The multinational corporation has become the dominant force leading the globalisation process and determining the future of the world economy. From this historic fact flow the major problems facing the world for the 21st century, including the well-documented increase in poverty, unemployment, low-waged employment and, conversely, the increased wealth and power of elite groups.

With control over the major markets, company strategies have shifted from growth in production to stabilising market shares through oligopoly bargaining. One important effect of this shift has been to increase the power of the salaried and bonus-driven professional manager and executive and to weaken external shareholder controls. Another has been the shedding of labour alongside essentially static output goals.

The Economics of Global Power

The increase in corporate power has come about primarily through increased foreign investment, both in volume terms and in terms of geographical spread. Key elements are: an increase of investment from the Northern industrial economies and Japan into Asia; control over 75 percent of world trade; control of certain global product markets by a handful of multinational corporations; control over the use of industrial technology by global patent law; involvement with transnational banks in increased financial flows and ideological conversion of key government and intergovernmental institutions.

Using Global Power Nationally

Corporations have used their increased international power to also increase their power within countries. Through this means they have been able to secure government compliance with social and economic policies which suit their global objectives - especially deflationary policies, abandonment of full-employment policies, labour market flexibilisation, lower taxation of executive salaries, higher interest rates, restructuring of the welfare state and privatisation. The same strategies have been deployed within the intergovernmental structures (World Bank, International Monetary Fund and OECD, for example) by ideologically captive governments.

II GLOBALISATION AND THE DETERIORATION OF SOCIAL POLICY

These global and national policies resulted in a marked deterioration of effectiveness in social policy and have undermined previously accepted roles for governments and norms in relation to social justice and the public good.

Through their power the corporations have been able to externalise much of their costs onto national welfare systems through shedding labour and employing higher-yielding capital. Their control over international trade and investment has enabled them to use threats to intensify inter-government and inter-worker competition and to weaken attempts at improving working conditions and benefits.

The result has been to reduce social equity, to increase unemployment and unstable employment and to achieve high rates of income growth for the higher income groups. The maximisation of short-term surpluses and de-regulation have also contributed substantially to environmental degradation.

III THE ICEM RESPONSE

The ICEM believes that any effective labour response must be based upon a shared understanding of the changed global power situation and must target the multinational corporation with a multinational realignment of trade union strength. It seeks to achieve this counterforce through establishing global union networks, mobilising global union action through the use of modern information techniques and technologies and through engaging directly with individual multinationals to secure agreements that will guarantee union recognition to monitor and enforce workers’ rights. It also pursues alliances with extra-governmental civil organisations at the international level and campaigns for both specific and general attempts to restore the social responsibility of governments nationally, regionally and within the global institutions.

Within this framework of action the ICEM supports its affiliates through information, seminars and industrial discussion in promoting work-creating policies within a sustainable democratic structure. The universalisation of core labour standards is a necessary endeavour, but this will only be achieved via mechanisms which impact the primary forces of the world economy - multinationally operating corporations. Fundamental reform of the Bretton Woods institutions (the International Monetary Fund, World Bank and GATT/World Trade Organisation) is needed to return national governments to the democratic control of their citizenry. Inter-governmental cooperation must be reconstructed to support socially responsible and publicly accountable policies, such as lower interest rates, global controls and taxes on multinational company financial flows and strong environmental and social protections. Within the existing institutions, the ICEM works at both international and national levels to promote employment generating policies with direct trade union involvement in their planning and implementation.

Essentially, however, the ICEM emphasises that improvements in the conditions of the world's workers will only come from increased rates of trade union organisation from local up to the global level within a common approach to international solidarity and a rejection of competitive theories of labour interaction.

GLOBALISATION AND SOCIAL POLICY

I GLOBALISATION OF POWER: CORPORATIONS IN THE WORLD

Globalisation is the manifestation of increased corporate power over critical choices at the world level. It is as much a social and political phenomenon as it is an economic one. As such it affects the lives of working people in all their interactions.

In order to project a clear vision for our response to our present condition, it is necessary to share a clear view of what has happened to bring us to this point. The first half of this paper will therefore concern itself with the rise of corporate power; the second with the effects of this power on social policy - especially on employment; the third with strategies for a response at several levels.

It is easy to define globalisation by reference to a number of disembodied global economic factors. Thus globalisation is said to be an increase in foreign direct investment, or in the volume of world trade, or the phenomenal increase in global financial flows and transactions across international exchanges. Often it is stated that in face of these trends governments have lost power to international markets.

Taken on their own, such accounts tend to support the notion of globalisation as an uncontrollable, natural economic process with its roots buried deep within arcane academic theory - a process which cannot be confronted, diverted or braked by human intervention. Those who promote this ideology conclude that the social dislocation and suffering arising from the globalisation process is unavoidable and necessary in order to achieve ill-defined beneficial outcomes based upon broader economic interaction between nations or regions. In other words: pain today for gain tomorrow, or 'pie in the sky', as an earlier generation of labour internationalists vividly paraphrased it!

