The Morality of Globalization
06 February 2000

The world's 40,000 multinational companies concentrate billions of dollars in a few hands and control the global economy far more effectively than governments, says Bill Jordan, General Secretary of the International Confederation of Free Trades Unions (ICFTU).One of the world's most respected trade unionists says that moral values, reflected in international labour standards, are needed to regulate globalization.

For centuries, global trade has held sway over the fate of millions of people around the world. It led to the expansion of the British empire, through the East India Company, while the vast profits of the slave trade provided the capital to finance and fuel the industrial revolution

Today, globalization is benefiting millions of people worldwide, through wealth creation, information technology and the Internet, technology transfer and improved quality through competition. Yet it still leaves far too many people feeling they are victims of forces beyond their control. So much so that demonstrators against big business have disrupted World Trade Organization conferences and economic summits in Seattle, Prague and elsewhere.

The world's 40,000 multinational companies concentrate billions of dollars in a few hands and control the global economy far more effectively than governments, says Bill Jordan, General Secretary of the International Confederation of Free Trades Unions (ICFTU). 'Most companies are run by decent people who would boast of their standards and defend their principles,' he told an international business conference in Caux, Switzerland, in 1997. But individual morality was not being reflected in corporate decisions, because of intense competition. Such competition had already dismantled national borders and now seemed 'intent on dismantling the effectiveness of workplace standards'.

Jordan, who represents 125 million workers in 143 countries and territories, called for fair wages and basic human rights at the workplace, and a new global morality to meet the social challenges posed by globalized business. What the world lacks, and most desperately needs, he said, 'are leaders whose moral values leave an imprint on every decision they make; leaders whose own morality gives them the strength to turn the tide of self-interest that seems to be driving the process of globalization.'

At the end of his stirring speech, the entire audience gave him a standing ovation. All, that is, except for an Indian industrialist who at first remained firmly in his seat. I don't know why the industrialist didn't immediately leap to his feet. In many ways he epitomizes just the kind of business leadership Jordan was calling for. Far from being a hire-and-fire, jack-booted boss grinding his workers into the dust, he is a gently-spoken man who, like Jordan, has a strong sense of social conscience and care for his employees. But he had earlier told me that, in his view, India's labour market was already far too regulated: employment laws which protect workers from being unfairly sacked also act as a disincentive to taking on new workers, which he wanted to do.

To keep even his present numbers employed, the Indian businessman has to make sure his company is more and more competitive and productive in a global market. India has had a manufacturing growth rate of around seven per cent. But employment has been growing at less than one per cent, because of competition, technology and the need for increased productivity.

I asked Jordan if employment laws, like those in India, were too tight. They only appeared to be so, he replied, because of the unfair competition coming from countries such as China and Indonesia--'places that are prepared to abuse their workforces for profit, where there is a lack of freedom for ordinary working people to defend themselves.' Such countries, which push down wage rates, attract a disproportionate amount of investment from multinational corporations, driven by global competition. All the more reason, then, for a global employment standard.

Jordan insisted that he is 'not a fanatic about regulation. I have no doubt that India has to respond to the free market's desire for less regulation.' But there was a danger of throwing the baby out with the bath water. Take one look at Russia, for instance, a country where almost anything goes. 'The money is flooding in and the level of corruption is rising to become a national scandal and a threat. The Mafia are becoming as powerful as government. That is what a complete absence of regulation means.' Jordan said that he would like to see countries remove all regulations which hamper trade but not those that protect against abuse.

One of the worst abuses is child labour. The issue was given particular publicity when TV reports showed children in India and Pakistan making footballs for British clubs such as Manchester United. Jordan acknowledged that countries such as India wanted to do something about it. 'Any country that can demonstrate that it has a programme for the long-term elimination of child labour has my backing,' he told me. 'Any government worth its salt wants to do something about it. And the Indian government is worth its salt. I would be the last person to take the only breadwinner out of a family if it meant starvation. But why should a child sit there sewing footballs when the mother or father could be doing it?' Jordan would like to see heavy fines imposed on anyone who employs someone under the age of 14.1

I asked Jordan if multinational corporations coming into developing countries were pushing up wage rates and poaching the most skilled workers, making it harder for local companies to compete. 'That is inevitable,' he replied. But he asserted that, 'If a successful company lands in India, you've got a gift. You should look over its wall as often as you can. And that is what is happening. Those people who supply it will learn techniques by being a supplier. This is the practical way of learning.'

This was hardly the voice of militant trade unionism. Jordan, who was President of Britain's engineering workers before becoming head of the ICFTU, compared the situation in the developing countries with that of Britain's welcome to Japanese inward investment: 'They came not just with money and jobs; what they brought were fantastically improved working techniques, more efficient ways of working; the art of good management.'

In his speech to the conference in Switzerland, Jordan called for 'a bedrock of human rights at the workplace' to be implemented by all member countries of the World Trade Organization. Core standards were needed to tackle the evils of child, forced and bonded labour, and to ensure freedom of association and collective bargaining. There should also be a tax on currency speculation, at a time when 'a relatively small group of unaccountable people can trigger the movement of billions of dollars across the world, and yet be unaccountable for the social consequences of their actions'.2

Concluding his speech, Jordan said: 'Whatever ideology or direction the world chooses to take, it must not lose its values, its standards. Although there is a difficult path ahead, not even the colossal forces of globalization are a match for the collective power of individuals to defend social values and justice. That power, that strength, is in the heart and hand of every decent person we meet. Let's use it. Let's change the world.'

1. In 1999 the International Labour Organization, under its new Director General, Juan Somavia, passed Convention 182 for the eradication of the worst forms of child labour, which involves 250 million children worldwide.

2. A 0.25 per cent tax on currency transactions, the proposed Tobin Tax named after economist James Tobin, would raise five times what the developing countries receive in aid, according to War on Want.

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