July 11, 2003

Social Torment: Globalization in Atlantic Canada

Excerpts from Thom Workman’s book on neoliberal policy and its effect on workers

by Thom Workman

The Dominion - http://www.dominionpaper.ca

At its core, Thom Workman's thesis is simple: labour is a major cost for businesses of all kinds, and thus an impediment to profits. As such, "transnational capital" seeks constantly to lower the cost of labour; when they do this by breaking down "trade barriers" to gain access to cheap labour or invoke international competitiveness to roll back wages, the process is called globalization. In Social Torment, Thom Workman starts by outlining the history of this shift from the "class compromise" of the twentieth century to the newly invigorated attacks on unions and the working class. And then he does something interesting; rather than spinning together a series of anecdotes to support his case, Workman looks at the numbers. The account that emerges is more powerful for its engagement with exceptions, as well as startling in its conclusions. What follows are a series of excerpts from the more broadly focused sections of the book. If you want Workman's close analysis of the maritimes, Social Torment is available from Fernwood Books (www.fernwoodbooks.ca), or through your local independent bookseller. Thom Workman is a professor of Political Science at the University of New Brunswick, Fredericton. --Dru Oja Jay

[An] account of globalization in terms of its growth in hardship has been undertold and, for the most part, silenced in the records of officialdom. Nevertheless, this is the account understood by those who bear the brunt of the globalization push. A more truthful portrait of global life does not have to circulate publicly to be known and widely appreciated by its victims. A richer and more rounded story about globalization, one that recognizes that its successes and achievements have been at the expense of vulnerable people around the world, will resound equally well with a young Malaysian woman toiling away in a semiconductor facility and a single mother part-timing in a call centre in New Brunswick. Ironically, it is precisely this side of globalization neglected by pundits, journalists, intellectuals and politicians that Atlantic Canadians are more likely to experience. Although the region is increasingly plugged into the globalizing world, the glamorous dimension of globalization is not as obvious in the region as it is elsewhere. Globalization does not sparkle in Nova Scotia or Prince Edward Island the way it does in Toronto, New York and Tokyo. ...

Unless we are to believe naively that leisure and luxury crystallize out of thin air, we must recognize and acknowledge that the comforts of globalization are reaped from the labour and toil of others. The only thing trickling down to the world's masses is more work and greater hardship. The impressive accomplishments of the last three decades are entwined with the deepening oppression of working people the world over. Despite the protestations of countless economists and politicians to the contrary, the fruits of the new world economy are not to be shared by everyone. Its beguiling comfort zones, zones that touch the owners of capital and extend to a wealthy managerial strata, high end professionals and a legion of intellectuals ruminating away in designer personas, do not emerge out of the toil, sweat, and, indeed, blood of those who enjoy them. One-sided sketches of globalization that celebrate its prosperity unforgivably trivialize the poverty and hardship of the vast majority of the world's people. Worse still, they cannot even begin to recognize the necessary link between the leisured life of the privileged few and the swelling ranks of the exhausted, the poor and the hungry.

* * *

The skilled labourer in the early twentieth century understandably resisted refinements to the labour process and played a significant role in the generalized resistance of workers, who often resorted to strikes, sit-ins and marches to improve their lot. In the end, worker restlessness throughout the early decades of the twentieth century contributed to rising real wages, and to a considerable extent this rise helped to pacify all workers. The corporate establishment grudgingly accepted the higher wages since it meant that people could consume more products. Indeed, many leaders of industry openly acknowledged this, and Henry Ford's famous $5 workday--a strategy intentionally designed to allow Ford's workers to purchase his automobiles--captured this crude formula well. Companies that lacked Ford's social perspicacity fought tooth and nail with their workers over wage hikes, but unrelenting pressure from below continued to nudge the social wage upward.

* * *

Getting more out of its work force for less money is a defining feature of transnational capital in the era of globalization. But it has not stopped there. Countless firms have offloaded their labour conflicts through the combined use of short-term contracting (supply contracts renegotiated every few weeks or months); subcontracting (enlisting the services of outside companies to manufacture goods); outsourcing (enlisting firms to assemble products and to manufacture component parts); and contracting out (especially supportive services and special tasks). The practice of subcontracting stands out among corporate strategies that intentionally download labour problems to smaller firms. Nike Corporation, for example, does not own one production facility. Nike and so many other leading corporations dole out the manufacture of their products to secondary facilities around the world. These firms must then recruit and manage local workers drawn from the masses of poor and desperate citizens. The threat of losing future contracts with the parent corporation is enough to persuade the local entrepreneurs to manage their work force aggressively--resorting to ferocious anti-unionism, firings, threats and harrassment--to maintain poor wages and working conditions and to avoid production interruptions. When workers do make meaningful advances against their local employers by modestly improving their wages or bettering their working conditions, the subcontracts are not as lucrative for the local elites. And, in a typical scenario, as standards for working people rose in South Korea and Taiwan, leading transnationals moved their contracts from those countries to Indonesia and Thailand during the 1980s and to Vietnam in the latter part of the 1990s (which, by the way, is the subtext to the thawing for U.S.-Vietnamese relations).

* * *

We must momentarily take notice of the fact that a free reign in its struggles against labour is not quite the same as a free market. Except for the boasts of ideologues, who are charged with the task of glorifying the free market, the corporate echelons have few illusions about the real effects of free-market evangelizing. The support for open trading regimes, for example, has less to do with free markets in any competitive sense than it does with gaining access to cheap labour and then establishing unrestricted intra-firm trading across borders so that the advantages of the cheap labour are not cancelled out by high tariffs.

