Hidden Political Economy of Globalization

* The transformation of Industrial Relations in Germany and Brazil. By Damian Raess.
European Review of Latin American and Caribbean Studies.
No. 84. Amsterdam. April of 2008: 120-2.

This is not a book but rather a doctoral dissertation published as such. Its presentation and communication style is more appropriate for academic evaluation purposes than for the regular reader as it constantly explains the way in which the data was collected, how the information was used, how the chapters were structured, etc. Nevertheless, the volume is indeed valuable because of the unique and first hand information offered on what the author calls, ‘the impact of economic globalization on industrial relations in Germany and Brazil’.
Through what appears to be an arduous field research, Hidden Political Economy of Globalization, allows the reader to get into the empirical facts of how neoliberal policies have affected the capital-labour relations and therefore the ‘bargaining outcomes and practices’ (p. 4). The clever comparative exercise between the German and Brazilian cases clearly exemplifies the ‘shaping’ of such productive relations in both developed and developing countries. While some similarities are identified, correlations and differences are also recognized in detail. For example, while an ‘erosion of the German model of industrial relations’ (p. 190) implies an increased fragmentation of collective bargaining and a decay of social security and working conditions (with some exceptions), in Brazil such fragmentation increased in the context of an absence of social benefits as well as an intensification of the degree of labour exploitation. In contrast to Germany, an escalation of net deindustrialization of Brazil, along with the maquilization of a considerable part of its remaining industrial complex is demonstrated (p. 179-91, 198). Raess also points out that in Brazil ‘[...] increased trade flows, especially imports, and openness have had a negative impact on union militancy and wages in metalworking during the 1990s’ (p. 129).
The work’s extraordinary richness of empirical information, however, is not accompanied by an equally strong theoretical framework. The author seems to be constrained by a sort of academic hype of what could be called an easy use of (new) ‘fashion’ concepts that, far from helping to ‘read’ reality in a more precise way, is actually making it more difficult to understand. The globalization concept used by the author as his ‘main explanatory variable’ (p. 16) is a rather flat descriptive conceptual tool. For Raess, the concept refers to a new phenomena of ‘observable flows of goods, services and capital’, ‘openness to such flows’, and ‘one marketness’ or ‘the degree in which production’s factor prices are set globally’ (p. 16-20). Yet, these aspects of a day-to-day deeper process of economic internationalization have been present over the 500 years of capitalist experience. A key limitation of the book lies in presenting the phenomena as new. It shades no light on the historical power and class relations established within local and national economies and nor on the nature of inter-capitalist relations (regional/international – metropolitan/ peripheral). Hence, it is the ‘market’ or ‘globalization’ and not specific social, economical and political actors who ‘ask’, ‘constrain’, ‘demand’, etc. Raess contends that, ‘[...] globalization might constraint unions by demanding more flexible work settings’ (p. 9). Or, ‘[...] work council’s freedom to choose has been dramatically reduced as employers have harnessed the forces of globalization to coerce labour to cooperate’ (p. 203; emphasis added).
Moreover, the globalization concept carries with it the notion that the State is no longer relevant, an assertion that leaves aside facts of life, like the increased public spending in metropolitan nations, their protectionism and subsidies of strategic production sectors such as agriculture, energy or high-tech, etc. The central matter is that when it comes to issues such as the access to cheap oil, the metropolitan power elites do not believe in the ‘market’ but rather on the ‘visible hand’ of the Pentagon. In a similar way and regarding peripheral countries, it must be remembered that local oligarchies have been highly active in implementing neoliberal policies to the benefit of their own social class and effective in strengthening subordinated, but profitable, relationships with their metropolitan counterparts. The limited theoretical calibre of ‘globalization’ keeps the author away from a deep analysis on the role of the State in the ‘transformation of industrial relations’ in Germany and Brazil. Raess’ approximation to the subject is mostly limited to the performance of economic units and the phenomena of ‘market competitiveness’ (such as the threats of outsourcing and foreign relocation strategies versus labour bargaining). No wonder that increasingly, globalization has been ironically labelled as ‘pop globalism’ or ‘globallony’.
Raess’ argumentation is constrained and its potential power to elucidate what can be categorized as a global class war against labour (workers) is clearly diminished, not only in regard to his phrase construction style but also in detriment of the finesse required to deal with some of his ‘major claims’ and conclusions (which indeed corroborate the existence of such a class war). For Raess, for example, it is obvious that: a) the effects of economic globalization play out differently across different levels of organized labour; b) higher trade and FDI flows are likely to be associated with greater labour concessions [recently more related to the preservation of jobs than to increasing wages as a result of an exponentiation of the worldwide socio-economical instability]; c) globalization matters for labour indirectly by way of how it deepens the cleavage between small and large firms, and how employers’ organizations develop strategies to adjust industry-wide bargaining institution to the increased diversity of interests among its members and; e) economic globalization affects union wage bargaining strategy and wages, as comparative advantage and ‘purchasing power’ ideology diminish the extent to which higher openness increases union moderation (p. 193-4). Accordingly, the author concludes that everything suggests that, ‘greater globalization levels, are likely to be associated with greater labour concessions.’ But, the author clarifies, ‘globalization’s implications are not inevitable’ as ‘actor’s strategies matter’ (p. 204). In short, the author ‘sterilizes’ (or ‘encrypts’ or ‘codifies’) his main findings by eradicating signs of critical analysis from the content. This does not mean that the general argument is inconsistent, but that it could still be considerably enhanced.

Gian Carlo Delgado
Universidad Nacional Autónoma de México