Global statistics of the contemporary period do not confirm this picture. World income has not grown substantially, and world food production per head has declined. More people eke out a bare existence below the poverty line than ever before; unemployment and underemployment are at a global high; the generation of low-wage, informal jobs reduces equality. At the same time, returns to capital are also at a historic high; there are more mega-rich and beneficiaries of astronomical executive salaries; the world of the super-rich is expanding but the world of the sub-poor is expanding faster. Statistically it is clear that there are, and will be, long term winners and losers in the globalisation power game.

Statistics over the past 20 years confirm that 'globalisation' is also the process by which the gap between rich and poor has widened dramatically both globally and within nations. At the world level fully 85 per cent of the world's wealth is consumed by 20 per cent of the population, while the poorest 20 per cent of Earth's inhabitants must try to survive on just 1.5 per cent.

As an international trade union that seeks to improve wages and working conditions throughout the world, the ICEM is confronted daily with the fact that 'globalisation' is a convenient phrase that disguises an essentially anti-social shift in power relations around the world. At the centre of this power shift are the multinationally operating corporations which are becoming the key institutions in world affairs at the expense of national governments and nationally based social organisations. Multinationals now control two-thirds of world trade, over 75 per cent of global investment and hold oligopoly positions in almost all of the strategic product markets.

In short the multinational corporations and transnational banks increasingly control the global economy.

This rise to power of organisations guided by a single criterion of economic success, without the constraint of social, environmental or equity issues, is the single most important, economic, social and political fact of the last decade of the 20th century.

Changing Multinational Corporation Strategy and Structure

On their way to global power, the multinationals have begun to change their strategies and their internal structures.

Strategy: There has been a basic change in the focus of multinationals from market expansion to market control in the major developed markets. This is not due to market saturation or the diversion of funds for expansion into new regions, as some suggest, but to an altered perspective on the part of the key corporate players.

There is no objective reason to suppose that some theoretical limit has been reached in the industrialised world where the ingenuity of entrepreneurs to supply new, or even basic human needs, has run out of steam. It is also clear that, while international investment has increased, this increase has benefitted the 'triad' countries of USA, Europe and Japan to the point where fully 75 per cent of all international investment now flows between those regions. Yet, for all this, there is an obvious move away from investment in increased production to concentrate on capital-intensive techniques that drive down costs at current output levels and that specifically drive out labour from the production process.

Competition between multinationals is not a race to conquer new markets but a competitive power bargaining for market shares. The corporation in oligopoly prospers not by selling more through the efficiency of lower prices or higher quality but by lower costs within the context of stable market shares and prices. Operating surpluses are secured from lower costs within stable or increasing prices rather than greater sales at lower margins. This translates directly to job losses for industrial workers.

Structure: Internally the corporation has witnessed the emergence into prominence of the salaried and bonus-driven executive principally commanding the information and technology and therefore the nerve-centre of the corporation. The ascendancy to power of the corporate professional has been identified as a key element of change in contemporary business. Salaried professionals (even those on super-high salary levels) are driven by motives different from those of the traditional entrepreneur. Much of the huge emoluments distributed to corporate executives have become surprisingly independent of high returns. In recent years failed corporations have rewarded their executives as much as the successful ones. Corporate concern seems to have shifted from distributed profits, which increase returns to shareholders and capital, towards retained earnings, which allow enormous executive salaries and build organisational security in the longer term through increased market power. The corporation has become less a money-generator and more an exercise in dynasty.

These developments have tended to confuse economists and social analysts of both the right and the left. Those of the right seek the hand of a non-existent market, which is now managed by oligopolistic corporations. Those of the left seek the profit-maximising capitalist of yesteryear, while the power has shifted to the salary and surplus-maximising professional manager.

Under these pressures modern economics has become a mere rationalisation for the power processes. Its adoption of the neo-liberal thesis was predetermined by the attempt to justify rather than to explain the deviations from standard economic theory such as the persistence of unemployment at unprecedentedly low inflation rates.

The dynamics of modern market forces do not derive from the power of economics but from the economics of power. The single most dominant market force is the corporation. In the same way, the global process that we are witnessing is not the power of globalisation but the globalisation of power.

This position paper sets out to identify the principal mechanisms behind the climb to global and national power of the corporation and to link this process to national and international policies which may provide an ICEM response to it.

The Economics of Global Power

The basis of the increased power of the corporation is in investment, trade, finance, markets and technology.

a) Increased Corporate Foreign Investment

Increases in the North:

Corporate 'foreign' investment may be defined as investment in direct production facilities in countries outside of the headquarters' countries. In the sense that most multinationals still have more than 50 percent of their assets in the country where they are headquartered, their global spread may still be described as an "export of capital". However, the trend from multinational operation (integration into many national economies) to transnational operation (operating under a uniform global concept, with a single global supply chain) is increasingly making statistics based on national criteria an irrelevance.

