The Autonomy of the Economy and Globalization

Submitted by libcom on August 3, 2005

The Autonomy of the Economy and Globalization Massimo De Angelis (University of East London)

vis - Ã - vis 4, Winter 1996

1. Introduction: The autonomy of the economy

Globalization, like capitalist exploitation, is not something new. Capitalism, as Braudel reminds us, has always been global. However, what is certainly new is the form, the context and the strategic reasons of this globalization. It is from these that we need to start if we are to clarify the strengths and weaknesses of those contemporary processes before which everyone seems so impotent; before which the residual radicalism of many parties of the European left turns into cynical fatalism and submission. Globalization is the globalization of many things. Borders have certainly fallen: not for masses of emigrants (who are increasingly illegal), but for TV images, cultural discourses, political projects; for flows of money, commodities, and productive cycles. Money - commodity - information - production are the elements through which the global factory is built in new forms, and to which echoes the chorus of submission in the name of "responsibility" and "realism". Spaces of manoeuvre have increasingly been limited by budget constraints, and these in turn are constrained by a global system - in the form of international treaties, or "objective" economic and financial mechanisms - apparently external to the realm of national politics.

It certainly seems paradoxical to discover that the satisfaction of needs are more constrained by the productive system of today, which produces more absolute wealth with higher productivity levels, than in the "golden age" of reformism. Then again, perhaps this is only a paradox for those who continue - despite the silence of official economic science - to insist upon interrogating the economic system from the point of view of human needs. If we examine it instead from the point of view of profit, there is no contradiction. A simple equation - say Marx's notion of the rate of profit - would be enough to verify that if the "immateriality" of labour increases relatively, if the proportion of sophisticated machines forming constant capital increases over living labour, then the ratio between surplus value and variable capital must be increased for the rate of profit to remain constant. And if we identify the rate of exploitation in terms of the rate of social exploitation, it is clear that not only wages, but also social expenditures forming social variable capital, must be targeted by capitalist strategies if the rate of profit is to be maintained or accumulation increased. To this end the productivity of waged and unwaged workers in industries and social services, of those working in schools and universities, of those involved in labour of reproduction etc., must increase. In many of these cases, this means an increase in the intensity of labour. So much for the death of Marx.

It seems, therefore, that the pervasiveness - across the most disparate social spheres - of economic discourse as budget constraint is the product of the generalised difficulty of capitalist accumulation at a social level. This pervasiveness, which has become the substance of mass cultural and political discourse, reflects a desperate attempt to impose the hegemony of capitalist values upon every aspect of human and social existence, and is a further step towards that Great Transformation that Karl Polanyi denounced as illusory and untenable.

>From this source, too, springs the hegemonic role assumed by technocrats and technocratic certainties. As Pierre Bordieu noted in an article against Juppé (Libèration 14 December 1995) "the technocrats arrogantly ascribe to themselves reason, modernity and reform, and with a wave of the hand ascribe irrationality, anachronism and conservative inertia to the common people." It would be mistaken to think that these "kings of technocracy" are simply the so - called apolitical technicians who have governed Italy in the past few years. Rather they are the "genuine" politicians: those who, having reduced the room for manoeuvre in the face of economic globalization, are increasingly obliged to conform to the strict "objective" criteria of economic management demanded by the "objective" constraints imposed by the international economy. Basically, Bill Clinton is a good technician to the extent that he accepts the principle of public spending cuts and a balanced budget. He is also a good politician if he is able to mediate between a range of different interests whilst managing this reduction. For the same reason, Italy's Dini or Britain's Major are good technicians or politicians. Juppé has proved to be a good technician but a terrible politician, because in order to manage "the" sacred principle of public debt reduction, he opened the door to an explosive social conflict. After all, what is a technocrat? A good technocrat is someone who knows how to do the job, in circumstances where the nature of the job as such is held to be impartial, above question. A good economist in the finance minister's seat is simply someone who champions cuts to social spending. The fetishistic character of technicism lies in the way it abstracts from its social nature, embracing instead the presumed objectivity and impartiality of economic discourse. Technicism is the ultimate mental state for the legitimation of those processes that seek to make the economy into the great Leviathan, the unchangeable and unquestionable constraint facing all political and cultural subjectivity, a constraint that subsumes everything. Viewed through the lenses of the philosophers and ideologists of technicism, the economy becomes autonomous. Not in the sense of an economic determinism, of the economy determining political processes etc., but rather that the economic priorities dictated by technocratic discourse, and which now encompass every sphere of life, are themselves considered to be the constraint which must be imposed. In other words, economic discourse becomes the meta - principle of an epoch, the "pre - analytical vision" - not of a particular trend in scientific thought (as it was for Schumpeter), but of life itself, in all of its possible manifestations.

