The Causes of Human Rights Violations (47): Globalization

Human history is often viewed as a widening circle of moral concern. In the olden days, the claim goes, people cared only about their siblings and tribe. Then they started to care about their class, their nation, their religious community, their civilization, and ultimately their shared humanity. Cosmopolitanism, or the equal respect for all human beings whatever their affiliation or location, is then the end-state of morality (although some want to go further and include animals or even inanimate objects in the circle of moral concern). This end-state dovetails with human rights concerns because human rights are also the rights of all humans, whatever country, class or culture they belong to.

The widening of moral concern – if it indeed occurred as described – went in tandem with other and more familiar globalization processes, such as increased international trade, integration of different economies, the development of international law, increased communication through the internet, easier transportation, intercultural dialogue, migration etc. And all these different processes interact: communication and transportation foster trade, trade fosters communication, communication widens the circle of moral concern etc.

This story implies that globalization – of any kind – is always or unequivocally beneficial from the point of view of human rights. However, that may not be true. Let’s look at some of the pros and cons of different types of globalization.

Pros

  • Increased migration is almost without exception beneficial to the prosperity and freedom of all parties involved, although the migrants obviously benefit most.
  • Intercultural dialogue promotes tolerance and agreement on human rights, and this dialogue is not only fostered by new technologies but also by international trade. Better communication as well makes people care more about what happens in the world and makes it more difficult for oppressive regimes to hide their oppression. In this sense, communication and trade drive the widening circle of moral concern.
  • Economic interdependence between countries creates a self-interested incentive for governments to promote rights and democracy elsewhere in the world and makes it more likely that international law can impose itself over concerns about national sovereignty. Global economic collaboration requires international regulation, and economic regulation can open the door for other types of regulation, including rights regulation. Countries that depend economically on an international institutional and regulatory system, will have a much harder time invoking their sovereignty when faced with accusations of rights violations, since they already lost a huge chunk of their sovereignty due to economic integration.
  • The increasing importance of multinational companies makes it easier for consumers in one part of the world to lobby for corporate responsibility elsewhere in the world.

Cons

  • Outsourcing, a commonly cited aspect of globalization, can result in people losing their jobs, and the threat of outsourcing can force people to accept lower wages or inferior labor conditions. And work is a human right.
  • The threat of cheap foreign labor and cheap foreign products can lead to protectionism and immigration restrictions, two major causes of poverty in developing countries.
  • Globalization may erode the welfare state because a large part of the tax base – corporations, financial intermediaries and skilled workers – become internationally mobile and can thereby avoid to pay the taxes that governments need to finance their welfare systems. The tax base can also decrease because governments cut taxes in an effort to maintain the competitiveness of local businesses.
  • The previous three phenomena – outsourcing, labor and product competition and pressure on the welfare state – may not only lead to restrictions on international trade and migration, but can also counteract the widening circle of moral concern: politicians and local businesses can and often do use these threats to stir up xenophobia. A xenophobic public is more likely to vote in favor of trade and immigrations restrictions. On the other hand, there’s some evidence that people’s circle of moral concern is wider in countries that are more affected by globalization.
  • Globalization implies a certain degree of power deflation: states lose power vis-à-vis the market, multinationals, international institutions and each other. This in turn means that decisions affecting the well-being of people are taken by outside forces. Democratic self-government – which is a human right – is then threatened.
  • The interconnectedness of international financial markets increases the likelihood that a local financial or economic crisis spreads to the rest of the world.
  • A higher number of increasingly globalized multinational companies also means a higher risk that some of those threaten indigenous cultures, exploit poor workers etc.

On balance, however, I believe that globalization is good for human rights, even though I can’t quantify the pros and cons.

Communism and Corporate Democracy

In an effort to convince you that my new $19.95 book is actually worth a lot more than that, I’m blogging some excerpts. Today, the importance of corporate democracy.

What can we learn from communism? I realize that, for many people, learning from communism is like listening to the devil. But that’s intellectual laziness, dismissing something without fully understanding it. So bear with me.

For example, our capitalist systems have shed many of the extreme injustices that characterized them in the time of Marx. But it’s still the case today that ownership of the means of production yields a kind of economic power over the workers who depend on the owners and who are forced to sell their labor power because they don’t have means of production of their own.

This dependence results in economic uncertainty and possibly poverty, because of the competition between workers trying to offer the best deal to employers. The fact that no modern economy has full employment makes this competition inevitable, even though today it’s more an international than a national competition. The “reserve army” now seems to be stationed abroad. International outsourcing (or the threat of it) pushes wages down.

We should also acknowledge that economic dependence in a system of private ownership of the means of production can be psychologically detrimental in the sense that it makes creative productive activity, self-expression and self-development (which require the free use of means of production) very difficult if not impossible. Moreover, it means that people are forced to work in systems based on discipline, supervision and control. Corporations have become islands of authoritarianism in a democratic world. If democracy and self-government are important in politics, why not in business?

Given the importance of work and production in the life of an individual and their potentially beneficial role in personal self-development, and given the importance of democracy and self-government, it is justified to give people a say in the way in which the means of production are used. The owners of the means of production should not be entitled to decide unilaterally on the conditions, organization, purposes, processes and meaning of production. Production is an important part of human life and people should have a say in it.

Concretely, this means a kind of corporate democracy and corporate participation. Participation, not by the shareholders (corporate democracy is today mostly viewed as a right of shareholders), but by the people directly involved in production, i.e. the “workers”.

