SOUTHERN INSURGENCY Wildcat: Workers’ Movements and Global Capitalism Series Editors: Peter Alexander (University of Johannesburg) Immanuel Ness (City University of New York) Tim Pringle (SOAS, University of London) Malehoko Tshoaedi (University of Pretoria) Workers’ movements are a common and recurring feature in contemporary capitalism. The same militancy that inspired the mass labor movements of the twentieth century continues to define worker struggles that proliferate throughout the world today. For more than a century labor unions have mobilized to represent the political-economic interests of workers by uncovering the abuses of capitalism, establishing wage standards, improving oppressive working conditions, and bargaining with employers and the state. Since the 1970s, organized labor has declined in size and influence as the global power and influence of capital has expanded dramatically. The world over, existing unions are in a condition of fracture and turbulence in response to neoliberalism, financialization, and the reappearance of rapacious forms of imperialism. New and modernized unions are adapting to conditions and creating class-conscious workers’ movement rooted in militancy and solidarity. Ironically, while the power of organized labor contracts, working-class militancy and resistance persists and is growing in the Global South. Wildcat publishes ambitious and innovative works on the history and political economy of workers’ movements and is a forum for debate on pivotal movements and labor struggles. The series applies a broad definition of the labor movement to include workers in and out of unions, and seeks works that examine proletarianization and class formation; mass production; gender, affective and reproductive labor; imperialism and workers; syndicalism and independent unions, and labor and Leftist social and political movements. Also available: Just Work?: Migrant Workers’ Struggles Today Edited by Aziz Choudry and Mondli Hlatshwayo Southern Insurgency The Coming of the Global Working Class Immanuel Ness First published 2016 by Pluto Press 345 Archway Road, London N6 5AA www.plutobooks.com Copyright © Immanuel Ness 2016 The right of Immanuel Ness to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN 978 0 7453 3600 8 Hardback ISBN 978 0 7453 3599 5 Paperback ISBN 978 1 7837 1708 8 PDF eBook ISBN 978 1 7837 1710 1 Kindle eBook ISBN 978 1 7837 1709 5 EPUB eBook This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental standards of the country of origin. Typeset by Curran Publishing Services Text design by Melanie Patrick Simultaneously printed by CPI Antony Rowe, Chippenham, UK and Edwards Bros in the United States of America iv Contents List of Maps, Figures, and Tables Preface and Acknowledgments ix xi Introduction The New International Working Class Here Comes the Post-Industrial Economy Why Global South Workers? Global Capital Investment and Class Struggle Imperialism, Globalization, and Multinational Capital Imperialism, Monopoly Capitalism, and Repressive Power From Market Liberalization to World Bank Benevolence? Imperialism, Monopoly Capital, Poverty, and Worker Resistance Chapter Outline Conclusion 1 2 5 8 16 17 18 Part I Capitalism and Imperialism 27 Chapter 1 The Industrial Proletariat of the Global South Poverty North and South The 21st-Century ‘Forces of Labor’ Production and Imperialism A New Industrial Proletariat Under Neoliberal Capitalism Workers’ Movements and Organized Labor Trade Union Decline: Poverty and Inequality Corporatism and Trade Unions Extraction and Production in Neoliberal Capitalism Conclusion 29 30 32 36 43 46 49 53 55 57 Chapter 2 Migration and the Reserve Army of Labor Theories of Labor Migration Labor, Marxism, and the Social Formation 60 61 65 v 19 22 25 Contents Migration and Labor over Time and Space: The Commodification of Labor The Americas: Colonization, Capitalist Development, and Labor Migration After the Second World War: A New Global Labor Migration Pattern Global Capital, Labor Mobility, and State Regulation Migration, Proletarianization, and Poverty Part II Case Studies 66 67 70 75 76 79 Chapter 3 India: Neoliberal Industrialization, Class Formation, and Mobilization Manufacturing and Worker Militancy in India’s Auto Sector The New Trade Union Initiative – Organizing Informal and Contract Workers Auto Worker Mobilization in New Delhi’s Industrial Belt, 1999–2013 Management–Labor Standoff and State Repression Conclusion: Corporate Control and Worker Solidarity Chapter 4 China: State Capitalism, Foreign Investment, and Worker Insurgency China’s Manufacturing Exports in the Global Economy Guangdong Province and the Pearl River Delta State Capitalism and the Rise of the New Working Class Migrant Labor, Proletarianization, and the Hukou System Migrant Workers’ Pension Shortfall Youth Workers and Labor Shortages ACFTU and the Chinese Labor Movement ACFTU Representation of Workers in the Export Sector The First Wave of Labor Protests, 1997–2002 The 2008 Labour Contract Law Yue Yuen Mass Strike, Dongguan, March–April 2014, and Its Aftermath vi 81 83 89 92 103 105 107 109 112 114 117 119 121 123 126 130 132 135 Contents Conclusion: Can Workers Organize Independent Trade Unions in China, and Should They? Chapter 5 South Africa: Post-Apartheid Labor Militancy in the Mining Sector The Rise of Mining and Manufacturing in Neoliberal Capitalism Southern African Platinum and the Global Economy Mining, Capital, and Contract Labor in Post-Apartheid South Africa, 1994–2015 Labor Unions in Modern South Africa The Tripartite Alliance and Post-Apartheid Trade Unions The South African Mine Worker Insurgency, 2009–14 The South African Strike Wave of 2014 Conclusion Chapter 6 Conclusion Promoting Foreign Investment for Export Production Reliance on a Migrant Workforce Citizenship Rights and Living Conditions Imperialism and the Global Working Class, North and South Trade Unions and Workers Movements in the Global South Rank-and-File Workers and the Future of Trade Unions Notes Index 144 148 148 150 151 154 158 161 173 175 179 180 182 183 184 184 188 191 215 vii Maps, figures, and tables Maps 4.1 India, with a focus on Haryana State 5.1 China, with a focus on the Pearl River Delta 6.1 South Africa, with a focus on the North West 82 108 149 Figures 1.1 International comparison of hourly labor costs in the textile industry, 2011 1.2 Labor costs in manufacturing industries in selected countries, 2012 1.3 Hourly manufacturing wage in selected countries, 2012 1.4 Hourly compensation costs in manufacturing in selected countries, 2009 3.1 Number of international migrants, 1960–2000 5.1 Actual and projected average annual rate of change of China’s population, 1950–2015 5.2 Percentage of population residing in urban areas in China, by major area, five-year averages based on midyear figures, 1950–2050 5.3 Employment growth in urban areas of China, 2009–13 5.4 ACFTU membership 1952–2012 10 11 12 13 75 120 122 123 124 Tables 1.1 Total male and female employment by sector, world, and regions 1.2 Value added by activity in 2010 2.1 FDI inflows and outflows by major regions, 1990–2013 2.2 FDI inflows and outflows by major regions, 1990–2013 (percentage share of total) ix 7 8 34 35 Maps, figures, and tables 2.3 Gross fixed capital formation of developing countries 2.4 FDI inflows as percentage of gross fixed capital formation, 1990–2013 2.5 Labor share of national income around the world 2.6 Capital share of national income around the world, 2008 2.7 Mergers and acquisitions as share of FDI inflows in developing countries 2.8 Number of greenfield FDI projects by destination, 2003–13, share of total 2.9 International trade union membership 2.10 Trade union density rates and indlices of membership composition in the European Union 3.1 Indicators of the stock of international migrants by major area, 1960–2000 4.1 Indian major union organizations 4.2 Strikes at vehicle manufacturing plants in India, 2009–13 4.3 Worker grievances at Maruti Suzuki, Manesar Plant 5.1 China exports and imports, 1952–2012 5.2 China exports by product category, 2012 6.1 South African trade unions x 36 37 40 41 42 43 50 52 74 88 96 97 110 111 159 Preface and Acknowledgments This book is informed by national and comparative studies of labor movements in the contemporary era. The overwhelming evidence suggests that existing labor structures are unable to challenge the hegemony of international capital, global production and commodity chains, and the oppression of the neoliberal state. This is not to say that organized labor has ever possessed a persistent power over capital, aside from interregna of revolution and ephemeral worker rebellions. The book suggests that the working class and peasants can only achieve a modicum of institutional and structural power and dignity inside the modern capitalist state. A central premise is that the early 21st century has vastly and irreversibly altered the geographic location of the working class to the Global South, where the majority of the world’s population resides. The geographic location of the working class has followed in the tracks of the expansion of trade liberalization, neoliberal capitalism, and global imperialism from the 1980s to the present. As in previous generations the modern working class is also primarily comprised of peasant workers migrating from rural regions. However, with severe exceptions where countries of the Global South (or Third World) border states in the Global North (Mexico to the United States, North Africa to Europe), the vast majority of modern industrial workers in China, India, Indonesia, Africa, and Latin America are internal migrants, just as the industrial working class during the emergence of capitalism in the 19th century were migrant workers from rural regions. In Europe and North America, migrant industrial workers often crossed international boundaries: for example Irish workers in England, and Southern and Eastern Europeans in the Americas. But something new has happened that is based on the scale of commodity production. Today, commodity production is a global project and dominates the production of all products – from the xi Preface and acknowledgments extraction of iron ore to high-technology and biomedical and pharmaceutical goods. This ethnographic and comparative book has been made possible through the incredible support of numerous people throughout the world, especially India, China, and South Africa, who provided accurate accounts of workers’ movements in each country and assisted with ethnographic research. I endeavored to interview many specialists and participants from different organizations so as to provide accounts ensuring the accuracy of the case studies in each region. These accounts have been reinforced by workers directly involved in struggles, their family members, and community leaders, together with labor activists who retold detailed descriptions of their specific struggles. Research and interviews were conducted in New Delhi and Haryana State in North Central India, the Pearl River Delta of south-east China, and the mining belt in North West Province, South Africa. In each case I was accompanied by legal experts, labor activists, and academics who were involved in the strikes and worker insurrections. This book has also enjoyed the collective support of literally hundreds of colleagues and friends worldwide who helped me gain access to crucial locations and lent support in developing and framing the research project, and who have provided vital comments on the manuscript. Among them, I would like to extend my special thanks to Suzanne Adely, Peter Alexander, Robin Alexander, Judy Ancel, Apo Leung Po, Edur Velasco Arregui, Samantha Ashman, Maurizio Atzeni, Au Loong-yu, Amiya Kumar Bagchi, Susanna Barria, Patrick Bond, Amy Bromsen, Dario Bursztyn, Stephen Castles, Vivek Chibber, Héctor de la Cueda, Ashwin Desai, Rehad Desai, Sushovan Dhar, Jackie DiSalvo, Gérard Duménil, Madhumita Dutta, Steve Early, Silvia Federici, Doug Ferrari, Bill Fletcher, Jr., Ellen David Friedman, Atig Ghosh, Mike Goldfield, Tony Gronowicz, Lenin Gonzalez, Daniel Gross, David Harvey, Scott Horne, Dek Keenan, Rena Lau, Andrew Lawrence, Li Shing Hong, Rebecca Lurie, Staughton Lynd, Christos Mais, Simangele Manzi, Biju