Autonomy of the economy therefore: the liberal right as the prophet of this autonomy, and the left - also liberalist - as a loyal convert, albeit one marked by the original sin of past membership in another religion. For the right, autonomy of the economy means the active promotion of institutional constraints, be these the Maastricht criteria of convergence as the basis of European monetary union, IMF structural adjustment programs, or active policies to deregulate the market. For the left, autonomy of the economy means accepting these constraints as a starting point from which to allow the national economy to assume more human and intelligent forms of the competitive game. It is no coincidence in this regard that the educational system has become one of the priorities of the European left. But to what end? Perhaps to provide a better basis for the free development of subjects? Hardly. Rather, its aim is to improve competitiveness on the international market.

Let's briefly examine some facets of this autonomy of the economy, of this totalizing constraint that goes under the name of globalization: firstly finance, and then the question of the productive cycle.

2. Financial globalization and public spending cuts

To begin with, there is the globalization of monetary and financial markets. Here the data is clear and unquestionable. For example, the Federal Bank of New York, one of the 12 organizations which comprise the US Federal Reserve, has recently estimated that the daily value of transactions in foreign exchange is 650 million dollars within the Tokyo, New York and London markets alone. Other estimates place the value up to a trillion dollars. The important thing, however, is the composition of these transactions, almost 18% of which are the result of international commerce and investment (for example, if the USA imports electronic products from Japan, they need to pay in yen and therefore to exchange dollars for yen). The other 82 percent of these transactions is pure and simple speculation, aimed at making a profit from the movement of exchange rates. While the profit per unit of each currency is low, being measured in tenths or hundredths of a dollar, the enormity of the volume involved means that profits (or losses) are very high. Even small deviations in the rate of interest or other factors that affect the profit expectations of the speculators can cause the flow in real time of huge masses of money, a flow that in turn produces fluctuations in the exchange rate and thus constitutes a constraint upon the economic policies of various national governments. In this regime, the power of the market seems huge, a power before which national governments must surrender their traditional instruments of economic management.

Who or what is the target of international financial speculators? We know that speculative attacks are directed against the currencies of those countries that do not rigidly control public finance: those governments that give into pressures on social expenditure, that display weakness in the management of financial reconstruction programs. If a country is not on the path of budget restructuring, of public spending cuts (especially to those components which enter into the social wage), it becomes paralysed by capital outflow, by the collapse of the national currency's exchange rate, by an increase in imports. It finds itself, therefore, in a situation wherein imports prove inelastic in price terms, where inflationary push increases, and where the real income of workers - an income that is less and less indexed to inflation - begins to fall. If, on the other hand, a country has begun a "healthy restructuring" of the public budget, and if substantial cuts to the welfare state have been introduced successfully, then it finds itself rewarded, with the loyalty of international speculators guaranteed and its currency stabilized. In this way, the competitiveness lost through a strong currency is counterbalanced by supply - side policies, productivity increases, and the reduction of labour costs. It seems obvious, if seldom acknowledged, that from the point of view of the proletariat, from the point of view of waged and unwaged workers, from the point of view of those whose experience of the economy is simply that of living out the work of production and reproduction, together with the satisfaction of needs through the wage (social and otherwise), the alternative posed by the globalization of international finance is a false one. In the first case, what has not been lost with cuts in public spending is lost through more unemployment and income - eroding inflation. The possible export push caused by the devaluation of money here is little compensation, since its effect is both small and concentrated in those geographically limited production sectors that are geared towards export. In the second case, what has been lost with the cuts in public spending is not won back either through the speedup of work and life rhythms demanded by international competitiveness, or through cuts in social spending and decelerating employment growth (which is increasingly the only source of workers' income).

It is clear, therefore, that this financial constraint has a class significance, being functional to the management of a country's rate of exploitation. It seems to me, then, that behind the common sense acceptance of the second alternative imposed by financial globalization, there lies the recognition by international capital of something very simple. This is that the factory, the place of production of capitalist social relations, has become identified with society, and that competition between different national capitals - yes, "national capitals" - must be played out in terms of the intensification of labour within production and reproduction. It is certainly true, as Revelli (1995: 168 - 169) reminds us in a recent essay, that unlike during the Fordist period, capital no longer seems to have a nation, in the sense that the space of the nation and that of politics no longer coincide. This is so because globalization processes have limited national sovereignty by reducing national governments' room of manoeuvre over monetary and fiscal policies. At the same time, it is also true that national states have not exhausted their functions of policing and planning labour power. In fact, these functions have now become their central strategic pivot. The management of public spending cuts is not symptomatic of a lack of national economic policy, but rather the opposite. The state tends increasingly to manage the variable capital of a nation, managing the social wage by guaranteeing the shift to private forms of pensions etc. This entails the creation of savings that can be invested in the stock exchange and in speculative flows, through the privatisation (and therefore commodification) of essential services - such as education - according to the criteria of international competition. Furthermore, all of this is often done in collusion with private firms (Ovetz 1996). In this context, economic policies enacted within individual national realities are presented as adaptations to an external objectivity, and national governments become the prophets of capitalist constraints said to be external, objective and immutable.

