Global Labor Strategies

Globalization, Neoliberalism, and Climate Change

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.

These twin realizations, the failure of neoliberalism and the climate crisis, will define the struggle for the interests of poor and working people for the next century. At the same time, the necessity to counter climate change may provide an opportunity to address the broader problems of neoliberal deregulation.

This article argues that it is only by rolling back neoliberalism that we can protect the rights of workers globally and solve the crisis of climate change. In Part 1 we provide a short history of globalization. In Part 2 we discuss the climate crisis and its effects on workers. In Part 3 describes proposals for a "global green new deal" to create full employment through climate protection. Part 4 argues that a new global and national regulatory regime is necessary both to counter both climate change and the race to the bottom. Part 5 discussions the role of organized labor nationally and globally in bringing about such a transformation.

How the G-20 Can Pay for a Global Climate Deal

The G-20 summit convening in London on April 2 is preparing to create a quarter trillion dollars of brand new stimulus money to help poor countries battle the global recession.

World leaders plan to use a little-known form of global currency to pay the freight, a currency known technically as "Special Drawing Rights" (SDRs) but often referred to as "paper gold." It’s a currency that can be issued by the International Monetary Fund (IMF), and the Telegraph has reported that the U.S. government is keen on the idea.

Senior figures in the U.S. Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth [of SDRs] to prevent the recession from turning into a global depression.

If leaders at the G-20 summit can create "paper gold" to jump-start the global economy, they can also turn it in a green direction to jump-start protection of the global climate.

They should put much of paper gold stimulus under discussion into an international fund, to help developing countries pay for climate protection. Such an action would remove the greatest stumbling block in the way of international climate action -- the lack of financing to pay for energy conservation, technology transfer, adaptation, forest conservation, clean energy, and research and development. It would allow negotiators to arrive in Copenhagen for climate talks at the end of the year with the finances in place to negotiate and sign a global deal. 

Without the financing, the chances of success in Copenhagen are slim. Yves De Boer, the UN's climate chief, left no doubt about that in comments he made this week criticizing EU finance ministers for putting conditions on financial help for developing countries, contrary to promises made in Bali in 2007:

I think without clarity on finance from industrialized countries there will be no commitment from developing countries.

"Paper gold" offers a way out of this stalemate -- a way to mobilize resources without either taxing or borrowing. That’s why G-20 leaders are proposing to issue a quarter trillion dollars worth of new SDRs – and why paper gold can play a crucial role in protecting the climate, too.

Measures that would fight both global warming and global economic meltdown simultaneously are being called a "Green New Deal." At the climate talks in Poznan last December, UN Secretary-General Ban Ki-moon called a "Global Green New Deal" the best chance for securing a climate agreement in Copenhagen in late 2009.  And in a February op-ed in the Financial Times, Ban together with Al Gore wrote,

What we need is both stimulus and long-term investments that accomplish two objectives simultaneously with one global economic policy response -- a policy that addresses our urgent and immediate economic and social needs and that launches a new green global economy.

World leaders convening at the G-20 have the opportunity to do just that.

The SDR Backstory

Countries normally set aside reserves, most often in gold and U.S. Treasury bills, as insurance to protect their currencies against speculation, runs, and other forms of economic adversity. If a country’s currency starts to plummet in value, the government can use the reserves to buy back its own currency and stabilize it.

Global Labor’s Forgotten Plan to Fight the Great Depression

In the early 1930s, as global unemployment tripled in two years and the world plunged into the Great Depression, the world’s labor movements developed a program for fighting the global crisis through international public works.  It’s a little-known historical might-have-been that could have helped halt the Great Depression, the rise of Adolph Hitler, and the Second World War.  And, as the efforts of world leaders to address today’s “Great Recession” threaten to break down in nationalist rivalry and petty political bickering, it bears lessons – and perhaps an alternative vision – for today.

Workers and organized labor have historically advocated government public works as a solution to unemployment.  Not only would they provide jobs and income for those directly employed, but they would raise overall purchasing power, thereby creating demand for the products of other workers and creating a virtuous circle of economic growth.  In the context of swelling unemployment in the early Depression, discussion of national public works programs developed in many countries.

The proposal for international public works originated with General German Trade Union Alliance (ADGB), which included most of Germany’s trade unions and represented the great majority of its workers.  The plan won the support first of the German union alliance, then of unions around the world, and finally of the League of Nations’ International Labor Organization. 

The plan was worked out by the head of the Alliance’s statistical department, W.S. Woytinsky.  Woytinsky was a Russian émigré who had been president of the St. Petersburg Council of the Unemployed during the 1905 revolution and had organized mass action to force the city to provide public works employment.  Observing Germany’s combination of spiraling deflation and spiraling unemployment in the early 1930s, he came up with the idea of using credit expansion to finance massive public works.