Matthew, Siphiwe Mbatha, Joe McDermott, Lori Minnite, Jeanne Mirer, Chere Monaisa, Patrick Neveling, Trevor Ngwane, Jörg Nowak, Benedicto xii Preface and acknowledgments Martinez Orozco, Ed Ott, Ranjana Padhi, Fahmi Panimbang, Bill Parker, Prabhat Patnaik, Lee Pegler, Frances Fox Piven, Rakesh Ranjan, Merle Ratner, Dick Roman, Ashim Roy, Ranabir Samaddar, Jose Manuel Sandoval, Vishwas Satgar, Rakhi Seghal, Arup Kumar Sen, Bishop Joe Sepka, Sher Singh, Luke Sinwell, John Smith, Juliana So, Shelton Stromquist, Ashwini Sukanthar, Dominic Tuminaro, Lucien van der Walt, Achin Vanaik, N. Vasudevan, Eddie Webster, Michelle Williams, May Wong, Lu Zhang, along with many others who read and reviewed the manuscript. Special thanks go to Zak Cope, among the leading thinkers of social class and imperialism today, who was of enormous help in reading, commenting, and critiquing this work. He was instrumental in developing the quantitative data and many of the tables which support the arguments of this book. Vital logistical support was made possible through the research staff of the South African Research Chair in Social Change at the University of Johannesburg. Thanks are also due to the City University of New York Research Foundation for supporting some of the travel. Finally, I thank David Shulman, acquisitions editor at Pluto Press, for his vision of the abiding significance of workers’ and peasants’ movements to radical transformation, and support in developing the new series which this book inaugurates, Wildcat: Workers Movements and Global Capitalism, edited by Peter Alexander, Tim Pringle, Malehoko Tschoaedi, and myself. I am impressed with the demanding review process at Pluto Press and a discernment to recognize and support outstanding works on the left. xiii Introduction The New International Working Class In the spring of 2014 a wave of unprecedented mass strikes in strategic industries in China, India, and South Africa defied the established wisdom among investors that low-wage workers pose no threat to corporate profit margins. Three years earlier, in 2011, came the first troubling indications that direct action by electronics, automotive, clothing, and mining workers could pose a risk to multinational investors and brands. In a growing range of industries, worker protests over wages and conditions could only be suppressed by armed state repression and violence. The spread of labor militancy across the Global South raises crucial questions about the revival of a global labor movement and the capacity of states and labor unions to contain dissent in such a way as to restore confidence in capital markets. In the 2000s the labor insurgencies that have rocked the world economy have been set off by migrant workers and their children, who constitute a large share of the global working class. Migrant workers are constantly being recruited by contractors to replenish the supply of low-wage labor available to capital. Since the 1990s, the vast majority of migrant laborers working in China, India, and South Africa have been peasants and their families, who have moved to industrial zones and who typically lack residency and work privileges equivalent to those enjoyed by urban inhabitants. The rapid industrialization that has occurred in the Global South over the past four decades now dominates global working patterns. The ascendancy of production workers in these new production centers today substantially overshadows the historical size of the working class of mass production in the Global North during its 1 Southern Insurgency heyday in the 20th century. As debates on the left increasingly focus on the proliferation of financial investments, this book redirects attention to the profound significance of manufacturing and mining workers, who have been often disregarded in the mature economies of the Global North as investment has been redirected to factories and installations in the Global South, resulting in a new working class in education, the public sector, finance, and a proliferation of commercial jobs. This book will show that the industrial working class has not disappeared but has been relocated and reconstituted in the South in larger numbers than ever before in history. Financialization and speculation are responsible for the closure of factories and the reduction in the number of middle-income jobs in mature economies of the Global North, while accelerating the expansion of a low-wage and insecure work force in the newly industrialized South. This contemporary system of neoliberal capitalist global accumulation distorts economies through investment in finance, real estate, derivatives, and other financial instruments, and has threatened the world economy to the point of disruption through speculative investments, increasing inequality worldwide as well as between North and South. here comes the post-industrial economy As in the North, workers in the South face constraints imposed by workers’ movements that are legacies of 20th-century capitalism, and are struggling to build new working-class institutions that will redefine the shape of class conflict for the next 50 years. In the 1970s the assault on the working class was in full swing, as capital and the state united in opposition to the representation of existing unions and the welfare state forged by the labor movements of the early 20th century. To capital, organized labor posed an obstacle to expanding corporate profits and restoring absolute hegemony in the workplace. Over the next four decades a resurgent capitalist class conducted a fierce war against labor unions in the West, turning them from a formidable force in major industries into a weak irritant at best. 2 The new international working class At the same time, the very existence of a working class was also called into question by leading scholars on the right and the left. While the right wing declared the working class dead and a false construct, leftist scholars were also challenging the legitimacy of the working class as a force for social equity and transformation. Yet, more than 40 years after the onslaught of the economic, political, and intellectual offensive against organized labor throughout the world, the working class has a heartbeat and is stronger than ever before despite the dramatic decline in organized labor. This assessment is rooted in an empirical examination of workers’ movements over the last decade which can no longer be contained by the state and international monopoly capital. While it may be the case that the labor movements in Europe and North America are a spent force, it is their very defeats that have marginalized their existing supine and bureaucratic order and regenerated a fierce workers’ movement in the early 21st century. Meanwhile the capitalist development of the South has regenerated Marxist debates about the nature of the working class, with industrialization for export stimulating the unambiguous presence of a class structure that traverses geographic boundaries. This book argues that the North applied models of representation in the South that contained the scope of worker representation within narrow boundaries, restricting worker mobilization. As the developing and emerging economies in the South have followed the pattern of the North, workers are choosing new means to advance their interests. It is in the South that workers have shaken off the shackles and restraints imposed by the labor movement. Momentous and unexpected labor uprisings and mass strikes are unfolding today among migrant workers in urban industrial zones who to varying degrees are challenging the neoliberal capitalist project. The intensity of these class conflicts in mines and factories was not envisaged by foreign investors, multinational corporations, and private contractors – or by many leftist scholars and activists in the West. Labor scholars agonized about the relocation of well-paid manufacturing jobs and the rise of a post-industrial economy, and a consensus emerged among advocates of free markets on the right and progressives on the left that work was no longer 3 Southern Insurgency relevant to society or to popular aspirations, human freedom, and revolutionary transformation. As early as 1973 sociologist Daniel Bell and champions of free market capitalism attributed the inexorable decline of the American working class to the vanishing of key manufacturing industries in the United States and the growth of information and new technology, while neither appreciating the importance of minerals nor considering the ongoing necessity to produce clothing, cars, and electronics. Somehow every region of the world would have to shift from farming, mining, and manufacturing to reach the status of a post-industrial society.1 While Bell dismisses the obvious class differences within Western societies he is indifferent to the necessity of industrial production under capitalism. Leftists and postmodernists have adopted the identical language of free market apologists for multinational capital. Farewell to the Working Class was declared by French political theorist André Gorz in 1980, auguring a post-industrial socialism free of workers. To Gorz, the socialist aspirations of the working class are ‘as obsolete as the proletariat itself ’, and they have been supplanted by a ‘nonclass of non-workers’ who have been created by the ‘growth of new production technology’ and will abolish all classes ‘along with work itself and all forms of domination.’2 Bell and Gorz concur that post-industrialism has replaced capitalism and class conflict, and that collective class unity is a figment of the imagination or an ideology that is dominated by the hegemony of a declining or unrepresentative class of workers in postindustrial society. Post-industrialism is a reality in the North principally because of the vast differences in wages and social benefits, and the growing dependence on highly exploited workers in the South who produce essential goods and services for multinational capital and also low-cost goods and services predominantly for consumers in the West. Meanwhile the well-founded assertion among labor unions and proponents of manufacturing workers in the North is that corporate relocation of production to low-wage regions and states in the South has been at the expense of good manufacturing jobs. The case studies in this book investigate the developing labor militancy and direct action in the early 21st century among 4 Ihe new international working class production workers in China, India, and South Africa, where employers exploit differences to create hierarchical systems of relative favoritism to promote lower wages and poorer conditions for all laborers. In each case, contractors and employers have hired young migrant workers with limited social ties to work in mines and factories. Employers also seek to divide workers on the basis of age, caste, ethnicity, and gender. Each case study demonstrates that industrial workers engage in a range of tactics and strategies to advance their collective interests both within and outside existing trade unions and organizational structures. The case studies, drawn from South African mines, Indian auto factories, and Chinese shoe producers, reveal that industrial workers mobilize around collective interests in order to improve their conditions. Although the particular workers in each struggle face dissimilar challenges and, at least in the case of India, have been defeated and imprisoned en masse for mobilizing collectively, they expose the growing activism among workers that is transforming itself into mass movements with unique characteristics in each country. why global south workers? In each of this book’s case studies I examine the composition of workers, the nature of their struggle, and the relationship of emerging rank-and-file workers’ movements to existing unions and the state, together with their outcomes. While factories continue to close in Europe, Japan, North America, and throughout the world, global production is growing dramatically. Yet for more than 40 years researchers and journalists have pondered the working class mostly without consideration of the vast majority of workers who are laboring in the Global South. At a time when public attention spotlights