Contract labor: the latest stage of illiberal capitalism - labor rights eroding

Much has been made in recent years about the transformations in the nature of the world. We witnessed the beginnings of a post-Cold War world, the inauguration of a New World Order, the end of "welfare" capitalism, the maturity of transnational corporations, and the atrophy of working-class politics in Euro-America. Through optimistic adjectives, the Euro-American media tell a story that everything has changed for the better and that humanity is soon to enter a realm of freedom hitherto known only in the United States and Western Europe. This excitement has been contagious, being carried to the media of peripheral countries and to intellectuals in the most peripheral domain of all--Academy-land.

Things have changed, even if only in our presentation of the world to ourselves. Yet, we must attend carefully to the glib assurances of the media, for whom the excitement of change is as much a way of making news as the news itself. Where do we begin to explore this world of ours, which at once gives those of us in the United States so much information and yet appears so opaque? We are told that the U.S. economy is in "recovery" given the drop in the unemployment rate (in May 1994 the official rate was 6 percent). Apart from being a conservative rate, the unemployment index does not tell us what sorts of jobs are now available. Most of the new jobs are for low pay, frequently offering a minimum wage which is only 90 cents more than it was in 1979; further, in those fifteen years, the minimum wage lost 23 percent of its value. If this is not bad enough, many of the new jobs are temporary, which curtails job security and prevents the workers from organizing unions.

Since 1992, temporary jobs increased by 250 percent across the United States. In my state, Rhode Island, the largest employer today is a temporary job agency named Manpower. During a period of rapid and heartless deindustrialization, Rhode Island suffered from the decline of manufacturing jobs (notably in the custom jewelry, shoe-making, textile, steel, and tool and die trades). Our politicians surrendered to the nameless and faceless forces, the supposed mechanism of growth. The surrender is not peculiar to Rhode Island, nor can it be to the United States; it is a global phenomenon exemplified by the abandonment of Keynesianism for an atrocious approach to economic management--the valorization of the "free market' and the adoption of the socially irresponsible theories of F.A. Hayek and Milton Friedman. These "free market" theories call for regimes of austerity, a code word which means that organized workers must yield their most basic entitlements (such as health and pension benefits) secured from years of genuine trade unionism. The "free market" nostrums have been forcibly imposed around the world through the aggressive offices of the International Monetary Fund and other agencies of international finance. In the 1980s, liberalization and privatization of the social programs of Third World nations became a price for "foreign" aid. For example, already inadequate health infrastructures were depleted of funds and subsidized food programs, price controls were cut, and Third World states came under pressure to terminate their support for the struggles of their workers against Transnational Corporations (TNCs).(1) Social services to promote the development of people's lives suffer at the hands of the one thing which masquerades as a person in the idiom of the bourgeoisie--GDP (Gross Domestic Product). Welcome to the latest stage of capitalism!

I was in Delhi, India, last year, collecting materials for my dissertation at the University of Chicago, when I was struck by the extent to which contract labor has become the dominant form of labor relations. My research was among the Balmikis, an Untouchable community in north India whose members, for the past century, have worked as municipal sanitation workers. I was interested in their struggles for equality and for social justice in the face of their gradual socioeconomic marginalization. It was in the context of this research that I met Mahesh Kumar, a young Balmiki man who became my friend. I am cautious about the word "friend," given the ease with which it erases all the barriers which continue to exist between us. Friendship in an unequal world is such a negotiated enterprise that it rarely exists through equality. Mahesh came to me for advice about a job that he and some of his friends had been considering. In Connaught Place, a commercial center in Delhi, a businessman set up shop as a labor recruiter for post-Soviet Russia. Mahesh asked me if he should accept the offer to work in this foreign country. he understood that this foreign was not exactly the same foreign which captivates the imagination of so many Indians, the foreign of commodity-laden Europe and mostly the United States. But it was nonetheless foreign, and it meant a job for a reasonable wage by Indian standards. I asked him about the nature of the job in Russia. He smiled as he told me he would be doing sanitation work. It struck me that as Communists the Russians had cleaned their own toilets, but the blessings of capitalism brought "guest workers" from the "lower races" to do their butt-end jobs.

