September 1988 - VOLUME 9 - NUMBER 9
Bennett Harrison is a professor of political economy and planning at the Massachusetts Institute of Technology. He holds a Ph.D. in economics from the University of Pennsylvania. Dr. Harrison is co-author, with Barry Bluestone, of The Great U- Turn, recently published by Basic Books.
Multinational Monitor:How can labor deal with capital flight?
BENNETT HARRISON In the first place, some capital is more mobile than other capital. That is one of the reasons why organizing office workers, hospital workers, workers in the service industry that services the large multinational corporations, is such a crucial priority. In principle, many services are highly mobile also. But that is in principle. Moreover, foreign governments are actively subsidizing the development of their own service sectors. So it is not quite so easy for an American insurance company to bop over to Tokyo as it is for, let's say, GM to decide, 'We are going to stop fighting. We are just going to become an importer of Japanese and Korean automobiles and take part of the profit,' which is a serious possibility. That is not quite so easy for Prudential. So organizing in the less footloose, certain parts of the service sector, becomes a very high priority. MM: What else?
The Canadians have national legislation on plant closures that all of the individual Canadian provinces have to [adhere] to.... So obviously in the United States, we need national legislation. Not only on advance notice but, at least as importantly, requiring that those companies which not only don't go bankrupt in the process of closing plants but actually become richer be responsible for their actions. They are lopping off their less profitable operations and are becoming even more profitable in the process, and they should be responsible for replacing some of the lost tax-base. The UAW in Ohio and the Ohio Public Interest Campaign, and actually Walter Mondale when he was a Senator and then Vice President of the United States, started the movement for plant closure legislation in the 1970s. A very important cornerstone of what [they were] pushing ... was the demand that companies that close but continue to be profitable concerns should make a contribution to the treasury of the community which they are abandoning in lieu of the taxes which they would have continued to pay had they stayed. The idea is to create an economic development fund out of which could be financed replacement development, replacement investment. That part of the original demands seems to have gotten lost in the concern for advance notification. Advance notification is very important, but the replacement fund is also very important. MM: Should that be attempted on the national level?
That was nonsense. That was a poker game and the governor blinked. The high-tech companies in Massachusetts are not about to leave Massachusetts, at least not in the short run and go to Vermont. There is too much at stake here [in terms of] skilled labor around the universities, in access to the airport and to access [to] downtown. All of this is a poker game. I am not suggesting that this is casual or that the odds aren't enormous or that people aren't going to lose. There are big stakes, but part of it at least is a matter of putting together the political coalitions to make some of this work. But the ultimate logic of it is that it is getting harder and harder without national legislation and, more importantly, national political commitment to make the case that it is crucial to resist the blatant playing off by companies of one political jurisdiction against another. MM: Didn't most of the historical examples of states taking a
lead in regulating industry or demanding that they bring up standards happen
in the older age of capital before the mobility and also in a time when,
politically, labor was on the rise?
There is a second side to this. The Third World itself is changing.... South Korea is industrializing and educating its young. South Koreans are demanding independent trade unions. They are not going to be as independent as some of the trade unions we have in the United States today, but they are going to be more independent than anything South Korea has ever had. Wages are rising in South Korea. Wages are rising in Brazil and Argentina and Taiwan. It is true that this means that capital to some extent can move on to Sri Lanka and to other places, but Sri Lanka or Bangladesh are not particularly desirable locations for high-technology, state-of-the-art metal working, or high-tech computer-driven textiles. My point simply is that [even] without our actively constructing a global mobile movement, objective economic conditions that bring about relatively more common sets of experiences for labor are happening. They are happening because of industrialization. It brings into existence large pools of workers who share the experience of coming to work in a factory, facing the problem of having their wages and working conditions set by somebody else, the threat of being laid off, the threat of having their work closed because companies are going to move from Taiwan and South Korea to Malaysia and so forth. The threat and the fear of that energizes people. It gets people angry. They start to organize, they start to make demands on their governments. That is already happening.... There is a struggle in the United States, often seeming to be about protectionism, to require that foreign companies not be allowed to dump their products below cost in the United States threatening to put American workers out of work. That movement, which to the public seems to be a unified, solidified, reactionary demand for protectionism, is in fact a much more complicated political movement. It includes characters like [Rep. Richard] Gephardt [D-Mo.] who hoped to ride into the White House on a very know-nothing, mindless, racist, anti-foreign demand for protectionism. But inside of the United States, in fact, that movement is very fragmented and very complex. And there are elements within that movement that are [saying they] do not think Third World workers should have to starve in order that Americans keep their jobs. What we do want to say is that Third World governments that support their companies at our expense by impoverishing their workers and arresting union organizers [should] not be allowed free access to American markets.... MM: So you don't have just an economic standard, but a humanrights/labor standard?
MM: When can we expect to start to see the economic effect of upward pressure on
wages in the Third World?
We are seeing this already. Companies talk about that among themselves.... American labor and its supporters must distinguish between rank protectionism and the kind of legislative demands that, for example, [Rev.] Jesse Jackson articulates, saying that we aren't interested in blocking imports from the Third World across the board. We are interested in [making] access to American markets contingent upon a policy which allows free labor organizing in the Third World.... The long run agenda is not to squash Chileans or Sri Lankans; it's to support their self-development in order to take away from international business the power to exploit living standard differentials. There are two ways to take their power away. One is to reduce the living standard differentials between peoples. The second is to take [these companies] over directly and talk about biting the bullet and speaking to the nationalization of industry. I don't think those are separate agendas.... MM: Don't most workers think about their
own security and the fate of their company and not about the whole economy?
Historically in the United States many of these benefits were developed attached to companies. They are another example of how in America we do things in ways that force people to become especially attached to the economic fortunes of their companies. But we can change that. [It] didn't come from God, for crying out loud, [it] came from legislatures and Congresses and lawyers and lobbyists. Of course, what I am getting at is that the demand for national health insurance independent of where you work and for whom you work or whether you work and how long you work is a demand which is totally consistent with the long range demand for breaking this connection between individual working people and their indenture to the company with whom they work.... My point is that the demand for national health insurance, which might seem to have nothing to do with run-away shops and multinational corporations, is in fact a demand which is fully consistent with the long range objective of breaking the indenture of individual working people to individual companies and that connection is just as true for the vice president for long range corporate planning of General Motors or IBM as it is for the person who works on an assembly line in Ford or the secretary who works for the Massachusetts Institute of Technology.... The more we can break that connection between individuals and firms, the more we can undermine the power of individual companies to blackmail people by directly and indirectly saying to them, 'Your future depends on your allegiance to the company.' MM: Can that work on the international level?
MM: What are the primary factors that corporations use in the site-selection process?
MM: How can labor prevent companies from relocating when demands like you have spoken of
are made on the companies?
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