrates how the restructuring of multi-national corporations, and worker responses to this, connect the two concepts

1

The Polanyi Problem and the Problem with Polanyi

The Polanyi Problem

In his account of the way in which globalization is ‘flattening the world’, Thomas Friedman introduces, halfway through his book, a note of caution. He mentions a conversation with his two daughters in which he bluntly advises them: ‘Girls, when I was growing up, my parents used to say to me, “Tom, finish your dinner – people in India and China are starving.” My advice to you is: Girls, finish your homework – people in China and India are starving for your jobs’ (Friedman 2005: 237).

But of course the world – or more specifically, the global economy – is not flat; it is highly uneven. This anecdote captures in a nutshell the widespread insecurity that unevenness creates. Indeed, unevenness and growing insecurity is the central theme of our book. On the one hand the new economy has created unprecedented opportunities for wealth creation, while on the other hand its uneven nature threatens established livelihoods. This implies that people in various parts of the world experience the dislocation brought about by globalization in different ways. Working people in the industrialized North are concerned about their jobs moving to other countries. Major regions of the world economy that were previously insulated from capitalism are now drawn in as major sites of industrial investment. New working classes are created. Other regions of the globe are essentially excluded from these new waves of economic transformation and remain marginal. This is the nature of capitalist industrialization.

Our research across the three nations shows how insecurity is manufactured by market liberalization. Mpumi Khuzwayo is a contract worker at the Defy refrigerator factory in Ezakheni, whose day-to-day routine is riddled with the insecurity of not knowing if her job will be available tomorrow. She saves all the money she can manage for times when she does not work, which is most of the year. She is scared of walking home at the end of her night shift because of high levels of violent crime. She feels that the ruling party, the African National Congress (ANC), has become aloof and removed from its base, but that the populist leader Jacob Zuma can bring the movement back to its roots.

Peter Tyree has worked in the Electrolux plant in Orange for most of the past 25 years of his working life. He was a strong supporter of the Australian Labour Party (ALP) and is an active union member. He has deep roots in Orange and is actively involved in the local football team. Electrolux has retrenched most of his mates and he does not know whether what is left of the factory will remain. His feelings of insecurity led him to support Pauline Hanson’s One Nation Party, which did not only advocate stricter immigration laws, but also government protection of local industry.

Bae Hyowon is president of his union, an enterprise union, in Changwon. This company supplies parts to the nearby LG factory. Workers are worried that their company will lose its contract with LG if they openly affiliate to one of the national union federations. LG has increasingly moved its contracts to Chinese suppliers, and Bae Hyowon is experiencing deep feelings of insecurity. He works overtime regularly, including Saturdays and some Sundays. This leaves little free time for his union activities and his involvement in an organization supporting the reunification of North and South Korea. Furthermore, he has little time for his preferred leisure activity, mountain climbing.

Mpumi, Peter and Hyowon experience insecurity as an individual matter, what C. Wright Mills (1959) calls a ‘personal trouble’. But when large numbers of workers in different factories, in different countries, experience the same feelings of insecurity, it is no longer a personal trouble only, it is a public issue. To understand insecurity, it is not enough to identify the sense of helplessness, fear, depression, anger, and sadly, often self-destructive behaviour such as suicide, substance abuse and domestic violence. It is necessary, as Mills argued, to identify the broad social forces, institutions and organizations that manufacture this insecurity.

Indeed, the insecurity created by rapid, unregulated social change lies at the centre of the social science project. It had its beginnings in attempts by classical social thinkers, such as Karl Marx, Emile Durkheim and Max Weber, to interpret the ‘First Great Transformation’ that led to the market economy. Its emergence was connected to the widespread concern with the economic, social, cultural and moral effects of moving from a non-industrial to an industrializing society. This concern reflected the major fault-line of politics at the time between the proponents of economic liberalism and their advocacy of the self-regulating market on one side, and on the other, those who favoured intervention to ‘protect society’. The idea of protecting society was not only a radical idea; it was also at the centre of the conservative ideas of Edmund Burke, for example, and his notion of an organic society.

