The Austrian EU-Platform of development NGOs organized a conference on the enlargement of the EU to Central and Eastern Europe in Vienna from November 18 to 20, 1998, under the auspices of the Austrian EU Presidency. Gallin was invited to speak on the problems of “political society” in the context of globalization. His contribution is given below. It was also published, together with the seventeen other contributions, in a volume issued by the Austrian EU Platform and the Austrian Foundation for Research on Development Assistance (ÖFSE) (Berggasse 7, A-1090 Wien) and edited by Karin Holzer (Südwind Verlag, ÖFSE Edition Nr. 8, 153 p.)

A point of departure for this discussion could be to reflect on what we are trying to achieve as the European Union seeks to enlarge to the East.

But first, we need to know who “we” are. “We”, for our present purposes, is organized political society in Europe, and also in the world’s “South”, the former Third World. This is a very large, but nonetheless clearly defined group.

It is not an amorphous mass but it is structured: it includes political parties, trade unions and a great variety of organizations that promote public interest issues such as human rights, women’s rights, international solidarity, environmental protection, minority rights, and others. In other words, those organizations by which citizens, by becoming organized, seek to exercise their democratic rights, gain support for their cause in public opinion and influence public policy.

In the last days of the Soviet empire, the democratic opposition within it, borrowing from Marx and Gramsci, coined the term “civil society” for what I have just described. But, in this new sense it described a repressed society seeking to organize itself informally in the context of a totalitarian police state, where people cannot be citizens because they are prevented from exercising their democratic rights, as they still are today in Burma, or in China. But in Europe we are all citizens now: we are citizens of our parties, citizens of our trade unions, and citizens of our countries and States. And as citizens, we must take responsibility for the entities of which we are citizens.

In geographical terms, the definition becomes more problematic, for one thing because no one knows where the limits of geographical Europe are: Europe is a peninsula on the western tip of Asia, without natural borders. Its eastern limits, however, are certainly not the eastern borders of the ten accession states of Eastern and Central Europe. They are more likely the shores of the Sea of Okhotsk, where so many of the Russian revolutionary intelligentsia, and other Europeans, are buried.

We also run into problems when we think about the South. That is not a geographical but a social and economic category. What we mean is poverty, tremendous social inequality, for most a history of colonialism and repression and in some cases politically repressive regimes surviving to this day. But are these not the characteristics of many of the so-called transition societies, the former Communist countries? It is perhaps very appropriate that this meeting should focus on these two categories of countries who have so much in common and perhaps far more to learn from each other than they need to learn from the established industrial democracies of the West.

Apart from this, the South today is permeating the North, socially, economically and demographically. The sweatshops of New York, Paris or London with their rightless immigrant labour force, most of it from the South, the building sites of Berlin, the trade in human beings, the spreading informal sector, growing inequalities, the working poor, the permanently unemployed youth, in the heart of the industrial democracies of Western Europe and North America – welcome to the South!

Who are “we”, then? We are in reality a world-wide community of voluntary organizations and movements of citizens organized for the purpose of advancing their economic, social and political aims. It is from the standpoint of this world-wide community that I think we should approach the issues.

What are our aims? They are, in the main, to secure the human rights defined in many declarations of the United Nations and their specialized agencies: the right to meaningful work and to a decent living, to be free from fear and persecution, the right to express one’s opinion and to organize in the defense of one’s interest, the right to a clean environment, for us and for future generations.

These simple, normal human aims, shared by a vast majority of human beings, appear to be extraordinarily difficult to achieve for most of the world’s population. We live indeed in a period of paradox, when we compare the aspirations of ordinary people, the available resources and the way they are allocated.

There has been a general assumption, since the beginning of the century that social progress, in terms of improving living standards, working conditions and civil rights and liberties, was a goal of society. Even though the belief in the inevitability of human progress was severely shaken by the experience of two world wars and of totalitarianism, the notion that social progress was at least desirable survived and, in the post-war years, development was defined in terms of social progress.

Even totalitarian regimes which maintained their peoples in miserable conditions held out visions for a better future. Even today, in a hypocritical and disingenuous way, the vision survives in the form of the neo-liberal trickle-down theory.

But the reality of today is the exact opposite: for some fifteen years or so, we have been living in a period of reverse expectations. This society is holding out quite explicitly the expectation of steadily deteriorating living standards and conditions, at least for the lifetime of anyone living today. This is something new and something tremendous. In the past, this would have been considered an admission of failure of a social system. Governments with such a record are expected to resign. Not so central bankers, CEOs of corporations and neo-liberal economists, who insist we need more of the same.

This is the context in which the negotiations for the eastward enlargement of the EU are taking place and development aid is discussed.

To understand what is happening we need to look at the effects of the globalization of the world economy. The extraordinary advances in electronics, communication and transport technologies of the last twenty years have been driving this global integration process. Its spearhead and at the same time its chief beneficiaries have been the transnational corporations (TNCs). Their rise has been spectacular. The 48,000 or so TNCs, with their approximately 240,000 subsidiaries, control three quarters of world trade in commodities, manufactured products and services, and even more if sub-contracting is included. The 500 largest TNCs control 70 percent of world trade and the 200 largest produce over one quarter of the world’s total gross national product. TNCs now also control one-third of the world’s productive assets. According to UNCTAD (UN Commission on Trade and Development) “international production has become a central structural characteristic of the world economy”.