the integration of these developing and emerging countries into the world capitalist economy, little attention is paid to corporate repression and worker resistance in the modern factories and mines that are integral to the world economy. Most media coverage of mass labor disputes is in the international financial press, and is oriented to providing vital information on key industries to foreign investors.3 5 Southern Insurgency At a time when academics are struggling to locate any sign of life among amorphous working classes in Europe and North America, worker struggles are rampant throughout the South. Three areas of inquiry among sociologists of work and political economists mainly studying labor in the North at present are precarious workers, unpaid work, and affective (or emotional) labor. New research, meanwhile, looks at potential forms of work in unstructured and often unregulated labor markets that are filled by day laborers, domestic workers, sex workers, street peddlers and food cart operators, temporary laborers, and for-hire drivers, all mainly employed in the informal economy.4 The discovery of workers in the informal economy with few legal rights reveals their weakness and their dependency on nongovernmental organizations (NGOs) and advocacy groups, and on political and electoral advocacy to defend and expand their rights. In the United States, campaigns to improve the conditions of fast-food outlet and Walmart department store workers are pursued primarily by advocates and by external union and community organizers to generate public attention for the purpose of raising the minimum wage, with the hazy prospect of organizing workers into unions down the road.5 The reconstitution of the labor force in the Global North from manufacturing and production to services and commerce is weakening the ability of workers in the West to organize unions. It is far more difficult to organize part-time and temporary service, retail, and hospitality workers employed at Starbucks, Tesco, or Walmart with irregular hours and nebulous connections to the workplace than industrial workers at Ford or Nissan who work full-time in their factories. Neoliberal economists and philosophers have only recently recognized the consequences of the capitalist neoliberal globalization that began in the 1980s. The development of the working class in the South is illustrated in Table 1.1, which compares total male and female employment in agriculture, industry and services from 1999 to 2009. Table 1.2 shows that although the workforce in the developing South is far larger, the developed North generates significantly higher value added in industry and services despite the expansive growth in foreign direct investment (FDI). In this way, 6 2008 2009 7 659.5 119.3 40.9 219 48.8 117 55.5 15.8 13.7 29.5 540.2 81.9 533.2 122 35.3 176.1 37.4 77.7 43.3 11.8 10.1 19.4 411.1 77.1 Industry 1999 2007 Services 2009 1999 2007 2008 2009 56.1 16.4 14.9 31.7 82.3 83.5 550.5 556.7 57.3 15.9 14.4 30.9 49.2 49.9 119.7 122.2 117.9 109.8 40.8 39.5 222.3 226 70.7 714.6 115.5 23.7 24.7 63.4 81.5 126.2 296.1 70.1 209.5 73.3 929 148.9 31.6 31.3 85.3 100.4 170.6 338.4 87.2 273.7 73.6 956 153.2 33.2 32.3 88.7 103.8 175.1 343.3 88.4 281.3 74.1 975.6 155.9 34.4 32.9 90.7 106.8 179 341.1 88.6 287.3 668.5 666.4 1,010.8 1,267.3 1,299.2 1,316.7 2008 Source: International Labor Organization (2011) Global Employment Trends 2011: The Challenge of a Jobs Recovery, Table A11: Employment by sector and sex, world and regions (millions), Geneva: United Nations, p. 68. World 1,038.9 1,056.8 1,061.2 1,068.1 Developed economies and European Union 24.8 18.7 17.8 17.5 Transition economies 39.1 32 32.6 32.3 East Asia 354.3 314.2 305.1 299.7 South-East Asia and the Pacific 115.8 122.2 123.7 124.5 South Asia 299.7 330.4 339.3 346.6 Latin America and the Caribbean 43.4 41.7 41.4 41.2 Middle East 10.1 12.2 11.9 12 North Africa 14.4 17.9 18.2 18.4 Sub-Saharan Africa 137.5 167.5 171.2 175.9 Total for developing and transition economies 1,014.3 1,038.1 1,043.4 1,050.6 Share of developing and transition economies in world total (%) 97.6 98.2 98.3 98.4 Agriculture 1999 2007 Table 1.1 Total male and female employment by sector, world, and regions (millions) The new international working class Southern Insurgency Table 1.2 Value added by activity in 2010 (US$ billion) Developed countries Developing countries World Agriculture Industry Services 400 2,100 2,500 12,400 5,000 17,400 31,700 10,600 42,300 Total 44,500 17,700 62,200 Source: UN Statistics Division (2014) ‘GDP and its breakdown at current prices in US Dollars’ (http://unstats.un.org/unsd/snaama/dnltransfer.asp?fID=2). Note: Agriculture includes farming, fishing, and forestry. Industry includes mining, manufacturing, energy production, and construction. Services cover government activities, communications, transportation, finance, and all other private economic activities that do not produce material goods. the rate of labor exploitation is far higher in the Third World than in developed countries. global capital investment and class struggle Why does foreign capital dictate the conditions of work and the rise of corporate absolutism in the Global South in which workers are prevented from forming independent unions? State authorities collude directly with foreign corporations, often with the complicity or indifference of unrepresentative enduring unions, in order to ensure a friendly environment for investment that prevents workers from being able to form independent unions. As we shall see in Chapters 4, 5, and 6, independent workers’ unions are opposed by governments in India, South Africa, and China. Since the 1980s, new export processing zones (EPZs) have been rapidly growing to create industrial regions near strategic urban agglomerations. These industrial production zones ban the formation of independent workers’ organizations unless they are company unions firmly under the control of employers, to ensure the preservation of low-cost manufacturing.6 Workers in neoliberal states must deal with corporatist unions and antiquated labor laws that were created for workers in the Global North, while state capitalism in China prevents workers from creating independent unions. This research examines the similari8 The new international working class ties and differences between neoliberal and market socialist regimes for industrial workers employed in a global system, regarding class power, wages, and conditions. We will find surprising outcomes: official union bodies that are disconnected from workers (ACFTU in China) may lead to better outcomes than cases where workers are coopted through corporatist structures (COSATU in South Africa), or simply ignored by the state (India). In the global world economy, monopoly capital promotes the export of migrant workers to strategic destinations in the Global South and Global North so as to expand reserve armies of labor and continue the conditions necessary for low wages and unsecure conditions among all workers. As unemployment grows exponentially through urban and international migration, labor and wage costs are reduced and restrained. As Foster and McChesney write in The Endless Crisis: The new imperialism of the late twentieth and twenty-first centuries is thus characterized, at the top of the world system, by the domination of monopoly-finance capital, and, at the bottom, by the emergence of a massive global reserve army of labor. The result of this immense polarization is an augmentation of the ‘imperialist rent’ extracted from the South through the integration of low-wage, highly exploited workers into capitalist production. This then becomes a lever for an increase in the reserve army and the rate of exploitation in the North as well.7 The immense inequality in wage costs across industries is demonstrated in Figures 1.1 to 1.4, which show international comparisons of hourly labor costs in the primary textile industry, labor costs in manufacturing industries in different countries, average hourly manufacturing wages, and hourly compensation costs in manufacturing in selected countries. Foster and McChesney marshal International Labour Organization (ILO) and UN Conference on Trade and Development (UNCTAD) data to demonstrate incontrovertibly that while industrial production contracted in the Global North from 1980 to 2007, production in the South has expanded, and global 9 Southern Insurgency Developed country ave. Developing country ave. Switzerland Belgium Japan Germany Austria France United Kingdom Italy Canada Ireland Australia United States Spain Greece Malta Israel Taiwan South Korea Portugal Hong Kong Czech Republic South Africa Poland Slovakia Estonia Turkey Argentina Venezuela Brazil Morocco Mexico Oman Tunisia Colombia Peru Mauritius Bulgaria Thailand Malaysia Egypt China coastal Kenya India Indonesia China inland Sri Lanka Pakistan Vietnam Bangladesh 16.80 2.16 35.33 30.42 27.77 27.69 24.55 21.03 20.17 19.76 18.61 16.60 16.47 15.78 14.06 11.67 7.58 7.10 6.87 6.21 9.53 9.35 3.94 3.80 3.80 3.43 3.00 2.88 2.86 2.85 2.83 2.56 2.19 2.07 2.05 1.97 1.93 1.57 1.50 1.29 1.18 0.82 0.76 0.67 0.67 0.55 0.48 0.46 0.37 0.28 0.28 0.00 40.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 Figure 1.1 International comparison of hourly labor costs in the textile industry, 2011 (in US$) Data source: Werner International Management Consultants Report, 2011, www.ukft. org/documents/industryinformation/04-ASSOC-INDSTRAT-122-2012AII-Werner%20 Textile%20Labour%20Costs.doc%5B1%5D.PDF 10 The new international working class Norway Belgium Switzerland West Germany Denmark Finland France Austria Luxemburg Sweden Netherlands Ireland Italy United States Japan United Kingdom Spain East Germany Canada Greece Slovenia South Korea Malta Portugal Czech Republic Croatia Slovakia Estonia Hungary Poland Lithuania Latvia Turkey Russia Romania Belarus Bulgaria China Ukraine Modavia Georgia Philippines Figure 1.2 Labor costs in manufacturing industries in selected countries, 2012 (in euros per hour) Data source: Rudolf Grünig and Dirk Morschett (2012) Table 9.1, ‘Labor costs in manufacturing industries in different countries,’ in Developing International Strategies: Going and Being International for Medium-sized Companies, Berlin: Springer. 11 Southern Insurgency Sweden France Belgium Germany Japan Luxembourg Finland United States Austria Italy United Kingdom OECD average Australia South Korea Israel Greece Cyprus Czech Republic Note: Hourly wage rates in national currencies for both OECD and non-OECD countries were divided by each bloc’s average working hours in manufacturing (39.7 and 42.2 hours per week, respectively). National currencies were converted into US$ using www.google.com, www.coinmill. com, and http://finance.yahoo.com/ currency-converter/. The figures were then adjusted for inflation using an Inflation Calculator (www.westegg.com/inflation). This calculation does not account for changes in the value of a country’s currency relative to the US dollar from the year the data is given for to 2012, or the possibility of a country’s wages having since increased by more than inflation. Brazil Mexico Peru Ecuador Chile Malaysia Russian Federation Romania Non-OECD average Thailand Argentina Guatemala Azerbaijan China Philippines Data source: International Labor Organization (ILO) LABORSTA Database Kyrgyzstan Nicaragua India Zimbabwe Iran 0 10 20 30 40 50 Figure 1.3 Hourly manufacturing wage in selected countries, 2012 (US$) 12 60 The new international working class China India Philippines Mexico Poland Taiwan Brazil Hungary Estonia Argentina Czech Republic Slovakia Portugal South Korea New Zealand Singapore Israel Greece Spain Canada Japan United Kingdom United States Australia Italy Ireland Sweden France Netherlands Finland Switzerland Germany Austria Belgium Denmark Norway 0 10 20 30 40 50 60 Figure 1.4 Hourly compensation costs in manufacturing in selected countries, 2009 (in US$) Note: data for China and India refer to 2007 and are not directly comparable with each other or with data for other countries. Data source: US Bureau of Labor Statistics. 