by Immanuel Ness/ROAR Magazine
A profound movement is emerging among workers in developing countries, demanding radical action on grievances outside the system of established unions.
In the 1980s, the economies that had dominated the world inthe postwar era entered a period of far-reaching transition away from state participation to private sector dominance. The conversion process was not uniform: in some cases the shift to market control occurred gradually through the withdrawal of state subsidies for social welfare, and in other instances a radical shift away from public welfare was imposed all at once, in what came to be known as shock therapy.
In the Global South, where most states had limited social welfare nets, economic liberalization converged on privatization of state production and market integration into the global capitalist economy. While twentieth-century industrialization in the capitalist and socialist economies of the North typically took place in the context of social welfare states, in the South, massive industrialization was carried out without provision for healthcare, adequate food, child care, housing, education, unemployment insurance, and old age pensions for workers and their families.
PROMOTING FOREIGN INVESTMENT FOR EXPORT PRODUCTION
In manufacturing, foreign direct investment (FDI) is concentrated in special zones such as special enterprise zones (EPZs) where workers have few rights. Finance capital has become dominant over production decisions, on the basis of criteria that have largely regulated wages and working conditions. Finance capitalists profit by investing in contractors that pay workers the lowest wages (in other words, super-exploitation). Industrial contractors are subservient to foreign multinational investors: if they fail to meet profit expectations financiers withdraw support and shift to lower-cost producers. Even in the mining and petroleum industries, capital reinvests in new forms of extraction when labor costs rise and threaten profits. The threat of disinvestment compels producers to restructure their operations to lower costs and restore high levels of profitability.
Developing countries seek to attract foreign capital by establishing separate governmental regions and enclaves such as EPZs, following a model developed in Mexico and China in the 1980s, as a way of generating investment in manufacturing.