Mani Tese: “Towards a New World Economic Order”. Florence, November 22-23, 1997

Introduction
Mani Tese (Outstretched Hands) is an Italian development co-operation NGO founded in 1964. It has supported 1,700 programs in Africa, Asia and Latin America, in co-operation with local associations and popular movements, including co-operatives, trade unions, women’s organizations, etc. It is based in Italy on 50 local groups with about 600 voluntary workers and 40,000 supporters. It runs two re-cycling co-operatives (in Florence and Milan) and raises most of its funding through collecting refuse (in some cases under contract with municipalities) and recycling it. Its secretariat is in Milan (Via Luigi Cavenaghi 4, I-20149 Milano, tel. (+392) 48 00 86 17, fax: (+392) 48 12 296, e-mail: manitese@planet.it, President: Ugo Biggeri, Secretary-General: Sabina Siniscalchi). It also runs meetings, conferences, workshops and publishes a monthly 16-page magazine.

Every two years Mani Tese organizes an international symposium on North/South issues; this year it was held in Florence from November 22 to 24. Gallin was asked to be one of three keynote speakers at the opening session (the other two were Susan George, of the Transnational Institute, and Paolo Ceratto, of the UNDP). Riccardo Petrella, of the Lisbon Group, chaired the sessions. The meeting was attended by approximately 1,400 people, most of them young (between 20 and 30).

The following is the text of Gallin’s address:

Colleagues, Friends,
I am glad to be able to participate with you in this discussion about the world order we live in and the world order we want. Our problem is how to get from here to there. That is by no means clear, so we have to discuss means rather than ends, but since all ends require their own means, it helps if we have clear objectives.

For my part, I have no doubt that our goals cannot be other than the historical goals of the labour movement: to bring about a democratic, free and egalitarian world society where the overriding social goals are to secure the well-being of all.

What stands in its way? Who are the strongest, and how to they exercise their strength? Who are the weakest, and how can they overcome their weakness? When we state these questions, we are discussing, of course, power relations in society.

From our point of view, globalization has affected these power relations in three major and related ways: through the rise of the transnational corporations (TNCs), through the changing role of the state and through the emergence of the global labour market

The transnational corporations are the spearhead and at the same time the chief beneficiaries of the technological developments of the last two decades – the revolution in electronics, communication and transport – and they are the predominant actors in the process of global integration.

You have already heard Susan George describe the full extent of their power. According to UNCTAD (UN Commission on Trade and Development) “international production has become a central structural characteristic of the world economy.”

Since the collapse of the Soviet bloc some six or seven years ago, caused principally by the inability of the bureaucratic collectivist system to adapt to the new technologies and to their social and political consequences, transnational corporate power has become truly global through the economic and political colonization of the former Soviet bloc and of the successor states of the USSR.

The “new capitalist nations” of the former Soviet bloc and much of the so-called developing world, including India, and including the FFCCs (Future Former Communist Countries), such as China, which had remained largely outside of the capitalist economy, have added hundreds of millions of people to the global labour market controlled by transnational capital.

In summary, we have a situation where the TNCs have immensely increased their power (as well as their ideological influence) within two decades, and where mobility of capital is practically uncontrolled.
One political consequence, with major social implications, has been the changing functions of the state: its decline in power and autonomy wherever it represents the public interest and, at the same time, its growing role as a servant of transnational corporate power.

The national state has declined at several levels: in the first place, as a significant economic actor and, by way of consequence, as an employer, as a regulator of society and as a machinery to redistribute the social product through taxation.

The number of privatizations at global level increased five-fold between 1985 and 1990 and is still growing very fast as formerly protected economies, such as India, and bureaucratic collectivist economies evolving into a form of Market Stalinism, such as China, Vietnam and Cuba, and of course the former Soviet bloc countries, are opening up to transnational corporate investment. Also in the industrialized countries of the OECD group privatizations are sweeping up the most profitable assets that have so far remained in public ownership.