13 Southern Insurgency production as a whole has grown from 1.9 billion to 3.1 billion workers – far more working people than at any time in the history of capitalism.8 The contemporary era of neoliberal capitalism in the early 21st century has replicated the earlier exploitative and dangerous forms of proletarianization that forced peasants from rural to industrial urban regions to work in commodity production and service sectors. This process bears striking similarity to the dangerous, unsanitary, and impoverished working and living conditions among workers in Manchester from 1842 to 1844, which were vividly depicted by Friedrich Engels in The Condition of the Working Class in England in 1844: But while England has thus outgrown the juvenile state of capitalist exploitation described by me, other countries have only just attained it. ... Their manufactures are young as compared with those of England, but increasing at a far more rapid rate than the latter.’9 The expansion of the urban industrial working class in the Global South since 1970 is in part a response to the restructuring of financial capital. As finance capital seeks to avoid traditional unions, workers are forming new rank-and-file worker organizations to defend their collective interests even as compliant states seek to repress labor demands by blocking the establishment of worker collective institutions. Ronaldo Munck suggests that the modern labor movement resembles those formed in the late 19th century to provide a counterforce to the hegemonic dominance of finance capital: [T]he historical parallels of the late nineteenth century and the emergence of the contemporary union movement teach us is that this necessary shift will not be smooth and organic. It is more likely that alternative social forces (the ‘informal sector’ for example) and new geographical locations (China, India and the Global South more generally) will challenge and subvert the current structures and strategies. What is clear is that the 14 The new international working class accelerated accumulation of capital generated by globalization has produced a massively increased global proletariat in the classical Marxist sense in China and India in particular. While perhaps up to twenty million of these new workers lost their jobs in China following the financial crisis of 2008 they have utterly transformed the nature of the global working class.10 In the post-Second World War era, mainstream economists predicted that the rise of the United States as the preeminent global power would be accompanied by the amelioration of world poverty and inequality through international development and investment. Through the support of the World Bank, the International Monetary Fund (IMF), foreign trade, private FDI, and foreign aid, new independent governments would direct development and economic expansion. However, import substitution policies in the immediate post-war era contributed to commodification of agriculture and natural resources, creating greater reliance on the global economy. As Michael Yates observes, the World Bank poverty indexes fail to consider that subsistence peasants living outside of the money economy have greater security than those who are forced into the formal economy: It should be noted that the World Bank has been instrumental in promoting large-scale export agriculture in poor countries. Many persons living below the World Bank poverty level are subsistence peasants operating outside the money economy. Their economic well-being is often greater than a dollar a day would indicate. As they are in effect dispossessed by Bank-promoted agriculture and move into urban areas, their money income may exceed the World Bank poverty level, but, in fact, they are considerably worse off than they were in the countryside.11 As peasants are forced off the land through commodification of agriculture, displaced rural peasants become urban workers who are unable to obtain the basic necessities for survival. 15 Southern Insurgency imperialism, globalization, and multinational capital Successive financial crises affecting the Global South and North demonstrate the significance of understanding the contemporary era through the lens of imperial domination by multinational capital. Ronald Chilcote asserts that the neoliberal era of ‘globalization’ does not represent a break with imperialism, but an extension of capitalist extractive power worldwide on a regional and local basis, where economic and political benefits flow to the capitalist ecumene in the Global North. In the neoliberal era, extractive power has given rise to a global proletariat, documented in Paul Mason’s comparative historical account of worker struggles extending from 19th-century Europe to the Third World in the present era.12 Ideological apologists for globalization and the application of market-based strategies ignore the growing importance of imperial and state violence that is used to support the system of economic inequality and exploitation.13 The threat of military and economic violence through coercion or the withdrawal of financial capital is more prominent in the contemporary era of capitalist globalization than it was in the postwar era of independence in the Global South. Since the 1990s, states that failed to comply with the strict rules of the capitalist international financial system have been sanctioned and threatened with economic and military destabilization by the capitalist West.14 In addition, the imposition of neoliberal reforms includes imperialist funding of police and private militias to suppress workers and peasants who oppose the new system, which is dominated by multinational foreign investments that redound to the benefit of the Global North.15 Rejecting the notion of capitalist globalization as a way forward, Samir Amin asserts the necessity to build a socialist form of globalization in opposition to the imperialist process which profits by reasserting colonial differences through the modern nation state: The alternative solution would be to accept authentic popular changes, which are the only forces capable of putting an end to the yawning financial chasm which the colonial systems 16 The new international working class have become. The tenacious colonial prejudices of the West and the short-term vision of the Left, incapable of imagining North–South relations outside the framework of the imperialist tradition, straight away eliminate this choice. ... Capitalist globalization such as is being offered at this time of crisis, as a means of managing it, is not in itself a way of resolving the crisis. ... The historical limit of capitalism is found exactly here: the polarized world that it creates is and will be more and more inhuman and explosive.16 imperialism, monopoly capitalism, and repressive power In the early 20th century V. I. Lenin identified monopoly capitalism as the dominant force in imperial subjugation. In his view, as profits in the industrialized West fell in response to the decline in profitability of local production that caused economic recession, finance capital sought new markets in which to invest profits. The global expansion of multinational banks representing the most substantial power of monopoly capitalism served as a fundamental intermediary in expanding capitalist imperialism.17 The concentration of finance capital through speculative banking stimulated the expansion of monopoly capitalist investments and laid the basis for foreign expansion in new markets in the underdeveloped world. The expropriation of surplus labor in these new markets expanded the profitability of capital. Given the substantial financial investments required, only monopoly firms were capable of investing in the imperial world outside Western Europe and the United States. According to Harry Magdoff, the shift from competitive to monopoly capitalism represents the new form of imperialism that expanded throughout the next century.18 Economies characterized by competition between many firms were replaced by ones in which competition was limited to a handful of giant corporations in each industry. Further, during this period, the advance of transportation and communication technology and the challenge posed to Britain by the new industrial nations brought two additional features to the imperialist stage: an intensification of 17 Southern Insurgency competitive struggle in the world arena, and the maturation of a truly international capitalist system where competition occurs in the markets of the advanced nations as well as in those of the semi-industrialized and non-industrialized nations. The struggle for colonial and informal control over economically backward regions for natural resources and low-wage labor is but one phase of this economic war against the Third World, and a distinctive attribute of the new imperialism.19 Following the Second World War, Magdoff argues, the emphasis of global imperialism continued to shift from competition among colonial states to the necessity for consensus among imperial powers possessing economic and technological advantages. The United States’ emergence as the dominant military power20 solidified the dollar as the world currency while expanding the foreign presence and profitability of industry and increasingly financial capital in monopoly form.21 from market liberalization to world bank benevolence? The neoliberal reforms of the late 1980s prescribed by the IMF, World Bank and the US Federal Reserve aimed to persuade all economies, especially developing countries of the Global South, to abide by a strict system of privatization and economic liberalization. Countries were expected to accept a system of reforms that removed all forms of social insurance and protection, privatized national resources and companies, and allowed for the free flow of international and domestic trade, without government restrictions. These policies were applied indiscriminately throughout the world without regard for the traditions or poverty conditions of individual countries. Those nation states that opposed the system were threatened with expulsion from the international system. However, even before the financial crisis of 2008 the World Bank, a leading architect of the imposition of global neoliberalism, challenged the system, recognizing its damaging consequences on those living in extreme poverty. Since the implementation of neoliberal reforms by governments in the Global South in the late 1980s, the Global South has suffered a series of financial, monetary, and ecological catastro18 The new international working class phes that also intensified mass poverty and the inequality between the South and North. The passage of the North American Free Trade Agreement (NAFTA), for example, has undermined the quality of life for workers and peasants in Canada, the United States, and Mexico, as monopoly capital shifted production to the lowest-cost producers, and forced Mexican peasants off the land through the dumping of low-cost agricultural goods from corporate farmers in Canada and the United States. In 1997–98, South-east Asian and East Asian economies, viewed as the engine of growth in the Pacific Rim, collapsed as financiers withdrew capital from the region. The global financial crisis that occurred in 2008 in the wake of the speculative housing bubble in the United States and Western Europe sent shockwaves throughout world economy while insulating banks and the financial masterminds of the schemes. Further, global economists recognized the imbalance created by a uniform system of neoliberal standards. Branko Milanovic, the World Bank’s lead research economist, asserts that the West bears some responsibility for the poverty conditions in the Global South, saying that economists and policy makers cannot ‘seriously believe that colonization, or, more recently, the Cold War had nothing to do with furthering civil wars and adding to the misery of the poor countries’ and that Europe would ‘be in a state of permanent war today if its borders were drawn as arbitrarily by foreign powers as the African borders were.’22 Milanovic advocates redistribution, or supplying foreign aid in the form of loans only to poor countries with pervasive poverty or widespread deprivation and underdevelopment. While acknowledging that inequality and poverty are consequences of market-driven policies, Milanovic fails to address the historical consequences of the imperialist