Multilateral Worker Protection in an Era of Footloose Capital

• Author: Rafael Gomez
• Pages: 296-323

296 HUMAN RESOURCE DEVELOPMENT

Multilateral Worker Protection

in an Era of “Footloose’” Capital

As the twin forces of globalisation and technology accelerate the pace of

economic integration, the debate surrounding the international co-

ordination of labour and other social standards grows more heated. Opponents

of an international social charter argue that harmonisation is an unnecessary

and counter productive interference in the workings of what should otherwise

be a liberalised system of free trade in goods and services. Proponents of

multilateral policy harmonisation argue that, in the absence of global standards,

the increasing mobility of capital facilitates a race to the bottom of social

policies. Even the mere threat of capital flight, it would appear, imposes

constraints on progressive forms of labour market intervention for nations

around the globe.

This chapter critically evaluates the arguments for and against the

establishment of international labour standards. In this regard, attention is

concentrated on two questions. The first question is whether labour standards

should be set globally. The second question and only as a subject for future

research and not as a topic that will be thoroughly covered in this chapter

addresses how core labour standards should be set.

With regard to the former question, four main arguments in support of

international labour standards are presented. The first is a general argument

defining the traditional rationale for intervention in the marketplace. The

second posits the logic of historical continuity by pointing to the creation of

the welfare state and the emergence of national regulation of labour markets

which developed, in part, as a response to the growth of national capital. As

capital now goes global, it makes sense, according to the principle of

“subsidiarity,” to set standards multilaterally as well. Third, the argument over

social dumping will be evaluated. Finally, the case for global standard setting

can be advanced on the basis of efficiency criteria. The equity-efficiency

hypothesis posits that normative concerns, such as guaranteed and enforceable

workers rights, are often necessary preconditions for improved long-run

 

297

TRADE UNIONS AND WORKERS PROTECTION

economic performance.

The conclusion reached in response to our second question concerning

what form international labour standards should take involves a hybrid proposal

that blends aspects of several standard-setting options. The idea is that the

International Labour Organisation (ILO) should remain the appropriate forum

for international standard setting and enforcement. But in order for the ILO

to have any real enforcement capabilities, it is necessary as a condition of

entry and continuing membership in the World Trade Organisation (WTO)

to ensure that countries work with the ILO in designing systems of

international social protection. The actual working and design of such a

proposed recommendation is not discussed in this chapter. The structure of

the chapter follows the order of these two main questions with the first

occupying the better part of the discussion.

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In order to provide a proper context for the debate surrounding multilateral

worker protection and in an effort to determine the kinds of standards that

should be discussed, I will begin by defining two terms central to the debate:

globalisation and labour standards.

.



According to Ostry (1997), the term globalisation first appeared in the

mid eighties and emerged, in part, as a response to the investment surge of the

second half of the decade which involved all the leading economies of the

OECD and not, as in the past, just the US. More recently, Giddens (1999)

has defined globalisation in sociological terms, emphasising the growing

“interdependence” of personal lives which according to Giddens "are now

more closely tied than ever before to events and happenings many miles away,

sometimes even on the other side of the world." One would think that a term

used as often as globalisation would by now (15 years after being coined) have

achieved some semblance of consistency in the literature. Unfortunately, as

the two definitions above point out, no global standard exists (pardon the

pun). Depending on political ideology, disciplinary approach, or level of

discourse, the term globalisation has a wide range of interpretations. In this

chapter a composite working definition will be employed that stresses the

economic, rather than the sociological, dimensions of the term.

First, as Figueroa (1997) and other critical political economists suggest,

globalisation should be distinguished from internationalisation.

Internationalisation refers to the fact that most goods and services can be