A substantive change in the pattern of foreign direct investment occurred almost 10 years ago. Corporate foreign investment had been running at an average of about $50 billions per year between 1981 and 1988. Yet in 1988 the total accelerated to $168 billions and since that time has attained and exceeded the $200 billions mark annually.

Contrary to some beliefs, this change did not originate in the corporations' search for cheaper labour because, until 1993, the bulk of this increase was towards other high wage, industrialised countries from whence originated competing multinationals. The USA was the primary target for foreign corporate investment throughout the 1980s, for example.

The incentives for this investment were based on lower investment risks, protection of global market shares and alliancing in anticipation of new regional arrangements.

....and in the South

Multinationals headquartered in the USA, France, Germany, UK, and Japan and other richer countries own 93 percent of all investment in the world. For the last three decades these companies have invested 70-80 percent in each others' headquarters' countries. That is, 75 percent of the investment has been within the headquarters countries of the so-called Triad of the USA-JAPAN-EUROPEAN UNION.

Since 1989 this 75/25 proportion has began to change, mainly owing to the massive investment being made in 10 countries of Asia. By 1994, 40 percent of multinational corporate foreign investment was in countries outside the Triad. The more this proportion changes, the more it can be said that there is a "globalisation" of multinational investment and of the global power of the corporations.

The investment by multinational corporations in the South, or developing countries, obviously has lower labour costs as a pull factor in certain sectors (such as textiles or electronic assembly, for example) but within the framework of globalisation ideology this factor has been exaggerated. Market access, tax incentives, investment stability, and environmental and social protection regimes are also of considerable importance.

This change in the proportions of multinational foreign investment has occurred only in the past seven years. Before that time the investment outside the Triad had been falling, reaching its lowest ebb in 1984. This aspect of corporate power is volatile and dependent heavily on perceived political risk to capital investment. Thus, any social or political disturbances in China and South Asia, for example, could result in a sharp reverse, as occurred in Latin America in the early 1980s.

The increase in power of the multinational in the past 15 years has been through greater investment in general and an increased global spread in particular.

There has also been an increase in foreign investment by multinational corporations headquartered in countries outside the Triad. South Korean, Indian and Taiwanese companies are now becoming well known local operators throughout the world. Although this is undoubtedly a new trend, it still only represents an insignificant part of total world investment. The vast bulk of direct investment still originates in the industrialised countries, which are also the key countries to decide policy within the international intergovernmental agencies. This has undoubtedly assisted the emergence of a geo-political climate and ideology overwhelmingly favourable to the multinational investors.

b)Multinationals Control of International Trade

One of the most cited statistics of globalisation is the growth in the volume of world trade which has exceeded world growth in each of the past 6 years.

There are three reasons for this:

first, intra-regional trade - as regional trading arrangements become effective, trade within the new blocs increases - the internal trade between the countries constituting the European Union, the NAFTA or the Mercosur for example is still registered as international trade;

second, increased integration of world production by multinationals means more transshipment of intermediate goods between subsidiaries;

third, increases in exports by manufacturers in the industrialising and low-wage countries.

These developments, however, have not led to a more even spread of trade. Trade has become even more concentrated over the past two decades. In 1992, 74 percent of world trade was between the rich OECD countries. In 1994 this figure was 77 percent. Furthermore, the increase in exports from low-wage countries is volatile. Thus the World Trade Organisation reports that for 1996 there has been a substantial slow-down of trade growth recently from Asia, including China.

Again, the real factor of change in the trade world is the increase in control by multinationals. By 1994 it could be confidently stated that multinationals control at least 70 percent of world trade. 35 percent of world trade is internal transfer of parts or supplies between affiliates of the same company and a further 35 percent is produced by the corporations for direct entry to the world market. Even a fair part of the portion remaining is supplies by contractors to the multinationals.

Thus globalisation in the trade sphere is not so much the growth in trade nor the spread of trade but the increase in the power of multinational corporations over world trade.

c) Control of Markets

The trends in multinational control of international trade have been accompanied by an increase in oligopoly in the sectors in which they operate. Almost all international sectors are now characterised by the dominance of five to 10 multinational corporations which control 60-70 percent of world trade output and 50 percent of world output in the sector - sometimes even more. The multinationals share markets by detailed product line rather than by a category of product, thus for example, the pharmaceutical companies will each tend to specialise in one complex drug.

Oligopsony - the presence of only a few dominant purchasers in the market - extends the power of the multinationals as buyers into raw materials, agriculture and feedstock suppliers.

d) Financial Flow Manipulations

Perhaps the clearest indicator and statistic which could separate the current situation from the past in the economic sphere is the growth in financial flows around the world.

