-Caveat Lector- http://www.ipaciapc.ca/english/conf/Fred%20Pomeroy.htm
Fred Pomeroy Remarks to IPAC Aug. 31/99 Fredericton Good Morning: Globalization is certainly a subject that�s on everyone�s mind these days. For some it is a panacea for all the ills of the world. For others, it�s a manifestation of evil itself. But like it or not, globalization is real and a part of our world, so we need to take this new reality into account. But what does globalization really mean? How does it affect us as employees and citizens? What do we need to do to come to grips with it and ensure that our interests as Canadians, our democracy and our culture get protected? I don�t claim to have all the answers to those questions. I�m much better at coming up with questions than answers, but I think conferences like this are very important because there�s a certain level of �hype� that we need to be able to separate out as we work on solutions. For example, there�s a widespread perception that a fundamental transformation is occurring in the contemporary world economy. That there is more trade of goods, more foreign exchange transactions, more foreign investment and more people migrating. There�s also the perception that this increased interaction with other nations is producing a qualitative change in the way each nation operates within its own borders. And as economies become more and more integrated, the power of nation-states to influence their own economic activity is eroding. Which is in stark contrast to the rising influence of business and market forces! So what is the reality? I think that when you look closely, the current wave of globalization is most directly characterized by the expansion of global financial markets� where the most dominant market force is the multinational corporation. It�s not about the power of globalization � it�s about the globalization of power! The IMF, and most international financiers and economists would argue that the unfettered mobility of capital is a prerequisite to the success of a global free-trading system. And there is no doubt that gross capital flows have risen dramatically. In fact, foreign exchange trading in 1995 was about 50 times the total volume of world trade that year. But relatively little investment is occurring from one country to another if we look at the net flows of investment. Instead, most international capital transactions are between financial customers who are hedging or speculating rather than investing in real plants and equipment. These speculative games raise the real interest rate, which dampens real investment and economic growth, and only serves to concentrate wealth and political power within a growing worldwide rentier class. World trade, as the ratio of merchandise trade to GDP, has increased steadily from 1973 with a historical high occurring in 1992. However, the increased level since 1950 represents only a catching-up from the level of the early part of the century. If we look at trade in terms of its rate of change, trade integration has in fact been slower since 1973 than what it was at the turn of the century, or indeed during the period from 1950 to 1973. What most distinguishes trade today from trade in the past is that it is controlled by multinationals. In 1994 they controlled at least 70% of world trade, 35% of which was the internal transfer of parts and supplies between affiliates of the same enterprises. The other 35% was product that these corporations made for direct entry into the world market. And a fair portion of the remainder was supplies from contractors to the multinationals. Trading patterns have also changed a lot when we look at manufactured goods. Countries are increasingly trading each other�s manufactured goods. However, the biggest change is in the export of manufactured goods from developing countries. And what is most interesting is that this rise in exports of manufactured goods from developing countries is not concentrated just in low-tech industries. The most rapid increase has been in machinery and transportation equipment, an area that requires substantial technical capabilities. So one of the challenges that we have to come to grips with is the reality that globalization means rising competition from low wage countries for the manufacturing sector of developed countries� like Canada. Foreign direct investment is also expanding rapidly. But there�s a misconception in some circles that multinational corporations are establishing themselves all over the world in a bid for low production costs and to avoid regulations. The reality is that the bulk of foreign direct investment is still concentrated in the industrialized economies. Multinational headquarters in the US, France, Germany, the UK and Japan, and a few other rich nations like Canada, own 93% of all investment in the world. For the past three decades 70% to 80% of these companies� investments have been in each other�s home nations. It is true that there has also been a significant increase in foreign direct investment that flows to developing countries. But only ten developing countries account for 70% of this investing. What this all suggests is that there�s a growing body of evidence that shows that multinationals want to invest in countries with economic growth, a trained work force, a reliable infrastructure, and political stability. And ironically, that many countries have embraced an agenda that is actually destroying the right environment for multinationals. The austerity policies promoted by the IMF and others undermine domestic demand, while reducing taxes and the size of the public sector means less support for education, training, and physical infrastructure. In this country the almost single-minded focus on fighting inflation, attacking deficits and debt, and cutbacks in government and spending on social programs has played a major role in ensuring high unemployment and growing inequality in wealth distribution. If we want to make a proper assessment of the policies we have been pursuing, we need to focus some attention on questions like: �Why does the concept of globalization bother so many people?