Perhaps no recent political issue better illustrates the global nature of modern capitalism than the massive flow of immigrants both documented and undocumented across borders. The phenomenon is neither unique to the United States nor have our responses been unprecedented. If capitalism is becoming increasingly global, it behooves advocates of social justice to learn from the experiences of other nations, just as corporate leaders are forging common interests and developing policies and institutions to reflect those interests.
Global capitalism is often portrayed as the realization of the 19th-century ideal of free trade, where goods and services are traded across borders through the elimination of tariffs, taxes on imports. Tariff reductions allow each nation to specialize in what it does best, facilitates economies of scale, and produces a win-win situation for everyone.
Todays global capitalism, however, moves far beyond this model. Not only do goods and services cross borders, the plants and technologies that produce those goods are equally footloose. There are good reasons to doubt claims made on behalf of the current free trade. These deals contain many restrictions. Signatories must observe and enforce within their own borders the patent and copyright monopolies enjoyed by the developed nations and industries while they open many of their state media, healthcare and transit systems to competition with private foreign firms. The guarantees of the limited liability of the investor and protection of investor assets against government expropriation are enshrined in these cross border agreements. That such deals present win-win situations either for nations or for social classes within particular nations remains open to question.
The globalization of capitalism in Europe has taken somewhat different steps from the US, but the distance between the two has closed, to the detriment of middle- and working-class citizens on both sides of the Atlantic. The original terms of admission to the European Union (EU) did require tariff reductions and commitments to various forms of investor and intellectual property rights, but minimum standards regarding the rights of labor to organize as well as EU-wide social protection standards were included in the original deals.
Generous transfer payments for infrastructure development helped such less developed economies as Ireland and Portugal integrate into the union while maintaining minimal social standards.
Corporate interests and free-market fundamentalists in Europe now argue that giving labor any rights makes labor markets inflexible and limits job growth. The evidence on this is scanty and especially ironic in light of the dramatic slowdown of our flexible and deregulated labor markets and financial systems. Economist Dean Baker points out that now that the late 90s job boom in this country is long past, European unemployment is no longer much higher than in the United States. Denmark has been especially successful. It does allow bosses more freedom to hire and fire workers than does France, but it provides both generous unemployment compensation and retraining programs for laid-off workers. Nonetheless, in many European nations unemployment remains a significant problem and continues to inspire business resistance to any labor protections.
Among some working-class elements in Europe, another fundamentalism has emerged. As capital has become increasingly mobile and as the EU has expanded to embrace Eastern Europe, low-wage workers have migrated to more advanced economies. They in turn have been blamed for economic stagnation in Europe and a right-wing anti-EU and anti-immigrant politics has emerged.
Both corporate fundamentalism and anti-immigrant fundamentalism are equally wrong. Immigrants in Europe, just like Mexicans flowing across our borders, are increasingly driven by the same forces of corporate globalization and are entering an economic world governed by the principles of corporate conservatism. The EU has become increasingly undemocratic and ever more an instrument of European-based transnational corporations. It now imposes significant limitations on the job creation steps its member states can take. A late 90s Stability and Growth Pact limits the amount of fiscal deficit a nation can incur to fight recession or undemployment. (Imagine if such a pact had been imposed on the US government. No stimulus package would be allowed.) Just as basically, the European Central Bank (ECB) operates with even more independence from democratic oversight than the US Federal Reserve. The ECB regards the fight against the remote possibility of a 1920s-style hyperinflation as more pressing than economic growth and job creation.
In some European states, sluggish job growth and the relatively free flow of labor and factories has led to pressure to scale back many forms of worker protection. French President Sarkozys campaigns against transit and other public sector workers are just one part of a metastasizing anti-labor campaign in Europe.
Yet if each of Europes formerly discrete labor markets becomes more flexible, none will achieve any significant advantage. Wages and labor standards will ratchet down. It will always be open to corporate conservatives to argue that one more dose of deregulation will do the trick, but it is worth pointing out that European states from 1945-1975 had considerably more regulated labor markets and enjoyed rapid job growth.
Europe cannot, however, go back to that era through various forms of protectionism, or harsh restrictions on population flows, or social democracy at the level of one nation. Corporate leaders have formed strong cross-national ties, their products are truly world products whose origins often have multiple sources. Populations are already so ethnically mixed that efforts to segregate would entail even more upheaval than the current crisis. The task is rather to rebuild the European social democracies by forging working-class interests and multicultural allegiances within Europe and eventually beyond Europe itself to include all of Europes trading partners.
Voters in France and the Netherlands rejected a European Constitution that would have enshrined corporate trade practices in fundamental law. Part of the impetus behind both rejections was an older chauvinism. Nonetheless, some European trade unions are exploring stronger cross-border ties and alliances. Unions and various social movements are also striving to build broad alliances that would enact international regulations and create new institutions that will strengthen the rights of working class citizens. These include more political controls on the ECB, to include an emphasis on job creation, renewed social spending by the EU itself, to encourage greater equalization of infrastructural resources among member states and new regulations to harmonize labor standards upwards. Advocates of social justice for both workers and undocumented immigrants here in the US should devote more attention to this European experience. Global examples come in many different forms.
John Buell lives in Southwest Harbor, Maine, and writes regularly on labor and environmental issues. Email firstname.lastname@example.org.
From The Progressive Populist, March 1, 2008
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