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There is nothing new about the international character of capitalism. Nearly 150 years ago Marx and Engels said, 'the need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe'. All those years ago they wrote that 'all old-established national industries have been destroyed or are daily being destroyed' and are being 'dislodged by new industries, whose introduction becomes a life and death question for all civilised nations'.

So what is new? It is the shift from a world economy based on national market economies which are linked together by trade and by investments to a single, borderless global market economy increasingly governed by one set of rules.

Transnational corporations companies or corporations operating in more than one country, TNCs for short - are the spearheads of globalisation. They have become the dominant economic and political force in the world economy. Over a quarter of the world's economic activity now comes from the 200 largest corporations.

As the US magazine Business Week noted after the fall of the Berlin Wall, 'a new brutally competitive world economic order is emerging with the demise of the Cold War.... The fundamental force behind this new order is the integration of the new capitalist nations and much of the developing world'.

Nation states are becoming irrelevant. A report by the United Nations Commission on Trade and Development (UNCTAD) notes that "TNCs encroach on areas over which sovereignty and responsibilities have traditionally been reserved for national governments". National governments no longer control the flow of financial capital. So they can no longer control their own economies. This in turn weakens the power of national democratic pressures from labour parties and trade unions.

Most importantly for the labour movement, globalisation has led to a global labour market in which workers of all countries are in direct competition with each other.

The relentless pressure on TNCs to continually increase profitability leads to a relentless search for cheap labour. Both manufacturing and service industries are being relocated, helped by technological advances in communications and transport.

Major airlines now have their global accounting done in India. Computer software development for many TNCs is done in low wage countries at less than half the price of the industrialised world. At the bottom end of the global labour market is the use of prison labour in China, or the workers, mostly women, who are exploited in the Export Processing Zones of developing countries and the 'new capitalist countries' of Eastern Europe, China, Vietnam, etc.

This is a race downhill in which countries underbid each other. And, because they cannot see an alternative, workers also end up underbidding each other. The main argument is 'competitiveness' and the need to survive. But for workers it is a race to the bottom, and the bottom means slave-like conditions.

Some believe there will be a transfer of jobs. They are wrong.

The US business magazine Fortune said: 'when work does move to less developed lands, it is by no means automatic that the shift will bring Western levels of employment and prosperity to the new host countries'. What it does bring are very profitable high-tech islands and EPZs where transnational capital is protected, with the help of the state, from social responsibility. There may be short-term advances in the living standards of a small group of workers. But as soon as some workers elsewhere lead the race to the bottom, those jobs may well disappear.

Dirty secret

What is it that makes poor countries poor? The answer is the dirty secret of neo-liberal globalisation. The global labour market is not regulated by economic laws but by political laws. It is regulated by massive government intervention in the form of military and police repression. Poor countries are not poor because their people choose to be poor but because they have been kept down by violence.

In a trade paper of the US garment industry the wages of a garment worker in El Salvador were advertised: 'Rosa Martinez produces apparel for US markets on her sewing machine in El Salvador. You can hire her for 57 cents an hour'. In later adverts, Rosa's wage had dropped to 33 cents an hour. The country had had a civil war for decades, with over 40,000 dead. It was a war of the ruling class, backed by US interests, where the labour movement was destroyed several times over through terror. It was a war aimed at preventing the people from defending themselves.

China is the largest and cheapest labour market opening up to transnational capital in the world today. It is the product of a terrorist police state which has exterminated millions of its own citizens by starvation and repression. Independent trade unions have been crushed.

When electronics workers in Malaysia tried to organise a national union, Texas Instruments and other companies threatened to pull out if the government allowed it. Unions are now accused of 'acting against the national interest' and the Malaysian Government has a severe Internal Security Act to deal with them.

There are many such examples. It does not take specialised knowledge in economics to understand why capitalism in its most destructive forms is sweeping the world almost without check. It can do so on the back of decades of repression and fear.

‘Competitive' wages in the world are now around US$10-20 per month. They can be as low as US$7-8 in the poorest countries.

A class issue

The only chance the labour movement in the low-wage countries has of breaking this cycle of poverty and terror is by securing democratic institutions. Their need is to open up the space for unions to breathe and struggle and to get some power for workers and for ordinary people.

In this fight their best and often only ally has been organised labour in the industrialised countries. But here too the labour movement is under attack. To achieve deregulation and flexibility in the labour market of North America and Europe, companies want to break the power of the unions. There is a union-busting frenzy. Laws in many countries ban workers from taking direct industrial action in solidarity with others.

This is why the struggle for human rights, democratic rights, and trade union rights has to be a number one priority for the labour movement everywhere. This is not a matter of taste, an academic debate or a 'western' concept. Democracy is a fundamental class issue for workers. Their ability to organise and to defend themselves depends on it.

What can we do? We are not in an argument with the neo-liberal conservatives and right-wing extremists about who has the better ideas. We have always had the better ideas. We are in an argument about power. For us, power means organisation: and that means doing first what depends on ourselves.

Our movement is used to making demands addressed to others: to the authorities, at national and international level, to employers. Of course we must do this to defend the interests of our members and society at large. But there is no sense in holding discussions with the International Monetary Fund, the World Trade Organisation, or national governments, if we do not first get our own act together.

This means understanding that the framework of nation states, where the labour movement traditionally exerted influence, has gone. A global economy means a global struggle, global organisation and global bargaining.

A major task is within our reach: the political unification of the labour movement. For the first time, it is possible to bring together the Social-Democrats, the Christian-Democrats (already integrated in Europe) and that part of the Communist component which is under control of its membership rather than a state bureaucracy. In Europe, we are moving towards such a unified, politically pluralist trade union movement, based on strong industrial federations.

At a world level, the International Trade Secretariats (ITS) are the unifying factor. The ITSs unite unions in a particular sector or industry. They vary in capacity, but they are the nearest thing to a global counterweight to TNC power, because they take workers at the point of production as their point of departure. The ITSs are the key to rebuilding a modem international labour movement.

A second task is to streamline our organisations and raise our level of competence. We must use new communications technologies - just as the TNCs have done - to make them work for the globalisation of our movement.

Third, we must reach out to the other actors in civil society that pursue agendas which converge with ours. This includes political parties which have not divorced themselves from the fundamental interests of workers. It also includes movements concerned with freedom and justice: the women's movement, movements in defence of human and democratic rights and for the protection of the environment.

Our task is not to issue marching orders to civil society or claim to be a 'vanguard'. We must build consensus on the basis of mutual respect. We must have all the urgency that the situation demands. But we must have all the patience that is needed for securing lasting mutual commitments among independent equals. At a global level, this means building a broad-based people's movement for a worldwide society based on human needs, with justice, freedom and peace.

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