* * *

The social equation of neoliberal policy reforms is clear: social austerity equals low wages. The choking of social assistance programs and other reforms drive people into low-wage jobs with poor working conditions. Neoliberal social policies, to employ gentler language, help moderate the social wage. Even in the face of irregular hours, daycare challenges, sexual harassment from bosses, customer mistreatment and chronic workplace stress, workers are now more likely to calculate that it is better to persevere through a rotten job rather than face the crushing indignities of severely eroded social assistance rates. In this manner the culture of austerity forces otherwise reluctant workers into the labour market thus helps keep wages down. ...

Neoliberal policy reforms also [target] working people directly. These include a sustained decline in the real minimum wage, the weakening of enforcement mechanisms for labour laws, the stagnation in labour codes and regulations, the erosion of universal legal protections by permitting shop-floor agreements to override existing labour standards, and a greater tendency to resort to back-to-work legislation and to broaden the definition of "essential service." These practices have been accompanied by a protracted public condemnation of unionized workers throughout the North for their supposed "inflexibility" in the face of increased global competition. Many organized workers, especially public sector workers, have faced a kind of "worker bashing" akin to the bashing of poor people that figures so prominently in the neoliberal agenda.

* * *

Globalization demonstrates poignantly that the nationally based labour compacts of the twentieth century were handicapped when capital decided to internationalize aggressively. But capital's advantage is a short-term one. It can roll back regional class compacts by virtue of its capacity to globalize, but labour will eventually and inevitably "catch up" with capital and begin to ratchet up labour standards once again. A renewed worker internationalism will inevitably follow this phase of globalization. These immanent historical tendencies cannot be sidestepped by anyone, least of all the families of capital. For all of the ideological mystifications associated with globalization--mystifications that have done their part to distort labour's response to the globalization push over the last three decades--it is worth bearing in mind that unbelievably vast quantities of brutish repression and coercion have become necessary throughout the south to stop labour from driving up workplace standards and wages. And when this finally happens, when the roll-backs of globalization have been reversed and then some, new crises will emerge that will inevitably shake the system to its very foundation. There will be no place for capital left to run.

* * *

Capital is not antidemocratic; it is antiworker. If throwing a democratic bone or two to "citizens" would do it any good, transnational capital would embrace any element of democracy in an instant. Discussions that centre around the notion of "democracy" are likely to miss the crucial and most important point about the evolving globalist agenda, namely, that the purportedly democratic institutions of the state are being attacked and usurped to undermine the relative power of working people. Almost invariably, these overworked dramatizations about the erosion of democracy give themselves over to genteel concerns about the importance of salvaging great nations such as Canada. Analysts must do more than chase the shadows of a world that emits such cruelty and suffering.

Globalization is alive and well in Atlantic Canada, but the story has little to do with the erosion of democracy. Voluntary structural adjustment and its antiworker consequences are amply evident in Newfoundland and Labrador, Nova Scotia, Prince Edward Island and New Brunswick. Provincial governments have enthusiastically embraced every aspect of the neoliberal agenda, and, as in the case of New Brunswick, have sometimes prided themselves for the leading role played within the Canadian federation. Throughout the 1990s, New Brunswick's Frank McKenna boasted that the province was "Canada's Laboratory," willing to forge ahead experimentally with neoliberal policies while the rest of the country took notes. The neoliberal policy framework, including the rising concerns about public debt, the celebration of the free market, extensive restructuring to social assistance, stagnating minimum wages, the downsizing of government, the privatization of public firms, the weakening of labour laws and municipal restructuring, is front and centre in the contemporary policy landscape of the region.

* * *

The Antiglobalization agenda coheres only by virtue of a vague sense of social injustice or political unfairness. It loses sight of the driving motive behind globalization, and its political ambiguity sits awkwardly against the logical and consistent guiding principles of transnational capital and the precision of its assault on workers. The antiglobalization agenda lacks a working-class centre; no singular, worker-friendly, organizing principle--say, "the dignity of working people"--guides its outlook. Cynically put, the antiglobalization agenda is a flexible agenda perfectly in keeping with the era of flexible production. It is, in colloquial speech, "all over the place," even as international capital targets working people relentlessly. Although it might be a very unpopular idea to express, it is nonetheless true that a progressive agenda is not quite the same as an agenda set for working people. The point is not to find the right slogan but to address the absence of an appropriate political focus for the antiglobalization movement. Since globalization is about extracting more surplus value out of working people around the world, the organizing principle of the antiglobalization movement should reflect this.

* * *

Worker-friendly ideas appear at the margins of public discourse in Canada. Indeed, they are often condemned as antiquated, especially when worker-friendly policies are linked to state spending. The worker's story is not the guiding narrative of political and social commentary anywhere in Canada, and concern for the innumerable victims of globalization often appears as an afterthought. The prevailing concern in public life is for the economy--that is, profits--and concern about the well-being of people often seems rhetorical and insincere.

The agenda of transnational capital is extensively institutionalized in Canada. It is embedded in the state, in the leading political parties at federal and provincial levels and in international institutions such as the World Trade Organization. The radical free-market agenda structures the policy conduct of these bodies. Moreover, Liberal, Conservative, Alliance and New Democratic Party platforms across Canada are subordinated to neoliberal principles with modest variations in degree. In contrast, the antiglobalization agenda largely is external to the formal political structures in Canada. The interests and claims of working people have very little meaningful bureaucratic presence in the leading institutions of the Canadian state or in the country's leading political parties.