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Promoting and Opposing the Market

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Abstract

As discussed, government interference in the economic process does not happen in a vacuum, but within the context of a more or less balanced social-economic infrastructure that has been established to enable agree- ment on the objectives that the economic order should try to achieve and how this should be done. Furthermore, the concept of social pluralism was introduced as a factor that complicates the process of reaching acceptable results, because the interests of different groupings in society are not always aligned. Employers and employees, for example, do not necessarily have equal interests. Comparable differences can exist between manufacturers of consumer products and consumer organizations, and so on. All these interest groups want their own objectives to be pursued.To this end, they try to influence the decision-making process regarding the what, the how, and the for whom of the production and consumption of goods and services by promoting or opposing the market economy. They can do this by trying to find support for their viewpoints with political parties, or they can become political parties themselves. Like governments, interest groups can also use instruments to achieve their objectives. These instruments can be acceptable-like advertising by businesses or a strike by labor unions for unacceptable, like blackmail and bribery. Moreover, interest groups can try to influence the decision-making process regarding the what, the how, and the for whom of the production and consumption of goods and services through the phenomenon of extra-parliamentary action. They can do this at state, supra-state, and global levels.

Keywords

Corporate Social Responsibility Welfare State Industrial Revolution Child Labor Labor Union 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

Chapter 2

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    Worldwide there are less than 200 governments but approximately 60,000 major trans-national companies, 10,000 single-country non-governmental organizations (NGOs), 250 intergovernmental organizations (IGOs), and 5,800 international non-governmental organizations (INGOs) (Willetts, P.: Transnational Actors and International Organizations in Global Politics, in: Baylis, J. and Smith, S.: ibid., (eds.) p. 357). All of these organizations may try to influence political outcomes, including moves along the continuum. Willetts divides them, rather arbitrarily, into two broad categories: (a) interest groups who seek to influence economic policy, like corporate businesses and unions, and (b) pressure groups who promote their own values (Willetts, P.: ibid., p. 369). At least three objections can be raised against this approach. The first is that pressure groups may try to influence economic policy precisely by promoting their values. Environmentalism is an example. Secondly, not all those who promote their values are representatives of pressure groups. The church is an example, as are those who criticize the way the Western world defines concepts like economic growth and gross domestic product. Thirdly, it is questionable whether unions should be considered to be seeking to influence economic policy. It seems to me that unions primarily seek to serve the interest of their members, i.e., the improvement of wages and working conditions (Bendiner, B.: International Labour Affairs: The World Trade Unions and the Multinational Companies, Clarendon Press, Oxford, 1987, p. 34). That this may, in turn, influence economic policy is a different matter.Google Scholar
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    These zones, with low-paid female labor as a prime component may function as an engine of economic growth, as was the case in the Philippines in the 1990s (Mittelman, J. H.: ibid., p. 77). In the Philippines, around 90% of the workforce employed in EPZs are women between 17 and 29 years old, of whom 40% receive less than the legal minimum wage, compared to 17% of the men. These young women routinely work and live in the factory compounds for a few years, sleeping in dormitories and saving as much money as possible for their dowries which, for that matter, is not a new phenomenon. Comparable circumstances existed in Japan in the 1930s (Allen, G. C.: “Japan,” in: Smith, E. O., (ed.): Trade Unions in the Developed Economies, Croom Helm, London, 1981, pp. 74–75). Furthermore, Scholte reveals that the number of women employed in 200 EPZs in the South alone increased from 1.3 million in 1986 to 4 million in 1994 (Scholte, J. A.: Globalization: A Critical Introduction: ibid., p. 251). Meanwhile, the number of these EPZs is rapidly increasing: from 79 in 1984 to 200 in 1989, across 35 countries. Their location is no longer limited to countries in Southeast Asia but now includes several countries on the African continent (Mittelman, J. H.: ibid., p. 157). According to Mittelman, 100 more EPZs were established in 2000 (Mittelman, J. H.: ibid., p. 42), and Scholte reveals that, including in former communist-ruled countries, 850 EPZs were in place worldwide at the turn of the millennium. In the words of Kelly, “the woman in Bangladesh took the job [making T-shirts] from the woman in Korea, who took the job from the woman in Taiwan, who took the job from the woman in South Carolina, who took the job from the woman in