Privatizations not only increase the scope and power of TNCs, but they also deprive the state of economic leverage and therefore weaken its ability to influence economic policy and, in its role as employer, labour policy.

Recent international trade agreements, for example within the framework of the World Trade Organization (WTO), or the Multilateral Agreement on Investment (MAI), currently under discussion within the OECD, penalize governments that try to exert a stronger control over TNCs.
These agreements compel governments to change or remove national laws, policies and customs that stand in the way of operations of TNCs in a global market economy, such as conditions under which firms may be bought, sold or closed by foreign investors. What these agreements do is to narrow the scope of democratic control over social and economic policies, transferring authority from democratically accountable governments – in the best of cases – to TNCs which are accountable only to their shareholders.

I want to stress and reinforce the observations by Susan George a moment ago on the need to resist this development. I am myself deeply alarmed about the potentialities of the MAI in particular to render the power of the TNCs virtually limitless.

The inability of the state to control international flows of capital (or, when capital goes on strike against the state, capital flight) has reduced its ability to tax capital and has thus reduced, sometimes drastically, its fiscal income which provides the basis for public services and social programs, thereby further undermining the social consensus which depends on the ability of the state to protect the weak through the redistribution of the social product.

Even more dangerously, the inability of the state to control capital within national borders through legislation or other political means carries with it not only the weakening of the state itself, but a commensurate loss of influence of all institutions operating within the confines of national borders: national legislatures, political parties, national trade union structures: in other words, all instruments of potential or real democratic control.

This is why political parties, regardless of their historical origins, their social base, their stated intentions or electoral promises, find it increasingly difficult to present clear-cut policy alternatives and, much more, to implement them once they are in government. This is why all governments end up doing more or less the same thing. The result is that citizens feel helpless and cynical with regard to institutions that can no longer deliver. What we are facing here is a crisis of democracy created by the growing irrelevancy of democratic institutions operating within the confines of the national state.

I am not telling you all this to say that we should give up the political struggle within the nation state, any more than I would tell you that we should give up the struggle at regional or municipal level on the grounds that such institutions have limited power. The point I am trying to make is, rather, that we can no longer rely on the state for support, even when our traditional political allies are in government.
Worse yet: it is not as though the state had altogether withdrawn from an economic and social role, on the contrary. State intervention is everywhere, also in the context of conservative governments, except that in this context it systematically favours business, and the strong over the weak. As examples, we only need to remember agricultural subsidies, bail-outs for bankrupt banks, insurance guarantees for overseas investments, infrastructure provided to foreign investors at taxpayer’s expense, military and other public procurement.

“Banana wars” and airline and aerospace wars, for example, are wars waged by TNCs through government proxies. The same forces that demand the privatization of public assets, and the dismantling of social and public services, clamour for state support when their interests are threatened.

No chief of state goes abroad these days without being accompanied by a brace of corporate CEOs and, as we saw on the occasion of the visit of China’s president Jiang to the United States, US policy towards China is determined, not by the State Department or by the President, but by the China business lobby, just as French policy in the Middle East and Africa is not made by Chirac or Jospin but by ELF-Aquitaine, and British policy in Indonesia is not made by Blair but by Vickers.

Nowhere is state intervention as apparent and as heavy-handed as in the global labour market. The main social consequence of globalization has been the emergence of the global labour market which means that, because of the fluidity of communications and the mobility of capital, workers of all countries, regardless of their degree of industrial development or social system, are in direct competition, with wage spreads ranging from one to fifty, or more.

This competitive underbidding at global scale, together with the competitive underbidding of the states against each other with tax concessions, free infrastructures and other presents for foreign investors, has set in motion a relentless downward spiral of deteriorating wages, conditions and social welfare provisions and of rising unemployment through closures, production transfers, outsourcing, casualization, etc. There is no bottom to this spiral other than the near-slave labour conditions that prevail at the bottom of the scale: a defenseless and rightless labour force working at wages of 10 to 20 dollars per month.