Many of the largest TNCs are linked together in strategic alliances and, through mergers, create ever lager units (Daimler/Chrysler, BP and Amoco, Novartis, are recent examples), not so much for the purpose of rationalization but to build non governmental centres of economic and political power: oligopolies with a diminishing number of ever larger players.
Since the collapse of the Soviet bloc nearly ten 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.

Another and related development has been the new mobility of finance capital. As late as the 1970s trade in foreign exchange, shares or credit was relatively slow and limited in scope. Computerization has changed all that. As from sometime in the 1980s, all this trade is conducted in real time, through global data networks connected by satellite.

Today, around $1,500 million are being transferred around the globe every day by electronic means (out of which one third through the London currency exchange), outside the control of any government or State. This represents in value 95 percent of all trade, or fifteen times the value of total world production. In the beginning of 1995 the turnover on the world foreign exchange markets was estimated at about double the foreign exchange reserves of the central banks of all industrialized countries. This means that any country’s foreign exchange reserves are vulnerable to a speculative attack and that a small number of world corporations and speculators can decide which country or region to plunder and to “privatise” next.

In summary, we have a situation where transnational corporate capital has immensely increased its power (as well as its ideological influence) within two decades and where mobility of capital is practically uncontrolled.

The main social consequence of globalization, however, has been the emergence of the global labour market. The global labour market means that, because of the mobility of capital and the fluidity of communications, workers of all countries, regardless of their degree of industrial development or their social system, are competitively underbidding each other, with wage spreads ranging from one to fifty, in all areas of the economy (production and services).

This competitive underbidding on a global scale has set in motion a relentless downward spiral of deteriorating wages and conditions and, in industrialized countries, of rising unemployment through production transfers, outsourcing, casualization, etc. But: there is no quid pro quo in terms of a balanced social and economic development for the industrially underdeveloped countries of the South, where unemployment remains a massive and growing problem – only beginning in a country like China – and where wages remain in most cases below poverty level. What is growing, is the wealth of local elites. In general, this also applies to the former Communist countries in Europe and Asia.

So far as the workers are concerned, there is no bottom to the downward spiral except the near-slave labour conditions that prevail at the bottom of the scale: a defenceless labour force, nearly without rights, working at wages of 10-20 dollars a month or less or, as in the case of China, prison labour.

Why is this? Because the whole system is ultimately held in place by repression.

The main point to be kept in mind here is the economic role of repression: the global labour “market” is ultimately not regulated by economic laws but by political laws, state intervention, in the form of military and police repression.

Take the example of the Export Processing Zones (or Free Trade Zones) where national police and armies have been turned into the security guards of transnational capital. These zones, which contribute virtually nothing to economic development, now number 845 and their number is growing by the day. Whole countries have turned themselves into EPZs, or aspire to that status and, in order to join that club, are repressing unions, popular movements and democratic rights in general.

World poverty is not difficult to understand. 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 countries which are significant actors in the global economy are either severely repressed societies (China, Vietnam, Indonesia) or societies that have been victims of severe repression in their recent past (Russia, Eastern and Central Europe, Brazil, Central America) and because it is these countries that are setting the standards at the lower end of the labour market, that the repressive regimes that govern them now, or have governed them in the recent past and are responsible for their present state, represent a direct threat not only to the workers of these countries themselves, and to workers anywhere, but to any perspective of balanced economic and social development where the well-being of the people is a social priority.

This is why the fight for workers’ rights is such an important component of the fight for human rights and democratic rights in general.

Neo-liberal globalization where everything is free but the people leads to a nightmare future world society and a highly unstable world society, a sort of global apartheid, where a few islands of high-tech prosperity will survive under military and police protection. They will be prosperous garrison states, gated estates, not democracies, and they will be surrounded by a world of squalid poverty with millions of people revolting and kept down by repression.

The traditional defence of political society against abuse, exploitation and injustice has been the law. But the rule of law is exercised within the framework of national states, and it is precisely the ability of the national states to express political society, for example by legislating to defend the common welfare and the general interest of society, if need be against transnational capital, has been decisively weakened by globalization. It has been undermined by the new mobility of capital which is now in a position to impose its agenda on the national state by threatening economic retaliation if its demands are not met.

The power of the national state has declined through privatizations, which have not only increased the power of the transnationals, as they buy up public assets, but which have also deprived the state of economic leverage and have therefore weakened its ability to influence economic policy and, in its role as an employer, labour policy.

The national state has also declined in its role of regulator of economic policy as a result of recent international trade arrangements which narrow the scope of democratic control over social and economic policies, transferring authority from democratically accountable governments and institutions to TNCs which are unrepresentative and unconstitutional entities accountable to no one. The Multilateral Agreement on Investments (MAI), prepared by the OECD is a good example. Now that the French government has withdrawn from negotiations, it is probably dead in its original form, but the danger that other attempts to transfer power from national States to TNCs will be made in another guise and in another context remains real.

