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Inside Labour: Mired in a parochial mindset

“NO MAN is an island entire of itself. Every man is a piece of the continent.” So wrote the English poet John Donne, although for continent he meant planet. 

Today, this is something that can be applied equally to a village, town, country or continent - just as it can be to a trade union, business or employer organisation.

But while employer organisations, in their multi- and transnational corporate forms, have clearly understood what Donne meant and ignored borders, the labour movement for the most part is still stuck with a parochial mindset. Although it is, of course, theoretically committed to internationalism.

There were good examples of this contradiction on Sunday and Monday of this week, when we had the annual break from our local concerns to indulge, for Africa Day, in outpourings of pan-African solidarity. Cosatu was quick off the mark to associate, verbally at least, the island of South Africa with the continent of Africa as a whole.

But the call was not of the “workers of all countries unite” type to which all trade unions are, in theory, committed. It was for “all African states to re-prioritise development in Africa in the interest of the masses”, this with the object of  “African industrialisation”.

The problem here is that, in common with many national businesses, the unions have ignored the fact that the present levels of deindustrialisation, of overall economic crisis, are a global phenomenon. It is also one that US economist Richard Wolff warned six years ago would not be “temporary, fleeting or short”.

Drowned out by orthodox economists

But Wolff, although highly regarded, is labelled unorthodox, so his voice, along with several others, was drowned out by the mainstream cacophony that included most orthodox economists and finance ministers such as Trevor Manuel. Rather than seeing 2008 as the start of a slump that had been threatening for years, they saw the obvious start of the crisis as a mere “blip” on capitalism’s road to ever-growing riches and a better life for all.

But by 2011, despite muted murmurs of optimism, there was growing consensus across the board that the world economy faced perhaps the biggest crisis in history. By then, a decidedly mainstream US economist, Nuriel Roubini, a one-time adviser to the International Monetary Fund, became one of a growing number of commentators who saw the world poised between the possibility of an ongoing recession and a collapse into a major depression.

So it is a global problem which affects not only Africa or South Africa in isolation. And it affects different regions and countries in different ways. A severe downturn began in Japan in 1989, a symptom of the wider crisis to come, and that country has still not recovered.

But even when the primary problem is pinpointed - as it was in investment banker Daniel Alpert’s book, The Age of Oversupply - the remedy proposed is merely the time-worn one of more regulation. And this is in line with the demands of most trade unions.

Blamed on corruption

At the opposite pole, there is a free market fringe that maintains the problem lies in not having sufficiently liberalised the market economy. But both liberalisation and regulation have failed and the fact that they continue to be promoted seems to indicate ignorance of economic history. Especially since both sides bewail - and partially blame - the problem on corruption.

Corruption, in fact, led the British government in 1720 to do something that would be unthinkable today: it effectively banned shareholder companies for the next 105 years because they were so prone to corruption. And this ban and the reasons for it were supported by Adam Smith, father of modern free market - laissez faire - capitalism.

Given the time he was writing, Smith could be forgiven for not foreseeing the advent of massive automation, of the microchip, robotics and consequent oversupply. But he knew how shareholder companies could fiddle his free market system. And it got worse after 1856 when corporations, allowed to function again in 1825, developed limited liability. For me this development was best satirised by Gilbert & Sullivan in their opera, Utopia:

"Though a Rothschild you may be, in your own capacity    
As a company you’ve come to utter sorrow,
But the liquidators say, 'Never mind, you needn’t pay,'
So you start another company tomorrow!!"

It is a history to which trade unions, economists and business would do well to pay heed.

Add your voice to this and /or the big labour debate or simply ask Terry a labour question.

* Terry Bell is a political, economic and labour analyst. Views expressed are his own. Follow him on twitter @telbelsa.

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