This already started in the 1970s when oil multinationals held large amounts of dollar deposits abroad which fuelled lending to the third world. The process precipitated a key shift from development policies based on import-substitution to dependence on global financing of elite-centred development, triggering the so-called 'debt crisis'. Deregulation in the industrialised countries and the accompanying neo-liberal policies forced upon heavily indebted under-developed countries, laid the framework for an exponential growth in financial flows in the form of debt repayments, purchases in stocks and shares, garaging of funds and so on. By 1990 it was customary for the richer Latin American elites, for example, to hold their bank accounts in the USA. Pension funds and mutual funds developed the capacity and potential to invest abroad and the so-called "emerging-markets" for money and equities emerged even more rapidly.

As a result of this activity, the volume of financial transactions has outpaced both growth in trade and investment. It has brought to the world scene a new group of power entities - the transnational banks and credit rating agencies. Most importantly, it enabled multinational corporations to include currency and financial transactions as part of their over-all surplus generating operations.

Centre stage in this drama has often been held by two of the ‘Bretton Woods institutions’ - the World Bank and the International Monetary Fund. These have presided over the distribution of basic funds to kick-start the cycle of dependency and have followed through with debt-collection, resulting in the opening of previously closed financial markets and assets to international capital. In reality, however, these bodies are but servants of corporate power. The flow of funds through private banks, insurance and investment trusts and the cash management departments of the multinational companies was recently estimated at a staggering $1.3 trillion per day. This is over 100 times the daily volume of world trade and a greater amount than the combined holdings of all national central banks of the world.

e) Control of Global Technology

As the multinational has increased its oligopoly position in the national and international markets it has more readily absorbed the core technologies of production. The key to current and future merchandise production is to increase application of technology which can reduce the use of, and dependency on, both labour and raw materials.

This caused the multinational corporations to lobby for an international controlling device over technology. This has emerged within the new World Trade Organisation as a global law to protect intellectual property (patents). It is a sad, but not surprising, irony that the institution that will play the biggest role in ensuring the supply of labour-displacing technologies has most indignantly resisted the inclusion of a labour rights clause within its operative legislation.

Multinationals control more than 90 percent of industrial patents and a substantial part of their surplus comes from royalties from the use of technology. Control at this level means that the cost of access to new technologies can be dictated, potential competition monitored and the pace of industrial development controlled.

Using Global Power Nationally - and Regionally

The key to comprehending the issues which face the ICEM, its affiliates and their members on a daily basis is not only the growth in international corporate power but how that power has been transmitted through national governments and institutions to the shop floor to create current social conditions.

Armed with awesome international power the corporations were able to use leverage on key governments to increase their power domestically. Successive governments were persuaded or effectively blackmailed into adopting neo-liberal policies which favoured the growth and needs of the corporations. In the industrialised countries the threat was clear enough: the combined trade, investment and industrial power of large companies provided the very base on which national economic and political power was founded. The increased return to capital for professional elites constituted an added positive incentive.

In the Southern countries the process was even more direct. Structural Adjustment Programmes - introduced through the IMF in over 35 countries - implanted the same neo-liberal policies as in the industrialised world under the threat of isolation from the global economy.

A partial political response to the national impact of corporate power has slowly emerged in the formation of regional 'trading blocs' - most advanced being the European Union, followed by NAFTA, the Mercosur and APEC. These formations are determinedly political attempts to build sufficiently broad markets to re-possess and re-domesticate the footloose multinationals that once grew within their borders. Already, however, it is evident that the regional groupings will encounter much the same constraints as national governments, if the neo-liberal policies of their combined governments and the rhetoric concerning inter-bloc 'competitivity' is any guideline. The early signs of interlinks between these blocs demonstrate their function as a staging post on the road to political globalism, rather than a counter to it.

The principal social and economic policies that have been put in place by these means are at the root of the corporations' power within the national and regional context.

These include:-

a) deflationary policies to keep exchange rates low for purposes of international product transfer (nominally shown as exports or imports). The impact is to depress national demand and therefore to induce low rates of economic growth. Exchange rate stabilisation and low exchange rates eased the introduction of the corporations' integrated global production techniques which can be sustained only with some security of forward value. But to local economies, these policies have brought increased unemployment.

b) abandonment of full-employment policies. Since 1940 the major industrialised countries had based their economic decisions on the understanding that governments were responsible for the maintenance of full employment. The higher labour costs that this involved were met by increased productivity and an expansion of demand. This conflicted with the corporate need to cut costs and consolidate market share and therefore was abandoned. Employment dropped to an historic low while profits climb to what even the 'Economist' has called "obscene levels".

c) labour market enhancement - to make labour markets "flexible" (that is, to remove legal protection) not only maximises the power of the buyer of labour (oligopsony), but also allows more flexible use of workers as corporations pursue diverse strategies on location or relocation of production and global supply of parts and products.