Taking a cue from recent League of Nations policy proposals, Woytinsky proposed an international agreement that would allow the lowering the gold reserve requirements for national currencies.  That would let central banks create new money that could finance international public works and thereby create the purchasing power needed to reflate the economy.

In a June, 1931, article, Woytinsky proposed an “Action Program for Reviving the Economy.”  It called for the labor movement to “assume the role of conveyor of the idea of an activist world economic policy.”  It was up to the labor movement to “force the state and all public institutions to implement measures to revive the economy.”

Labor’s policy “must be a global economic policy.  All nations are suffering because the world economy is sick, and therefore they must all concentrate their forces upon joint action to overcome the worldwide crisis.”  The international agreement would provide an alternative to the rise of economic nationalism, supporting “tariff reductions and European economic unification” as well as “internationalization of wage policy and social policy.”  The program would also support workers’ fight for higher wages, shorter hours, social rights, and regulation of business.

Can Green Jobs Be Good Jobs?

[This article first appeared in the TheNation.com, available here.]

At the first Good Jobs, Green Jobs conference, held in Pittsburgh a year ago, advocates of green energy bemoaned their inability to get a modest renewable-energy tax credit through Congress over the opposition of the Bush administration. The idea of addressing the economic, energy and environmental crises through green jobs seemed a distant vision. So did the idea that a labor-environment coalition around green jobs could reach beyond the fringes of the two movements. But this year, things were different. Meeting in Washington, DC, February 4-6, speakers were reporting in from their BlackBerries on Congressional negotiations of the yet-to-be-approved stimulus package estimated by the Center for American Progress to include $80 billion for green jobs.

The Blue-Green Alliance, which sponsored this year's conference, grew out of a coalition formed in 2006 by the Sierra Club and the United Steelworkers Union. A year ago, the Steelworkers stood alone; today the alliance includes the Communications Workers of America (CWA), the Laborers International Union of America (LIUNA), the Service Employees International Union (SEIU) and the Teamsters (IBT), all of which have active programs on green jobs.

It's a challenging time for the labor movement. Union leaders appear genuinely thrilled about the election of President Obama; early in the conference Steelworkers' president Leo Girard proudly quoted Obama's statement, "I see labor as the solution," not the problem. The blind, neoliberal faith in markets and globalization has come crashing down along with the global financial system, vindicating the lonely labor voices who have long been calling for government guidance of the economy. But the Great Recession is decimating labor's thinning ranks, and unions face budget cuts and layoffs not only by employers but also within their organizations. Two major unions, SEIU and UNITE HERE, are engaged in very public internecine battles, while representatives of the Obama administration are trying to nudge the two national labor federations to reunite.

In this context, the chance to grow membership through green jobs represents a rare opportunity, one that the labor movement is taking up with alacrity. "Global warming is a working families issue," said AFL-CIO president John Sweeney at a press conference to announce a $1 million Green Jobs Center at the National Labor College.

Part of labor's involvement reflects the concern that has grown among many constituencies as melting ice caps, burgeoning wildfires and devastating floods demonstrate the immediate threat of climate change. At Sweeney's press conference, Mark Ayres, head of the union's building trades department, endorsed green jobs as good policy and good for labor. "But there is a more important reason" to fight global warming, he said, showing the audience a photograph his granddaughters.

Is Another World Possible?

[This article originally appeared in The Nation, available here.]

The recently concluded World Social Forum is a good gauge for assessing the state of the world's alternative social, economic and political movements. Organized in 2001 as a counterpoint to the World Economic Forum, the annual meeting of global and corporate elites held in Davos, Switzerland, the WSF brings social movement organizations and activists from around the world together around the idea that "another world is possible." If Davos represents a failed globalization from above, the WSF represents an emerging globalization from below. It's a massive affair--this year more than 100,000 people gathered here for the five-day event. Part political convention, part carnival, part countercultural happening, the WSF serves as the center of gravity for the global justice movement that emerged in the late 1990s to contest corporate globalization.

The question on the minds of many was how to respond to what some call the "crisis of crises"--the economic, climate, political and cultural catastrophes that have engulfed the planet--and whether social movements can provide a unifying alternative vision for a better world. Economist Walden Bello of Focus on the Global South summed it up: "There is a sense of urgency and seriousness combining both pragmatism and principle. There is much less rhetoric. Things are taking place very fast outstripping what many predicted. There is a clear collapse of neo-liberalism. We have been triumphant over Davos.... Now we need alternatives and must get down to the hard work of creating them."