and monopoly capitalist domination that has continued and expanded for two centuries right up to the present day. imperialism, monopoly capital, poverty, and worker resistance The research developed in this book supports the Marxist theoretical tradition, which recognizes the unrelenting significance of 19 Southern Insurgency modern imperialism. As Magdoff argues, new imperialism has not diminished in the postcolonial era but has in fact accelerated through the assertion of military power, the never-ending search for natural resources, and low-wage labor markets found in the Global South, where a large reserve army of labor increases labor competition and reduces the bargaining power of workers throughout the world.23 In the post-Cold War era, while capital investments have grown dramatically throughout the Global South, the United States has emerged as the hegemonic power in the world, which can employ military force to ensure the circulation of natural resources and industrial goods, and modern cyber-technology to control any threats to its dominance in the world system. Samir Amin designates the new form of imperialism as generalized monopoly capitalism supported by the leading financial powers of the Global North. The system both expands the power of the capitalist class in the North and pauperizes workers in the South: This concept of generalized-monopoly capitalism enables us to specify the scope of the major transformations involving the configuration of class structures and the ways in which political life is managed. In the centers of the system, the United States/Western Europe/Japan Triad, generalizedmonopoly capitalism brought about the generalization of the wage system. The managers, termed ‘executives,’ involved in the monopolies’ administration of the economy, were thenceforward salaried employees. … At society’s other pole the generalized proletarianization suggested by the wage system was accompanied by multiplication of the ways in which the labor force was segmented.24 The financialization of capital has forced the Global South to develop manufacturing and production by turning from the development of local and national markets to generating export promotion, leading to the growth of a larger working class. Ostensibly, FDI is the lifeblood that provides the capital necessary to create manufacturing and jobs that will reduce economic 20 The new international working class insecurity, although often at the cost of uprooting peasants and by imposing harsh living conditions on those who migrate to work at FDI destinations. Although some developing countries have reduced extreme poverty, by and large big businesses in the imperial world are the primary beneficiaries of FDI, multiplying their financial leverage, reducing or eliminating public and balance of payments deficits, and supporting standard economic policies that do not prioritize the sustainable economic development necessary for human survival. Through creating a flexible supply of labor through temporary, informal, contract, and migrant labor, capital therefore expands the share of workers employed under insecure and precarious conditions. As Tom Brass shows, the development of capitalism in the modern world is compatible with the forms of unfree and bonded labor that are entrenched in caste systems of exploitation, and these endure and grow as multinationals compete for cheaper labor: ‘Ironically … free markets that are global in scope mean that unfree labour becomes for capitalists not just an option but in some instances a necessity, as competition cuts profit margins which in turn force down labour costs.’25 Cities become the cradle of economic insecurity for urban dwellers and recent migrants. The degradation of labor is heightened by uneven development as precarious labor responds to fight economic insecurity and poverty. Ultimately, these precarious workers become the visible element of a system that reproduces economic insecurity for the majority of people, while it enriches the few at the national and global levels. A critical examination of the inequalities in the system of trade and foreign investment shows that FDI has replaced foreign aid and social safety nets that were intended to reduce economic insecurity, and instead contributes to intensified exploitation. Further, the unequal effects of FDI demonstrate that new investment does not offset underdevelopment and structural poverty. FDI reduces indispensable skills through training workers to produce primarily for foreign consumers. The outflow extends to the system of migrant workers trained in IT positions necessary for the Global North while minimizing the needs of the Global South. 21 Southern Insurgency chapter outline Part I of this book analyzes the theoretical and historical underpinnings of the financialization of global capitalism, representing the destructive human consequences of foreign investment, and examining the emergence of class antagonisms and resistance to capitalist exploitation and oppression through the development of rank-and-file workers’ organizations in the Global South. Chapter 2 examines the contemporary growth of economic imperialism through the expansion of monopoly and multinational capital on a world scale. Historical and contemporary Marxist interpretations attribute this expansion to the restructuring of finance capital and the commodification of agriculture, infrastructure, manufacturing, and services, contributing to the displacement of peasants to urban regions in both North and South. As FDI, where the majority of profits are repatriated by the economic imperial power, replaces foreign aid as the primary form of development finance, the chapter examines its influence on the new shape of imperialism. The chapter examines the technological investments of monopoly capitalist imperialism in low-wage regions for mining, manufacturing, and services that are capable of generating the highest level of surplus value. The chapter also considers financialization and monopoly capitalist development in the Global South arising from cross-border movements of people, and shows the deepening of inequalities across the world, focusing on capital flows and the insecure prospects for development in poor countries. Chapter 3 examines imperialism, labor migration, and the expansion of the reserve army of labor. The chapter surveys worker exploitation under temporary migration, and assesses the challenges and opportunities that imperialism and monopoly capital pose for workers. Although the movement of workers across national boundaries might create divisions that undermine existing labor standards, it might also be a source of working-class and union revitalization, through active international solidarity. Part II (Chapters 4, 5, and 6) examines labor developments in three industrial sectors: platinum mining in South Africa, auto manufacturing in India, and shoe manufacturing in China. These 22 The new international working class examples demonstrate the capacity for working-class insurgency and the establishment of independent unions in key industrial sectors, where workers seek to upend national development plans that accord with neoliberal efforts to erode labor unions and repress the autonomous organization of workers. Consideration of the changes in mining and other industries in South Africa, India, and China demonstrates not only the advantages of poverty wages, poor working conditions, and a capacity to apply technological innovations to produce considerably higher levels of surplus labor than in other regions, but also the magnitude of the problem. The three case studies provide convincing evidence of the emergence and expansion of oppositional proletarian formations and organizational mobilizations challenging the power and control of economic imperialism and finance capital. Chapter 3 examines the rise of the industrial working class in India in the wake of neoliberal reforms aimed at expanding corporate profitability and upper-class power. The state has encouraged FDI by reducing taxes and tariffs, and facilitating the development of duty-free zones where labor standards have been withdrawn and labor unions are unwelcome. The rapid growth of neoliberal capitalism has modernized India’s industrial centers and brought them into the world economy. Widely regarded as a successful model of economic development, the country is firmly united with the capitalist imperialist economy as exploitation of the vast majority of its population grows. This chapter examines how independent rankand-file workers’ unions in India have arisen in direct response to rising FDI aimed at eroding the power of traditional labor unions. As multinational companies demand strict subservience and impose draconian conditions on precarious workers, new class-struggle unions are forming and expanding in India’s industrial belts. Chapter 4 examines worker insurgency from 2010 to 2014 in the Pearl River Delta, the largest export production center in China’s Guangdong Province. Two major forces in the region’s rapid industrialization are the migration of millions of rural peasants to work in the burgeoning production industries, and massive investment by foreign capital in the region’s manufacturing industries, which supply brands for the world economy. The 2014 strike at Yue Yuen 23 Southern Insurgency is the largest private-sector strike in China’s history, and suggests that activism among workers in the private manufacturing sector is growing dramatically as laborers expand their struggles beyond local protests, which had previously circumscribed the growth of a broader movement of industrial workers. The chapter examines how workers are defending their collective rights and challenging the coercive and socially irresponsible conduct of foreign multinationals. Chapter 5 examines the formation of new worker organizations in South Africa’s mining sector from 1998 to the present. While the end of apartheid has conferred formal political rights on the Black majority, the post-apartheid state has not given them concomitant economic rights. In the mining sector, migrant and local workers who are paid low wages, live in poverty, and work in grueling and dangerous jobs are resisting by joining autonomous general assemblies and engaging in sit-down strikes, often without the support of the National Mine Union. The chapter chronicles the democratic workers’ struggles that led to the 2012 massacre of 34 workers in Marikana. Mine workers have mobilized in workplaces and communities through workers’ assemblies that are nurturing class-struggle unionism to resist monopoly capital’s exploitation. Older unions thrash about for relevance among militant workers, constrained by outmoded government laws that once granted them legitimacy but now render official forms of militancy illegal. The case studies here show that it does not matter whether workers have established democratic rights or state recognition. Factory workers in South Africa, India, and China demonstrate that the absence of official state recognition ironically gives workers greater freedom to pursue their appeals for justice and improved conditions. Workers in the Global South are paving the way for a democratic, inclusive, and participatory unionism that challenges the system of capitalist domination far more successfully than existing unions in the West that are advanced by sanctimonious advocates of liberalism and corporate social responsibility. In the South, rank-and-file workers are challenging existing unions to demand more than a raise – in effect a restructuring of society for all workers. Each chapter in Part II asks why workers are rejecting equivalence and parity with the Western trade union 24 The new international working class model. The evidence suggests that workers are developing a class consciousness at their workplaces together with an understanding of the range of possibilities in short-term rather than long-term contracts. Instead of making a truce with capital, class-conscious workers are seeking an alternative or transcendence which rejects corporatist models of accommodation but takes advantage of what is possible. conclusion The system of economic imperialism has been identified by Marxist political economists for more than a century, through rigorous historical analysis, as a product of the extractive policies of monopoly capitalism on peoples of the Global South with the support of imperial and local powers. The purpose of this book is to document how workers in the early 21st century are countering exploitative corporate labor practices in the Global South, challenging autocratic systems of control which work through FDI. In the contemporary era of imperialism dictated by the logic of financial capital, the global industrial working class is larger than at any time in history. In regions of the Global South that have become crucial locations and sources of labor supplies, capital investment, and emerging market economies, military and police power has been exercised in support of compliant national governments dependent on the foreign investment that has become ever more integrated into the world economy through advances in new technology. In the neoliberal era of financialization, Third World countries are compelled to integrate their economies into the world system of capital or risk exclusion from the international system of trade, dominated by monopoly capital. To gain entry into the World Trade Organization (WTO) and become eligible for funding from the IMF and World Bank, states must guarantee political stability through the establishment of comprehensive criminal justice systems aimed at removing any internal threats to manufacturing by worker organization that could lead to interruption of industrial production through strikes and insurrections. 