Menial labor has traveled the world for a very long time, but it was with the inception of the slave trade of early capitalism that a close identity between race and class developed. That is, during the eighteenth and nineteenth centuries, slaves and indentured servants from Asia and Africa were brought to work on the plantations of the New World. In the twentieth century the "free market" served the same purpose, as Europeans frequently managed to leave the hard and dirty tasks to people of the so-called lower races. After the Second World War, Europe and the United States prevented the flow of colored workers into their countries; when they had colonies they allowed some colored workers in as subjects of the Empire, but now the prospect of allowing large numbers in as equal citizens disturbed their racist notions of a national community. "Temporary" migration became an attractive option, as we see with the Mexican field laborers, Turkish guest workers, and Francophone African laborers. In the 1970s, the oil-rich Gulf was an attractive place for lower middle-class and working-class Indians who went for short periods to work as engineers, mechanics, manual laborers, houseworkers, and nurses. They made money and returned to enjoy the fruits of their trying sojourn. Of course, stories of rape and other violence, as well as sudden termination of service, also circulated in India--teaching us that even such attractive cash opportunities have their terrible side.

Contract labor of this form need not be international; it also exists within the bounds of the nation. Factory workers from Orissa (in eastern India) tend the mills of Surat (in western India), as well as share beds as their shifts rotate. Sweepers at New Delhi's international airport work as contract workers and (it is alleged) are forced to participate in a smuggling operation that their employers operate.(2) Given such conditions, what was I to say to Mahesh, and then to Rakesh, and to Bimla, and to Ram, and to Santoshi? The money would be helpful, and this is what would make the difference between working as sweepers in Delhi and in Moscow. I was genuinely unable to offer any advice, and in a way Mahesh was happy that the conversation had been inconclusive. We talked about it again a number of times, but each time we came no closer to any answers. I conveyed my worry that the local contractor might defraud him, and he might find that the money he expected would be used to pay for incidental expenses. He had already considered that possibility but was willing to take the risk. Beyond that, there was little to say.

Contract labor has become a common way for firms to extract maximum profit from labor, whether in manufacturing or service. The sign of our enlightened times is that such workers are in effect indentured and without hope of attaining what had been minimum standards of welfare capitalism. Menial jobs are not the only ones being given on contract, but also mental jobs, from secretaries to computer programmers to graphic designers. Even though both mental and menial labor fall under the same rubric of contract labor, the class and national differentials which divide the various states of indenture cannot be ignored. A large chasm divides the migrant day-laborer from the temporary secretary--an ideological chasm made wider by a racist nativism which identifies the loss of desirable jobs with the immigration of workers. But we must recognize that immigrant labor is now an essential part of global class formation; mental laborers from the Third World are confronted with the relations of production imposed upon menial laborers in the industrialized nation.

Consider the case of Hewlett-Packard (H-P) and the mental laborers from China, India, and Russia who come to the United States on business visas to write computer programs for H-P. These workers do not have access to basic benefits, such as health care or social security; they earn very modest weekly pocket money, room and board, and a monthly salary of $250 which is remitted directly to their home countries. For this, H-P has been accused of "high-tech indentured servitude."(3) Joining H-P are a series of major supermarkets, department stores, and utility firms who exploit foreign software programmers for a few months to conserve their long-term costs (such as health care and unemployment benefits). We are still not used to high-tech workers being treated as indentured laborers, as opposed to, for instance, sanitation workers.

