The Political Employee (Dan Gallin, 8 October 1997)

In connection with its congress in Copenhagen from 4-8 October, the Danish Commercial Workers’ Union (HK) held a workshop on “The Political Company”. This concept was developed by the Monday Morning Strategic Forum, a Danish think tank on economic and political issues which also publishes a magazine. It means, roughly, a company that is aware of its broader political and social responsibilities and acts upon these perceived responsibilities. It is the contention of the Forum that this applies to an increasing number of companies and one of its representatives, Soeren Schuldt Joergensen, introduced this concept to the workshop.

Dan Gallin was asked to speak on: “The Political Employee – a Future Actor in the International Strategies of the Trade Union Movement” and Karen Retvig, president of HK/Service, one of the five HK trade groups, spoke about the challenges facing the trade union movement as both companies and employees were getting more “political”.

These presentations were followed by a panel discussion involving Helle Degn, Social-Democratic MP and Chair of the Foreign Policy Committee of the Danish Parliament, Uffe Oestergaard from the Centre for Cultural Research at Aarhus University and the speakers. The session was chaired by Steen Karlsen, Director of HK’s Department of Political and Economic Strategies (which includes international relations) and Ole Carlsen, of the HK General Council and was attended by over one hundred HK congress delegates. The following is Dan Gallin’s contribution.

Brothers and Sisters, Comrades and Friends,
We are entering this discussion on the assumption that the “political company” is a “new business concept of the market economy” insofar as it integrates social responsibility as a strategic element of company policy, even while its objective remains the same: accumulating profit for its shareholders.

It is true that this is a new concept within the framework of neo-liberal ideology. It was, after all, Milton Friedman, the contemporary leader of this school of thought, who promoted the notion that companies had not only the right but an obligation to be socially irresponsible:
“Only people can have responsibilities”,
he wrote.

“Business as a whole cannot be said to have responsibilities. The doctrine of social responsibilities is a fundamentally subversive doctrine. In a free society there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”

That is to say, so long as it does not actually engage in criminal activities.

Consider for a moment the notion of the “non-political company”. We very quickly see that the “non-political company” is an ideological construct that bears no resemblance to anything that ever existed in society. Not only does company behaviour by Friedman’s definition have obvious political consequences: but in fact, throughout capitalist history companies have played an enormous political role, more often than not in close association with the state.

We only need to think of the great European trading companies of the 18th and 19th centuries which conquered, and subsequently administered, huge parts of Asia and Africa as spearheads of colonialism, of the role of the steel and armaments companies led by Stinnes and Thyssen in the Weimar Republic, of the intervention of companies such as United Fruit or Standard Oil in the Latin America of the 1930s and 1940s down to the role of ITT and Kennecott Copper in the overthrow of the Allende government in Chile in 1973.

Companies who raised armies and conquered territories, who established civil administration over vast countries, who told governments what to do and what not to do, who overthrew governments when they perceived them as obstacles to their interests and replaced them by others, and who in some cases are still engaged in this kind of game, are of course political in every conceivable sense of the word.

These are, of course, extreme examples but in every country it is accepted as a matter of course, whether one approves of it or not, that there should be a business lobby seeking to influence government and political parties, directly or indirectly, in conformity with its perceived collective interest.

What, then, is the “political employee”? The political employee is a response to the political company. Employees became political because the kind of society being constructed by the political company was perceived to be incompatible with their interests as individuals and their collective interests as a class.

The political employee is, before all else, the organized employee. Organized for what? Obviously, organized to resist, that is, in an adversarial relationship with the political company at every level: the enterprise, the local community, the national state, the world. Workers organize for one purpose only: to resist, to struggle. In order to submit, they do not need to organize or to form organizations. The “non-political employee” is the unorganized employee.

The political power of business had to be opposed by an alternative ideology (socialism) and by alternative centers of power (trade unions at industrial level and the state at political level). Consequently, since the last century, trade unions supporting, in most cases, a socialist program have been the primary expression of the political employee.

What has changed with globalization? Two features stand out: the enormous increase in power of the transnational corporations as a result of the revolution in communications and transport technology, which they control and of which they are the chief beneficiaries; and simultaneously the decline of the state in its regulatory function as an expression of the public interest or common interest of society.

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; it also has declined as a regulator and as a machinery for redistributing wealth through taxation.

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

Privatizations not only increase the power and the scope of transnational corporations, 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.

The growing inability of the state to control international flows of capital (or, when capital goes on strike against the state, to control 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 its national borders through legislation or through other political measures carries with it not only a weakening of the state 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 democratic control where it exists at all. What we are facing here is a crisis of democracy created by the growing irrelevancy of democratic institutions operating within the framework of the national state.