25 Southern Insurgency However, workers are building bridges in workplaces and communities by struggling for the rights of newcomers and the outcast temporary workers, and seeking independent unions free of employer domination. Through direct action and worker assemblies, workers are pushing existing unions to act as oppositional forces to capital or seeking alternatives to the status quo. They are initiating concrete efforts at building workers’ organizations through parallel structures that exist independently of older established unions, which are weakening everywhere. As capital formation changes and old unions lose their relevance, industrial workers are struggling to defend and advance their collective conditions as they challenge capital on a new terrain. 26 Part I Capitalism and Imperialism 27 1 The Industrial Proletariat of the Global South In the 20th century manufacturing was deemed essential for national economic development and modernization. Today international economists consider manufacturing as a sign of the subservience of emerging and developing countries to global capitalists and financiers in the advanced economies of the North. The terminology of the World Economic Forum and multinational economic institutions that differentiates between advanced, emerging, and developing economies contains an underlying contradiction. Advanced economies provide high-technology inputs into the consumer goods, such as automobile global positioning systems (GPS), technology, and creative content determined by the tastes of affluent consumers in the advanced countries. A range of industries are now considered dispensable for advanced countries: automobile production, shipbuilding, electronics, and even manufacturing of high-tech products are outsourced to ‘emerging’ and ‘developing’ countries that can produce commodities at a fraction of the cost in wages, while the profits are realized by firms in the North. The shift of most industrial production to the South from 1980 to the present is a fundamental feature of neoliberalism in which monopoly capitalists in the North gain advantage over workers in the imperial world. The economies of the South, which were once considered to be developing, are in a position of permanent subordination to the advanced countries. Profitability is expanded and a higher surplus on investments is produced using inputs from the South, where newly proletarianized workers are being impoverished. In the three decades from 1980 to 2011, the share of industrial employment in the Global South expanded from just over 50 per 29 Southern Insurgency cent to 80 per cent of the world’s 3.27 million workers in the formal sectors of the economy.1 The shift of foreign direct investment (FDI) to the South for industrial production has dramatically enlarged a class of especially oppressed and exploited industrial workers that far exceeds the development of mass industrialization in Europe and North America in the 20th century. Foreign companies thrive on a workforce composed primarily of migrant contract laborers whose rights to strike are limited. Independent unions are banned or opposed. Contract and temporary workers deprived of rights keep wages down for all and expand profit margins which are appropriated by multinationals in the Global North. These are the New Industrial Proletariat. As states in the South have competed for capital, they have also succeeded in removing the fangs of traditional unions that formed and consolidated in the postwar era of independence and national liberation struggles. The forces of organized labor formed in the image of their European colonial predecessors have adopted policies that demobilized workers in exchange for dispensations to union members employed in industrial sectors in key industries. Today’s mobilization of workers in the South is challenging not only national and international capitalists, but also the institutional regime responsible for co-opting unions into a system that protected a small proportion of the urban working class. Worker assemblies and newly formed independent workers’ organizations in the South are making demands reminiscent of those made by the mass industrial organizations advanced by rank-and-file workers who formed the Industrial Workers of the World (IWW) a century ago. poverty north and south The focus of media and academic research is on poverty in the North, in response to growing recognition of the generalization of destitution worldwide, as popularized by the Occupy movements in 2011. Poverty and inequality is indeed endemic in the North, above all in states that have eviscerated the social welfare protections that emerged in the mid-20th century in Europe and North 30 The industrial proletariat of the Global South America. Growing disparity and indigence intensified in the wake of the economic shocks of 2008–09 through government policies that allowed industrial producers to declare bankruptcy in order to restructure wages while banks foreclosed on the homes of the working poor. The divergence was particularly marked in the centers of finance capital, London and New York. Yet despite the decline of industrial jobs and the growth of poverty and inequality in the North (especially among racial minorities, immigrants, and youth), wages and material conditions in the imperialist core in Europe and North America remain far better in the era of neoliberal capitalism than those of almost all unionized workers in the South. The expansion by multinational conglomerates of foreign investments in extractive and production industries in the South has in many ways contributed to a divergence of interests between workers in the North and South. While workers in the North may seek to keep commodity, food, energy, and natural resource prices low, capital is financing investments in the South designed to increase profitability through extracting higher levels of surplus labor, impoverishing industrial workers in poor countries, and threatening the remaining production workers in the North. An enduring feature of existing trade union leadership in the auto industry of Europe and North America has been opposition to investment in low-wage factories in the global South. Organized labor in the North has only sought to improve conditions in the South with a view to advancing its own organizational interests. Raising the cost of labor in the South has always reduced the propensity of capital to export production, and redounded to the benefit of union members in the North. Given the concentration of mass production in North America, Europe, and Japan during the 20th century, existing trade unions unfailingly aligned with big business in their industrial sectors to prevent free trade. These efforts to preserve industrial production in the North failed miserably, as trade unions typically became allied with national manufacturers to defend shrinking industrial turfs from further outsourcing of production to the South. 31 Southern Insurgency the 21st-century ‘forces of labor’ A leading interpretation of the rise and fall of workers’ movements is Beverly Silver’s Forces of Labor.2 Silver posits that in response to worker militancy in locations of industrial development, capital undertakes two primary fixes in the workplace: spatial and temporal. Drawing on the development of capitalism in Europe and North America from the 1870s to the 1930s, Silver asserts that the expansion of capitalist production in a specific state and region inevitably leads to a concomitant intensification and strengthening of working-class organizational power, creating a crisis of profitability. The centralization of production tends to stimulate the organization of the working class through the mobilization of workers and the consolidation of labor unions. Successful unions rooted in rank-and-file militancy typically organize and strike to improve wages and working conditions, forcing capital and nation states to mollify worker demands through wage concessions and the establishment of social safety nets. However, higher wages and welfare states undermine the stability of capital and are likely to produce economic crises. Thus capital is forced to consistently identify strategies to reduce labor costs through the reversal of social gains and reduction in wage costs, and ‘intensifying the commodification of labor’.3 In turn, the likelihood that measures that discipline the working class also weaken social harmony and legitimacy forces capital to seek out lower-cost regions for production. The growth of labor movements and the consolidation of trade unions in the 19th and 20th centuries gave rise to higher wages, improved working conditions, and state labor laws which standardized the relationship between organized labor and capital. While capital retained control over workplaces, collective bargaining agreements with unions tended to increase wages and states expanded social welfare protections to the broader working class. The contradiction between capital accumulation and worker militancy creates a historical crisis for capitalism. When a mobilized working class inhibits capital from reasserting hegemony to expanding profits, over the past 140 years capital has consistently relocated to new low-cost production regions with more docile labor forces. Silver 32 The industrial proletariat of the Global South argues that the propensity toward crisis in the ‘temporal dynamic’ contributes to an effort to recover profitability through ‘fixes in the spatial dynamic’. Thus capital seeks to identify geographic regions with a higher intensity of labor commodification in order to offset higher wage standards and welfare regimes that increase the cost of production and reduce profitability, and to assure that ‘profits can be made – even with the partial de-commodification of labor and the establishment of expansive social contracts – as long as these concessions are made to only a small percentage of the world’s workers.’4 While capital unceasingly seeks to pursue spatial fixes by the continuous relocation of production geographically to new regions, these initiatives only temporarily postpone crises, which reappear as militant working classes emerge in these new regions and challenge profitability by demanding higher wages and social benefits. Silver observes that the ‘successive geographical relocation of capital constitutes an attempted spatial fix for crises of profitability and control that only succeeds in rescheduling crises in time and place.’5 Despite the growing labor militancy in the South, capital has preserved the dominance of the imperialist core by recapturing profits and material gains in the financial centers of the North.6 