Protectionism or Solidarity? (Part I)

Kim Moody

“What is called globalization is really another name for the dominant role of the United States.” –Henry Kissinger (1999)

AS THE 21ST century opened, U.S. labor seemed more energized and more engaged in grappling with the forces that had so long kept it on the defensive.  Perhaps it was the fact that over a million workers had joined unions in the last two years and new members outnumbered lost ones by over a quarter of a million.  Maybe it was the high-visibility experience of Seattle and the promise of a new coalition of forces.

Whatever the medicine, more labor leaders appeared ready to move in a new direction.  Steelworker union leaders held meetings with student activists.  UNITE supported campus anti-sweatshop campaigns.  The AFL-CIO reversed its position on immigrant workers, calling for amnesty for the first time ever. And, of course, there was Seattle.

At its February Executive Council meeting in New Orleans, the AFL-CIO continued this trend by endorsing the April 4 National Student Labor Day of Action called by the United Students Against Sweatshop, the Student Labor Action Project and other campus-based groups active around labor issues.

They also promised to call a spring conference on “Development and Labor Rights” that would reassemble much of the Seattle coalition.  In addition, the federation broke new ground by calling for amnesty for immigrant workers and launching an internationally focused campaign that promised to go beyond trade issues to a “new internationalism.”[See note 1]

At the New Orleans meeting, John Sweeney struck a strong internationalist note. Calling it the Campaign for Global Fairness, the federation laid out a policy that pointed away from labor’s 100-year embrace of American imperialism.  True, Sweeney had quietly steered the federation away from its most blatant Cold War moorings when he first took office; but that change was partial, its impact still far from the members, and its direction not clearly announced.

Now, Sweeney and the AFL-CIO leadership called openly for a campaign emphasizing “broad-based education” among union members, “workers’ rights in the international economy,” “building international solidarity,” and debt relief among other things.  Even before the Campaign for Global Fairness was launched in New Orleans, however, three clouds from the old days of the 20th century hung over this quest for a new internationalism: partnership, political pragmatism, and protectionism.

Partnership was played out one more time at a February meeting in New York of top labor leaders and corporate CEOs convened by John Sweeney only a week before the AFL-CIO Executive Council.[See note 2]  This was one of a series of semi-clandestine labor-management encounters held to find common ground on health care, education and, of course, trade issues.  The lead organizer for capital’s side was Jack Welsh of General Electric, who not only plans to move more of GE’s work to Mexico, but has told his suppliers they must do the same or lose their contracts.

What, if anything, they actually agreed to remains their secret.  What is clear is that the spirit of Seattle was sorely missing in this polite exchange about the high costs of American business in today’s competitive world.  That trade should be a central topic in this labor-capital dialogue is consistent with Sweeney’s pre-Seattle initiative at enlisting big business in the struggle to “reform” the WTO.[See note 3]

The first action focus in the Campaign for Global Fairness was not international solidarity, as that is usually understood, or a confrontation with global capital as in Seattle, but the more familiar terrain of a lobby over trade policy, specifically to stop Permanent Normal Trade Relations (PNTR) status for China.

In a letter from Sweeney, the International Unions, state federations, and central labor councils were asked to mobilize for an April 12 demonstration on Capitol Hill and to “blanket the Congressional offices in a massive Labor Lobby Day…” This was to be supplemented by TV ads in targeted Congressional Districts with the message, “no blank check for China.”

In fact, some 12-15,000 union members showed up for the lobby-less than half that made it to Seattle.  While the Campaign for Global Fairness also made a bow to the faith-based Jubilee 2000 rally for Third World debt relief on April 9, no mention was initially made of the already announced April 16 demonstration at the annual meeting of the IMF and World Bank.

The April 16 event had already been endorsed by most of the organizations, now organized as the Mobilization for Global Justice, that made Seattle a visible symbol of a new internationalism and anti-corporate, even anti-capitalist, consciousness, as well as a credible example of the effectiveness of mass action.  An uproar from movement organizations and some labor bodies eventually brought an AFL-CIO endorsement for the “permitted” orderly part of April 16.