As constraints or external forces controlling social variable capital, both financial globalization and the free flow of capital share the same strategic aims as the Maastricht treaty in Europe, or the hobbling of indebted Southern countries by the IMF: namely, the increase of surplus value and the reduction of social variable capital.(1) As for the Maastricht treaty's efforts to create a European currency, it is clear that the target ratios of Deficit/GNP at 3% and Debt/GNP at 60% set for individual states must be understood as a conscious policy of attacking public expenditure, especially its social component. It is also true that, to date, none of the European countries - Germany included - have fulfilled the requirements for European Monetary Union set out in the strict (and orthodox) interpretation of the Maastricht treaty. The near future, therefore, will see either a strategic retreat on other objectives, or else a more massive attack upon public spending at the European level.(2) The next two years are therefore of crucial importance in defining the relation between classes in Europe. In this sense, the recent struggles in France and Belgium are an indication of how things are moving in a direction that is fruitful and promising, and how such constraints can actually be "deconstrained".

It is also worth remembering the strategic meaning of a single European currency. Immediately after the explosion of conflict in France, The Economist noted, in an article only somewhat paradoxically entitled "France prepares for EMU",

if Germany succeeds in imposing strict fiscal limits on other single currency countries, all the burden of adjustment in a recession will fall on output and jobs. The only policy instrument then left to national governments will be microeconomic ones (such as, for example, structural changes to labour markets) (Economist 1995, December 9th: 11).

What is anticipated, then, is an European zone in which the whole weight of recessionary mechanisms falls upon the labour market and labour processes, in which the macroeconomic buffers used to smooth the cycle during the Keynesian era are abandoned, in which trade union and government spaces of mediation are consequently also reduced - a situation, in other words, wherein the continuous restructuring of capitalist relations of production becomes the only manageable variable in the competitive battle between economic blocks.

The distinction between capital flows as represented by the globalization of international finance, and those imposed by constraints such as the Maastricht treaty or IMF dictat, is more formal than substantial. If the latter clearly represents an institutional constraint, the free flow of capital via financial globalization is equally the product of precise political choices by Western governments. Gramsci comes to mind here with his observation that "liberalism too is a form of state 'regulation', introduced and maintained through coercion and legislation: it is a fact of conscious will, a will conscious of its own ends, rather than the automatic, spontaneous expression of an economic fact" (Gramsci 1994: 152). Here, then, can be found capital's theoretical and political understanding of "constraints". From this point of view, here and now, the alternatives are either liberalism - that is, a strategy to increase the social rate of exploitation - or the reduction of the social rate of profit. From this point of view, a Keynesian - style management of capitalism has become unthinkable, not so much because an increase in demand will not increase employment, but rather because Keynesian policies presuppose a social structure able to engender institutionalised productivity deals between labour bureaucracies and employers, able to subordinate the social rate of exploitation to economic growth. This social compact, this class composition, has gone forever, destroyed through restructuring after it became a political composition and began to threaten capital. Its dismantling also destroyed the material base of any joint (union - employer) management of the rate of exploitation. At the microeconomic level, and in the face of a restructuring based upon the growth of capital's technical composition, "the battle against public debt" is mainly a battle to reduce social variable capital and to increase the social rate of exploitation - this is the old adage behind the mystifications used to legitimise the cuts.

And there have been many mystifications. For example, the high public debt in Italy is really nothing more than the combined result of fiscal evasion by privileged social strata, financial aid to those firms which restructured themselves at the expense of the workforce, clientelism, and interests on debt (Fumagalli 1994). A real Welfare state, after all, has never existed in Italy. In other countries, such as the United States, the enormous public debt of the 1980s was the combined product of anti - inflationary policies (that is, the capitalist management of the crisis of Keynesianism), tax cuts for companies and high income groups, an increase in military spending, and an increase in interest payments (itself caused by interest rate rises that had provoked, at the beginning of 1980s, a recessionary phase aimed at helping anti - worker restructuring) (Cleaver 1981; Heilbroner 1989). This is the kind of public debt that governments want the great majority of the population to pay.

It's obvious that any reduction of public debt causes, through a multiplier effect, a reduction of economic growth and therefore employment. It has been estimated that were all European countries to conform to the Maastricht criteria, there would be cuts in expenditures equivalent to 1/5 of the European GNP in 1994. This of course would have catastrophic effects in employment. It is also obvious that the reduction of the deficit/debt could be obtained through cuts in military expenditures and increased taxation upon the richest part of the population (this could also compensate for the losses in income endured in recent years by the great majority of the population). It is also well known that the public debt is not so great as to justify cuts in social expenditures. Indeed, if government capital expenditures are distinguished from government current expenditure and adjusted for inflation, the deficit reduces notably (Bellofiore 1993). It has also been established that the greater part of interest is owed to enterprises and high income families, in the United States even more than in Italy (Heilbroner & Berstain 1989), so that a healthy moratorium or annulment of debt would be in the interest of most. All this is obvious, but the alternative is never raised in the debate. The constraint is clear, and the equation has only one unknown: how much should social expenditure be reduced in order to meet public debt? Or, how can the social security system be restructured so that it weighs less heavily upon on the state budget?