There are no long-term winners in this process. Production transfers create less jobs than they destroy and, even so, the apparent beneficiaries of transfers of production are the losers of tomorrow as production gets transferred further downward. Take the Hungarian sugar industry for example. It has been bought up by two West European TNCs, Südzucker and Eridania-Beghin-Say. Now they are closing down to transfer production to the Ukraine, where costs are even lower.

Any regulation perceived by TNCs as an obstacle or a cost factor can become the trigger of this process: environmental regulations, social regulations and, in the last analysis, any human right that involves direct or indirect costs for transnational investment.

But what is the global labour market? It is not at all a “market” in the normal sense of the word, regulated by economic laws of supply and demand. It is regulated by political laws, and by massive state intervention in the form of police and military repression.

Let us look at the economic role of repression. How did low-wage countries get that way? No people ever chose to be poor. If people are poor, it is because they have been forced into poverty and kept there by violence. The poorer (low-wage) countries which are the significant actors in the world economy are either severely repressed societies (China, Vietnam, Indonesia), or societies that have been victims of severe repression in their recent past (Russia, Central and Eastern Europe, Brazil, Central America) and this past repression still determines labour market conditions today. Or else they are “democraturas”, where democratic forms are observed but are largely irrelevant to the way social relations are conducted, such as India or Mexico.

To this we need to add the free trade zones, of which there now are 700 and their number is growing. These are zones which have been set aside by governments where foreign investors practically enjoy exterritorial privileges and where very often normal social legislation does not apply, where access is controlled by the police and unions are kept out by violence. These are not free trade zones, these are free-fire zones for transnational capital.

We also could say with justification: take the government off our backs! What does competitiveness and competition mean when the terms of competition are ultimately, and in large measure, determined by police repression? Does it mean that workers everywhere will keep underbidding each other until we all hit the bottom of the scale? That countries will keep underbidding each other on the speed by which they dismantle their social welfare and security provisions? That is precisely what it will mean if all other things stay equal, that is, unless we do something about it.

It is not necessary to extrapolate a lot or to engage in political fiction to see where this leads us. Neo-liberal globalization if unchecked will lead us to a nightmare society, where a few islands of high-tech prosperity will survive under military and police protection. They will be relatively prosperous garrison states, perhaps with high rates of subsidized unemployment, fortified gated estates on a world scale, not democracies, and they will be surrounded by a world of squalid poverty with millions of rebellious people kept down by repression. In the last century Marx wrote that humanity had a choice between socialism and barbarism. We did not do so well on socialism, and indeed we have barbarism staring us in the face.

That is why the fight for human rights and for democratic rights is an absolutely essential element in advancing towards a new and better world order. Democracy is not an academic issue or a matter of cultural preference. For the labour movement the fight for human and democratic rights, without any double standards whatsoever, is not only a moral obligation but a fundamental class issue, because only when these rights are guaranteed can workers organize to defend themselves and to advance their social and political agenda.

This struggle for human and democratic rights is also the meeting point of the common labour interest in any part of the world, the common interest of those who seek to rise out of near-slavery and those who struggle not to sink into it.

No Asian worker will tell you that he or she will voluntarily accept working without rights, for miserable wages and often appalling conditions to defer to some alleged “Asian values”, that they will forego democracy because it is supposed to be a Western import, and that they will abstain from organizing democratic and independent trade unions in order not to strain their employers’ competitiveness. The Korean workers, in any case, and others as well, have put to rest this sort of nonsense spread by corrupt and authoritarian elites who are making a fortune out of selling their countries to transnational capital.
Human rights are indivisible and universal: they are universal because the human body is made the same way wherever humans live and because the experience of pain is universal.

