As the global economy hurtles toward Great Recession II, the earth hurtles toward climate catastrophe. Both represent the results of a neoliberal deregulation that has left humanity no means to shape our economies to serve human needs — not even the need for economic and environmental survival.
How global movements respond to these intertwined environmental and economic crises will be key to our common survival. The politics will surely be complicated. A case in point is an article in today’s New York Times about the United Steelworkers union’s WTO complaint against China for providing “illegal clean energy subsidies” to domestic solar, wind and other green industries.
To promote international dialogue on these questions, we thought it might be useful to post a recent paper, entitled “Globalization, Neoliberalism and Climate Change”, which was prepared by GLS at the invitation of Professor Liu Cheng of Shanghai Normal University for an international conference this April on “Global Economic Recession vs. Deregulation” jointly organized by the Peking University Law School and the Shanghai Normal University Faculty of Law and Politics and supported by the ILO Beijing Office. The paper stresses the interest of workers around the world in cooperating to create an alternative to neoliberalism based on making the transition to a green economy.
Globalization, Neoliberalism, and Climate Change: Toward a New Regulatory Regime
For thirty years, global and national economies have been guided by policies of neoliberal deregulation, often known as the “Washington Consensus.” Neoliberalism has been disastrous for workers in most countries, pitting workers against each other in a race to the bottom and making it all but impossible to protect working class interests. There is now a growing consensus that the Washington Consensus has been a failure.
There is also a growing global recognition that we are in the midst of an unprecedented climate crisis. Ready or not, that crisis is affecting every nation, every locality, and every worker. Its effects are already serious, and unless decisive global action is taken to counter it, they will soon be catastrophic. Neoliberal deregulation, by dismantling the means for public steering of society to meet social needs, has also made it nearly impossible to correct global climate crisis. Read the rest of this entry »
[This is the second in a series of three posts on the Beijing Declaration’s proposals and next steps in implementing its vision.]
The times they are a-changing. US government officials long known as market fundamentalists seize banks, buy mortgage and insurance companies, and commit $7.7 trillion – half of the US annual product — to government intervention in financial markets. The Clintonite “moderates” who once gutted the social safety net and sacrificed commitments to jobs programs in order to build up budget surpluses now propose vast public works programs financed by budget deficits. The IMF, scourge of “irresponsible” countries that didn’t balance their budgets, advocates a trillion-plus dollars in global government deficits and claims to have replaced “structural adjustment conditionalities” with condition-free loans.
These programs may well fail in halting the downward spiral of the global economy. But they open the door to new forms of more social and public economy. That’s one reason conservatives normally oppose them – and one indicator of how serious the present crisis really is. The economic crisis it possible to put proposals on the table that have long been ruled inadmissible.
While economists have asserted with great confidence that one after another trillion dollar “solution” would save the global economy, one after another has failed, raising the specter that it cannot be saved in its present form. Peter Boon and Simon Johnson of the website baselinescenario.com recently raised that possibility in the Wall Street Journal. They note that economists generally believe even the Great Depression of the 1930s could have been stopped by proper monetary policy. But, Boon and Johnson argue, governments may simply not be able to prevent such huge deflationary spirals. “Perhaps the events of 1929 produced an unstoppable whirlwind of deleveraging which no set of policy measures would truly be able to prevent.” Their implication seems evident: The same could be true today.
The multi-trillion dollar rescues and bail-outs so far just attempt – possibly futilely — to save the status quo. But what can we do if the status quo can’t be saved?
An excellent starting point for discussion of what to do as present efforts to address the global economic crisis fail is the Beijing Declaration, issued by a group of NGOs and social movements who met in October on the occasion of the Asia-Europe People’s Forum in Beijing. Many of its proposals would be valid in more normal times – indeed many are already functioning in some parts of the world. But the present crisis [link to “Present crisis in historical perspective] puts them on the table everywhere.
Neoliberalism and globalization have been comprehensive in their effect. They have reshaped the economy at every level from local villages to global markets and institutions. And they have reshaped every sphere, from private finance to government taxation, from government spending to international trade, from the environment to agriculture and industry.
The Beijing Declaration provides a vision [link to Globalization from below in hard times post] of a similarly comprehensive transformation. Its proposals would affect local, regional, national, continental, and global economies. And it makes concrete proposals for finance, taxation, public spending and investment, international trade and finance, environmental protection, agriculture, and industry.
