The ILO and the myth of

What is the essence of the ILO (International Labour Organisation)? Some in the labour movement have the illusion that it can be a genuine force for defending workers' rights. Luca Lombardi analyses a recent ILO document, A Fair Globalization: Creating opportunities for all, and shows that in reality the ILO makes a lot of statements about ethics, morality, "fair development", etc., but in reality it is an instrument in the hands of the bosses.

In February 2004, the International Labour Organisation (ILO) published a report on globalisation ‑ A Fair Globalization: Creating opportunities for all. It is worth reading not so much for its content, which is fairly poor, but because it graphically demonstrates the attitude of this organization towards the labour movement. It also shows how ill-placed the confidence of the reformist leadership of the trade unions and left parties in the UN and its agencies is.

First of all, we should note that this so-called "labour organisation" is a rather strange one. On the board (executive board) of the ILO in fact, there are not only trade union but also employers' representatives. So while the bosses are given representation on a body which is supposed to exist for the purpose of defending labour rights, the situation is not reciprocated when it comes to allowing workers' representatives onto the governing bodies of the bosses' organisations. We can imagine how the bosses would react if the workers were to demand that their representatives should be allowed onto the international bodies of the capitalist class!

This single fact determines the whole outlook and role of the ILO. This is the only UN agency that has anything to do with labour, and bosses are present on its leading bodies! On those international agencies where the real power is to be found (such as the WTO and the IMF), there are no labour movement representatives. Not even the most pro-business right-wing trade union leaders are given any positions. This is a good representation of bourgeois democracy in general: endless meetings that gather together useless individuals speaking about how nice the world could be, while the directors of the multinationals are deciding the really important things behind the scenes.

The ILO itself gives figures that show how this actually works in practice: "In a world comprising nation States with vastly unequal power and wealth, it is inevitable that countries will have unequal influence in international organizations... the developed countries, with around 15 per cent of the world's population, account for 17 per cent of voting strength in the UN, 34 per cent in the International Fund for Agricultural Development, and over 60 per cent in the World Bank and the IMF." (p. 116)

Thus the UN is run just like any stock company, where the big shareholders rule and the other "stakeholders" watch in silence without any voice. It gives us a clear idea of which of these bodies is the most important for the capitalists. Even the smallest and weakest of powers can have a say at the UN. After all mostly it is a talking shop with no real power, as the latest war in Iraq clearly demonstrated. But when it comes the important matters dealt with by the IMF and World Bank then the smaller powers are relegated to a position of powerlessness.

The report

As a whole the report is a blend of wishful thinking with a little bit of data which is presented merely to confuse the reader. There are also some gloomy observations from the real world, all reassuringly mixed up with the ideology of some sort of soft liberalism. This is all based on a sort of cult of the holy family, where the market and the state, as sacred parents, have given birth to this prodigious son called "globalisation", whose aim is to spread happiness all over the world.

The political role of the ILO is to propose a slowed down version of globalisation palatable to its critics. They see the crisis of capitalism and warn the most mindless zealots of bourgeois ideology that some adjustment is needed in order to avoid a complete crash of the system. The ILO refers to this as an attempt "to build a fair and inclusive process of globalisation". This is nothing new. The different agencies of the UN always play the old game of the good cop and the bad cop. The IMF is implacable in forcing governments to starve their peoples in order to repay their debts, while the ILO tries to show the reassuring face of "fairness", without doing anything concrete to achieve it.

This division of labour is necessary, as the "public debate on globalisation is at an impasse", i.e. the world population is sick and tired of the real effects of globalisation and is starting to look for an alternative. To these people the ILO explains that, "we are certain that a better world is possible", distorting the well known slogan of the anti-globalisation movement. The ILO sums up its ideas about how to improve the situation thus:

- "a focus on people" (why not, but what does it mean in a world ruled by the big multinational enterprises?)

- "a democratic and effective State" (just like those that bombed Iraq back to the stone age?)

- "sustainable development" (once again, appreciable, but meaningless at present)

- "productive and equitable markets" (as if it were possible for a market ruled by giant corporations to be equitable to all)

- "fair rules" (i.e. what is needed to allow the strongest to rule)

- "globalisation with solidarity" (to give some money to the poor to buy the commodities from the big corporations)

- "greater accountability to people" (as the spin doctors in the Blair government aptly demonstrate)

- "deeper partnership" (of the horse and the rider)

- "an effective United Nations" (whose role is to speak a lot, while the imperialist countries do whatever they want).