d) lower taxation for higher salaries. The dismantling of progressive taxation systems cleared the way for the increase in salaries, bonuses, and corporation-derived benefits needed to service the growing power of the middle to top management beneficiaries of corporate power.

e) higher interest rates. Company monopoly over technology and a high level of control over capital gives a powerful mix. Easier to control and predict than volatile labour, capital only needs a favourable rate of interest to function as a pump for earnings. As national governments have virtually lost their will to employ traditional taxation of companies and high earners as controls on their currency in the face of speculative threat, they have had to resort to raising interest rates. The resulting indebtedness has further encouraged firms to cut labour and restructure production to favour high-yielding capital in the short term. At the same time, governments have had to cut social services and public investment, with further effects on employment, training and small company investment.

f) restructuring of the welfare state - to reduce corporate taxation levels, and restrain internal labour costs (the 'social wage'), but to externalise costs of corporate labour shedding by increasing state expenditures on unemployment support.

g) privatisation - enabled the creation of additional or larger multinational corporations as the companies bought into previously protected state assets. Typically in the energy industries, but also in telecommunications and transport, for example. In the South this was often achieved at low cost through devices such as debt-to-equity swaps. Once privatised, the rigour of cost-cutting and labour shedding has wrought its worst.

II GLOBALISATION AND THE DETERIORATION OF SOCIAL POLICY

The foregoing policies were pro-business and unrelentingly anti-social and anti-labour. They were promoted in opposition to the established growth and progress of liberal social policy developed over the past 100 years. By their application, the rise of corporate power has undermined:-

- nationally based democracy in which the citizen had come to participate in the governance of the country where he or she was born and socialised.

- redistribution of income and wealth through government measures to support lower income groups and to maintain social cohesion by dampening extremes of wealth and income.

- social insurance and welfare systems which had assumed the burden of economic adjustment and the accidents of sickness and weakness as a shared public responsibility.

- increases in workers' power at the workplace where the worker had begun to exercise some control over his/her workplace life and destiny.

- the concept of "public services" as the concern of government, charged with protecting the collective or public interest, rather than as a captive goldmine for profit-oriented private corporations.

In these ways the core aspects of global corporate power ('globalisation') were set against the core aspects of social democracy or socially constrained capitalism. The results have been experienced in social deterioration and the weakness of social policy at the national, regional and international levels.

Externalisation of costs

The social legislation developed over the past 100 years in the advanced economies raises internal costs to the corporation as a condition of its functioning within society. Increased global reach raised the threat that, unless governments allowed these costs to be passed back to the community, corporations would shift to less socially protected environments.

The result has been a downward spiralling of inter-governmental competition to absorb much of the social costs previously shouldered by business. This attempt to externalise costs has produced a contradictory situation in relation to welfare spending. While the new corporate ideology held that welfare should be constrained where it prevented flexibility in the use or rejection of labour or, indeed, where it contributed to any cost burden on the company, it also argued that the state should step in to absorb the results of changing business strategy.

The appearance of a decline in welfare spending is not the strict reality in most industrialised countries. In fact government spending on social security and welfare as a percentage of national income in the highly industrialised countries has decreased only in the case of the USA - in all other countries the expenditure has increased. Expenditure in Japan was 3 percent of national income in 1970 and 8 percent in 1980, in Germany the corresponding figures are 16 percent and 18 percent, and in the UK from 9 to 10 percent.

Instead there has been a redistribution within welfare expenditure away from support for pensioners, the sick and the disabled, towards those workers whom corporations have made redundant in the course of cost-cutting and restructuring. The shift has been from quality of life benefit to unemployment benefit. Welfare expenditure has not decreased, but nor has it grown to keep pace with the aggressive actions of business.

Substitution of Capital for Labour

The cost-cutting strategies of multinationals involve a wide range of tactics of which relocation into low wage areas is only one. In certain sectors of industry which are heavily labour-dependent, such as ceramics, jewellery, textiles and electronics assembly, for example, there is clear evidence that production shifts have been induced by the lure of cheaper, unprotected labour.

A more significant tactic in most ICEM industry sectors, however, has been to increase the use of labour-replacing technology. The costs of doing so are reduced by a weakening of labour laws relating to redundancy and lay-off compensation.

Corporations in virtual oligopoly positions and facing a weakened labour movement have passed on cost savings in higher profits and executive salaries rather than in productivity bonuses to workers. In all the major economies there has been a declining rate of wage increases compared with productivity growth. Between 1977 and 1986 earnings increased up to three times that of productivity growth but between 1992 and 1995 the increase was l.3 times or no increase at all. In the case of the USA, for which more complete figures are available, since 1983 workers have been receiving real wage increases consistently below their increase in productivity.

This process has two effects: lower demand for labour in general, leading to unemployment, but higher demand for skilled labour to handle the new technology, leading to large wage differentials between lower paid and higher paid workers.