America’s Northeast” (Kelly, C. M.: ibid., p. 200). Bendiner provides a comparable example from some 15 years earlier. He calculated that the difference in wages and living standards between countries meant that an American had to work 28 hours to buy a refrigerator, whereas, across the border, a Mexican had to work 416 hours, and an Indian worker had to work 1,069 hours for the same refrigerator (Bendiner, B.: ibid., pp. 184–185). In line with this, one could also compare the purchasing power of workers engaged in a similar job classification within a single trans-national corporation, as suggested by the world company councils that have been set up by international trade unions. As an example, one could develop a common market basket “for a General Motors headlight assembler (one kilogram of meat, one white shirt, one month’s rent, etc.) and dividing the costs of these commodities in local currency by the worker’s hourly wage. The resultant figure (number of minutes of work needed to purchase a certain commodity) indicated the comparative remuneration of the headlight assembler and provided a crude international comparison of wages within a transnational.” (Busch, G. K.: The Political Role of International Trades Unions, The MacMillan Press Ltd., 1983, pp. 194–195).Google Scholar
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    Consumption seems to be the new “erotic dysfunction” (McIntosh, A.: Soil and Soul: People versus Corporate Power, Aurum Press, 2002, p. 106), which leads to freedom because “to buy is to be” (Klein, N.: Fences and Windows: ibid., p. 174). Here, according to Klein, the end of the Cold War was an important turning point (see section 1.2.1). After the Cold War, a new ideology had to be invented, because without an ideology, shopping would just be shopping. That ideology was “lifestyle branding”: “an attempt to restore consumerism as a philosophical or political pursuit by selling powerful ideas instead of mere products” (Klein, N.: Fences and Windows: ibid., p. 182). One might also say that, after the Cold War, disoriented Americans started “seeking comfort in the security of great brands” (Hutton, W.: The World We’re In: ibid., p. 173). Consequently, modern consumers do not buy products, but feelings and images (Loo, H. van der and Reijen, W. van: ibid., p. 183). Through branding, i.e., the way producers try to differentiate their product from the competition, Benetton sweaters have become the symbol of fighting racism, Ikea furniture stands for democracy, and computers symbolize revolution. The new ideology worked tremendously well, and branding became “the high point of seller-centric narcissism” (Mitchell, M.: Right Side Up: Building Brands in the Age of the Organized Consumer, HarperCollinsBusiness, 2002, p. 7), and “the chief cultural activity in the United States” (Kuttner, R.: Everything for Sale: ibid., p. 57). Consuming is in the genes of Americans. “Shop till you drop,” so it seems (De Volkskrant, 23 December 2003). This may explain why President Bush, in an attempt to calm down the nation after the dreadful events of September 11, 2001, advised his fellow Americans to visit the shopping malls in order to overcome their fear (Barber, B; Fear’s Empire: ibid., p. 230). Consuming has become a new American religion. In 1999, the country spent $535 billion on amusement alone, which is more than the GDP of the 45 poorest countries in the world (Hertsgaard, M.: ibid., p. 40). Around the turn of the century, American consumer debt was just under $5 trillion, virtually the same amount as the federal debt (Moore, M.: Downsize This: ibid., p. 137). It should be noted, however, that consumerism is not an exclusively American phenomenon. In Germany, for example, the individual savings quota, which was still 14.6% in the mid-1960s, had decreased to less than 10% in 1999 (Miegel, M.: ibid., p. 148).Google Scholar
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    Beigbeder, F.: 99 Francs (Dutch Translation), Breda, 2000, p. 49. According to this author, who worked as a copywriter with one of the world’s largest advertizing agencies, the influence of brand leaders is so penetrating that, in time, the saints on the Roman Catholic calendar will be replaced by 365 logos (Beigbeder, F.: ibid., p. 147). Therefore, his conclusion is that “the brands have won the Third World War against humanity” (Beigbeder, F.: ibid., p. 31; author’s translation). It is no longer advertizing that imitates life, but it is life that imitates advertizing. and it is also advertizing that has taken over the role of those who previously gave meaning to life, like schools, the church, and cultural institutions (Werner, K. and Weiss, H.: ibid., p. 36). The Netherlands has an internet site for personal advertisements which only uses brand names to characterize potential partners for men and women who are surfing the internet to find one. Apparently, known Dutch brands are more characteristic than qualifications like sympathy, friendliness, and warmth (Berenschot BV: Beelden van Bestuur: Berenschot Trendstudie, Lemma, 2002, p. 116).Google Scholar
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    They do not stem from necessity but from vanity or what Rousseau already called “amour-propre” (Fukuyama, F.: The End of History and the Last Man: ibid., p. 108). The so-called Frankfurt School of sociology even argues that mass consumption is the new expression of repression by the capitalistic culture industry. By creating false needs, consumerism intoxicates the class-consciousness of the working class (Loo, H. van der and Reijen,W. van: ibid., pp. 179–180).Google Scholar