Where does this leave us? A strategy of “defending the state” will not take us very far because we no longer have the means of changing power relations in society within the borders of the nation state. Is it, then, possible to imagine a forward strategy going beyond the nation state? Of course it is. What we have to remember is that the globalization we are experiencing is only a partial globalization: what is being globalized is capital, and the political network at its service.

One could go so far as to say that there is a virtual world government, made up of supranational institutions such as the International Monetary Fund, the World Bank, the World Trade Organization and others, and this virtual “world government” is of course not subject to any form of democratic control or accountability. Its policies and decisions are fashioned by the lobbies of transnational capital, the same lobbies which determine the policy of the principal governments which control these institutions in the first place.

What is not globalized, is the rule of law, democratic rights and human rights, trade union rights. We could say: yes, let us globalize, but then let us globalize everything!
Taking the political struggle of the labour movement, and of the social movement in a more general sense, to the global level where it belongs, it is of course possible to oppose a progressive model of globalization to the present conservative model. Briefly put, it would involve building a new international system of regulating TNC operations on a world-wide basis, the taxation of the international flow of capital (the Tobin tax), an enforceable international labour legislation and a number of other elements we could think of.

The reason why this does not take us very far is that we are not in a contest with neo-liberal conservatives on who has the better ideas about organizing society, whether at national level or on a world scale. We have always had the better ideas. Our problem is that we are in a contest of power where the value of ideas is ultimately judged by the ability to enforce them. We are in a war where the interests of the powerful are defended, whenever they are seriously threatened, with the utmost brutality and by any means required.

In our present situation, the priority cannot be to develop blueprints for better institutional arrangements. What we most need to do is to look for the points of leverage where we can change power relations in society.

We have the same problem with the codes of conduct developed in the 1970s and 1980s by well-meaning international institutions: for example, those of the UN, the OECD and the ILO. None is binding, none is enforceable and consequently none of them have made much difference in practice. The “Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy” adopted by the ILO twenty years ago is a good example. It runs for ten pages and as a compendium of guidelines on how transnational corporations should behave it is unexceptionable. It is not, however, binding and it does not even provide for a complaints procedure. In the event of disagreement over its application, all the parties can do is to submit a “request for interpretation” of its meaning.

The measure of a statement of principle must be taken through its practical effects and, so far as the international trade union movement is concerned, the experience has been severely disappointing. When it comes to specific cases, that is to say requests for interpretation of the Tripartite Declaration as it applies to the actions of specific companies, two are particularly instructive: that submitted by the IUF in 1992 regarding the operations of Pepsico in Burma and the request of the ICEM in 1993 seeking to establish whether the Malaysian subsidiary of Exxon was entitled to prevent one of its employees from attending an ILO meeting in Geneva and to withhold occupational safety and health information from him.

The ICEM request was declared irreceivable by a majority in the ILO committee in charge of administering the Declaration, composed of the employers’ group and some governments. The ICEM reaction was blunt: “This case, by common consent one of the strongest ever referred to the ILO…dragged on as a direct result of the clear and calculated blocking tactics of the employers’ side and a number of governments… it had no chance against the clear political agendas of the majority of governments and the employers.” The Declaration, ICEM observed, was being “cynically used by multinational enterprises aided by a number of governments as a means of delaying an issue until it quietly disappears” and the reason why it was adopted in the first place was that “governments and multinational enterprises recognized from the outset that it would be largely meaningless and that it would not bind them in any way.”

As for the IUF, it was trying to establish whether a company operating in a country where basic human and trade union rights were denied on an exceptionally severe and widespread scale had not put itself in a position where it could not possibly observe the principles of the Declaration. Its request for interpretation was also declared irreceivable by the same majority of professional hard-liners on the employers’ side and representatives of governments anxious to do nothing that could antagonize transnational corporations. The employers’ view was that “it was dangerous and ill-advised to attempt to link investment decisions to the human or trade union rights record of a country … had this been the intention of the Tripartite Declaration, which it is not, the employers would never have supported its adoption.”