Let's take the example of pensions. The British prime minister, the Tory John Major, regularly attacks his Labour colleague Tony Blair, accusing him of fomenting the "politics of envy" when - in the face of widespread popular discontent - he timidly points the finger at the scandalously enormous profits made by recently privatised firms over the last few years (a privatization, moreover, that has not been followed by any significant reduction in prices or increase in service quality). The "politics of envy" seem instead to be embraced by those Italian and French commentators scandalised at the relatively short working life of some groups of workers in the public sector. But what is so unfair about retiring at the age of 50 or 40? If this is unfair to those who must work until 65, then we should simply adjust the retirement age downwards. Little if any of this perspective, however, has made it into the debate. The "conventional wisdom" proposed instead by the press and TV networks is that the current difference in conditions is unfair.In highlighting this, though, they all reach the same conclusion, which is that everybody should retire at 65, since to level the retirement age downwards would be irresponsible given the public debt. Keeping for a moment to the theme of pensions, there is also the classical argument that, demographically speaking, the number of workers paying contributions is declining, while the number of pensioners benefitting from them is on the rise. From here stem all the proposals to lengthen people's working life and working day, to abandon inter - generational solidarity, and to promote private and integrative pensions. The validity of this argument, as with all economic arguments, is limited to the set of assumptions made - in other words, to what is left out of the picture. In this case, a very simple historical fact is overlooked. If it is true that the number of young workers has fallen in relation to those who are now retired, it is also true that the social productivity of the former has increased. Since the difference between labour productivity and wage rates allows us to estimate the rate of exploitation in the form of profit per hour, it is clear that in principle one could comfortably "support" the growing number of the elderly by eroding profits.(3)

The true question of pensions, one which is strategic for capital, seems therefore to be firstly, the attempt, through the introduction of private pensions and thus investment funds, to increase the link between workers' savings and capitalist investment. Since workers' savings are simply postponed consumption, which in the hands of today's bankers become capital that can be loaned out in the production process, it follows that, secondly, the strategy on the pension front tends at any given time towards increasing the quantity of available capital that can be thrown into the valorization process. In doing so, however - and here is my third point - this strategy also tries to link the fate of workers increasingly to the prospects of capitalist accumulation. The higher the social conflict, the more that the financial Leviathan makes share prices fall, the more the value of workers' "capital" - which from their point of view is simply future consumption - falls. Once internalized, this link may serve to restrain conflict. For example, were share price to fall, today's workers who contribute to private pensions would have to "invest" an increasing amount of capital in order to guarantee a given future consumption. So, while the question of pensions is simply one of the many themes concerning the current restructuring process, attempts to "reform" it tend to increase the rate of social exploitation, to attack current consumption and increase the length of people's working lives, and to mobilise the active subjectivity of workers in a capitalist sense, by attempting to transform all citizens into careful and anxious readers of the daily stock exchange bulletins, an activity which was once the preserve of a privileged and wealthy minority.

3. Globalization of production processes

A second meaning generally associated with the term "globalization" concerns production. There is no doubt that in the last twenty years, the process of restructuring in the North that followed the social conflict of the 1970s has led to the establishment of production lines in parts of the world where lower wages and a greater intensity of work guarantee higher profit margins for international enterprises. This phenomena can be described as a leopard - skin spread of manufacturing concerns to the South of the world, housed in free - export zones created by local governments which guarantee to transnational companies favourable fiscal terms, the use of infrastructures, and a large reservoir of very cheap labour power, itself made available through "enclosure" policies directed against traditional forms of economic activity.

While South Korea, Taiwan, Mexico, Malaysia, Haiti and Brazil are the countries with the highest numbers of workers in such areas, the industrial triangles in the south of China have developed at a remarkable rate over the last decade. The majority of industries in these areas are owned by big transnational companies, and the majority of workers are employed in the electronic, textile, and clothing sectors. And while the total numbers employed in these areas is not enormous, the figures have grown significantly in recent years. Total employment in Mexico's Maquiladoras, for example, has gone from 110,000 in 1980 to 500,000 in 1992, while in Asia about 700,000 workers are employed in the free - export zones. What is significant is the proportion of female workers involved. In Asia these are mostly unmarried women aged between 17 and 23, with the highest densities being 88% in Sri Lanka, Taiwan, and Malaysia, and around 75% the South Korea and the Philippines. Often there is a widespread use of "training contracts" as a way of paying only 60% of the local minimum wage, with workers repeatedly fired and re - hired, as a way of guaranteeing for the employer a permanent cut in wage costs (Knox and Agnew 1991).