“GLOBALIZATION FROM BELOW” TACKLES THE “GREAT RECESSION”

At the pit of the Great Depression in 1930, an American country music group named the Carter Family recorded a song called The Worried Man Blues. It began:

“I went down to the river and I lay down to sleep
When I woke up there were shackles on my feet.”

Though many subsequent verses describe the horrific outcome, there is no explanation of what had happened or why – just an awakening to a seemingly endless catastrophe.  The song immediately became an unprecedented national hit.  It’s hard to imagine that its success didn’t have something to do with capturing the sense of being the helpless victim of incomprehensible disaster that so many felt in the face of the Great Depression. 

The seemingly sudden collapse of the global economy in 2008 has similarly left millions, indeed billions of people all over the world a victims of a catastrophe that appears both inexplicable and unending. 

But what’s now being dubbed the “Great Recession” is neither incomprehensible nor irremediable.  On the contrary, it can be understood as an expectable result of a capitalism that has been globalized and at the same time “freed” by neoliberalism of control in the public interest.     

The economic globalization that transformed the world at the turn of the century promised, according to its advocates, a glorious vista of prosperity that would provide unprecedented economic growth and raise billions of people out of poverty.  In practice it generated personal and national insecurity, growing inequality, and a race to the bottom in which every community, nation, and workgroup had to reduce its social, environmental, and labor conditions to that of its most impoverished competitor. 

But economic globalization also gave birth to a new convergence of global social forces that opposed this kind of globalization.  People all over the world fought back against this “globalization from above” with their own “globalization from below.”  They used asymmetrical strategies of linking across the borders of nations and constituencies to become a counter power to the advocates of globalization.  They created a movement – variously known as the global justice movement, the anti-globalization movement, global civil society, or as we call it, “globalization from below” -- that some in the media even characterized as “the world’s other superpower.”

The anti-globalization/global justice/globalization-from-below movement developed in response to the expansive phase of globalization and neoliberalism.  Now the global economy has entered the most severe financial crisis since the Great Depression.  The financial crisis has turned out to be the start of a cascade of other economic crises that are reshaping the global economy as definitively as an earthquake reshapes a city.  Current leaders of the world’s nations have utterly failed to develop a solution.   The likely impact of their failure on ordinary people around the world is incalculable. 

The advocates of globalization from above propounded as an article of faith that markets are self-regulating and that all would be for the best in the best of all possible worlds if only governments, labor unions, citizens organizations, and the unruly mob let them alone to do their thing.

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 makes 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?  Can globalization from below really provide an alternative solution to the great recession? 

New GLS Discussion Paper: Global Warming and the Great Recession

Today GLS is releasing a new discussion paper Globalization From Below Tackles the Great Recession. 

Its purpose is to stimulate discussion about ways that the global conjunction of forces variously known as the “global justice movement,” the “anti-globalization movement,” and “globalization from below” can respond effectively to the new situation created by today’s historic crisis of the global economy.  That crisis is now widely acknowledged to be more severe than any since the Great Depression of the 1930s.  Indeed, it has now been dubbed, “The Great Recession.” 

As we head off the World Social Forum in Belem, Brazil we're eager for feedback, so post comments or email us directly at [email protected].

Read the full paper here

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Global Warming and the Great Recession

Global warming directly threatens virtually every individual, group, and nation.  Climate protection represents the great common necessity for humanity.  It is a concern for labor, its allies, and the globalization from below movement.

Paradoxically, the slowing economy is reducing the production of greenhouse gases.  But it is also leading to cuts in already inadequate plans to move the global economy to a sustainable basis.

World leaders are using the “Great Recession” as an excuse to continue business as usual -- the destruction of the earth by global warming.  Corporations and governments are already reneging on already inadequate commitments. Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, says,

“European industry is saying we can’t deal with financial crisis and reduce emissions at the same time.  Heads of government have other things on their minds.”   The December meeting of world leaders in Poznan reveals the quiet retreat from already inadequate plans and standards.

But this retreat may have unintended consequences.  The “Great Recession” has already delegitimated global leadership and neoliberal ideology and policy.  Failure to take effective measures to halt global warming provides a further self-delegitimation of global leadership and neoliberal ideology.

Why establishment remedies aren’t working

The “Great Recession” is part of a cycle that has repeated itself dozens of times in the history of capitalism.  The destruction of the earth’s climate by human activity is so far unique in human history.  Yet both share the same root: the failure to shape human activity to meet human need.  And each can only be solved through a global democratization that places human activity under shared human control.