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    In the 1990s, exclusive contracts between schools and producers of beverages increased by 1,384%, and 240 school districts in 31 states gave exclusive rights to Coca Cola, Pepsi, and Dr. Pepper (Moore, M.: Stupid White Men: ibid., p. 134). The same applies for fast food chains. Taco Bell, Pizza Hut, and McDonald’s, among others, are now selling in about 30% of American public high school canteens (Schlosser, E.: Fast Food Nation: What the All-American Meal is doing to the World, Penguin Books, 2002, pp. 51–57). During the 1990s, the sponsoring of school programs and activities in the United States increased by 248% (Moore, M.: Stupid White Men: ibid., p. 133).Google Scholar
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    During this repression, particularly in the second half of the 19th and the beginning of the 20th centuries, several people in the United States were killed during clashes between demonstrators and the authorities. In 1886, for example, a demonstration in Chicago over the introduction of an eight-hour working day ended up in a clash with the police, who killed four demonstrators. During the next day’s protests another 11 people were killed, both demonstrators and policemen, and 117 persons were wounded. Several leaders of the demonstration were arrested and executed (Busch, G. K.: ibid., pp. 7–8). Eight years later, in 1894, the same city saw 30 strikers killed by federal troops (Busch, G. K.: p. 17), while in 1892 a group of guards, hired by a robber baron from Homestead, Pennsylvania, killed a number of striking workers (Berman, P.: ibid., p. 34). As for legal repression, the beginning of the 20th century was characterized by “the consistent hostility of American legal culture to virtually any form of labor organization.” This legal culture was manifested in several rulings of the American Supreme Court, “condemning unions as an invasion of entrepreneurial rights and dismissing legislative attempts to endorse them as legitimate bargaining agencies” (Tomlins, Chr. L.: ibid., p. 30). The Great Depression of the 1930s temporarily changed this attitude with the passing of the Wagner Act, which implied that “collective bargaining was guaranteed to play a major role in the regulation of employment practices in a wide range of industries” (Tomlins, Chr. L.: ibid., p. 147). By 1947, however, labor relations went considerably back to “normal” again with the passing of the Taft-Hartley Act (Tomlins, Chr. L.: ibid., chapters 7 and 8). A few decades later, Reagan fired striking air-traffic control staff, calling in the army. One may argue without reservation that this was another expression of anti-unionism, which is characteristic of the history of American labor relations. To a certain extent, the history of the union movement in the rest of the world is comparable to that of the United Sates. In Germany, as a consequence of the passing of the Anti-Socialist Act in 1878, unions were driven underground (Owen Smith, E., (ed.): Trade Unions in the Developed Economies, Croom Helm, London, 1981, p. 178). Great Britain’s turbulent history of those days can aphoristically be captured in terms like “the Tolpuddle Martyrs,” “the Derby turn-out,” “the Sheffield outrages,” “the Junta,” or “Black Friday” (Owen Smith, E., (ed.): ibid., p. 123). In industrializing Japan, the authorities suppressed the unions under the terms of the Public Peace Police Act of 1900, whereas Australia experienced the “savagery of the union-employer, union-government collective bargaining conflicts of the 1890s” (Cupper, L. and Hearn, J. M.: Australia, in: Owen Smith, E., (ed.): ibid., p. 13).Google Scholar
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    In this respect, Great Britain adopted the Trade Union Act of 1871 and the Trades Disputes Act of 1906, the French granted freedom of association by law in 1884, while in 1890 Germany withdrew the suppressive anti-socialist legislation of 1878 (Windmuller, J. P., et al.: Collective Bargaining in Industrialised Market Economies: A Reappraisal, International Labour Office, Geneva, 1987, pp. 121–122). Also at this juncture, trade unions joined forces by establishing national federations. Those of Great Britain formed a Trades Union Congress in 1868, the United States saw the establishment of the American Federation of Labour (AFL) in 1886, while the French formed a General Confederation of Labor (CGT) in 1895. Around the same time, social democratic parties were emerging into legitimacy and power all over Europe. Meanwhile, the continuing spread of communism resulted in the establishment of communist unions and communist political parties; these communists felt strongly supported when a revolution in 1917 brought their compatriots to power in Russia. If we add to this the facts of the First World War (1914–1918), the Great Depression (1930s), the Second World War (1940–1945), the start of the Cold War, and several examples of corruption, treason by communist unions, and militant behavior by unionists, which, of course, did not contribute to a positive image of the union movement, then, looking back, it is no exaggeration to say that the first half of the 20th century, and more than a decade after that, was hardly a time of a balanced