Low waged employment and international competition

International competition between workers of different countries is one of the key ideological planks in the globalisation mythology. In most countries this has been used as a threat rather than a reality. Ironically, it has been used to engineer precisely the outcomes predicted from competition - lower wages and higher unemployment.

There are two aspects to the competition argument: First, the supposed economic competition between nations or more recently regional groups; second, that between parts of the work forces of nations or regions.

The idea that a nation lives or dies by virtue of its exports puts commerce before history, geography, and culture. In fact, only a few small nations are heavily dependent on exports. Significantly, the two biggest economies in the world are the least dependent on trade which, as a percent of GDP, is only 7 percent for Japan and 9 percent for the USA. The rhetoric of national competitivity is primarily a modern mechanism of social control - a threat in much the same way that external war threats have been used by politicians in the past.

The promoted competition between workers is also a scare tactic to weaken any resolve to insist on proper working conditions. Governments and the media consistently publish tables of world labour costs to prove either that imports from low wage countries will displace workers in high wage countries or that corporations will relocate to low wage countries unless wage demands are modified.

But there are rarely tables indicating the levels of corporate taxation, the comparative differences in health, safety and environmental regulations, of depreciation allowances, of subsidies to multinational investors, of transport costs, of profit repatriation schemes, or of all the other factors, other than labour costs, which govern corporate decisions to locate in different countries. A reasoned study of such tables would show that desirable locations are constructed by the political actions of governments and that labour costs need not be important element of the final decision.

Even so, there can be no doubt that freer trade means greater dislocation and displacement of workers in high-waged countries. This has always been the case. Workers have always borne the burden of adjustments to changes in trading patterns. It was precisely to lessen such burdens that the labour movement in the past rejected the free trade ideology and organised nationally and internationally to ensure that any benefits from it should be distributed more evenly. The weakening of this political understanding through the espousal of competitive analogies by labour movements inside the new regional trading blocs is one of the biggest dangers workers face at the present time.

The fact that employment has not been maintained nor the benefits of freer trade passed to the lower income groups is a politically driven event and not the economic result of increased international trade. It is, however, the political result of freer markets.

Governments not ideologically wed to the notion of free trade could sustain employment and ensure that any benefits from trade were more evenly distributed. This would of course mean opposing the higher income groups who currently benefit from a lack of social justice and the corporations which would lose the ability to play one workforce against another.

Labour should take a lesson from capital. Employers have clearly understood that they have more in common with one another than with the respective national frameworks from which they originated. The result of their cooperation is the shared corporate agenda for exploitation - structural adjustment policies of the IMF and World Bank, controls over patents and prohibition of market controls by governments via the World Trade Organisation, the beginning of true market globalisation by the formation of regional markets. It is high time that organised labour remembered the intuitions that guided its birth - that workers of all lands have more in common with one another than they do with their national employers. It is the loss of that realisation that leads workers to regard one another as competitors in a contest where they do not even make the rules.

Social equity and equality

Trade unions have nevertheless succeeded in pressuring governments on the employment issue, despite the neo-liberal agenda of deflation, export orientation, national competition and the abandonment of full employment policies, .

The response has been either weak employment maintenance policies (albeit without any major financial commitment), or labour market flexibilisation to create low wage and temporary jobs. The result in both cases is a reduction in security and social equity between the employed and the unemployed and between the low waged and the high income earners.

In short, both policies have failed in the face of cost cutting and global outsourcing strategies by the corporations.

Environmental deterioration

The widespread problems of environmental degradation are part of the attempt by companies to externalise costs. The environmental effects of production are mostly inherently global in nature. The temptation to dump these problems on the global commons rather than confront corporate power through regulation is strong within the neo-liberal competition ethic.

III THE ICEM RESPONSE

Like all power, the increased power of the multinationals has its weaknesses; its contradictions engender opposition. The ICEM response builds upon these factors to enhance the bargaining strength of its member unions in the search for positive change.

Understanding the global situation

Solidarity is the common pursuit of shared goals, based on a shared vision of the causes of injustice.

In its publications and conferences the ICEM seeks to lay bare the real power structures and operations of the world social economy to help forge a common understanding of the universal processes which are faced by all its members.

Impacting the multinational multinationally

In the past labour's response to the social abuses arising from market power was pursued largely though national organising and political activity. If, as the foregoing analysis argues, the power nexus of the world social economy has shifted from a purely national to a multinational level, any attempt to strengthen workers' ability to respond to the attacks being visited upon them must be directed at impacting the corporation at the level of its international as well as its national operations.

For the ICEM this has meant constructing global networks between trade unions of different lands and even between organised workers in the global facilities of individual multinational corporations. The tendency to national or regional labour isolationism is countered by the regular exchange of information on a common base - same employer, same product, same job, same work system, but often widely differing conditions. A shared identity of interest is created to counter the ideology of competition and a readiness to act in mutual support is built from this understanding.