� �And why are so many NGOs representing poor people, workers and native peoples around the world mounting big campaigns to oppose further trade integration, like the Multilateral Agreement on Investment, that they successfully stopped about a year ago?� The promoters of globalization portray it as an inevitable and natural economic process that is unfolding precisely as economic theory predicts. A process which cannot be diverted or braked by human intervention. We sometimes refer to it as the TINA factor in the labour movement .�which is shorthand for �there is no alternative�. I think it�s important to recognize that globalization is first and foremost an ideology. An ideology where the market is accepted almost universally as the great regulator of our social and economic life, and all individuals, companies and society must submit to it. But today the role of the market is very different than in the past. In earlier periods it was recognized that the market is not, in fact, a solution for all the problems a society faces. Indeed, markets left to operate freely are very prone to generate injustice, insecurity, instability and inefficiency�. So it�s not unreasonable for a lot of people to be apprehensive over markets being assigned a greater role. In many ways the ideology of the market has taken on the trappings of a religion with its� own set of commandments: Thou shalt not resist the process of globalization of finances, capital markets and corporations. It�s unavoidable and irreversible�. and the only question left is how to adapt to it. Thou shalt liberalize your domestic market and cease to protect sectors of your economy. No national interests or social democratic choices shall prevail over the interests of the international speculators. Thou shalt deregulate the functioning of the economy and of society. Nation-states shall not intervene in establishing regulations in the economy. Instead the free market will play this role. It is not up to citizens to decide how society needs to be governed. Thou shalt privatize the public sector. All parts of the economy shall come under control of the private sector: public transportation, train, water, gas, electricity, banks, insurance, hospitals, schools, universities, pensions and culture. Privatization will ensure that material and immaterial resources will be used in the most efficient ways, in the interest of the market. The ostensible virtue here is that the private sector is so much more efficient than the public sector. And last but not least: Thou shalt be a winner. If you don�t compete, or if you lose, your competition will kick you out of the market with all the negative consequences that entails! These �commandments� have been translated into policies that successive governments have either been persuaded, or effectively blackmailed, into adopting � to the advantage of corporations. And the pursuit of these policies and their underlying values has had a profound effect in countries where they have been deployed. For example: The participation of citizens in the governance of the country through the democratic process has been undermined in many cases; The redistribution of income and wealth, which had previously been achieved through government measures to support lower income groups and to maintain social cohesion by dampening extremes of wealth and income has been halted or reversed; Social insurance and welfare systems which used to shoulder, as a shared public responsibility, the burden of economic adjustment and the accidents of sickness have been weakened; Workers� power in the workplace, where working people had made real progress toward exercising some control over their life and destiny has been reduced; And the concept of �public service� as the concern of a government charged with protecting the collective and public interest has been eroded. As a result of these and other complimentary policies I would argue that we have seen a deterioration of our social structures and a weakening of social policy at the national, regional and international levels. And Canada is no exception. So what are some of the ways we could begin to respond? I think our first challenge is one of rhetoric. It's about the words, ideas and symbols upon which a vision of the world -- our hopes and expectations -- is founded. We must say no to the dominant ideology and refute the principle that "competitiveness" is the only worthwhile goal. We must recognize that it is part of the �means� to an end� and not the �end goal�. To reach our �end goals� we need to work to strengthen both our solidarity with one another and our social cohesion. Our next challenge is to reclaim, as citizens, the agenda of the nation. At the moment it�s not our provincial or national governments who are defining the "common good". Instead it's the corporations and bankers. And the growing inequality in our society won�t be reversed until that reality is recognized and overcome. One of the biggest problems we face as citizens is the seemingly overwhelming challenge that gaining greater control over globalization presents. It looks like �Mission Impossible��.. but there is room for hope. Within the labour