Table 1 summarises occupational changes in manufacturing industry in some key areas of the world economy. Although the loss of 9 million jobs in the North has not been completely offset by the increase of 6 million in Latin America and Asia, the table clearly shows a structural shift within the international division of labour. The limitations of this comparison should also be noted, since no data has been included for Africa (which apart for South Africa is not, in any case, particularly relevant to a discussion of international manufacturing), China and other countries of East Asia. As has been mentioned, an important aspect is that of gender composition. In Table 2 the ratio of female to male workers in manufacturing industries between 1984 and the early 1990s is set out - a ratio which, apart from India and Brazil, is higher in developing countries than in those of the North. In Malaysia, Singapore, and Sri Lanka, the number of women waged workers has overtaken that of men, while in Thailand the number is almost identical. In many instances, this has meant a conscious choice by the companies concerned to hire relatively young women, since these workers are considered more submissive. Furthermore - and especially in the textile industry, where the use of fixed capital is often modest - it is relatively easy for employers to react to any worrying signs of workers' struggles by closing their plants and relocating elsewhere. As The Economist notes, "the clothing industry uses little capital and is very mobile. All you need is a shed, some sewing machines, and lots of cheap nimble fingers" (Economist 1987: 67).

Table 1 - Wage employment in manufacturing (millions of people)

1974 1984 1993 % 1974 - 84 % 1984 - 93
North America 22 21.3 19.8 - 3.18 - 7.04
Japan 12 12.1 13.7 + 0.8 + 13.2
Western Europe 35.2 28.3 (5) 26.5 (6) - 19.6 - 6.3
Total Centre 69.2 61.7 60 - 10.8 - 2.75
South Asia 5.6 6.4 6.5 + 14.3 + 1.56
S - E Asia 6.3 6.4 (7) 9 (8) + 1.6 + 40.6
Latin America 7 7.6 (9) 9.5 (10) + 8.6 + 25
Total Periphery 18.9 20.4 25 + 7.9 + 22.5

Table 2 - Ratio of female to male manufacturing workers (11)

1984 1993 (12)
USA 0.48 0.48
UK 0.41 0.43
ITALY 0.49 0.49
GERMANY 0.41 0.41
JAPAN 0.54 0.55
CHINA 0.67 0.81
HONG KONG 1.02 0.8
INDIA 0.1 0.1
SOUTH KOREA 0.61 0.65
MALAYSIA 0.81 1.04
SINGAPORE 1.06 1.11
SRI LANKA 0.6 1.36
THAILAND 0.72 0.98
BRAZIL 0.32 0.37

We should not be deceived by this very broad picture, since current changes are more complex than a simple move of the Fordist factory from North to South. At least two further pieces of data demand consideration. To begin with, none of the big transnational corporations can at present be truly defined as global. Of the one hundred transnational corporations on the Fortune list,

around forty firms generate at least half of their sales abroad; less than twenty maintain at least half of their production facilities abroad; with very few exceptions, executive boards and management styles remain solidly national in their outlook; with even fewer exceptions, R&D remains firmly under domestic control; and most companies appear to think of a globalization of corporate finances as too uncertain (Ruigrok and van Tulder 1995: 159).

Secondly, the great majority of investment flows between nations occur within the triad of US - Europe - Japan. According to the data of one United Nations agency, four - fifths of the movement of international capital during the 1980s occurred in these regions. And although the yearly economic growth rate of foreign investment in developing countries has almost doubled in recent times, it is also true that the amount of foreign investment in developing countries has fallen from 25% of the world total (1980 - 84) to 19% (1985 - 89) (UNCTC 1991: 10).

As some researchers have suggested, this data means that "globalization," rather than being a given reality to which we must submit ourselves, is actually a strategic objective, and therefore capable of failure (Ruigrok and van Tulder 1995: 175). Moreover, there currently seem to be two alternative "global" strategies for reaching this objective (Ruigrok and van Tulder 1995: 178 - 182). The first of these, globalization in the strict sense of the word, aims at establishing an international division of labour within the transnational corporation through a vertical integration of the production process. The production cycle, in other words, will be globally subdivided according to criteria of comparative costs. Forms of production that are labour - intensive and in need of little capital are destined for low wage areas, while the production of those components that require sophisticated technologies or high value - added services will instead be concentrated in areas that offer a suitable structure and environment. This strategy, then, very much resembles the old Fordist one, but now deployed in new forms and contexts. The factory becomes the global factory, in which the different production departments are spread throughout the world. As a consequence, the geographical dispersal of different types of workers within the wage hierarchy constitutes a barrier to the circulation of struggles. To the extent that production is still concentrated in the countries of origin, this global strategy serves to threaten and discipline the bargaining power of the internal domestic working class.

The second global strategy, called "glocalization", aims at an inter - firm division of labour within enterprises that remains confined to the triad of the US, Japan and Europe. This alternative strategy is based more upon a Toyotist than a Fordist managerial philosophy, with firms trying to "glocalize" through the subcontracting of productive cycles and the structured control of supplier networks (outsourcing). For this reason, this strategy is based largely upon the presence within the global North of de - regulated labour markets and a flexible labour force.

