As early as the 1980s, most developing countries in the Global South âincluding Turkey and Argentina âbegan to abandon protectionist economic measures in favor of economic liberalization. While Turgut Ozal in Turkey championed free-markets in the aftermath of the 1980 coup, Carlos Menem heralded from Argentina promoting a similar agenda, 13 years after the military intervention of 1976. Weary workers in both countries faced rising pressures to acquire a new set of skills and adapt to changing workplace organizations to keep their jobs. In the automobile industry, managers demanded rapid and seamless worker adaptation to flexible and lean production systems inspired by Toyotism . However, as rising productivity did not translate into rising wages and workers increasingly lost their autonomy on the shopfloor , conflicts in the workplace began to increase. Around the world, tensions induced by industrial upgrading were most visible in the form of extended protests, strikes and walkouts (such as in Argentina , Brazil, India, South Africa), while elsewhere (such as in Turkey , Chile) similar disputes lost their heat quickly, and workers went back to the production line, albeit grudgingly.
In developing capitalist economies, a switch to Toyotism marks a radical break with the older production systems (i.e. Fordism ) because it introduces new management technologies. Shopfloor practices of Toyotism combine lean manufacturing with employee participation (via proposal schemes) to lower production costs and optimize just-in-time production.1 This demands a multitasking worker who voluntarily engages in brainstorming, data collection, cause and effect analysis and proposal making (Hutchins 1985, 44). Historically, the birth of Toyotism was initiated by managers who faced increasing pressures to control growing worker unrest in Japan in the aftermath of World War II (WWII) (Silver 2003, 42). To avoid frequent interruptions on the shopfloor, the managers combined these new technologies with handsome benefits (such as lifetime employment opportunities) to a core group of workers (Silver 2003, 42). The success of this management system soon reached international fame, and rapidly spread around the globe like a wildfire.
Targeting the expanding consumer base in middle income countries, most automobile companies with production sites in developing areas followed similar business plans to reduce costs, enhance quality and maximize efficiency. To meet market demands, personnel managers avoided high labor turnover rates and focused on eliminating interruptions on the production line.2 Across most of these companies, securing the consent of the workforce was designated as âthe best practiceâ to prevent labor contention. Despite these measures, labor commitment to new industrial practices exhibited notable discrepancies ranging from outright rejection to enthusiastic approval of new techniques even across different factories of the same corporation: not all workers felt equally motivated to abandon old habits in favor of new ones.
In Turkey and Argentina , auto-workers employed by a global multinational corporation (MNC ) (FIAT ) also resisted proposed changes at the outset. However, while labor opposition was quickly eliminated and FIAT employees rapidly endorsed Toyotism in Turkey , their counterparts in Argentina stayed in opposition for longer. This book is motivated by this puzzling behavior. Tracing a broader set of policies adopted by politicians in governing labor unrest, it offers a nuanced account by putting the analytic lens on politics of industrial upgrading in a comparative perspective. Specifically, the following chapters show that vocational education and training programs are highly relevant in understanding how labor unrest is governed in developing areas. This is because the content of these training programs shapes ordinary workersâ attitudes toward new technologies and influences whether they will turn into unrepentant luddites or flexible bees. While much ink has been spilled on the ideal recipe for creating competitive national industries in advanced industrialized countries (Piore and Sabel 1984; Schmitz and Musyck 1994; Porter 1998, 2000) and the importance of skills, not all training programs have a positive impact on workersâ future income earnings. More importantly, by overlooking how some vocational modules deprive employees of their hard-skills in the long run, these works rarely establish any connection between training programs and labor unrest, especially in the Global South .
Existing accounts on training workers in developing contexts often present a very bleak picture, citing historical barriers to developing an active industrial policy.3 These include colonial legacies and state building trajectories (Schneider 2015), rent-seeking and a divided business community (Schneider and Karcher 2010) and/or political institutions such as electoral and party systems (Schneider and Soskice 2009). However, these accounts do not tell us a very important part of the story: the mechanism through which labor preferences evolve from staunch opposition to enthusiastic approval of new production technologies. Cases presented in the following chapters address this blind spot by critically unpacking the institutional background of vocational education and training reformâa key mechanism behind labor preference formationâand problematizing diverse trajectories of manufacturing worker consent. As we shall see, in developing settings, synchronizing blue- collar preferences with innovations in production techniques is a process where political dynamics play a key role in shaping labor responses.
Where Marx Meets Institutions: An Interdisciplinary Theoretical Framework
To develop these points, the following chapters take an interdisciplinary approach and combine insights from the writings of Karl Marx with those from an institutionalist, political economy perspective. There are at least two reasons why this is necessary for a clearer analysis. First, much of the existing works in the political economy tradition following the footsteps of âmarginal revolutionâ explain capital accumulation not in terms of surplus value extraction , but rather, in terms of utility functionâdefined as the extra price individuals are willing to pay to increase the pleasure (often gained from consumption) (Rapley 2017). This turn away from David Ricardoâs labor theory of valueâand also Marxâs elaboration of the conceptâhas fundamentally transformed the development economistsâ focus, pushing many to exclusively problematize the micro-level, individual behavior to explain divergent outcomes ranging from firm performance to industrial relations and labor union strategies. This narrow angle in most economic models further makes very ambitious universal claims, masking important variations across time and space (Rodrik 2015).
Nevertheless, many of these models are oversimplifiedâand empirically unverifiedâimaginations that disregard how employers and employees interact, especially in developing settings. Turning a blind eye to mechanisms of surplus value creation and extraction does not simply make these dynamics irrelevant or go away. While labor theory of value is not without its critics on the grounds that it over-estimates the contribution of manufacturing at the expense of service and finance to value creation, this comment does not adequately capture the experience of the Global South . As we shall see, across much of the developing world, capital accumulation depends on the repression of wages through a mixture of absolute and relative surplus labor extraction tactics (Selwyn 2014, 267). This is different than advanced capitalist settings where technological innovations and/or other mechanismsâsuch as highly sophisticated financial instrumentsâmay accelerate the accumulation of capital in faster ways (until the next crisis). Yet, in many countries of the Global South , such dynamics are conspicuously absent: financial markets are often underdeveloped and game-changing technological innovations are either limited or non-existent. Rather, these settings stand as attractive zones of investment largely due to cheaper labor costs.
At the same time, however insightful as he might have been, Marxâs theoretical framework also has...