But it is not as though the state had altogether withdrawn from an economic and social role, on the contrary. State intervention is everywhere, except that it now tends to favour business over labour, and the strong over the weak. As examples, we only need to remember legislation outlawing solidarity (secondary) action, agricultural subsidies, insurance cover for overseas investments, infrastructure provided for foreign investors at taxpayers’ expense, military and other public procurement, “banana wars” and airline and aerospace wars waged by transnational corporations through government proxies, etc.

What globalization has done, is to deprive the political employee – and we might simply say the ordinary citizen – of one of the potential power centers where the influence of the “political company” could be counterbalanced. The state did not just “leave a political vacuum”: its functions have been re-defined by transnational capital as those of a servant of the “political company”.

Also at the level of the emerging global politics have the states become the servants of the political transnational corporation. Recent international trade agreements, for example within the framework of the World Trade Organization (WTO), penalize governments that try to exert a greater control over TNCs and compel them to change or remove national laws, policies and customs that stand in the way of operations of transnational corporations in a global market economy, such as conditions under which firms may be bought, sold or closed by foreign investors. Consequently, they narrow the scope of democratic control over social and economic policies, transferring authority from democratically accountable governments to companies which are only accountable to their shareholders.

At global level, we do not have a “world state” to relate to. There is a virtual world government composed of institutions such as the International Monetary Fund, the World Bank or the WTO but this “world government” is entirely devoid of democratic controls. Its policies are guided by powerful international business lobbies, who also guide the policies of the major governments who control the international institutions.

The democratic accountability of international capital and the democratization of global governance is the central issue of the 21st century.

The assumption that the emerging “global political company” will naturally tend to have policies that are socially responsible and benevolent, that is, policies that effectively substitute the public interest functions of the state such as promoting sustainable development, social welfare, human rights, equality between men and women, etc. is entirely gratuitous and belied by the evidence.
One of the major social consequences of globalization is the emergence of a global labour market where, because of the mobility of capital and the fluidity of communications, workers of all countries, regardless of their degree of industrial development or social system, are in direct competition in all areas of the economy, with wage spreads ranging from one to fifty, a competition that has set in motion a downward spiral where the income and conditions of workers everywhere are under pressure.

This system is held in place by violence and we need to be clear about the economic role of repression. The global labour market is not a “market” at all: it is not governed by economic laws but by political laws. At the bottom end of the scale, near-slave labour conditions prevail and they are held in place by police state terror.

The poorer countries which are the significant actors in the global economy, which attract the bulk of transnational corporate investment, and which are ruled by elites which have formed close partnerships with transnational capital, are either severely repressed societies (China, Burma, Indonesia, Vietnam) or societies which have been victims of severe repression in their recent past (Russia, Eastern and Central Europe, Brazil, Central America) and where the sequels of this repression still determine the conditions of the labour market.

The cases where “political companies” have refused to take advantage of the extraordinarily favourable investment conditions offered to them by police states – the only kind of states presently capable of enforcing such conditions – are entirely exceptional, and they are all companies that are vulnerable to consumer pressure. To represent companies like Carlsberg and Heineken as socially responsible because they have withdrawn from Burma is an abuse of the concept. All those who were involved in getting them to take that step know their extreme reluctance to get out of Burma. Only the threat of significant financial loss, and not a sudden enlightenment about their moral duties, caused them to withdraw – in some cases, not without leaving proxies behind, such as Heineken’s associate Frazer & Neave.

In the case of China, again, the companies that have refused to invest on human rights grounds can be counted on the fingers of one hand, and they are, to my knowledge, all in the garment industry, an industry also vulnerable to consumer pressure. Even companies which have relatively decent practices in the countries where they originate, or in the industrial democracies where they operate, will uncritically adapt to police states in the name of competitive pressures.

So, what is the “political employee” to do in this context? One of the power centers, the nation-state, is lost, but another, the union, remains. In a global economy, the “political employee” has to be the “international political employee”. To what extent can the union become the expression of global employee politics?

What we are talking about here is changing the relationship of forces in society and the first point that needs to be made in this connection is that if any workers’ organization at all can even think in those terms it is unions and not, for example, works councils. There is an international trade union movement which, despite all its imperfections which are many, has a proven record, resiliency and organizing capability. There is no international works council movement and there never can be, except at the level of a single company and experience shows that wherever the transnational company is strong and the unions weak, its works council, even when led by self-described left-wingers, ends up eating out of the company’s hand.

We have some important experiences already. There are the agreements between the French food transnational Danone and the IUF: the master agreement of 1988 in four points: trade union recognition, equality between men and women, information at the workplace and pro-active vocational training, with the implementation agreements concluded on each of the four points in the following years. A fifth agreement, on previous consultation of the unions in the event of restructuring and closures, was signed in May this year. All these agreements are jointly monitored by the company and the unions at local, national and international level.

