Study Guide for Chapter 4 of Introducingglobalization

Labor:

Study Guide for Chapter 4 of IntroducingGlobalization

Prepared by Matthew Sparke for students using

Introducing Globalization: Ties, Tensions, and Uneven Integration, Oxford: Wiley-Blackwell, 2013.

Learning objectives:

After completing this chapter, you should be able to:

1)understand the ties of sourcing efficiency and downward harmonization;

2)describe the historical shift from Fordism to Post-Fordism;

3)explain the implications for workers of Post-Fordism;

4)list new global challenges facing attempts to organize worker solidarity;

5)identify new strategies used to develop global solidarity among workers;

6)apply knowledge of global labor market forces to personal job search plans.

Main arguments:

While Chapter 3 explained the emergence and ongoing transformation of global commodity chains in terms of capitalist imperatives to make profits, the underlying argument of chapter 4 is that the basic source of these profits has remained the same throughout capitalism’s long history: namely, labor. The chapter further explains that businesses need labor both as workers who produce commodities and as consumers who buy commodities, although – and this is a key point of the chapter – the workers who make and the workers who consume no longer work and live in the same countries thanks to global commodity chains. In the mid twentieth century they did tend more often to overlap, and the balance between the worker role and consumer role was generally achieved within particular national economies. This balancing of national mass production with national mass consumption has come to be known as Fordism because of the ways in which Henry Ford himself believed in making sure his workers were paid enough (and were socially encouraged enough) to buy his company’s cars. But the development of global commodity chains since the 1970s has transformed this Fordist approach to balancing production and consumption on a national basis. Instead, businesses now seek out both workers and consumers globally, and the old need to pay national workers enough to buy nationally made goods no longer applies as a dominant business model. For all these reasons, the short cut to understanding the main points of Chapter 4 is Table 4.1 on page 115.

Figure 4.1: Changing capitalist approaches to labor management
FORDISM / POST-FORDISM
National mass-production / Strategic global production
Factory assembly lines / Subcontracting & line teams
In house commodity chains / Market network commodity chains
Just-in-case inventories / Just-in-time deliveries
Taylorism / Flexibility and benchmarking
Working-class solidarity & union growth / Workers divided & unions decline
National mass-consumption / Uneven global consumption
Government demand support / Minimalist government
Government arbitration of labor & business disputes / Anti-union laws & pro-business facilitation
Development of welfare-states / Development of workfare-states
Government provision of free or affordable public services / Government cutbacks in public-services and universal access
Regulation of finance for long-term national interest / Deregulation of finance for short-term investor interest

The term “Fordism” was coined by the Italian Marxist, Antonio Gramsci, who died young – in 1937 – after being imprisoned by the fascists. He therefore never saw or wrote about post-Fordism, and was more interested in exploring the historical emergence of Fordism in America in the early twentieth century, not its global eclipse heading into the twenty-first century. Nevertheless, his historical materialist approach still anticipated the idea of Fordism being a phase from which new regimes of capitalist coordination would emerge. More than this, it was an approach that understood “labor management” in its largest possible sense, telescoping out of what was going on in terms of assembly lines and the division of labor inside factories to the much larger scene of coordinating capitalist production and consumption in society as a whole. Two big questions follow from looking at Fordism and post-Fordism in this kind of way. First, why did the Fordist era come to an end? And second, what were the implications for the division and organization of labor in the broadest social sense?

Chapter 4 explains the historical shift from Fordist to post-Fordism in terms of basic economic developments in capitalism. By the mid 1960s, the previously war-torn economies of Europe and Japan had fully recovered, and America’s big businesses faced increased competition both at home and abroad from foreign competitors. In this context, the grand Fordist bargain with labor was shaken to the core. No longer did it necessarily make sense to pay national workers enough to consumer national goods if those same well-paid workers might also be buying more and more foreign made goods. And meanwhile, paying American workers well was never going to help in developing effective demand abroad. As a result, American business was increasingly interested in both sourcing as efficiently as possible and finding new ways to beat foreign competitors with lower prices both at home and abroad. Balancing national mass production with national mass consumption in the Fordist way, with all the associated governmental involvement in demand management, welfare-state supports, and other strong public services, therefore came to look increasingly anachronistic, or at least unnecessary and unaffordable from the political-economic perspective of business.

That last point about the political-economic perspective of business is also worth stressing because alongside the underlying economic causes of the end of Fordism – i.e. the growth of global competition – came other much more directly political causes, too. These played in different ways at different speeds in different countries, and in some countries such as France and Germany, the balance of power supporting the old Fordist grand bargains lived on for decades. But in the US, the original home of Fordism, the impulse towards post-Fordism also came as an organized political reaction from business to all the gains organized labor had itself made in the 1960s and early 1970s. Funding think-tanks, academics, and politicians, this business break-away from Fordist bargaining with organized labor helped in turn to create the new neoliberal consensus on post-Fordist labor flexibility, de-unionization and the roll-back of the welfare state.

From the perspective of workers, meanwhile, the full scope of the problems presented by the post-Fordist, and increasingly international division of labor stretched from the personal challenges presented by business experiments in subcontracting, temping, flexible line teams and other new styles of worker management, to the national scale where unions and the right organize came under assault, to the global scale of adjusting to “race to the bottom” pressures, including “whipsawing” wage and benefit cuts, enabled by the offshoring of low-skilled and increasingly high-skilled work to cheaper foreign factories, offices, research centers, and laboratories. Already under direct political pressure from neoliberal political leaders such as Reagan and Thatcher, traditional unions were also initially ill-equipped institutionally and even linguistically to start to re-organize internationally. Many still organized under the banners and terminology of early-twentieth-century labor “internationalism,” but most unions had become accustomed to the forms of national wage-bargaining and national deals with national business under Fordism, and so at first found it hard to switch to the post-national organizing necessitated by post-Fordism. This has now begun to change, however, and more unions are now joining with community organizers, immigrant-rights groups and other representatives of workers and their families to both imagine and organize new forms of global solidarity.

Challenges still abound for global worker organization, including enduring gender inequalities in pay and treatment that are exacerbated by vast national, cultural, and linguistic divides between workers working and consuming in the same global commodity chains. So, while transnational responses have been developed by global union federations, cross-border works council, the ILO, and other international worker representatives, it is important to register the real losses workers have suffered as a result of the transition to post-Fordism. More upbeat commentators prefer to remind us of the benefits flowing to highly educated and well-trained workers who enjoy the skills, flexibility, and personal resilience that allow them to profit in the sweet spots of high-tech and high-finance employment. But their emergence as a special class of beneficiaries amidst post-Fordist capitalism only exacerbates another of its most remarkable global features: namely, increasing in-country inequality the world over.

Key conclusions:

1)The sourcing efficiencies created by cheap labor in poorer countries create downward harmonization pressures on wages and workplace protections in wealthier countries.

2)Downward harmonization pressures are creating new global divisions of labor.

3)The older Fordist divisions of labor that balanced national mass production with national mass consumption have been replaced.

4)Post-Fordist divisions of labor now link the fates of workers and consumers on a worldwide basis.

5)With the new global divisions of labor also come new social divisions of labor, too.

6)In response, organized labor has begun to develop transnational strategies of global organizing and solidarity building, but these remain less extensive and influential than the global commodity chains of TNCs.