This list of pipe-dreams means nothing at all in the real world. The ILO states that, "the potential for good is immense". Yes, the potential reached by the productive forces is huge, but under capitalism it only leads to a harmful type of development. In fact, just a couple of lines below we read: "seen through the eyes of the vast majority of women and men, globalisation has not met their simple and legitimate aspirations for decent jobs and a better future for their children" (p. X). So much for the comparison between dreams and the real process of globalisation!

The ILO would like to have a "fairer" kind of globalisation in order that the toiling masses cease to complain, but it cannot explain why the process is taking a completely different road: "market opening measures and financial and economic considerations predominate over social ones", that is, the capitalist class rules the world. But, if this is the real situation, what is the point of discussing about so-called "fair globalisation"? We should draw the conclusion that it is only a smokescreen behind which endless exploitation continues.

Of course, as Marxists, we support every democratic reform, even the very minor ones. So we agree that "freedom of association and expression" and "strong representative organizations of workers" are very good things for the working class. The problem is that for the bourgeoisie these measures are only good so long as they can continue to make profits. If the "democratic" pressure of the workers, which involves a challenge to their profits, becomes too high, the bourgeoisie will pass from formal democracy to dictatorship just like people who change places in a crowded bus.

The ILO rightly suggests that "a minimum level of social protection needs to be accepted and undisputed as part of the socio-economic ‘floor' of the global economy". But, where are the resources to make this happen, going to come from? According to the ILO: "the international financial system should be made more supportive of sustainable global growth". What a joke! To call on the sharks of finance capital to pay for social services is just like asking a plague to contribute to health care.

So, the ILO's great project is reduced to asking the multinationals to "adopt a cautious and gradual approach" to globalisation. This is the essence of the role it assumes for itself. The main UN bodies are like the four horsemen of the Apocalypse: the IMF, the World Bank, the WTO and the ILO. They all pursue the same objective with different means. The ILO only asks the others to be more cautious, not to rush too much, as the pressure of globalisation on the workers is becoming too heavy and risks provoking a revolutionary backlash.

As we said, what the term a "fair market" means when workers and small businesses face giant corporations is hard to say. If you have a boxing match between the heavyweight world champion and some skinny little boy, even with the fairest rules of all, the end will be a sure massacre for the skinny boy. So what kind of fairness is possible when an African peasant has to deal with a giant corporation like Monsanto? On this the ILO report quotes one of the people who took part in the research, who said: "A conversation between a cat and a mouse is not a conversation". This sentence is more profound than the rest of the 150 pages of the whole document.

Wishful thinking and reality

The gist of the document is always the same: a moral denunciation of real globalisation, an abstract description of what fair globalisation should look like (the classical start to each of these sections is "in an ideal world..."), and then this is followed by some minor proposal of no effective meaning.

For instance: "The current path of globalisation must change. Too few share its benefits. Too many have no voice in its design and no influence on its course... we have come to agreement on a common goal: a fair globalisation which creates opportunities for all. We wish to make globalisation a means to expand human well-being and freedom, and to bring democracy and development" (p. 2)

And again: "The imbalance between the economy and society is subverting social justice... the majority of the world's people enjoy none of the property and other rights... there is growing polarization between winners and losers" (p. 3)

And again: "There was a widespread sense of instability and insecurity" (p. 13), and on the same page "while people largely favour more openness and interconnection between societies, they are much less positive when asked about the impact on their jobs and incomes".

This is very clear. The workers would be able to enjoy the technological development provided by two centuries of capitalist exploitation if only this were at their disposal. The point is that it isn't at their disposal. The ILO gives no indication of how this could be achieved, and the reason for this is that a UN agency is not there to explain to the workers that they must take power and expropriate the capitalists. That is the only way that the means of production – created by the labour of the working class ‑ can be put at the "disposal" of the workers!