A couple of observations follow on from the fact that the processes of globalization are centred around these two strategies. First, globalization and glocalization produce contradictory effects. For example, the first tends to promote international trade together with the international division of labour, while the second, being concentrated within particular blocks, tends to reduce them. This indicates that the world economy is not subject to one dominant structural dynamic, given that the hierarchical integration of North and South, which follows on from globalization, or the dichotomy between development in the North and underdevelopment in the South, which follows on from glocalization, are both possible scenarios, depending upon which strategy prevails. This in turn depends, of course, upon the relative difficulty of implementing each strategy in the face of a spreading revolt within the South against work rhythms and low wages, and within the North against casualization and cuts to welfare benefits.

Secondly, the interaction between these two strategies tends to accelerate the geographical diffusion of the dichotomy between development and underdevelopment. Taken as a whole, then, the current trends don't seem to point to a worker subject with homogeneous work and employment conditions, let alone to a clear distinction between workers of the North and those of the South. The vertical integration strategy deployed by globalizing firms exploits the lower wages of the Third World, and uses them as a bargaining chip to push down workers' wages in their home country. Furthermore, it also exploits the skilled workers of the South: those engineers, technicians, and programmers who are increasingly entering the ranks of the transnational corporations at only a fraction of the costs of their Northern counterparts.(13) The horizontal nature of the glocalisation strategy is based upon the dichotomy between a Toyotist management of labour power in the "mother corporation" (workers' participation, quality, etc.), and the use of territorially dispersed, subcontracted labour power. The latter in turn is based upon a de - regulated labour market that induces the workers to greater competition and flexibility. The net result of the interaction between these strategies of globalization and glocalization is the simultaneous presence of development and underdevelopment in the same country, region, city - or even neighbourhood.

The erosion of the social fabric, the increase in poverty and marginalisation produced by cuts to public spending can become functional to accumulation, especially so far as the strategy of glocalization is concerned. This strategy can even capitalise to some degree upon the lack of social cohesion, when the increase in marginalisation leads to the construction of prisons as outsourced, forced labour camps. This is already a reality in the United States. Faced with an explosion in detainee numbers, prisons managed by private companies expanded by 500% between 1985 and 1995, making theirs one of the most lucrative of businesses. Once guaranteed a state subsidy, the companies managing prisons can concentrate upon cutting costs and maximising profits. Here are some cases taken from the PEN - L Internet discussion list:

* the majority of workers from a furniture company (Michigan Brill Mfg. Co) lose their jobs and $5.65 hourly wage, while the inmates of the state prison are hired instead with a wage ranging from 56 to 80 cents an hour.

* In Texas, about 100 inmates of the private prison in Lockhart assemble electronic components for industrial giants such as IBM, Dell and Compaq, production performed by an Austin firm before its closure. The prisoners earn the minimum wage and no other benefits.

* In Ohio, the inmates of the Ross County's prison were assembling car parts for Honda, until the United Auto Workers union succeeded in stopping the operation. Now the inmates assemble toys and input data in computers.

* Juvenile prisoners answer the telephone and take bookings for TWA near Santa Barbara. The inmates in San Quintino input data in computers for private companies.

* Staff at the prison in Pendletone Oregon manage the company Oregon Corrections Industries, Unigroup, where the inmates produce jeans with the brand name "prison labor".

Third, these strategies depend - at least for part of the production process, and in some of its geographical locations - upon the active participation of workers in quality control, in product innovation, in production design, and in the self - management of the firm's use of their labour power. In the words of Marco Revelli,

The Japanese industrialists of the post - Fordist era and their Western emulators . . . think it "fortuitous" that workers remain human beings. They can afford to solicit their employees "to think", "to re - humanise themselves", because they are convinced that they possess a monopoly upon human nature (and that the "commodity that works" is the only possible way of being human). Thought born in the universe of the factory is inherently conformist and directed towards the goals of production (1995: 192).

Unfortunately for the philosophy of these post - Fordist managers, their employees have a rather different opinion. The results of a survey recently taken among 1500 hundred workers and managers by Kepner - Tregoe, a U.S. consultant firm, have been so shocking that it was decided to have them checked again by another group of consultants. The results clearly show that every aspect of the philosophy of workers' participation is matched by a disenchanted cynicism amongst workers. Kepner - Tregoe's president, T. Quinn Spitzer, had this to say: "The vitriolic response was amazing . . . Workers don't like their companies, and there is a fundamental social change going on in this country regarding workplace relations . . . The workers hear the verbiage about how 'our people are the most important asset we have' and they want to throw up." (quoted in Collective Action Notes 1996).