Silver views the monopoly over trade and investment by capital in the North as a tendency rather than a structural feature of the world economy, but one that nevertheless accentuates inequality and poverty. This tendency has now become an essential feature of monopolistic firms which earn higher profits selling products in the North than can be obtained in the South. The emergence of a middle-income urban stratum in the South who can afford consumer goods also advantages firms in the North which own the financial assets of firms in poor countries, and has turned peasant and rural workers into highly exploited impoverished semi-proletarian laborers. South–South industrial trade is captured by financial firms which control FDI, commerce, and distribution systems, and which repatriate profits in the North. To corroborate the North–South inequality that rests on imperialism and capital flows, Tables 2.1 to 2.4 demonstrate that, despite developing countries’ low share of world gross domestic product (GDP) and FDI, globally Northern capital is completely dependent on the super-exploitation of low-wage Southern labor.7 33 In 1995 Out In 2000 Out In In 2010 Out In 2013 Out In 34 Source: UNCTAD (2014) World Investment Report 2014. Investing in the SDGs: An Action Plan, ‘Annex table 01 – FDI inflows, by region and economy, 1990-2013’; ‘Annex table 02 – FDI outflows, by region and economy, 1990–2013,’ Geneva: United Nations. World 904,270.2 996,713.8 1,467,579.61,422,254.8 1,410,695.8 1,451,965.4 Developed economies 743,475.3 622,866.5 988,769.3 703,474.1 857,453.5565,626.5 Developing economies 141,040.7 341,433.3 420,919.4 648,207.6 454,066.9 778,372.4 Transition economies 19,754.2 32,414.0 57,890.8 70,573.1 99,175.4107,966.5 2005 Out World 240,900.4 207,618.3 363,170.5 344,255.3 1,241,226.5 1,415,016.9 Developed economies 229,583.2 172,514.4 306,898.4 222,582.3 1,090,662.2 1,142,383.2 Developing economies 11,317.3 35,033.0 55,655.2 117,674.5 147,372.4 266,646.1 Transition economies 0.0 70.9 616.9 3,998.5 3,191.9 5,987.5 1990 Out Table 2.1 FDI inflows and outflows by major regions, 1990–2013 (US$ million) S O U T H E R N I N S U RG E N C Y 83.1 16.9 0.0 84.5 15.3 0.2 1995 Out 64.7 34.2 1.2 In 87.9 11.9 0.3 2000 Out 80.7 18.8 0.4 In 82.2 15.6 2.2 62.5 34.3 3.3 2005 Out In 67.4 28.7 3.9 2010 Out 49.5 45.6 5.0 In 60.8 32.2 7.0 2013 Out 39.0 53.6 7.4 In Note: For developing countries as a whole, profits repatriated from FDI investments grew notably between 1995 and 2008. Repatriated income from FDI in the developing world increased 747%, from $33 billion in 1995 to $276 billion in 2008. In other words, repatriated profits are growing faster than FDI inflows. In 1995, repatriated profits represented 29% of FDI inflows, but, by 2008, repatriated profits represented 36% of FDI inflows. (UNDP, 2011, Towards Human Resilience: Sustaining MDG Progress in an Age of Economic Uncertainty, New York: United Nations, p. 100). Source: UNCTAD (2014) World Investment Report 2014. Investing in the SDGs: An Action Plan, ‘Annex table 01 – FDI inflows, by region and economy, 1990–2013’; ‘Annex table 02 – FDI outflows, by region and economy, 1990–2013,’ Geneva: United Nations. Developed economies 95.3 Developing economies 4.7 Transition economies 0.0 1990 Out In Table 2.2 FDI inflows and outflows by major regions, 1990–2013 (percentage shares of total) The industrial proletariat of the Global South 35 Southern Insurgency Table 2.3 Gross fixed capital formation of developing countries (constant 2005 US$, millions) 1990 1995 World 6,731,810 7,087,020 Developing countries 911,006 1,186,331 Percentage share of world total 14 17 2000 2005 2010 8,899,560 10,421,600 11,345,100 1,531,615 2,343,238 3,522,715 17 22 31 Note. Gross fixed capital formation (formerly gross domestic fixed investment) includes land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like, including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings. According to the 1993 System of National Accounts (SNA), net acquisitions of valuables are also considered capital formation. Source: World Bank. production and imperialism By the 2010s, for the first time since the 1980s, the expansion of trade and finance had given rise to a new stage in labor–capital relations, which depends decisively on the exploitation by multinational corporations and local contractors of workers in the South, buttressed by the dominance of the imperialist states in the North.8 There are several reasons for this. Forced Migration International capital, expanding through finance and banking, has invested in land and real estate in the South, inflating land and property prices beyond the reach of peasants and workers, and forcing them out of the countryside into industrial and urban centers where they become manufacturing, construction, and service workers. Growth of Megacities In the two decades from 1990 to 2010, the rapid and unending imposition of market liberalization expanded the population and 36 The industrial proletariat of the Global South Table 2.4 FDI inflows as percentage of gross fixed capital formation, 1990–2013 Region/economy 1990 1995 2000 2005 2010 2013 World Developed economies Developing economies Africa Asia Latin America and Caribbean South-East Europe and CIS 4.2 5.2 18.0 9.5 9.7 8.2 4.2 4.3 18.6 8.4 9.0 6.7 4.0 3.0 3.9 7.9 7.3 7.7 16.2 9.6 13.9 12.1 17.0 10.9 10.2 12.0 8.3 9.2 12.7 6.2 4.3 8.6 24.2 15.1 18.5 24.3 0.5 3.1 11.9 12.5 18.9 17.2 Source: UNCTAD (2014) World Investment Report 2014. Investing in the SDGs: An Action Plan, ‘Annex table 05 – FDI inflows as a percentage of gross fixed capital formation, 1990–2013,’ Geneva: United Nations. area of urban conglomerations to include areas that once formed part of the rural hinterland. The majority of the population of the new megacities in Africa, Asia, and Latin America consists of displaced rural peasants who have moved to shantytowns on the periphery of urban centers, many of which lack clean water, medical services, and sanitation.9 Industrial Production Multilateral financial institutions determine the value added to industrial goods in each nation on the basis of GDP rather than the direct surplus value extracted from workers employed by the subcontractors of multinational corporations. As work is contracted out to low-price producers, calculation of corporate profits and contribution to the economy is concluded without acknowledging the labor input of Southern production workers who work for a fraction of the wages of the North. In addition, through establishing subsidiaries and relying heavily on labor contractors, multinational corporations seek to disown accountability for the impoverishment and dangerous and exploitative conditions that ensure profitability from enterprises employing the newly proletarianized labor forces. 37 Southern Insurgency The relocation of industrial production to the South compels us to reconsider the nature of global class relations in the early 21st century. As political economist John Smith asserts, ‘What’s involved here is not merely the globalisation of production but the globalisation of the capital–labour relation, in which capitalists in imperialist nations have become very much more dependent on value extracted from workers in the Global South.’10 Smith sums up the dramatic shift in industrial production from North to South thus: In 1980 half the world’s industrial workers lived in Europe, Japan, and North America, i.e. the imperialist nations. Since then, in just three decades, their numbers have declined in absolute terms by around a quarter, while the export-led expansion of the industrial workforce in low-wage countries has grown rapidly and now comprises 80 percent of the world’s industrial workers. The scale and speed of this global shift, and even more so the form it has taken, are strong evidence of the significance of the outsourcing phenomenon.11 In a highly referenced report on the importance of low-wage labor to the world economy, Stephen Roach, former chief economist for the investment banker Morgan Stanley, confirms the strategic importance for finance capital to redirect and expand production to the South: In an era of excess supply, companies lack pricing leverage as never before. As such, businesses must be unrelenting in their search for new efficiencies. Not surprisingly, the primary focus of such efforts is labour, representing the bulk of production costs in the developed world. In the United States, worker compensation still makes up more than 75% of total domestic corporate income. And that’s precisely the point. Wage rates in China and India range from 10% to 25% of those for comparable-quality workers in the United States and the rest of the developed world. Consequently, offshore outsourcing that extracts product and/or services from relatively low-wage 38 The industrial proletariat of the Global South workers in the developing world has become an increasingly urgent survival tactic for companies in the developed economies. Mature outsourcing platforms, in conjunction with the internet, give new meaning to such tactics.12 The vast transfer in economic wealth and resulting inequality between developed North and industrializing South are demonstrated in the statistical tables. Table 2.5 shows the labor share of national income and Table 2.6 the capital share of national income around the world in 2008. Table 2.6 demonstrates that capital share of income for the developing countries is 22 percent higher than that in the developed countries, and the labor share of income is 12.4 percent lower in the developing countries than in the developed countries. Capital share is calculated by dividing gross operating surplus by the sum of gross operating surplus and compensation of employees based on data from 1992 to 2002 in developed and developing countries. Gross operating surplus is gross output less the cost of intermediate goods and services (to give gross value added), and less compensation of employees. It is a gross figure because it makes no allowance for depreciation of capital. The capital shares of Bolivia, Philippines, Poland, Tunisia, and Ukraine were obtained indirectly. In the UN source document (2004), gross operating surplus for those countries includes gross mixed income, which is the income of private unincorporated enterprises. However, in an earlier edition of the National Accounts Statistics, a ratio of gross mixed income to gross operating surplus is available. Table 2.7 shows mergers and acquisitions (M&As) as a share of FDI inflows in developing countries, and Table 2.8 the number of FDI projects by destination from 2003 to 2013. These tables reveal that multinational corporations rely more than ever on M&As (representing the centralization of already existing capital by way of the takeover of monopolies by other monopolies) or profits generated from capital investments in the Third World, consisting in greenfield FDI (new capital investment in productive capacity without local restrictions). According to UNCTAD’s World Investment Report 2014: 39 Southern Insurgency Table 2.5 Labor share of national income around the world (percentages) Country 1970s 1980s 1990s 2000s Algeria Armenia Australia Austria Azerbaijan Belgium Botswana Brazil Bulgaria Chile China Hong Kong Colombia Cyprus Czech Republic Dominican Republic Egypt Estonia Finland France Germany Greece Hungary Iceland Iran Ireland Israel Italy Jamaica Japan Kazakhstan Kuwait Kyrgyzstan 75.1 71.9 84.8 76.0 76.2 80.5 69.7 58.5 65.5 52.1 68.5 58.2 64.1 51.7 62.0 72.4 65.3 75.3 78.4 86.9 66.1 86.4 73.1 79.4 64.8 77.2 72.0 89.2 77.0 58.1 89.9 75.3 78.9 45.6 70.1 42.9 71.5 51.0 64.5 52.8 55.3 73.3 68.2 67.6 39.4 70.0 74.4 72.6 76.5 67.1 58.4 81.9 45.0 69.0 78.5 69.9 89.7 81.5 85.3 38.9 95.5 43.2 94.6 71.2 74.1 45.2 78.6 34.7 82.2 53.2 68.2 57.7 73.3 72.7 68.7 63.9 40.8 64.1 67.7 76.3 71.5 65.2 70.7 89.3 46.1 58.6 75.9 72.5 86.8 79.7 68.0 28.1 73.0 OECD average Non-OECD average 74.5 65.1 75.7 65.2 72.8 62.1 72.3 59.9 Source: Marta Guerriero (2012) ‘The labour share of income around the world: evidence from a panel dataset,’ Appendix H, Labour share averages and trends, by decade, Institute for Development Policy and Management (IDPM), Working Paper Series WP No. 32/2012, University of Manchester, pp. 51–3. 