Their morals

The ILO considers the market laws to be "the necessary foundation" of the economy. Unfortunately for these wishful thinkers it is this very "foundation" that is destroying society. Hence the ILO is put in the difficult position of having to defend capitalism but at the same time also has to describe the actual effects of the system on society. That's why the document dedicates a lot of space to ethics. After all, ethics in this context is cheap, but would also add, utterly useless:

"Globalisation has developed in an ethical vacuum, where market success and failure have tended to become the ultimate standard of behaviour, and where the attitude of ‘the winner takes all' weakens the fabric of communities and societies." (p. 7)

But what are ethics if not a "standard of behaviour"? It all depends on your class point of view, for such standards do exist in capitalist society. It is not true that globalisation exists within a vacuum of ethics. It exists within the ethics of the bosses, the standards established by the capitalists' drive for profit. What is true is that this kind of "moral standard" is inhuman.

The data

The document is not very rich in concrete information, i.e. real data, as such information would contradict the political conclusions that the ILO tries to draw. But, hey, why spoil a good story with such annoying details as concrete data or real facts? In spite of this general approach, the document does quote some figures at least. Unfortunately, even these do not help to make its case.

For instance: "in East Asia, growth lifted over 200 million people out of poverty in a single decade." (p. 3). Fair enough, but where do these 200 million people actually live? Almost all of them live in China. So what about the role of "workers'" and "democratic" rights in lifting growth? And what about the role of the "necessary foundation" of the economy – the law of the market? In China it is the state that rules the roost. While the Asian "tigers" sank under the pressure of currency imbalances in the 1990s, China survived the storm relatively unscathed because of the important role of the state and the fact that the country has no seriously functioning capital markets.

Meanwhile "in sub-Saharan Africa and Latin America, more people lived in poverty at the end of the 1990s than at the beginning of that decade" (p. 4). This is thanks to the IMF backed policies, the World Bank's "anti-poverty" projects and so on. As for the backyard of US imperialism: "in Latin America... real wages of unskilled workers have tended to decline").

So the more you bow down to the "Washington consensus", i.e. the IMF, the poorer is your population. But again, why bother people with these concrete facts and figures when you can tell them the ever so funny story of the market and its wonderful effects? The ILO states that, "an open market is today generally recognized as the necessary foundation for development, growth and productivity" (p. 7).

The data quoted in the document clearly demonstrates that the only country that lifted a sizeable number of people out of poverty in the 1990s [China] is not a standard capitalist one, but a country which has a large and powerful state, independent of the IMF and which has no real capital markets. But when the ILO draws political conclusions from the data, it advises the poor countries to take the opposite road and break with all kinds of state control or state intervention. Yes, the ILO, in passing, is forced to concede that India, China and Vietnam are doing relatively well because "they have not followed orthodox liberalisation strategies", but, at the end of the day, the advice it gives to the other "developing" countries is to not follow these crazy people even if they did achieve a degree of success in developing their economies.

Here we are not stating that China, India and Vietnam have eliminated poverty. On the contrary the huge majority of the population lives in terrible conditions, and extreme polarisation is taking place, with two extremes: a vast majority living in poverty and a minority that is accumulating the wealth in its hands. But we do have to note that in these countries a certain degree of development has taken place and this has meant that sections of the population have risen above the general level of poverty. The point is that in all three countries (although coming from different experiences) the state plays an important role in the economy

The capitalists recognise this particularly in the case of China. While capitalists always attack the "evils of communism" ‑ this plague from hell ‑ they are happy to put into "communist" China colossal amounts of investments, as they are sure to make profits out of the horrible exploitation of the Chinese proletariat. This shows that basically globalisation, in its essence, means giving international capital a free hand to exploit the workers of any country. This involves an enormous growth of world trade. As the document says, "world trade has expanded rapidly over the past two decades. Since 1986 it has consistently grown significantly faster than world gross domestic product." (p. 25). But even more than a growth in world trade it involves the export of capital.

By the way, in the 1990s the growth of both of these was concentrated in China and in its trade partners, Taiwan, Hong Kong and the rest of South East Asia. The huge surge in FDI (foreign direct investment) is the best demonstration of how imperialism has developed. In the 1980s FDI was insignificant as a percentage of GDP but after the collapse of Stalinism it underwent a huge expansion. The ILO explains that in the 1990s there was a huge process of deregulation of the financial markets, where every underdeveloped country attempted to solve its impasse by attracting a portion of FDI inflow. As this rat race has no end, this meant the destruction of all forms of control on the flow of capital. The consequences are very well known: the Mexican crash, followed by the "crash of the Tigers" in 1997, then Russia, then Brazil, and recently, of Argentina.