movement we are challenging multinational corporations in some innovative ways, with some clear examples of success. In the past, labour�s response to the social abuses arising from market power has been pursued largely through organizing and political action at the national and provincial level. However, as the power nexus of the world economy has shifted from a purely national to a multinational level, any attempt to strengthen workers� ability to respond -- has to be directed at impacting corporations at the level of their international as well as their national operations. Consequently, we are constructing global networks between trade unions in different countries, and between organized workers in the global facilities of individual multinational corporations. The tendency towards national or regional labour isolationism is being countered by the regular exchange of information on the common ground we share: same employer, same product, same job, same work system, but in often widely differing workplace conditions. The goal is to create a shared identity based upon this commonality of experience and interest -- to counter the ideology of globalization. The ability of corporations to undermine the regular process of collective bargaining by using threats to transfer production, or by alluding to claimed concessions by workers elsewhere, is one of the most corrosive features of globalization for trade union unity. So we�re working to counter these threats by keeping our members informed of the true situation in their industries, and developing the ability to locate expertise in one union that can assist others facing similar experiences at a distant location. The same sophisticated communications systems that are used by the multinationals to coordinate their global production systems are being used by workers and their unions to develop and pursue independent strategies. This can include terrorizing boards of directors electronically and targeting their companies to get them to pay attention. For example, the world�s first �cyberpicket�, using the Internet, was put in place to assist the United Steelworkers� Union in the US in a dispute with Bridgestone/Firestone. It proved to be a very effective tool and is now being used in a number of other situations around the world as unions use the Internet to link with their allies, exchange information, publicize their message, and educate their members. Corporations have a real need to inspire a positive social image for themselves and their products, and that gives us an opportunity to exert some influence over their activities. The intelligent use of public information campaigns has sometimes enabled the labour movement to engage companies that would have been virtually impossible to influence by more traditional methods. Building a labour response to the global nature of the multinational corporation also requires direct engagement with the multinational management of the enterprise. There are now a number of examples of this happening in different industries. The purpose of the exercise includes developing a framework for new labour/management collective agreements -- at the industry and the company level -- multinationally. While this will never replace or weaken the need for national or local agreements, it will underwrite them with the guarantee of a similar approach across the global operations of the enterprise concerned. The labour movement has also undertaken a number of initiatives with organizations like Greenpeace, Amnesty International, Third World Network and many other NGO�s to pursue common objectives, and engage the management of multinational corporations in dialogue and joint forums on issues of importance. To date our greatest success has been in the area of the environment. For example, a year ago, we reached a very important agreement between one of the International Trade Secretariats that our union belongs to and the World Chlorine Council. The agreement commits unions and companies to a new era in industrial relations and the continuing development of environmentally sustainable practices in the chlorine and chlorine-related industries. Under the terms of the agreement management must recognize and respect the right of employees to organize and bargain collectively. Furthermore, signatory companies will not urge employees to oppose unionization in their operations worldwide. We also spend a lot of time working with the federal and provincial governments to press for action on items of concern to our members. Time doesn�t permit me to go further on that aspect of our work this morning. But if I had to summarize the situation in this country in a few words it would be: There has never been more wealth generated or more conspicuous consumption. There is growing disparity in the distribution of wealth and opportunity, and an escalating problem of child poverty. Fewer and fewer people qualify for lower levels of social benefits. A very important part of people being able to get involved in defining Canadian�s interest lies in being able to organize and join the union of their choice � so they can have greater influence in the decision making process. Frankly, that�s getting harder to do in most jurisdictions in Canada due to legislative and administrative changes. That�s what I call a �king-size� problem � so we all have our work cut out for us! Thank you for your attention. __________________________________________________ Do You Yahoo!? Send FREE video emails in Yahoo! Mail! http://promo.yahoo.com/videomail/ <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! 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