Fourth, both globalisation and glocalisation are based upon a labour power which is presently disorganised, especially at the international level. Despite this, the low wages in the labour intensive parts of the global factory engendered by globalization are the targets of movements and struggles that seem to replicate, at an accelerated pace, the high points of class struggle in the Fordist West.(14) And while the Fordist factory of the North had emerged hand in hand with a wage policy which attempted to recuperate workers' antagonism - just think of Ford's $5 day scheme in 1914 - in the South wage increases have mostly been the product of workers' struggles. Table 3 compares International Labour Office strike data from some of the countries of the world's South. As can be seen, apart from the case of the Philippines, where the period 1984 - 1988 coincided with struggles against the Marcos regime, the developing countries sampled have witnessed a growth of industrial class conflict, against its apparent stagnation in the United States. These figures must be treated with caution, however, since they report only official strikes.

Table 3 - Numbers of strikes (average working days lost for strikes, thousands)

1984 - 88 1989 - 93 % rates of change
USA 7257.82 7001.76 - 3.52
NIGERIA 225.66 1414.86(15) + 527
MEXICO 1436.6 1636.58 + 13.87
HONG KONG 2.8612 5.2934 + 84. 9
INDONESIA 165.0534 811.59(16) + 391.7
SOUTH KOREA 2500.78 3386.42 + 35.41
MALAYSIA 16.59 74.72 + 350.27
PHILIPPINES 2287.16 974.57 - 57.38
SRI LANKA 164.57 286.86 + 74.30
THAILAND 96.78 155.34 + 60.50

This growth of the workers' movement within the Fordist parts of the South forces transnational corporations towards a greater mobility, insofar as that is possible. So, if American clothing factories such as Levis or Nike subcontract large parts of their production process to countries like South Korea, these in turn subcontract to Chinese or Indonesian factories, where wages are lower, and the workers' movement does not yet pack the punch of its South Korean counterpart. Finally, one also has to bear in mind here the possible effects of social antagonism within the cycle of high - tech capital upon a range of geographical areas (Witheford 1995).

As for the strategy of glocalisation, based upon the flexibility of work in the North, two examples - one from Paris, the other from Liverpool - seem worthy of mention. In the first, the massive working class response to Juppé's measures during December 1995 again raises the spectre of rigidity against the strategy of flexibility. In the second, an ongoing action by English dock workers is significant for a number of reasons: because it opposes their bosses' decision to use legally guaranteed forms of flexibility and to fire workers who had struck against casual labour, and because the strikers are bypassing the law against sympathy strikes in UK through the concrete solidarity of Canadian, US, Israel, Australian, Spanish, Italian, Portuguese, and other dock workers who are actively boycotting ships coming from Liverpool. This is a concrete example of how the struggle against elements of flexibility can throw up a global working class response. Not only this, but as the mobilisation in the early 1990s of hundreds of groups in Mexico, US, and Canada against NAFTA has shown, this struggle is trying to make use of communication technologies and the Internet both to accelerate and organise the circulation of struggles, and to confront capitalist strategies of globalization with an equally global antagonism.

4. Conclusion

Within current common sense, the word "globalization" is associated with a perception of the fate of contemporary societies as fixed, immutable and given. If there is some space for changes, these are nonetheless confined to what is necessary for adaptation to global competition's new rules of play, or for the fine - tuning of the budget. But it seems impossible to contemplate radical changes, even within the hypothetical horizon of parties belonging to opposing camps. The ideology of the "failure of communism" (read state capitalism) is used here to taint as fanciful any attempt to think beyond the basic assumptions that constitute the most expeditious tallying of life in pursuit of accumulation. With all its dependence upon subjectivity and creativity, modern capitalism can only promote a political culture characterised by the absence of "radical" imagination, by the absence of an alternative vision of existence - not in the distant future, but here and now, where the present material and subjective bases could render it conceivable, if not actualisable.

It seems to me that the picture of globalization set out in this paper is quite different from that static, given, incorruptible and immovable one presupposed in political debates and offered up in the common places of traditional channels of information. Our picture illustrates that the globalization of both finance and production processes is a strategy, and thus subject to failure. Furthermore, it seems that we need to respond in two ways to the passive acceptance of the economy's autonomy. Firstly, with autonomy from the economy, with a critical and radical thought that refuses to accept the basic assumptions imposed by a representation of the world finalised in the elaboration of strategies for the maintenance of the current system of affairs. Secondly, with the economy of autonomy, economy understood here not as a system of capitalist relations, but as an alternative system of social relations, definition of needs and of human modes for their satisfaction, given the current material and subjective bases. In short, against the false realism of economic fetishism we have to recover a utopian discourse, in thought as well as in antagonistic and constitutive practice. Through an interesting play on words, the word utopia is defined in English as no/where - no place. But this could also be read as now/here - here and now. Utopia therefore not as an alternative model, not as a party program or a plan in search of subjects to subordinate, but rather as an open and inclusive horizon of thought, as antagonistic practice and communication. If theoretical and political recomposition must occur as a heterogeneity of antagonistic themes, and thus of subjects - labour, production, reproduction, race, gender, health, environment, education etc. - then this entails a discourse which to those who manage the Great Leviathan will necessarily seem "utopian": that is, as a discourse centred around the needs and aspirations of real human subjects, uncoupled from the priority of social relations which take the form of despotic things.