However it is worth noting that 30% of overall FDI in the 1990s went to China (this figure is now a lot higher). This is rather strange if we consider that China did not liberalize capital markets at all. So the capitalists, while praising the virtues of deregulation, voted with their money for the most regulated economy of them all. This shows that it is simply not true that deregulation helps growth, as even the capitalists understand when they are moving their money around the world.

As for the deregulation of the financial system, the ILO states: "On capital account liberalization, there is emerging agreement that the growth benefits to be derived from it are small... financial openness has also, in some cases, led to a misallocation of resources and an increase in the real cost of capital... financial openness has limited the scope for deploying counter-cyclical macroeconomic policy..." (p. 39)

For sure, the growth of the inflow of FDI, and in general of the financial markets is astonishing. The ILO quotes data from the international bonds market. From 1990 to 2002 this has grown 5 times (something like 40% a year). In the meantime, the world economy has grown at a level less than a tenth of this figure (and the per capita GDP growth was only 1% a year). Actually, as the ILO explains: "since 1990 global GDP growth has been slower than in previous decades". So how is it possible for the real economy to be barely growing while the financial markets skyrocketed? Well, it is simple. Financial markets are not linked to the "economy" but to profits. As globalisation meant an enormous increase in the exploitation of an ever-increasing number of workers, "investors" cheered this process inflating one bubble after another. How it would be possible to insert "fairness" into this Frankenstein's monster the ILO cannot explain.

On the contrary, it is forced to admit: "The impact of globalisation on poverty is difficult to assess. The number of people living in absolute poverty worldwide has declined significantly from 1,237 million in 1990 to 1,100 million in 2000. However, most of this improvement is accounted for by the changes in just two very large countries, China and India... in sub-Saharan Africa, Europe and Central Asia, and Latin America and the Caribbean, poverty has increased" (p. 44)

So, it seems that only a strong publicly owned economy, even one that is rotten to the core like that of China, can avoid the havoc produced by globalisation. But the ILO insists: "The reduction of the role of the State that has occurred across the world may often have been desirable, but in many cases the pace has been too fast" (p. 58). Once again, the conclusion is the very opposite to what the data would indicate. To be fair, the ILO does underline that the weakening of the state has gone too far, but of which state are they talking about? The United States? In reality the process of globalisation has weakened the states of the former colonial countries that are now more than ever puppets of the big corporations.

Inequality

Globalisation has brought poverty and inequality through savage attacks on the living standard of the working class. It has provoked the collapse of social services even in the most advanced countries. The document explains that since the 1960s, the ratio of per capita income of the poorest to the richest countries has risen from 54 to 121 times, while the per capita income of the poorest countries has grown something like 0,6% per year.

But inequality also worsened inside the advanced countries: "Income inequality has increased in some industrialized countries... Even more striking has been the sharp increase in the share of the top 1 per cent of income earners in the United States, United Kingdom and Canada. In the United States the share of this group reached 17 per cent of gross income in 2000, a level last seen in the 1920s" (p. 42)

For example, the ratio of the highest paid 10% of workers over the lowest paid 10% of workers between the mid-1980s and mid-1990s has grown 15% in Italy, 35% in the UK and 37% in the US.

Globalisation has also meant an enormous change in fiscal policy: "Globalisation also affects public finances... In the world's 30 richest countries the average level of corporate tax fell from 37.6 per cent in 1996 to 30.8 per cent in 2003, the top marginal tax rate on personal income declined in the vast majority of countries" (p. 40)

And finally, globalisation has also meant the collapse of the bargaining power of the workers: "The influence of trade unions in the rich countries has come under pressure from increasing globalisation... the traditional counterweight to the power of business has thus weakened, both nationally and globally" (77)

Now we know how the "ethical vacuum" was filled. It was literally filled by the sweat and the blood of millions and millions of workers.

Proposals

The ILO admits that globalisation, as it is, is a mess. Hence it proposes a sort of prudent Keynesianism with the aim of slowing down the process of privatisation and axing of the welfare state. The logic being that if the workers starve, they won't be able be exploited properly. The ILO document says that this is "to take the ‘high road' of business-labour collaboration in order to achieve efficient gains, and to eschew the ‘low road' of cost-cutting and downsizing" (p. 65).