Finally, the growing inability of the state to control international flows of capital 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 its ability to protect the weak through the redistribution of the social product.

Through the globalization process, transnationalized capital is in a position to escape the demands of political society, in particular of the labour movement and of the political Left. Capital is therefore no longer interested in contributing financially and politically to a social and political compromise, but seeks hegemony. It has declared its own goals to be the general goals of society, has surrounded itself by an ideological bodyguard in universities and media, makes increasing demands on public resources to advance its own interests and meets all opposition with an iron fist.

Even more dangerously, the inability to control capital within national borders through legislation or other political measures carries with it a commensurate loss of influence of all institutions operating within the confines of national borders: national legislatures, political parties, national trade union centres: in other words, all instruments of democratic control where such control existed in the first place.

This is why political parties, regardless of their historical origins, social base, 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. The result is that citizens feel helpless and cynical in the face of 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. Economic and social inequalities lead to political inequalities and the erosion of democratic rights leads to “low intensity democracies” that have no credibility in the eyes of their constituencies.

For all these reasons, the neo-liberal agenda (turning the State into a servant of transnational capital through structural readjustment programs) and the neo-liberal dogma, which tells people that so-called economic constraints, which are in reality a political power-play, have the force of a law of nature and which tells people that they have no control over anything that is important to them here and now, are the principal threat against democracy at this time.

EU enlargement to the East is the major European political development at the beginning of the 21st century. It is our best and, indeed, our only hope to secure a lasting peace on this continent, to consolidate a culture of democracy in all of its parts, to reintegrate and revive a cultural heritage that had been temporarily lost and, in time, to get the values of the common welfare to prevail over the laws of the “market”. We cannot afford to fail. This is why we must face the difficulties, which do not arise only from the present situation of the accession candidate countries, but from the policies of the EU itself.

In this context, it is important to understand that the EU, as a regional entity, has been subjected to the same globalization pressures as its constituent States and has reacted in a similar way. It is in the first instance and above all an economic union and unfortunately, despite all the talk about a “European social model”, not a social union.

Its policies are largely determined by the neo-liberal agenda: a restrictive monetary and fiscal policy and cutting back on public services, including the dismantling of social services serving the common welfare. The result has been massive unemployment (officially 18m. or 11 percent of the working population, and 20 percent of all young people), increasing poverty, social polarisation and creation of a marginal underclass.

It is unfortunately unlikely that the current political dominance of social-democracy in the EU will by itself bring significant changes. We are talking about social-democracy “light”, with strong connections to business, which has bought the neo-liberal ideological package at the top of the market (before the Asia crisis and the Russia crisis) and is now reluctant to sell at a loss.

All other things remaining equal, this means that accession negotiations are bound to be long and difficult. Under present conditions, it is impossible to imagine a quick and unconditional accession even of the five Central European first wave countries without catastrophic social consequences for their own populations. The last thing the countries of Eastern and Central Europe need is the policies currently advocated by the EU (deregulation and the dismantling of social security systems) – in fact they need the exact opposite: the strengthening of social security systems and the regulation of the markets. In a general way, this also applies to most countries in the South and, indeed, to the needs of political society in the North.

We all need a fundamental change in the social policies of the EU, backed by corresponding changes in monetary and fiscal policy, with full employment, social justice, social security and ecological sustainability as overriding objectives.

There are a number of proposals to this effect and alternatives are on the drawing board. There are two considerations, however, we must keep in mind. In the first place, because of the increasingly global nature of the world economy, there can be no regional solutions to regional problems. Democracy, as a general normative concept of social coexistence, and a democratic alternative world order, has no future unless it is a world-wide project. In the second place, we are not in an academic argument as to who has the better ideas for organizing world society. We are in a global power struggle conducted with the utmost brutality which political society will continue to lose as long as it remains fragmented along national State borders and remains essentially unorganized.

Our task is therefore to globalize political society, to organize it on a global scale. All of us who have dealt with these issues for some time know how difficult this is. We do not only have to contend with the obvious external opposition—the agenda of transnational corporate power and of its neo-liberal bodyguards and, especially in the last ten years, the resurgence of nationalist extremism—but with our own internal difficulties.

The NGOs, despite largely converging agendas, suffer from a deficit of internal democracy and accountability, from bureaucratisation even of small organizations, from lack of balance between the larger and well-established among them and others that are smaller and poorer but represent concerns that are no less legitimate and from a great difficulty of coordinating their action.

It may not surprise you if I tell you that I believe that in this context the trade union movement has a major role to play when it comes to building an alternative power structure at world level, despite 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 when they resist it is because the trade union struggle is before anything else a struggle for human dignity: 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 political 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, the trade union movement takes charge of the concerns and interests of political 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 type of structures that need to be supported and strengthened. 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 has obvious consequences for development policies. It means our priority has to be to strengthen institutions, and this may 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.

I thank you for your attention.