The IUF has also signed an international agreement on union recognition with the French hotel chain ACCOR and an agreement on equality with Nestlé. The IMF has established a world-wide works council with the Swedish ball-bearings company SKF and a similar structure exists in the Westminster Bank following an agreement with the British unions. Finally, a majority of the European Works Councils were established on the basis of agreements between ITSs or European union structures and companies, not as a result of unilateral decisions of the latter or their acceptance of some code of conduct.

Despite these gains, a global trade union movement in the true sense of the word is still in its beginnings, and the International Trade Secretariats are the best point of leverage we have, but very significant changes are required at different levels in a relatively short time and under great pressure. They can be summarized in three concepts which are linked: organization, democratization, and political reform.

Organization raises problems of structure: a more rationally organized and cost-efficient trade union movement at national level and a more powerful trade union movement, with greater authority and resources, at international level. The question needs to be raised whether ITSs should not become actual international unions, in the full sense of the word.

Speaking in Denmark, where precisely these questions have been fruitlessly discussed for years, and keeping in mind what I have experienced in four decades of international work, I am perfectly well aware of the tremendous obstacles of bureaucratic routine, lack of communication and territorial thinking that need to be overcome, but overcome they must be. I am not trying to scare you, but time is running out and anyone who thinks we can go on as before and trust fate shows that they have not received the bad news yet.

Democratization is what we need to do particularly if we build larger and more powerful organizations at international level. A significant delegation of authority and resources from the national to the international level requires the democratization of the movement to avoid creating dysfunctional mammoth organizations that will continue to lose ground to the conservative onslaught like their smaller predecessors are now doing. This means the active involvement of the membership in the formulation of international trade union policy and in international trade union action and in order to secure such an involvement a massive education and information job is needed. This raises the question of defining our goals, and this in turn means defining our politics, not in terms of formal and historical links to this or that party but by returning to our own sources.

Finally, we have to become more political. This means that we must forcefully reassert both the legitimacy and the necessity of the politics which are naturally ours, regardless of our relationship with our traditional political partners.

Because of the economic constraints imposed on national governments by globalization, because of their inability to control transnational corporations and finance capital, most parties of the Left who are – or hope to be – in government are backing away from a commitment to labour interests and labour demands. Yet, trade union action needs a political dimension, both at national and at international level, and this political action can only take as its point of departure the interests of our members. That is where we must make a stand because our members have no other place to go.

We are not an “interest group” among others but a movement which represents the general interest of society against the economic and political power structures of a capitalist system that is leading the world, yet again, into a new crisis. Our political objective is one without which nothing else we do makes sense. Nothing trade unions can do is secure or of any lasting value unless we succeed in changing society so that the well-being of ordinary people becomes its principal priority.

The world-wide coalition of social solidarity that needs to give this politics a practical expression and momentum still needs to be built. The trade union movement, which is unique in that it is the only universal and democratic force in the world today, has both the duty and the possibility of organizing civil society at global level around a political agenda. It can give consistency and permanency to a broad industrial and political alliance with single-issue and public interest groups whose objectives converge or coincide with our own: movements for democratic and human rights, women’s movements, consumers’ movements, movements for the protection of the environment, informal sector organizations and others.

That agenda of social responsibility cannot be left to the “political company” because its politics is likely to be very different depending on whether the agenda is controlled by the unions or by themselves. We are not interested in codes of conduct adopted by unilateral and top-down decisions by companies which can pick and chose which public interest they care to respect and who can modify or recall their codes the same way they adopted them. We are interested in agreements.

What we can attempt to do, keeping in mind that all companies are always political and have been for the last two hundred years, is to try to change their political agenda, and that can only be done by changing the relationship of forces in society by the means outlined above, in other words, by changing their cost/benefit calculations.

The politics of all companies is based on their perceived interest but, once we can argue from a position of strength, and with the force of organized civil society and public opinion behind us, it is possible to ask the question as to whether they perceive a difference between their short-term and long-term interests and whether they accept, as we do, that there is such a thing as a “common interest of humanity.”

At that point, it will become possible to identify socially-responsible companies. We all agree that we are not talking here about philanthropy or about patronage, nor about the kind of company which buys only into part of the progressive agenda, like being very good about the environment but very bad on workers’ rights, or promoting women but polluting the environment and investing in dictatorships.

We are talking about companies that accept a broad and consistent social and political agenda, ranging from global industrial relations based on the recognition of trade union rights throughout their operations to socially responsible behaviour in terms of sustainable development, equality and “good corporate citizenship” in the context of human and democratic rights.

With such companies it is worthwhile to talk about a new global social contract and a new world order based on justice and freedom for all. Their number, initially very small, will grow to the extent that we are able to regain industrial strength by building the labour movement we need, with a capacity of militant, sustained, in depth action at international level, in short, with a capacity of rewarding our friends and punishing our enemies.

Thank you for your attention.