40 The industrial proletariat of the Global South Table 2.6 Capital share of national income around the world, 2008 Country Argentina Brazil Bulgaria Chile Columbia Cote d’Ivoire Czech Republic Dominican Republic Estonia Hungary Kazakhstan Kyrgyzstan Latvia Lithuania Mexico Moldova Mongolia Nicaragua Slovakia Poland Tunisia Mozambique Philippines Portugal Ukraine Australia Austria Belgium Canada Denmark Finland France Germany Greece Iceland Italy Japan Korea, Republic of Netherland Spain Sweden United Kingdom United States Average for developed countries Average for developing countries Average for world Capital share % 0.529 0.512 0.525 0.372 0.455 0.489 0.459 0.395 0.342 0.403 0.566 0.258 0.380 0.414 0.565 0.420 0.502 0.438 0.358 0.274 0.354 0.554 0.460 0.313 0.297 0.291 0.293 0.309 0.303 0.375 0.396 0.328 0.378 0.611 0.391 0.411 0.371 0.254 0.340 0.313 0.307 0.326 0.268 0.348 0.425 0.393 • per capita, US$ 41 Growth rate (%) 1.13 2.4 -0.18 4.22 0.96 -0.58 1.65 5.03 4.64 5.05 2.19 3.15 4.61 3.4 1.16 -0.34 1.01 -0.38 2.33 3.99 3.15 1.8 1.26 4.5 -0.87 4.59 3.58 3.35 4.58 4.03 5.12 3.7 2.96 4.21 4.53 3.17 2.07 4.58 4.12 4.69 3.89 4.64 4.29 4.006 2.211 2.962 GDP* 10,466 6,709 6,768 9,991 5,683 2,195 12,344 5,531 9,154 10,057 6,235 3,173 8,043 8,046 2,345 7,097 1,462 3,187 8,578 7,286 6,085 1,014 3,241 15,245 5,108 23,027 24,145 22,334 22,942 24,515 19,495 22,347 22,944 12,547 22,260 20,604 22,562 14,020 23,152 17,101 22,204 21,615 30,048 21,548 6,602 12,858 Southern Insurgency Table 2.7 Mergers and acquisitions as share of FDI inflows in developing countries Year In US$ billion: M&A Non-M&A FDI FDI Annual change in %: M&A Non-M&A FDI FDI 2007 2008 2009 130 526 656 125 628 753 46 502 548 -4 19 15 -63 -20 -27 Source: UNDP (2011) Towards Human Resilience: Sustaining MDG Progress in an Age of Economic Uncertainty, New York: United Nations, p. 101. Developing and transition economies tend to host greenfield investment rather than cross-border M&As. More than two-thirds of the total value of greenfield investment is directed to these economies in the Third World, while only 25 per cent of cross-border M&As are undertaken there. At the same time, investors from these economies are becoming increasingly important players in cross-border M&A markets, which previously were dominated by developed country players.13 Meanwhile, Hoffman reports that ‘M&A accounted for more than 89% of FDI in developed countries and for about 76% in the world for the period from 1998 to 2001 with a steady increase in these shares since the 1980s.’14 Well over half of FDI inflows into OECD countries represent cross-border M&A rather than companies setting up factories or offices from scratch. Thus there is a distinct difference in the pattern of FDI in the imperialist and the semi-colonial countries of the world economy.15 According to the World Bank: [M]ore than one-third of FDI inflows to developing countries now originate in other developing countries: of the 11,113 cross-border M&A deals announced worldwide in 2010, 5623 – more than half – involved emerging-market companies, 42 The industrial proletariat of the Global South Table 2.8 Number of greenfield FDI projects by destination, 2003–13, share of total (%) Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Developed economies 44 46 49 50 52 46 47 49 48 49 50 Developing and transition economies 56 54 51 50 48 54 53 51 52 51 50 Source: UNCTAD (2014) World Investment Report 2014. Investing in the SDGs: An Action Plan, ‘Annex table 22 – number of greenfield FDI projects, by destination, 2003-2013,.’ Geneva: United Nations. either as buyers or as takeover targets by advanced-country firms.16 a new industrial proletariat under neoliberal capitalism In The Crisis of Neoliberalism, political economists Gérard Duménil and Dominique Lévy contend that the concentration of income and wealth is generating a privileged ruling class which controls economic and political power through imperial hierarchies that concentrate wealth in the North as a ‘permanent feature of capitalism.’17 The dominant class, centered in the United States and Europe, attains profits and wealth through foreign trade realized primarily from the control and increasingly the possession by monopoly capitalists in the North of land, natural resources, and capital in the Third World: Economically, the purpose of this domination is the extraction of a ‘surplus’ through the imposition of low prices of natural 43 Southern Insurgency resources and investment abroad, be it portfolio or foreign direct investment. That countries of the periphery want to sell their natural resources and are eager to receive foreign investment does not change the nature of the relations of domination, just as when, within a given country, workers want to sell their labor power, the ultimate source of profit.18 Fundamental to the maintenance of the neoliberal capitalist system is the imperialist project to appropriate the resources and labor of the South. According to political economist Prabhat Patnaik, relocation of production to low-wage countries is facilitated through the capacity of finance to realize profits from investments in the Third World: the new finance capital is not necessarily tied to industry in any special sense. It moves around the world in the quest for quick, speculative gains, no matter in what sphere such gains accrue. This finance is not separate from industry, since even capital employed in industry is not immune to the quest for speculative gains, but industry does not occupy any special place in the plans of this finance capital. In other words not only does capital-as-finance function as capital-as-finance, but even capital-in-production also functions as capital-asfinance; capital-as-finance on the other hand has no special interest in production. This is basically what the process of ‘financialization’ involves, namely an enormous growth of capital-as-finance, pure and simple, and its quest for quick speculative gains.19 Why the Global South? Lmperialist Globalization The presence of an expansive reserve army of workers in the Global South has allowed managers to hire informal laborers, while systemic unemployment has diluted the power of conventional strikes and work stoppages. The informal sector has been a distinctive feature of the political economies of the South in the decades after the Second World War, especially tertiary workers in unreg44 The industrial proletariat of the Global South ulated sectors of Africa, Asia, and the Americas. Sarah Mosoetsa and Michelle Williams, editors of the ILO’s influential report on labor in the South, assert that existing unions must redirect organizing from traditional members to informal workers who are marginalized in the economies of the South: [T]rade unions’ traditional forms of power – workplace bargaining and regulatory capacity – have also been eroded. These changes in the structure of the economy have had profound implications for labour. Labour in the traditional manufacturing sectors has had to find new forms of power and leverage in an effort to combat job losses and the diminishing significance of the sector in the economy and in response to the changing nature of work. At the same time, the new importance of the service sector, in which trade unions were formerly less interested in organizing, has forced labour to think about new approaches to organizing and new tactics for mobilizing.20 Semi-proletarian workers have been neglected by unions in the South since the independence era. Given the growth of financial investments on a world scale, even if manufacturers in the South produce for sale in national or regional markets, foreign investors in the North can easily retrieve profits realized offshore by manipulating monetary and commercial instruments. Sam Moyo, Paris Yeros, and Praveen Jha describe the contemporary system of imperialist domination through financialization: A systematic transfer of surplus value from the periphery to the centre, far beyond the initial investment, has been intrinsic to this relationship, whose mechanisms have included the repatriation of profits, interest payments, and dividends, the imposition of monopoly rents, as well as unequal exchange. Moreover, through these mechanisms, the centre has been able to displace its own contradictions of accumulation to the periphery, thereby curtailing class conflict in the centre 45 Southern Insurgency over a long period. The crisis that is now upon us, to the point of engulfing the centre itself, is arguably the terminal accumulation of systemic contradictions.21 The expansion of neoliberal capitalism has radically reshaped the composition of the industrial working class on a global level. The dominant mode of exploitation in Africa and Asia has been through the commodification of agriculture and mining, and the exploitation of the rural peasantry. Even mine workers were never fully integrated into the dominant urban industrial economies of major cities in the periphery of the Third World. In the South African mineral industry, the vast majority of workers were semi-proletarian migrants drawn from Mozambique, Swaziland, and other rural regions of the state to work for defined periods before returning home. The growth of global production units that are controlled by financial markets has closed out for almost all newcomers to industrial zones the possibility for the new industrial proletariat to return to rural regions.22 workers’ movements and organized labor The welfare state accords in Europe and North America of the mid-20th century came about in direct response to the expansion of an autonomous workers’ movement, formed among rankand-file workers, that grew out of the Industrial Workers of the World and the socialist electoral blocs that emerged in the early part of that century. Since the 1970s, organized labor in the North has faced the inexorable erosion of working-class power among production workers, who have been the mainstay of worker insurgencies throughout the world since the origins of mass capitalist production in the early 20th century. From the 1980s to 1990s the primacy of traditional unions representing industrial workers in the South came under attack from the emergence of militant unions galvanized by rank-and-file workers’ movements in Latin America, East Asia, and Africa, notably Brazil, South Korea, and South Africa. In Brazil and South Africa, militant workers’ movements aligned with left political parties and social 46 The industrial proletariat of the Global South movements to form national alliances that ultimately gained political power. In all three cases, the new alliances were unwilling to challenge, or incapable of challenging, the monopoly capital that dominated international finance and commerce.23 These newly recognized unions in the developing world have been incorporated into state governing structures through neo-corporatist forms of institutional recognition of labor representation and collective bargaining rights that assented to the dominance of capital and the state in return for recognition and minimal economic gains for members. As industrial investments have spread throughout the South, however, new independent workers’ movements have emerged challenging the hegemony of capital, state, and union policies that have in many instances relinquished institutional power for the majority of the working class. Nevertheless, when workers’ movements are transformed into formal bodies for organized labor in poor countries of the South, they are usually only able to represent a small portion of workers, and encounter significant limitations in extending wage and social protections to the vast majority of impoverished workers. A fundamental question for labor unions and strategists at a time of deteriorating organizational power is how to challenge the hegemony of neoliberal economic institutions in the early 21st century. In view of the erosion of existing unions in the North, greater attention has been turned to workers’ organizations throughout the South, where vibrant movements have emerged in Africa, Asia, and Latin America from the 1980s to the present. Four factors are behind the emergence of these moveme...
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