The ability of corporations to undermine the regular process of

collective bargaining by using threats to transfer production or by making allusion to claimed concessions by workers elsewhere is one of the most corrosive features of globalisation for trade union unity. The ICEM seeks to counter these threats by keeping its members informed of the true situation in their industries. Support for individual affiliates through speedy supply of up-to-date information on company finances, strategies and comparative contract terms is a central feature of ICEM international networking. So too is the ability to locate expertise in one union that can assist others facing similar experiences at a distant location.

Global mobilisation

The same sophisticated communications used by the multinationals to coordinate their global production systems can also be used by workers and their unions. It is no longer easy to exclude workers from access to strategic information. The ICEM has been a leader in effective deployment of the latest technologies in this field.

The world's first "Cyber picket", constructed by affiliates in response to the Bridgestone/Firestone campaign of the American USWA, has already begun a new chapter in trade union solidarity techniques. The ICEM pages on the World Wide Web, linked increasingly to the web-sites of other labour and social organisations and those of its member unions, provide a new and expanding medium for exchange and publicity. The emerging use of the Internet for tele-conferencing and distance learning opens new ways of opinion-forming and democratic policy making.

As the neo-liberal ideology projects its flow of unproven statements and images, such as the claims of increased prosperity for all, individual corporations become vulnerable as targets for the release of citizens' frustrations. The need of corporations to inspire a positive social image for themselves and their products can also provide an avenue for influence upon them.

The intelligent use of public information has sometimes enabled the ICEM and its affiliates to engage companies which would have been virtually impossible to influence by more traditional methods.

Direct engagement

Building a labour response at the level of the corporation requires direct engagement with multinational management of the enterprise. Objectives include the writing of new labour/management agreements at the industry and the company level multinationally. While this will never replace or weaken the need for national and local agreements, it will underwrite them with the guarantee of a similar approach across the global operations of the enterprise concerned.

Primary among the items for such agreements must be the recognition of freely organising trade unions as the representatives of the company workforce. This can help counter the pernicious attempts to sideline organised labour through a direct appeal to the individual worker to quit his or her collective allegiance.

The basic application of workplace human rights will feature in these agreements derived from the international conventions on child and forced labour, of reasonable treatment and remuneration of employees. Common best practice standards for health and safety and environmental performance must be incorporated. The means for monitoring these agreements and the standards defined within them must be seen as a function of the organised trade union presence in the enterprise. It is not appropriate that these tasks be ceded to so-called ‘neutral’ external observers which do not have a daily presence inside the plants.

The ICEM is already engaged with some headquarters' managements of major companies in discussing such accords. Capitalising on the corporations' growing need for positive public image, endorsement by a strong and respected labour international can become part of the incentives to be deployed in direct engagement by member unions.

Construction of extra-governmental international alliances

The changed global power constellation has produced a private citizens' counterforce operating globally in the form of issue-based organisations. These challenge the corporations in the social, environmental and political spheres through lobbying, direct action and boycotts. Such organisations as Greenpeace, Amnesty International, Third World Network and many others have began to construct global civil society as a counterforce to the global corporate governance.

The construction of alliances with the new extra-governmental area of international social action has been a delicate exercise for labour. There has been a slow learning curve on the part of labour when faced by those who may share only one part of our agenda.

The ICEM has undertaken a number of initiatives with the organisations mentioned above and others sharing a specific objective. It has also sought to engage corporate managements in dialogue and in joint fora on issues of importance. This has been the case especially in environmental (Chlorine, Climate Change) and in health and safety (Synthetic Mineral Fiber Hazards) areas which are also a key concern of corporate management in confronting its social critics.

The objective has always been to bring corporate management closer to a realisation of the power of organised labour to influence the companies' climate of operations - as well as to gain specific agreement over a given issue. When this power is organised as a continuum from the national through the regional to the international level, this can be expected to have an enhanced effect. This will only be the case, however, if strategies are agreed among and supported by all the International's affiliates.

Structurally Re-Adjusting the World Bank/IMF

The structural adjustment policies of the World Bank and International Monetary Fund pave the way for freedom of capital movement by the multinationals throughout the developing regions. They have also effectively restructured those societies to yield long term surpluses that will be collected as interest on debt by First World banks. The current rate of debt interest from the developing countries is twice as great as received foreign aid and equal to multinational direct investment in those countries.

The ICEM engaged this situation on behalf of its affiliates in 1992 with a series of publications and seminars on trade unions and Third World debt. Its publication 'Labour and Debt' was originally published in English and Spanish and has since been translated to several other languages. In 1994 a major ICEM seminar was held in Germany on the issue and a regional meeting in Asia took place in 1995. In 1996 the book was translated by the ICEM's Danish affiliates and distributed to the World Summit for Social Development.

