The Global Development Crisis by Benjamin Selwyn

Author:Benjamin Selwyn
Language: eng
Format: epub
Publisher: Wiley

Capital–Labour Dimensions of the Global Business Revolution

This chapter has argued, first, that creative destruction needs to be conceptualized as a global process, uniting firms within TNC-governed global commodity chains (GCCs), in asymmetric relations across the world. The second element of this argument is that global creative destruction and stratification must also be understood as an inherently conflictual social process, based upon the exploitation of labour by capital. Class relations cannot be understood only as existing within nation states (or national firms), but must be conceived of as global social relations. That is, just as the most powerful units of capital (TNCs), with assistance from hegemonic states and international institutions, seek to organize their relations with subordinate units of capital, so too do they seek, through the governance of their GCCs, to organize global capital–labour relations. This is not to argue that TNCs (mostly located in core economies) directly manage the labour regimes of their supplier firms (mostly located in peripheral and semi-peripheral economies). Rather, their governance of global commodity chains enables TNCs to effectively sub-contract the management of labour to their suppliers. In this way ‘local labour control regimes’ exist as sub-regulatory systems within the global labour regime (Jonas 1996).

The proliferation of GCCs has occurred in tandem with, and based upon, the expansion of the world’s labouring class, which, as noted in chapter 1, more than tripled in size between the 1980s and the mid 2000s. This expansion was stimulated by waves of depeasantization across the global south (Araghi 2000). The expansion of the global labouring class has been managed closely by international financial institutions in an attempt to facilitate local and global capital accumulation through heightened labour exploitation (Rainnie et al. 2010). For example, Brady and Martin (2007) report how workers in countries that implemented IMF agreements were 60 per cent less likely to be in a trade union after the programme, making them easier to exploit. In a similar vein Paul Cammack argues that the World Bank’s objectives, as formulated in its annual World Development Reports, are ‘to deliver an exploitable global proletariat into the hands of capital … to deny the poor any alternative, and to create a reserve army of labour that will enforce the disciplines of capitalist labour-markets across the greater part of humanity’ (2002, 125).

While the IFIs have attempted to manage labour relations through influencing state policies, TNCs have played a complementary role, through the global restructuring and governance of their supply chains. They have done this, particularly, through the spatialization of production, in ways that Schumpeter described as the reorganization of industry. Buckley and Ghauri have emphasized how:

The managers of [Transnational Corporations] are increasingly able to segment their activities and to seek the optimal location for increasingly specialized slivers of activity…. The more precise use of location and ownership strategies … is the very essence of increasing globalization. (2004, 83)

At the heart of this strategy lies the so-called Babbage principle.6 Charles Babbage (1835) argued that the division of labour could both lead to

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