From the TUC

Globalisation, anxiety and the role of trade unions

31 Jan 2012, by in Economics

I returned from a week away on Sunday, meaning the last two days have taken a familiar course. Yesterday,  I tackled the inbox, deleted the spam, returned the urgent messages and generally got my electronic life organised. Today I tried to catch up on what has happened in the world while I was outside the news loop.

Particularly interesting (and relevant for me) was the launch of the IPPR’s publication, ‘The Third Wave of Globalisation’.

I don’t pretend to have read all 96 pages, but I’ve seen enough to see there’s some interesting stuff here. The report argues that the first wave of globalisation was led by the UK and took place about 140 years ago. The second wave followed the Second World War and was US led. We are now at the third wave, which will require advanced economies, like those in Europe, to focus on their strengths in high-end technology and component goods across international chains of production. The report describes how people in the developed world fear that “as the east emerges, the west will become ‘submerged'”. In his Foreword, Lord Mandelson takes up this theme, spending some time thinking about why globalisation has brought incredible benefits, yet many have what he calls “nagging doubts” about it. In fact, Mandelson goes further, pointing out that globalisation brings “a mix of new economic opportunities and disruption, volatility and insecurity for individuals and families”.

I think people have feared globalisation for a number of reasons. One is that they have simply felt incredibly powerless in its wake. This is especially true in that the disruption of globalisation hasn’t been spread equally. It may be true that, for some, globalisation has led to new opportunities to travel and work abroad, but a manufacturing worker losing his or her job in the West Midlands and being told that that job going to China is somehow a sign of world economic progress could hardly be expected to feel positive about it. The growing divide among rich and poor in recent years has made matters worse. So globalisation has often seemed like something happening to people, rather than being shaped by them. We try to shape world events through our elected politicians, but right now, the bond markets and international speculators seem more powerful than the ballot box, especially in some European countries.

The IPPR cannot solve all these problems, of course, but its call for action on current account imbalances between surplus and deficit countries is welcome, as is Lord Mandelson’s call for a more robust industrial strategy for the UK.

A couple of weeks ago, the TUC launched its own report, ‘German Lessons’. Whereas the IPPR went to Brazil, China, India, Germany and the US, we focused on one country, Europe’s strongest, Germany. Like the IPPR, we don’t have all the answers, but policymakers should think afresh about the role of trade unions in creating a fair globalisation. German companies are used to being winners. Volkswagen aims to be the biggest motor manufacturer in the world. Siemens and ThyssenKrupp are two other world leaders that we visited. What is interesting is that all three recognised the imperative of investing in China. It is the biggest growth market in the world and to sell there in any meaningful way means getting a base there. And when I say “all three” recognised the importance, I don’t just mean managers, I also mean trade unions in those companies. Because in the German Social Market Model, works council representatives, who are usually trade union members, also take responsibility for major investment decisions. What is crucial, however, is that those works council reps can also keep one eye on their own constituencies. So what they do is they support company investment in China (or India, or Brazil), so long as there is also an agreed investment in the home plants, protecting jobs and skills in Germany. In short, they negotiate, like good, old-fashioned trade unionists always have.

Trade unions can’t make the powerless powerful, but they can help to cushion the inevitable blows of globalisation. If we want a globalisation that takes workers with us, trade unions are undoubtedly part of the solution.

One Response to Globalisation, anxiety and the role of trade unions

  1. Steve – Camden CA
    Feb 1st 2012, 2:52 pm

    All institutions, from government to business, we must become more self-organized and collaborative around core missions and strengths. We must learn new ways to work together, to govern and to innovate.