and welcomed developments of union movements. In this respect, British history from the 1920s reveals that shop stewards acted as espionage agents for Russia, passing on information on production methods. In France, the “Fantomas Affair” of 1932 brought into the open that the Profintern, the international organisation of communist trade unions, had developed a network of over 3,000 “ correspondents” who passed information about workplaces, via the Parti Communiste Français (PCF), directly to Moscow. Even worse, during the Second World War, after Germany and Russia had concluded a non-aggression treaty, PCF unionists sabotaged French war production and sought to assist the Nazi occupation (Busch, G. K.: ibid., pp. 22–23). After the Second World War, communist intervention in national affairs in countries of Eastern Europe like Czechoslovakia, Hungary, Bulgaria, and Romania was not the exception but the rule (Busch, G. K.: ibid., chapter 4). As for the United States, it was revealed in 1967 that the AFL-CIO union was acting as a disbursement agent for the CIA, thus funding overseas projects of political interest to the American government (Busch, G. K.: ibid., pp. 189–190). Finally, in the beginning of the 1970s, it appeared that the British Trades Union Congress, closely allied with the Labour Party, was unable to control militant shop stewards who opposed deal-making with the Heath government on a policy of wage constraint (Busch, G. K.: ibid., pp. 215–218). Furthermore, unions did not always limit their activities to their basic function of improving the wages and working conditions of their members (Bendiner, B.: ibid., p. 34). The AFL, for example, competing with the militant Industrial Workers of the World (IWW) to attract new members, was staunchly supported by the American government, who took severe steps to repress militant socialists, anarchists, and communists because they were believed to threaten American policies. In short, the hunt for the American left was on, with the government assisted by vigilantes who organized lynching parties (and got away with it) and an AFL who “supported the government in its crackdown on the left” (Busch, G. K.: ibid., p. 34). In addition to this, labor in America has always been subject to the influence of gangsters who seized control of local union organizations. In this respect, congressional hearings between 1955 and 1960 “disclosed a widespread and unsavoury state of affairs,” which led the then AFL-CIO president to comment in 1957, “We thought we knew a few things about trade union corruption, but we didn’t know the half of it, one-tenth of it, or the one-hundredth part of it” (Owen Smith, E., (ed.): ibid., p. 161).Google Scholar
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    As an example of the latter, the American store chain Wal-Mart is known to have paid Guatamalan 13-year-old teenage girls $0.30 per hour for making Wal-Mart label clothes, and $0.18 per hour for seamstresses from Bangladesh for an eighty-hour, seven-day week, which is half the local minimum wage and way beyond the legal work-week of 60 hours (Palast, G.: ibid., pp. 208–209). In this respect, Gates reveals that South Asia alone has 134 million children working 16-hour days for $0.08 per day (Gates, J.: ibid., p. 257). Although it is too simple to label the anti-globalists just as agitators, one can argue that the methods they use are more likely to lead to strong reactions from vested interests than to stimulate reflection on the way we deal with worldwide problems. Regarding this, it can be hoped that more influence can be expected from authors like Klein, Hertz, and others. They argue, substantiate their views, point to dangers, and come up with solutions. Their writings, if read by those in power, will probably have more influence than the revolting methods of the anti-globalists.Google Scholar
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    Report of the Independent Commission on Population and Quality of Life, ibid., p. 147. In addition to this, the commission suggests that unpaid caring services at home as well as in the community should be measured and valued in parallel accounts established for each country and widely publicized on a regular basis (Report of the Independent Commission on Population and Quality of Life: ibid., p. 90). One might call this benchmarking for voluntary work, thus underlining its importance for society. In contrast to what one would expect, however, it is not the wealthier people who contribute to increasing budgets for voluntary work. In this respect, the United States saw a decline in charitable spending of 65% between 1980 and 1988 by people earning over $500,000 annually, whereas donations from people with yearly salaries between $25,000 and $30,000 increased by 62%. Even more remarkably, the poorest Americans, earning $10,000 or less, gave 5.5% of their income to charity (Wheen, F.: ibid., p. 29).Google Scholar
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    Lasch, however, observes that “it is either naïve or cynical to lead the public to think that dismantling the welfare state is enough to ensure a revival of informal cooperation,” because “market mechanisms will not repair the fabric of public trust. On the contrary, the market’s effect on the cultural infrastructure is just as corrosive as that of the state” (Lasch, C.: ibid., pp. 100–101).Google Scholar
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