In the end, of course, the great ideological battle waged by the employers’ group and its allies to defend the right of companies to do business with dictators and to thus participate in the oppression of peoples in dictatorship countries, was fought in vain: Pepsico withdrew from Burma anyway, together with other companies such as Heineken and Carlsberg, not out of respect for the fundamental principles of the ILO and much less for those of the Tripartite Declaration, but because the combined pressure from trade unions and human rights groups was threatening their public image and their markets.

I believe there is a great lesson for us there. If we succeeded in getting Pepsico, Heineken, Carlsberg, Liz Claiborne, Levi Strauss, Reebok, Macy’s, Eddie Bauer, Starbucks, Texaco and others out of Burma, it was because a number of us, organizations and individuals working in organizations, formed broad coalitions capable of mobilizing public opinion on this particular issue.

Another example: the IUF campaigns to secure trade union rights at the Coca-Cola bottling plant in Guatemala, in the early 1980s. This struggle, which ultimately had a considerable impact on the trade union situation in Central America and on the positioning of the international trade union movement with respect to the TNCs, was successful because it was carried by a coalition of trade unions, human rights groups and solidarity groups, co-ordinated by the IUF but extending far beyond its membership.
Our problem is a problem of organization. That is the point of leverage. For our opposition, power comes from the control of large – very large – amounts of money. For us, power comes from organization: we have no other source of power than our ability to organize large masses of people. So the issue for us is to become organized, both in surface and in depth

Organizing is what we know how to do – in principle. The reason why this tool is of so little avail at this time, is that we remain, for the most part, prisoners of the mental framework imposed on us by national borders, at a time when all centers of power and decision that matter have gone away to a different level.

Let us take the trade union movement as an example. For the first time in history, the material and technical conditions exist for effectively operating a labour international in the true sense of the word. When it took several weeks to travel from Europe to Japan or China, and the mail took just as long, when telecommunications were exorbitantly expensive and complicated, it was difficult to build more than a symbolic International and, in fact, the early Internationals of labour were practically European organizations, operating on a small, densely populated territory with easy and permanent communications.

Today, with modern air transport, with fax and e-mail, in other words, precisely the tools which made such a massive contribution to globalizing capital, we have the means to globalize the labour movement.
But mind has not followed matter. The international trade union movement remains to a large extent a loose network of national organizations, reacting with national reflexes. Under the impact of the crisis, many retreat in their national shell, which is exactly the opposite of what they should be doing. They should of course be strengthening their international networks. What they are doing is a natural reaction but a wrong reaction, in the same way as putting on the brakes when driving on sheet ice is a natural reaction but a wrong reaction.

Even such a simple idea as to form trade unions across national borders appears utopian although it is in fact already lagging behind reality. As we said in school, the objective conditions exist, the subjective conditions are lacking.

What I have just said does not necessarily apply only to unions.

At the same time, in the present context, our task has become even more complicated. It is not only the trade union movement that has to be put in shape, to turn it into effective combat organizations at international level, but civil society as a whole needs to be unified in action and organized to form a credible alternative power structure. I am referring to the organizations of civil society in all its complexity: human rights organizations, solidarity organizations, women’s movements, movements for the defense of the environment, for the rights of minorities, of the informal sector and also the political parties that are close to us, as long as they remain close and do not forget the original purpose of the exercise.

We should all be conscious that we represent converging interests and that we have a common cause and a common struggle to conduct, with high stakes: what world society is going to look like in 10 or 20 years. Together, we need to reconstitute the social movement at world level, fighting with the means that globalization, and its underlying technology, has given us. We should consider ourselves the liberation movement of humanity, and our principal weapons are the fax and the computer.

I believe that the trade union movement has a very important role to play when it comes to building an alternative power structure at world level, and I am aware that I am saying this moments after having described its weaknesses, which are many.