At the same time as modern capitalism wipes out the traditional privileges of intellectual labor, one of its major actors--the transnational corporations (TNCs)--revalorized the accumulated capital of intellectual labor and sought to become its major purveyor. In the Eighth Round of GATT (General Agreement on Tariffs and Trade), the TNCs and their home-bases in Euro-America have begun to force unjust and vicious laws for intellectual property rights onto the world. For example, the Trade-Related Intellectual Property Rights (TRIPS) agreement states that companies who take out patents on products and not only on processes will have to be duly compensated. Currently, many nations only recognize the international validity of patents as processes--reasoning that an idea is not valuable until accompanied by the notion of how it can come into being. For example, Feldane (an anti-inflammatory drug) is made in India by a local company following their own process and sold for Rs. 18 per ten tablets. If the local company has to compensate Pfizer (a TNC drug company) which patented the product, they would have to charge their Indian customers Rs. 520, even though the process of manufacture is different. Euro-American "intellectual property" claims an enforceable right on, for example, a plant that a Euro-American scientist "finds" in the tropics and patents in his name, despite the fact that local peoples may have used the plants for centuries.(4) The intellectual property seized by the TNCs will be protected under TRIPS and denied to the working poor. Intellectuals will join the ranks of temporary workers, and intellectual property will be beyond their means to purchase.

Yet TRIPS will not provide compensation to the Indian Institute of Technology, built and run by the money of Indian taxpayers, which trains the computer programmers who work for low wages for companies such as H-P. Instead of training workers in the United States, the TNCs now appropriate the outstanding technical training created at great sacrifice in the People's Republic of China, India, and the former Soviet Union--societies that put scarce resources into their higher educational (technical) establishments. Under TRIPS, H-P would not have to pay the Indian Institute of Technology for creating a computer programmer, but an Indian farmer would have to pay Cargill, Inc. for using its patented seeds. The United Nations has determined that between 1960 and 1990, the United States and Canada accepted more than a million professional and technical workers from developing countries; those countries lost an investment of about $20,000 per skilled immigrant. Between 1960 and 1969, 45.7 percent of the immigrants from developing countries into the United States were registered as skilled; between 1980 and 1989, the percentage rose to 75.1.(5)

Nations are still important, but the importance of Third World nations seems to diminish in light of the increasing power of TNCs and the international finance combined (World Bank/IMF). In the context of his discussions with the International Monetary Fund, the Indian Finance Minister Dr. Manmohan Singh said that "economic relations are power relations." The "world has changed. India is not immune. India has to survive and flourish in a world we cannot change in our own image." To explain this powerlessness, Dr. Singh said that "we are not living in a morality play."(6) Indeed we are not, as the TNCs now find new ways to benefit from the misery of the South while savaging organized labor in the North.

A sign of how things have changed is the fate of the UN center on Transnational Corporations (UNCTNC), set up in 1976 to develop a code to regulate the TNCs. The center began to serve a watchdog function, for example, publishing a list of drugs and chemicals banned in TNC home countries but sold in other countries. Under pressure from the United States, the UN replaced the center with the Division on Transnational Corporations and Investment, a kind of chamber of commerce for the TNCs. From mediator between the TNCs and the Third World, the United States-dominated new UN has become the champion of the TNCs--another critical voice is now gone. There is no better time to be vocal about our dissatisfaction with the new immoral world built by international capital, whose drive is made easier by the deep pessimism within the left.

Contract labor, TNCs, GATT--this is the vocabulary of our future, and our silence results in the loss of rights won by international labor struggles.

NOTES

(1.)For an overview, see Elmar Atvater, Kurt Huber, Jochen Lorentzen, and Raul Rojas, The Poverty of Nations (London: Zed, 1991).

(2.)Ranjit Singh, Adhikari Sona Chorate Hain (Mahapran: August 1991).

(3.)"60 Minutes," 3 October 1993, and 19 November 1993.

(4.)Quincy McKeen took out "Plant Patent No. 559" on a heliotrope plant he found in Guatemala in the late 1980s. Even though the local people had been using the plant for a long time, McKeen became the financial benefactor since he was the one with access to U.S. patent laws. See P. Sainath, Patent Folly: Behind the Jargon on Intellectual Property Rights (Bombay: Indian School for Social Sciences, 1992).

(5.)United Nations Development Program, Human Development Report (Washington D.C.: UNDP, 1992), P. 57.

(6.)Jeremy Seabrook, "The Reconquest of India: The Victory of International Monetary Fundamentalism," Race and Class (July-September 1992): 10.

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