This classical outlook of social science shared the view that work was the fundamental social experience. Work and the social relations structured around work, including the grounding of human life-forms in nature, were seen as the central dynamic of modern industrial society. In recent times, with the turn to the study of culture and consumption and the rise of post-modern obsessions with subjectivity, this concern has tended to fall by the wayside. Also, the labour movement is often relegated to the past and is seen as tired and old. Nevertheless, as the International Labour Organization (ILO)’s Commission on the Social Dimension of Globalization argues: ‘Work is central to people’s lives. No matter where they live or what they do; women and men see jobs as the “litmus test” for the success or failure of globalization. Work is the source of dignity, stability, peace, and credibility of governments and the economic system’ (ILO 2004: 6).

The rapid growth of economic liberalism over the past 25 years has led to the current period of world history being defined as a Second Great Transformation (Munck 2002). The theoretical work of Karl Polanyi is influential in the construction of a sociology of this transformation (Peck 1996; Burawoy et al. 2000: 693; Burawoy 2003; Silver 2003; Munck 2004; Harvey 2006: 113–115). The starting point for an understanding of Polanyi’s work is his concept of ‘embeddedness’ – the idea that the economy is not autonomous, but subordinated to social relations. This is a direct challenge to economic liberalism, which rests on the assumption that the economy automatically adjusts supply and demand through the price mechanism. The idea of a fully self-regulating market economy, Polanyi argued, is a utopian project. In the opening page of Part One of The Great Transformation he writes: ‘Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society’ (Polanyi 2001 [1944]: 3–4).

This is the Polanyi problem: creating a fully self-regulated market economy requires that human beings, nature and money be turned into pure commodities. But, he argues, land, labour and money are fictitious commodities, because they are not originally produced to be sold on a market. Labour cannot be reduced simply to a commodity, since it is a human activity. Life itself is not sustained by market forces, but is reproduced socially: in households, in communities, in society. Land is not simply a commodity, because it is part of nature. So, too, is money not simply a commodity, because it symbolically represents the value of goods and services. For this reason, Polanyi concludes, modern economic theory is based on a fiction, an unrealizable utopia.

In his classic study of the industrial revolution Polanyi (2001) showed how society took measures to protect itself against the disruptive impact of unregulated commoditization. As we mentioned in the preface, he conceptualized this as the ‘double movement’ whereby everwider extensions of free market principles generated counter-movements to protect society. Against an economic system that dislocates the very fabric of society, the social counter-movement, he argued, is based on the ‘principle of social protection aiming at the conservation of man and nature as well as productive organization, relying on the varying support of those most immediately affected by the deleterious action of the market – primarily but not exclusively, the working and the landed classes – and using protective legislation, restrictive associations, and other instruments of intervention as its methods’ (Polanyi 2001: 138–139).

Polanyi’s theory is profoundly shaped by moral concern over the psychological, social and ecological destructiveness of unregulated markets. This assessment resonates today because such a relentless drive towards a market orientation lies at the very heart of the contemporary globalization project. As a consequence, market-driven politics dominates nations across the globe (Leys 2001). The discourse of this politics centres on the language of the market: individualism, competitiveness, flexibility, downsizing, outsourcing and casualization.

With reference to the First Great Transformation, Polanyi countered this discourse with a language growing out of a new ethics that challenges the market definition of persons and society. Such a definition reduces all human encounters to relationships between commodities in a conception where, as Margaret Thatcher argued, society does not exist. Polanyi’s moral intervention is grounded in the notion of the innate value of persons, hence the centrality of constructing a just and free society, where participatory democracy, at work and in society, recognizes the rights of persons and their communities. In this vision, persons, communities and society are the priority. Thus markets have to be socially regulated. Within such a structuring of social relations, society asserts its control over markets to counter the corrosive effect of insecurity.