Bello, Walden and Stephanie Rosenfeld (1992) Dragons in Distress. Asia's Miracle Economies in Crisis. London: Penguin. Bellofiore, Riccardo (1993) 'Per una ripresa alternativa dello Stato Sociale', Bozze 3, September. Cleaver, Harry (1981) 'Supply - Side economics: splendori e miserie', Metropoli 7, December. Cleaver, Harry (1988) 'Close the IMF, abolish debt and end development: a class analysis of the international debt crisis', Capital and Class 39. Coates, Ken and Stuart Holland (1995) Full Employment for Europe. Nottingham: Spokesman. Collective Action Notes (1996) 9 Jan - Mar. (POB 22962. Baltimore, MD 21203, USA. E - mail: [email protected]). Fumagalli, Andrea (1993) 'L'economia italiana sotto il gioco di Maastricht', in L. Berti and A. Fumagalli, L'antieuropa delle monete. Roma: Manifestolibri. Gramsci, Antonio (1994) Scritti di economia politica. Torino: Bollati Boringhieri. Heilbroner, Robert and Peter Bernstein (1989) The Debt and the Deficit. False Alarms/Real Possibilities. New York: W.W. Norton & Co. Knox, Paul e John Agnew (1992) The Geography of the World Economy. Harlow: Longman. Ovetz, Robert (1996) 'Student Struggles and the Global Entrepreneurialization of the Universities', Capital and Class 58, Spring. Revelli Marco (1995) 'Economia e modello sociale nel passaggio tra fordismo e toyotismo', in Pietro Ingrao and Rossana Rossanda, Appuntamenti di Fine secolo. Roma: Manifestolibri. Ruigrok, Winfried and Rob van Tulder (1995) The Logic of International Restructuring. London: Routledge. UNCTC (United Nations Industrial Centre on Transnational Corporations) (1991) World Investment Report 1991: The Triad in Foreign Direct Investment. New York: United Nations. Witheford, Nick (1995) 'Cycle & Circuit of Struggle in High - Technology Capitalism', Common Sense 18.


(1) See Cleaver (1988) for a general class analysis of the debt crisis and IMF policies. To my knowledge, we still lack a similar class analysis of the most recent developments of the debt crisis and, in particular, of the development of financial crisis following the beginning of the Zapatista rebellion in 1994.

(2) This article was written before German chancellor Kohl's announcement late in April 1996 of a cut of 70 million marks to public spending, and before most of the discussion about possible elastic interpretations of the Maastricht criteria. The former steps up the battle against public spending, the latter concedes to popular pressure against cuts: Europe's fate is still to be decided on the ground.

(3) Furthermore, the pensioners of today are the workers of yesterday who, whatever the balance between their past social insurance contributions and the pensions they receive, have created more wealth than they have been paid.

(4) North America = USA and Canada. Western Europe = Austria, Netherlands, Belgium, Germany, Italy, Sweden. South Asia = India and Sri Lanka (1984 and 1993), India, Sri Lanka and Bangladesh (1974). South East and East Asia = Hong Kong, Republic of Korea, Malaysia, Philippines, Singapore, Thailand, Taiwan (only for 1974). Latin America = Mexico, Brazil, Venezuela. Source: Knox and Agnew (1992) and my updates.

(5) Holland 1987.

(6) Austria 1989, Belgium 1991, Germany, Italy and Sweden 1992.

(7) Thailand 1985.

(8) Malaysia 1991.

(9) Mexico 1985.

(10) Brazil and Venezuala 1990.

(11) Source: Knox e Agnew (1992) e my updates.

(12) Italy 1992, Germany 1992, China 1991, India 1989, Malaysia 1991, Singapore 1990, Sri Lanka 1991, Thailand 1990, Brazil 1990.

(13) "A top - level scientist at a major American corporation would cost at least $250,000, including salary, benefits, and overhead. The same calibre of talent could be had in the East for one - tenth the cost" (Reich 1991: 124; from J. Holusha, "Business Taps the East Bloc's Intellectual Reserves," The New York Times, February 20, 1990, pp. A1, D5).

(14) Just as the mass worker in these regions has been created at an accelerated pace, so too are the forms of struggles and levels of confrontation typical of the mass worker reproduced at a faster pace than those seen in the Western countries. A case in point is South Korea. "In Korea, labor's attitude bordered on the insurrectionary, making nearly impossible the institutionalization of Western - style bargaining processes . . . precisely because labor and other groups had been strongly repressed in the pursuit of high - speed development, political decompression did not lead to the creation of a new consensus around the traditional strategy of growth but to a politics of polarized struggle over the distribution of income, sectoral priorities, the trade - off between environmental and economic priorities, and the direction of development itself" (Bello and Rosenfeld 1992).

(15) 1989 - 92.

(16) 1989 - 92.