Establishment remedies for global warming and for the Great Recession are already failing.  The reason, at bottom, is the same.  As the economists say, you can’t push on a string.  When powerful private interests control humanity’s resources and decision making, efforts to entice them to do the right thing are unlikely to override their own calculation of their interests.  As long as production is driven exclusively by the search for profits, not by human need, nobody should be surprised that it doesn’t always assort very well with human need.

In the case of the Great Recession, governments have attempted to give incentives for financial institutions to resume lending and investing by providing them trillions of dollars in investment and cheap and even free credit.  But those institutions have continued refusing to lend and invest because they consider hoarding to be more in their interest. 

In the case of global warming, the Kyoto treaty and the EU have tried to get corporations and other institutions to produce less carbon emissions by a “cap-and-trade” system that essentially charges a fee for a permit to pollute and then allows the permits to be bought and sold.  So far this has completely failed to reduce carbon emissions, which have not decreased even in the countries where the system is most developed. 

Labor Faces Hard Times

Two recent images of the labor movement in this time of crisis stand out for their stark contrast.

One is a photograph of UAW President Ron Gettlefinger sitting at the witness table before a Congressional committee with the heads of the Big 3 auto makers, pleading for help. The other is a photo of jubilant workers celebrating their victory after a six day sit-in at the Republic Windows and Doors factory in Chicago.

It is not stretching things to say that these images crystallize the problems and possibilities of organized labor today.

Missed opportunities

Gettlefinger’s testimony was a sad coda to an era in US industrial relations that actually ended in September 2007 when the UAW reached a concession packed agreement with GM following a two day strike, and  similar agreements later that year with the other auto makers. The agreements froze wages for production workers; reclassified and placed “non-production” workers on a lower wage scale; and set a new hire rate at about $14.00 an hour—about half what incumbent workers earn—with inferior benefits. A buyout program was designed to push as many senior workers out the door as possible to make room for the new hires. The union promoted the contract as a way to buy time for the companies to reorganize and retool.

Nothing much happened. The restructuring took the form of plant closures. The retooling remained a promise by the Big 3 to produce more energy efficient cars. But all the while the companies kept up their incessant advertisements for SUVs, pick-ups, and other gas guzzlers.  And they continued to pursue their lobbying and lawsuits against tougher mileage standards. The spike in gas prices and the credit crunch provided the coup de grace to a dying industry.

In October 2007, we asked on this blog, whether the UAW could turn its collective bargaining defeat into a strategic retreat by regrouping and developing an independent survival plan for the industry? Now we know the answer: they could not. Tragically, the UAW kept marching in lock step with the very companies that were destroying the US industry. The union even supported the companies’ opposition to tougher mileage standards because, they argued, it would unfairly hurt sales of light trucks and SUVs and imperil many jobs.

Had the union taken an independent course things might now be different. They might have been able to mobilize popular opinion behind a plan to produce greener cars and new vehicles for public transportation, preserving the jobs and the economies of the communities that depend on them.  Instead, there is no plan to rally around, only a demoralized plea for a bailout.

Next Steps for Globalization from Below

[Previous posts have described the vision laid out in the "Beijing Declaration" on "The global economic crisis: An historic opportunity for transformation" and the specific proposals that make up its" transitional program" to move toward a "radically different kind of political and economic order." This post looks at next steps toward realizing such a vision and program.]

The convergence of social forces we call "globalization from below" has a lot of experience in how to challenge globalization from above.  Its various overlapping organizations and networks have played critical and globally visible roles in challenging the formation and further empowerment of the WTO; demanding debt relief for poor countries; opposing IMF structural adjustment policies; providing high-quality, high-profile critiques of the World Economic Forum, the G-7, and the international financial institutions;  fighting for affordable AIDS drugs for the world's poor; demanding protection of the world's climate; contesting imperial adventures like the US attack on Iraq; and challenging the myth that "there is no alternative" to neo-liberal capitalism.

Globalization from below has become a kind of global social bloc, drawing together a diversity of forces around common interests and joint action.  It has depended less on formal organizations than on new forms of social networking that have allowed rapid coordination of thinking and campaigns worldwide.  It has utilized asymmetrical methods to counter the centralized power of globalization from above with the linkage of thousands of grassroots movements, constituencies, and organizations around the globe.

The dense set of connections and dialogues that constitutes globalization from below provides a vehicle for responding to the emerging economic crisis.  As the "Beijing Declaration", "The global economic crisis: An historic opportunity for transformation" indicates, the upcoming World Social Forum in Belem, Brazil at the end of January 2009 provides an opportunity to jumpstart the process.  Here are some thoughts about objectives the Forum – and the wider nexus of social networks that interact with it – might pursue.