Polanyi’s work also contains a warning. Insecurity may not necessarily result in progressive counter-movements. It could, and it has, led to its opposite. Indeed, this was the central preoccupation of Polanyi’s classic work, namely that the unregulated liberalization of markets between 1918 and 1939 would lead to the rise of fascism. It was this response to liberalization that led to Polanyi’s concern with democracy.

Polanyi recognized different responses to the commoditization of labour, but did not explain how these responses come about. The challenge is to identify the responses that are emerging today as Polanyi under-theorized how counter-movements are constructed. In order to understand the Second Great Transformation, and actual and potential counter-movements, we have to address these theoretical shortcomings. We identify five areas of under-theorization in Polanyi’s work.

The Problem with Polanyi

The society problem

Polanyi makes constant reference to society, but at no stage is the nature of this central concept clarified. In this, Polanyi is not alone, for as Fred Bloch points out in a comment to Michael Burawoy: ‘[Your paper] points to the absurdity that the sociological tradition has failed for a hundred and fifty years to give us an adequate or useful conceptualization of “society” – ostensibly the main object of its analysis’ (Burawoy 2003: 253). For Burawoy, society occupies a specific institutional space between the state and the economy. He calls this reappropriation of the analysis of society Sociological Marxism. Society is not a timeless notion but a specific historical product. Nor is it ‘some autonomous realm suspended in a fluid of spontaneous value consensus, rather it is traversed by capillary powers, often bifurcated or segmented into racial or ethnic sectors, and fragmented into gender dominations’ (Burawoy 2003: 199). It is also, Burawoy suggests, Janus-faced: ‘on the one hand acting to stabilize capitalism but on the other hand providing a terrain for transcending capitalism’ (Burawoy 2003: 199).

We would agree with Burawoy when he says that society occupies a certain institutional space between the state and the economy. But how such institutions relate to the state and the economy is contested. Schools may be privatized; hospitals can be run and funded by the state, churches or business; sport can be commercialized. The boundaries between society, the state and markets may be analytically distinct, but in reality these boundaries are not fixed and tend to shift over time.

In order for a society to exist, social relations need to have a certain density of ongoing institutional interaction – a social structure. These structures, Burawoy suggests, tend to include and exclude categories of individuals on the basis of social characteristics and distribute power unequally along similar lines. These characteristics are generally an integration of gender, race, generation and, of course, class inequalities. Social inclusion and exclusion can be constituted on the basis of a certain territory (i.e. spatially), or these boundaries can be drawn within a certain territory (i.e. socially). We stress the spatial constitution of society as a key characteristic. Society also constitutes a public domain, where issues are discussed and debated. As in the case of other social institutions, this domain and the rules of engagement within it, are contested.

At the centre of Polanyi’s notion of society is that of a contradictory tension with the market: on the one hand markets destroy, undermine, fracture and fragment society, while on the other hand they also create, what he calls active society, where individuals come together in groups and movements, generating cultures of solidarity and resistance. An active society is best understood when contrasted with a passive society. We identify two types of passive society: the first is one where the market dominates through the promotion of individualism and consumerism. This reflects a typical neoliberal order, where corporations capture a state in order to search for new areas of profitable investment through the privatization of a range of institutions such as schools and hospitals, and the provision of water and electricity. Corporations have, therefore, both ideological and financial reasons for wanting to control the media and shape the public discourse. In Australia, for example, the media tycoon Rupert Murdoch controls, through News Corporation, 70 per cent of the national newspaper market and, with the new media law amendments, he can extend his control to television and radio stations (Manne 2006: 10).