Communism traditionally proposes the end of the employment relationship (or the right to rent people) and the common ownership of the means of production as the ways to achieve this participation and to abolish so-called alienation (which means working for a wage, or working in an obscure system of division of labor, rather than working for a product). The workers in the factory, rather than the capitalists or the shareholders, would own the factory and all the assets in common. Or, more correctly, society as a whole, which in communism means the class of workers, would own the totality of all means of production, because otherwise the workers would be tied to one specific means of production and wouldn’t be able to switch freely to another one.

This would obviously spell the end of private property, not necessarily private property as such, but in any case private property of the means of production.

This is unacceptable because private property is an important value. It’s unequal distribution should be criticized, as well as the exclusive right of decision of the owners of the means of production, but there are good reasons to keep the right to private property more or less intact.

Common ownership of the means of production, as proposed by traditional communists, is not the only means to create corporate participation and worker control over production. Communism should simply mean the community of workers in a factory or corporation deciding more or less democratically on their work. Modern-day capitalism has in some cases reconciled private ownership with large measures of worker participation. Many decisions in companies are now taken by the owners and the workers together. (This participation is not incompatible with the free market either. A free market is a system between economic agents, not within them). But we should try to go further and extend and deepen this participation in order to make production and work more meaningful.

Private property of the means of production should not be understood as an absolute right to govern the workplace dictatorially. And the abolition of private property is not a prerequisite for corporate democracy. This is evident if we take a look at historical cases of communist rule, where private property was abolished (to some extent) but corporate governance continued much along the same lines as in capitalism. The bosses changed – autocratic party members and government bureaucracy instead of capitalists – but the workers didn’t have more influence.

This proves that corporate democracy requires something more than or different from common ownership. Private ownership, strictly speaking, gives the employer only the right to label someone a trespasser.  So abolishing ownership will not, of itself, change how production takes place. Changes have to occur, not on the level of the ownership of the means of production, but on the level of the organization of production.

You can buy the book here. More about Marx here.

The Causes of Wealth Inequality (5): Globalization

Globalization is supposed to have lowered the earnings of less-educated workers by putting them in direct competition with low-wage workers around the world. This competition put pressure on wages through international trade in goods and services; through the relocation or threat of relocation of production facilities to overseas locations; through competition with immigrants in local labor markets; and through other channels. …

U.S. and European workers are told that … our societies can no longer afford a generous welfare state. …

Contrary to the standard framing, which presents globalization as something that no nation can escape or even attempt to shape, we can choose the terms under which we integrate capital, product, and labor markets across countries. Over the last 30 years we have indeed “chosen” a particular form of globalization in the United States – a form that benefits corporations and their owners at the expense of workers and their communities. If we had chosen globalization on different terms, however, economic integration would not have required rising inequality. Another globalization is possible. (source, source)

So globalization, as it has occurred and is occurring, causes higher inequality in the West in two ways:

  • The direct competition with overseas workers who can produce at lower wages puts downward pressure on wages in the West, especially for low-skilled workers at the wrong end of inequality.
  • Governments in developed countries react to this competition by restricting social safety nets because the taxes necessary for the funding of these safety nets hurts the competitiveness of local businesses, a competitiveness already under pressure from low-cost labor in the developing world. Less generous safety nets obviously also have a negative effect on inequality.

If these effects are real, perhaps they can explain the decline of manufacturing in many developed countries.

However, I’m not sure this pressure on wages is real and significant (I’ll try to find some data), and we also shouldn’t dismiss the benefits for low-wage workers in the West of cheaper products. This particular result of globalization can offset the possible negative wage effects of wage competition.

Also, I’m not sure governments in the West are actively attacking safety nets (here it says they haven’t during the last decades, but it seems that the recent economic crisis has convinced some to start cutting benefits). And finally, we should remember that inequality isn’t just a national problem. The inequality between countries is just as, if not more, important. And globalization has had a beneficial effect on inter-country inequality because it has redistributed wealth from rich countries to poor countries. For example, it’s hard to imagine how China could have had the same success in poverty reduction without globalization. The question is of course whether this redistribution had to come from low skilled workers in the West, rather than from their more wealthy fellow citizens. The fact that it did come, however, was undoubtedly beneficial to the poor in the receiving development countries.

Racism (9): Race and Employment

Racism expresses itself in different ways, one of which is discrimination in employment:

In 2004, Jean-François Amadieu, a sociologist at the Sorbonne, sent out 500 CVs replying to ads for sales jobs in the Paris region. The CVs were identical except in one regard: some applicants had north African names, and others traditional French ones. The white male French names received five times as many job offers as the north African ones. When Amadieu repeated the exercise in 2006, the ratio was 20:1. (source)

Such examples of racism in employment policy have an impact on unemployment rates across races. Those are very unequal for different races.

And then the numbers exclude those who are in prison. Given that there are 5 times as many blacks behind bars as whites in the U.S., including them in unemployment statistics would make the gap even wider. (And why shouldn’t we include them? They obviously don’t earn a living and can’t provide for their families).

Of course, this difference between the unemployment rates for blacks and whites isn’t entirely caused by direct discrimination in employment decisions. Other elements play a part:

  • Jobs are often concentrated in white suburbs, difficult to reach for blacks who do not own a car.
  • Blacks often can’t rely on networks of family businesses as much as whites or Latinos.
  • Blacks “have been relegated to precarious, low-wage work … at disproportionate rates” (source), making them more vulnerable to recessions, outsourcing and competition from immigrants.
  • Indirect discrimination: if blacks receive substandard education, are less healthy and more poor, then this will affect their employment prospects.