The following account provides a bit of background on the problems in each of the spheres, then summarizes the main elements of the Declaration’s proposals.
With their trillions of dollars of financial bailouts, governments are acquiring new leverage over, and even outright ownership of, banks and other financial institutions. The conservative officials who are conducting the bailouts hate this and would like to return control to private hands asap. But once the financial system has proven itself to be so catastrophically dysfunctional, and once such vast sums of public money have gone into rescuing it, the argument for making finance a public utility serving public purposes becomes irrefutable.
The industrial relations system in China is in play as workers, peasants, corporations, and a variety of civil society, state, and party actors vie to determine its future. Now the collapse of the global financial system and the likelihood of a deep global recession/depression add a whole new dimension to the struggle of Chinese workers and reformers for a more equitable system. Global markets for goods made in China will shrink. Thousands of foreign companies with operations in China could be swept away or be forced to significantly downsize. Indeed, even global giants like automaker GM, one of China's biggest auto producers, are teetering on the brink of bankruptcy. China’s banking system—while somewhat isolated from global pressures—is likely to feel the effects of the financial crisis. No one knows what effect the crisis will have on the value of the vast quantities of the US dollars and debt that China currently holds.
Against this back-drop we take a look at aspects of the Chinese industrial relations system before China is sucked into the vortex of a global recession.
Trouble at Wal-Mart
It has been two years since the ferociously anti-union Wal-Mart recognized the ACFTU in its stores. The event made headlines around the world.
Under Chinese labor law if 25 workers petition for a union, a committee can be elected and the union must be recognized. Normally this is a top-down pro-forma affair in which both management and the official union play a part, but in this case, Wal-Mart’s refusal to play by the normal rules forced the ACFTU to actually recruit workers at the workplace and establish the union without management participation. Once Wal-Mart recognized the first union branch, at its Fujian store, recognition quickly followed at Wal-Mart’s other Chinese facilities. Today, the ACFTU says it represents 50,000 Chinese workers at 108 Wal-Mart locations in China. Many hoped the Wal-Mart experience would be a breakthrough in the development of the Chinese industrial relations system and in the evolution of the ACFTU. Things have not turned that way.
We have a good glimpse into the world of Wal-Mart’s workers through voices of the workers themselves as they discuss and debate–and criticize–the actions of Wal-Mart and the ACFTU in on-line blogs. Some of these discussion threads, as well as relevant articles from the Chinese press, have been translated by the excellent, and increasingly indispensible, China Labor News Translations (CLNT). Read them here.
Wal-Mart has not engaged in serious collective bargaining and the ACFTU has fallen into a typically cozy relationship with Wal-Mart’s management. After Wal-Mart and the ACFTU signed a substandard contract at a store in Liaoning province, the company presented the agreement as a template for contracts at stores throughout China and essentially refused to bargain any further. Among the contracts provisions were a pay increase that did not keep up with inflation and which will not come into effect until mid-2009. According to CLNT report, “Many individual store unions were not even given a chance to sign the template themselves. Indeed in Shenzhen City, for example, the Buji store has signed a collective contract on behalf of fifteen other outlets in surrounding areas.”
For its part, the ACFTU defends its approach to bargaining with Wal-Mart. According to Zhang Jianguo, the ACFTU’s director of collective bargaining, the new contracts require annual negotiations, wages above the minimum wage, and contain language on working hours, vacations, and social security and training.
But workers at Wal-Mart’s Bayi store wanted to negotiate a better agreement. A grassroots leader, Gao Haitao, who has become a hero to Wal-Mart workers throughout China for his combative defense of Wal-Mart workers’ interests, organized a fight back and made new demands in negotiations with management. Instead of negotiating, “Wal-Mart simply bypassed Gao by convening the staff and workers’ congress and finding a trade union chair from another store to sign the contract in his place!”, according to CLNT.
The ACFTU—which says it supports Gao—stood by while Wal-Mart refused to bargain leading the CLNT to conclude. “….the experience of Gao Haitao and the farcical top-down collective bargaining contract negotiation procedure shows that there is no genuine collective bargaining by workers’ representatives. When a Wal-Mart union did come out to negotiate a good contract, the ACFTU did not tender its support.” As a result of Wal-Mart’s actions Gao resigned from his job in frustration in September in a move that many see as a blow to authentic union development in China.