A second type of passive society is one where the state dominates society. This takes place under authoritarian political regimes, be they of fascist or state socialist nature. The state attempts to control social institutions such as schools, trade unions and other civil society organizations. It is not in the interest of the state to allow open debate in the public domain and hence it tightly controls the media. In fascist states, the ideology operates on the basis of social characteristics and minorities are cast as scapegoats. In such cases society tends to be weak. As Burawoy convincingly shows, faced with the introduction of markets through shock treatment, post-communist Russian society evidenced signs of ‘involution’, a retreat to the household economy and a barter economy. The result was that Russia could not forge a social response to protect itself against the destructive elements of markets (Burawoy 2001).

A further example of societies where the state dominates is that of colonialism, an area largely unexamined by Polanyi in The Great Transformation, whose focus is, with one exception, mainly on the industrialized North. The exception is his deep interest in pre-colonial societies where he identifies non-market relations of exchange as the basis for building alternative social relations based on reciprocity and redistribution. Under colonialism the state is created and captured by the colonizer who proceeds then to impose on the colonized a sharply unequal and racially segmented state. This bifurcated state, in the words of Mamdani, has a contradictory effect: it both destroys indigenous society while at the same time preserving selectively traditional structures that can be manipulated to reproduce cheap labour power (Mamdani 1996). This generates a powerful counter-movement, not against the market as such (indeed, in some cases it may demand an extension of economic opportunities through removing restrictions to trade, produce and to selling labour on an open market), but against colonial rule.¹ This movement, a national liberation movement, aspires to the construction of a new post-colonial society.

For us then, society is not held together by shared values; on the contrary, it reflects an ongoing ideological contest between these different visions of society. What of his alternative? For Polanyi, socialism is the alternative to the self-regulating market. Socialism is essentially, he writes, ‘the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society’ (Polanyi 2001: 242). Although for Polanyi there was no simple teleological transition from capitalism into socialism, it remained unclear how he envisaged such an alternative would emerge.

The spontaneity problem

‘Counter-movements cannot be seen as spontaneous, practically automatic responses; they are constructed’, argues Munck (2004: 257). There is no consideration in Polanyi’s work of how working classes are made and unmade (Silver 2003). In particular, there is no understanding of how the formation of a working class is an active process (Thompson 1963). As Burawoy (2003: 221) observes: ‘He [Polanyi] was writing before Edward Thompson’s transformative The Making of the English Working Class, which underlines the importance of working class traditions for class formation, in particular those of the “free-born Englishman.” For a class to mobilize, it needs “resources” – cultural, political and economic. It needs capacity. In Polanyi’s account, where might such resources come from?’ He concludes, ‘the English working class could not be regarded as a blank slate, defenceless against market forces. It was already embedded in community, which gave it the weapons to defend itself and advance active society in its own name’ (Burawoy 2003: 222).

To explain the emergence of counter-movements one needs a theory of social movements. Social movement theory provides us with an understanding of the structural conditions, political opportunities and repertoires that movements draw on, and how resources are mobilized when social movements engage in contentious politics (Tarrow 1994; Jenkins & Klandermans 1995; Tilly 2004). Transnational social movements are not merely a reflex against globalization. They are shaped by changes in the opportunity structures of international politics. ‘If globalization consists of increased flows of trade, finance, and people across borders’, Tarrow argues, ‘internationalism provides an opportunity structure within which transnational activism can emerge’ (Tarrow 2005: 8). He identifies ‘the political process that activists trigger to connect their local claims to those of others across borders and to international institutions, regimes, and processes’ (2005: 11). He identifies a new stratum of activists – what he calls ‘rooted cosmopolitans’ – of which transnational activists are a sub-group. Transnational activists are defined as ‘people and groups who are rooted in specific national contexts, but who engage in contentious political activities that involve them in transnational networks of contacts and conflicts’ (Tarrow 2005: 29).