The ICEM joined with major campaigning organisations of the South against the continued policies of structural adjustment and is known by non-governmental organisations in this role. Other ITS's and the ICFTU have campaigned on the need for change within the overall framework of structural adjustment. These joint protests have had some effect. Recently the World Bank began to reconsider its policies on labour and other aspects of social impact. However, the loans which the World Bank offers represent less than 7 per cent of world foreign direct investment by multinationals and are controlled overwhelmingly by the governments of the five largest investing countries.

The ICEM is a part of the opposition to the social irresponsibility of structural adjustment programmes, has proposed the cancellation of the developing world's foreign debt burden - especially that of the poorest countries. It will continue to cooperate with its non-governmental partners and with other international trade union bodies to ensure that labour issues are included in programmes promoted by these multilateral agencies as long as they continue to function.

This alone, however, cannot be the long term answer to world growth and development under a socially responsible and democratic regime. The whole purpose and orientation of the ‘Bretton Woods’ institutions is counter to the exercise of democratic control over economic choices at the national political level and is aimed at substitution of these mechanisms by the global corporate agenda. To re-assert civic control over social and economic goals must mean a re-structuring of the organs of global governance.

Restoration of the social responsibility of governments

Under the impact of multinational global power, either directly or via the ‘Bretton Woods’ institutions, governments have abandoned many areas of social responsibility previously accepted as a duty. The redistribution function towards the weaker and more vulnerable groups in society has been put in reverse and now serves as a benefits pump to professional and corporate elites.

Alongside the tasks of international organising set out above, it is necessary for the ICEM to promote a new worker-directed and socially-oriented agenda, both to national governments and international civic organisations, to confront and confound the destructive neo-liberal policies from which our members are suffering. The necessity to both change the character and restore the authority of elected governments can only be comprehended and undertaken in tandem with the new global level of social action against corporate global governance.

At the international level the ICEM works directly and within inter-governmental structures such as the ILO, OECD and WTO to support a series of policies aimed at increasing democratic power over economic choices and releasing the stranglehold of corporate interests. Policies to create productive and sustainable employment as a base to development require a new approach to the global institutions:

a) Action is urgently necessary to harness financial transactions at the global level by

- levying taxes internationally on both individual corporations and on speculative transactions in order to encourage expansive, productive investments (so-called ‘Tobin tax’);

- instituting multilateral controls over speculative financial flows, so as to ameliorate effects on interest and exchange rates;

- including in World Bank/IMF structural adjustment programmes socially responsible and employment-creating activities;

b) For these efforts to be effective, however, governments need to be persuaded to create more appropriate coordinated organisations at the highest level to deal with global economic and social and economic problems from a democratic perspective.

- Thought should be given to an Economic Security Council that can intervene with sufficient resources to alleviate desperate hardship and underwrite self-reliant national development;

- Global acceptance of minimum labour standards within all appropriate international instruments, including the World Trade Organisation provisions and the upcoming Multilateral Investment Accords, may help to put a floor under the downward trend in labour rights and protections. Since these bodies have been specifically constructed to weaken labour protection among other social protections, however, it needs much more than a simple codex to reinstate them. More important is how such standards are to be enforced on the real actors - the multinationally operating companies. Operating codes and individual agreements need to be written with the individual corporations that contain within them practical means for monitoring and enforcement by workers and their organisations.

- The effects of World Bank and IMF policies on the least privileged of the world’s citizens have exceeded the destruction wrought by successive world wars. The value of such institutions needs fundamental questioning. Is the creation of indebtedness and the forced abandonment of social protection a desirable or even a sustainable objective? If not, should the responsible institutions not be consigned to the dustbin of history as a failed and ignominious experiment? Would it not be better to replace them by new institutions charged with repudiating unacceptable debt burdens, regulating international financial flows, gathering levies on foreign exchange transactions and coordinating the financial and economic policies of national governments secure in their own sovereignty.

National and Regional Work-Creating Policies

The ICEM emphasis on information exchange among affiliated unions by publication, conferences and training seminars supports trade union efforts at national and regional levels to pressure for the introduction of employment-creating policies:

- shorter working hours and the sharing of available work across a wider spectrum of the workforce;

- more investment in training, retraining and continuous education to equip new and older workers with the revised skills necessary to switch employments in response to a more rapidly-changing industrial mix;

- tax regimes and low interest rates to encourage useful, productive investment rather than speculation;

- judicious relaxation of deflationary policies to enhance domestic demand;

- credits for medium-sized enterprises squeezed by the market power of the multinationals;

- investment in public infrastructure schemes to both provide employment and a more attractive base to incoming investment;

- taxes on multinational company operations to help counteract the outflow of funds and to reduce national debt.

In the promotion of these and other employment-positive initiatives the aim is to press for direct involvement of trade union representatives in deciding, installing and monitoring the key policies that will affect economic and industrial development. Success in this objective will only come from organised strength at the individual and global workplace. The central task of labour therefore remains to Organise, Organise, Organise.

Globalization and Workers' Rights
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