The fact remains that the trade union movement today is the only universal, democratically organized force at global level, with a remarkable capacity for resistance: it is the only movement, besides the churches, which has survived two world wars and two totalitarian regimes with a capacity for social destruction unprecedented in modern times.

This is not surprising: it is the only institution which is able to empower workers through organization, workers who are conducting thousands of struggles, large and small, every day, all over the world, because they have no alternative and no other place to go. They only have the choice to resist or to submit, and most of the time they do not submit because the trade union struggle is before anything else a struggle for human dignity, in other words, for a need more basic than life itself since people will die for it.

The trade union movement is not a “pressure group” like any other. It has no interests separate from civil society as a whole. This is not surprising either since the very great majority of the world’s population are dependent workers and, when it takes charge of their concerns and interests, it takes charge of the concerns and interests of civil society at large.

And most importantly: the trade union movement is made up of structures and networks which, despite their weaknesses, cover the entire planet and are the potential or actual networks and structures of resistance. This is of fundamental importance because, if we want to create a credible alternative power, we must be aware that our credibility depends on our ability to create serious inconveniences to corporations and governments that will not listen and this, in turn, requires structure, it requires permanent organizations capable of acting consistently over the long term.

These are the structures that need to be supported and strengthened, particularly by making trade union organization within TNCs a priority. I already mentioned the importance of human and democratic rights as an organizing issue. Especially in a difficult political context, when we are facing repression, the support of a broad-based alliance on this issue is crucial.

Something like this is already functioning when it comes to the newer codes of conduct, those which are negotiated between unions, or coalitions of unions and NGOs, and companies or groups of companies, such as is currently the case in the garment industry, with the Clean Clothes Campaign.

There is a world of difference between codes of conduct unilaterally adopted by companies which, in some cases, are mere public relations operations, or adopted by intergovernmental institutions which in general are not worth the paper they are written on, and those which are the result of a bargaining process and which are, in effect, agreements. They include references to most of the core ILO conventions, which guarantee the freedom of association and of collective bargaining, as do the agreements which the IUF, for example, has concluded with Danone, ACCOR and with a number of other companies.

So far the struggle for global trade union rights has left aside one of the most important issues, however, and that is the issue of secondary or solidarity action. In most of the industrialized countries, not to speak of the others, the right of workers to take action in defense of their fellow-workers wherever they may be, has been severely curtailed for no reasons that have any basis in natural justice. The right to take solidarity action without having to pay exorbitant fines, to go to jail or to be exposed to other sanctions, should be recognized as a basic democratic right

It will become increasingly important to carefully chose strategic priorities. Since resources are limited, we cannot allow ourselves lose the focus of our action and to lose sight of the main objective, which is to change power relations at global level. This means that projects and activities which strengthen international organizations, which link local struggles and which constitute and strengthen permanent networks of mutual support must be given priority.

This does not necessarily mean helping those who most need it. This is hard to say, but we neither have the mandate nor the capacity to indiscriminately alleviate human tragedy. Our duty, as a priority, is to fight tragedy by fighting the structures which generate it and keep it alive, until such a time as we can change them, not to treat the symptoms.

Let us also remember that an alternative power, to be effective and sustainable, needs to be built on solidarity relationships between those who provide assistance and those who, at a time in their existence, need to receive it. Contrary to charity, which an authoritarian and top-down relationship, solidarity is reciprocal and involves mutual rights and responsibilities. In relations of solidarity there is no place for guilt – a very bad guide to politics. – nor for the manipulation of guilt. Solidarity builds, whereas charity weakens and can be extraordinarily destructive.

In that order of ideas, let us also remember not to crush people under the weight of our good will. If organizations are to be helped, let this help remain proportional to their capacity of absorbing it without damage. We all know through experience that one can kill organizations by offering disproportionate help, in the same way as one can kill a starving person by offering too rich a meal.

Colleagues and Friends:

I hope I have contributed constructively to the discussion.

I thank you.