Agency is central to building movements. Leadership vision, commitment and imagination are cardinal to such projects. A gap in much of the literature is an explanation of how and why a person might become a movement activist. Such an explanation requires drawing on what could be called the social psychology of activism in order to explore how individuals are transformed from passivity to activism (Mead 1934; Fromm 1947; Cooley 1956). Drawing on qualitative interviews with activists, the core of our argument is that while global restructuring undermines agency through demoralization and depression, creating a sense of worthlessness and a corresponding lack of capacity, participation in movements transforms these self-destructive feelings, generating empowerment, creativity and a determination to resist. Harvey (2000: 237) captures the key to this psychological transformation when he poses the question, ‘Where, then, is the courage of our minds to come from?’ Such courage is spawned by the spirit of movement, since genuinely democratic movements assert the innate value and creativity of persons, liberating the victims of restructuring from the dungeon of their commodity status.

The labour movement problem

A third problem is whether the labour movement can be part of the construction of a counter-movement for, over the last two decades of the twentieth century, there was an almost complete consensus in the social science literature that ‘labour movements were in a general and severe crisis’ and that this situation has contributed to ‘a crisis in the once vibrant field of labour studies’ (Silver 2003: 1). Indeed, much of the emerging scholarship on social movements pays little attention to the new labour internationalism, assuming that the labour movement is a spent force – an old social movement (Castells 1997; Keck & Sikkink 1998; Tarrow 2005).

How then can the labour movement be posited as a key facet of the counter-movement when it is in a crisis produced by the very forces that need to be challenged? Part of the answer is a reinvigoration of labour studies where the discipline should not just reflect the decline (i.e. analyse the past); it should explore the contradictions that may create the opportunity for a counter-movement to emerge (i.e. explore future possibilities). Indeed, the crisis is beginning to produce a labour studies renaissance (Waterman & Wills 2001; Silver 2003; Burawoy 2003; Herod 2001a, 2001b, 2003; Herod & Wright 2002; Munck 2002, 2004).

The central question is whether globalization represents ‘an unambiguous and unprecedented structural weakening of labour and labour movements on a world scale, bringing about a straightforward “race to the bottom” in wages and conditions’, or is it ‘creating objective conditions favourable for the emergence of a strong labour internationalism?’ (Silver 2003: 1). Silver develops a many-sided answer. Firstly, she says, capital mobility on a global scale has undermined union bargaining power, state sovereignty, the welfare state and democracy. States that insist on maintaining expensive social compacts with their citizens risk being abandoned by investors scouring the world for the highest possible returns. The ‘race to the bottom’ takes the form of pressure to repeal social welfare provisions and other fetters on profit maximization within their borders. Secondly, transformations in the labour process have undermined the traditional bases of workers’ bargaining power (Silver 2003: 3–5). Hyman makes a similar point when he writes that global competitive pressures have forced corporations to implement ‘flexible production systems’, transforming a once stable working class, replacing it by ‘networks of temporary and cursory relationships with sub-contractors and temporary help agencies’. The result is a structurally disaggregated and disorganized working class, prone more to a politics of resentment than to ‘traditional working class unions and leftist politics’ (Hyman 1992: 62).

Silver then presents a counter-argument. Firstly, capital mobility has created new, strategically located working classes in the global South, which in turn produced powerful new labour movements in expanding mass production industries. These movements were successful in improving wages and were the ‘subjects’ behind the spread of democracy in the late twentieth century. Secondly, just-in-time production systems create global production chains and actually increase the vulnerability of capital to the disrupted flow of production and thus enhance workers’ bargaining power, based on direct action at the point of production. She concludes, ‘the more globalized the networks of production, the wider the potential geographic ramifications of disruptions, including by workers . . . It was only post facto – with the success of mass production unionization – that Fordism came to be seen as union strengthening rather than inherently labour weakening. Is there a chance that we are on the eve of another such post-facto shift in perspective?’ (Silver...

Table of contents

• Cover
• Series page
• Title page
• Copyright
• Preface: A Journey of Discovery
• List of Abbreviations
• 1: The Polanyi Problem and the Problem with Polanyi
• Part I: Markets Against Society
• Part II: Society Against Markets
• Part III: Society Governing the Market?
• Notes
• References
• Index