On this question, the document even expresses a very soft criticism of other UN agencies. First of all, the ILO admits that the WTO's rules are deeply flawed in favour of the rich countries, i.e. of their multinationals, and explains the reality of the unequal exchange: "Many developing countries and LDCs (Least Developed Countries) still depend on agricultural commodities for more than half their export earnings. Yet from 1980 to 2000, world prices for 18 major export commodities fell by 25 per cent in real terms." (p. 83)

Given that the ILO recognizes that the financial markets are strongly dominated by big G7 companies and that the financial crises have terrible social costs, it even praises something which is similar to a Tobin Tax, and it is in favour of "prudent strategies towards capital account liberalization".

As for the IMF and World Bank, the ILO says: "In many poor countries, mostly in Africa, external debt is still at unsustainable levels. Between 1990 and 2001, external debt as a percentage of gross national income rose from 88.1% to 100.3% in the severely indebted countries." (p. 102)

Anyone behaving in such a manner would usually be defined as criminal usurers – or "loan sharks" ‑ and would be put in jail. But on the world market they are called the "IMF", World Bank, Deutsche Bank, etc., and they are alive and well, and are regarded as very respectable institutions.

Faced with such a dramatic situation the ILO proposals in the document are nothing but a joke. It speaks about more rights for the workers to organize after describing the slaughter of thousands of shop stewards every year, it speaks about the role of the cooperatives, that now have 800 million members worldwide, after complaining about the harsh domination of the big corporations. But, above all, the sort of mini New Deal suggested by the ILO has to be financed. But where is the money for this plan supposed to come from?

The document does explain that the UN has "pitiful resources" at its disposal, and therefore it can barely stay afloat. So, where's the money? The ILO explains that total world military spending in 2001 was estimated at $839 billion. On this basis it asks for a 5% reduction in military spending, and for this to be redirected towards social programmes. But Bush and the others are not very keen on this kind of "redistribution". On the contrary they are increasing enormously military expenditure. Therefore the ILO has a plan B: "private philanthropic initiatives by foundations and wealthy individuals".

Now here indeed is a great idea. Let's beg for a few dollars from the rich, the very same class that created the mess in the first place. Thus those governments that have enormously reduced taxation on the wealthy – a policy which has severely cut back the public services ‑ are now supposed to go begging for some pocket money in order to avoid the starvation of a large part of the planet's population. It is a bit like the so-called "gentlemen burglars" that steal the money in your wallet but have the courtesy give it back to you empty.

When you strip away all the empty phraseology, this is the real essence of the final conclusion of the ILO document. Never mind the fact that millions of people are starving while the big corporations continue to rake in massive profits, never mind the fact that workers' rights are being taken away and living standards are collapsing everywhere. Just approach your boss and beg, and globalisation will become as "fair and inclusive" as can be.

Thus the ILO mountain has indeed produced a mouse. The ILO can produce no better, because it is a body of world capitalism. It is there as a sop to the workers. The problem is that many trade union leaders ‑ in reality bureaucrats – continue to uphold the myth of the ILO as a genuine organisation for the defence of workers' rights. It is no such thing. Yes, there are the so-called "ILO standards", i.e. minimum workers' rights that any country signing up to the ILO should respect. But the ILO has never really done anything to make sure these standards are respected.

The workers in all countries have rights to the degree that the labour movement fights for them and is constantly vigilant. In some cases it intervenes to put pressure on some regimes, like in Turkey or Iran. Turkey formally adheres to the ILO but the Turkish workers in reality do not have the same rights as many European workers, for example. In Iran the ILO is toying with the idea of setting up some kind of union. As there is no real alternative it might even have some degree of success in getting a union going. If such a thing were to happen, no doubt many workers would join. But they would join because they need a union to fight for better wages and conditions. The ILO is intervening for they fear an explosion from below, which they think may go beyond the limits of capitalism itself.

Thus the role of the ILO would be to provide a channel for the workers, but a channel with limits. As always, the ILO stays within the strict confines of the "market economy". On that basis it cannot offer any long-lasting solution to the problems of the workers.

The purpose is to allow for the setting up of moderate trade unions that try and hold the working class under control and stop the workers from going beyond the limits of capitalism. Part of this role is the production of such documents as A Fair Globalization: Creating opportunities for all. This is an ideological back up to its "moderating" role within the movement. It is not a genuine organisation for change. It cannot be. The only way of defending workers' rights is through the struggle of the working class itself.