In true AFL-CIO tradition, the 2000 elections cast a long shadow over everything, with a $40 million campaign to put Al Gore in the White House and more Democrats in Congress.  No doubt the AFL-CIO’s major reasons for bypassing the opportunity that April 16 offered to renew the spirit of Seattle were the 2000 elections and the timing of Congressional action on China’s trade status.

In all likelihood, the emphasis on opposing China’s PNTR was pressed on Sweeney by the industrial unions who feel the brunt of imported goods and exported jobs. The UAW’s Solidarity magazine, for example, was far more frank about the economics of the situation than was the resolution of the AFL-CIO Executive Council, pointing directly to imports as a threat to jobs. Similarly the Steelworkers’ magazine Steelabor.

Yet this move back to more traditional political territory and away from the more radical grassroots coalition pre-figured in Seattle, not to mention the baggage it loads onto the federation’s newly announced internationalism, points to the strong pull of old habits and ideas, including protectionism and its very deep roots in economic nationalism, the third shadow of the past cast over a “new internationalism.”

In this writer’s view, opposing PNTR in the name of workers’ interests was correct, but for different reasons than most of those offered by the AFL-CIO.  While the federation leaders seem to have made a point of avoiding the anti-Asian sentiment so typical of past efforts to stem imports or immigrants from Asia, the campaign against PNTR status for China is really about the fear of rising, ever-cheaper imports, not human rights.

The economics of the situation are, in fact, serious.  U.S. direct investment in China grew ten-fold from 1992 to 1997, while imports more than doubled in the same period, creating an enormous trade deficit.  These imports are not limited to toys and textiles.  China has doubled its steelmaking capacity in the last ten years to 124 millions tons a year and plans to export 25% of its output.

The labor-backed Economic Policy Institute predicts that some 600,000 jobs could be lost over the next decade if the PNTR/WTO deal goes through Congress.  In addition, there is no doubt that China’s record on labor and human rights is horrendous.  The AFL-CIO’s near-total emphasis on stopping PNTR thus was not an irrational political move-but clearly neither was it a new departure in internationalism, nor the type of action or issue likely to rekindle the coalition or spirit of Seattle.

It also let the real culprit off the hook. This campaign against PNTR status and WTO membership for China, focused solely on China’s labor and human rights record, covers up the role of the Clinton Administration, which negotiated the agreement that underlies WTO membership, and the U.S. corporations who will profit the most from it.

In this sense, the politics and direction of this effort differed from the fights against NAFTA, WTO and fast-track in that it did not challenge corporate power or the corporate-dominated setup of these multilateral trade agreements, as those earlier fights had done. As waged, it simply challenged one nation’s full admission to the system in hope of slowing down the flood of imports.  There is also more than a little hypocrisy in singling out China’s labor rights record with its implication that labor rights in the United States-or Mexico, or South Korea- are some sort of model.

The agreement signed by the Clinton Administration last November, which guarantees U.S. support for China’s trade status and WTO admission, is one more NAFTA-style market-opening corporate bill of rights.  In fact, the concessions made to U.S. business in this agreement go beyond NAFTA or WTO requirements and are, as one U.S. official told National Public Radio, a “one way street for the U.S.”

The deal, in particular, opens China to U.S. agricultural imports and financial institutions who will preside over and profit from the largest privatization in history.  This, in turn, will dislocate millions more workers and farmers in a nation that already has a “floating” jobless population of 100 million.  As former Clinton economic adviser Laura D’Andrea Tyson stated in a Business Week Viewpoint (May 1, 2000), “the deal the Clinton Administration struck with China to gain our support for its admission to the WTO is manifestly in the U.S.’s economic interest.”

By this Tyson clearly means the interests of corporate America-or, as a Clinton aide told the Wall Street Journal (May 2, 2000), defeating PNTR for China “would just deny American companies the concessions” made by China.  Yet the AFL-CIO remained practically silent on this side of the question, preferring to put all its focus on China itself.  Clinton and the multinational banks and corporations that will profit from this scarcely draw a mention in the AFL-CIO literature or Sweeney’s speeches and statements.

All of this gives the federation’s position a nationalist character more reminiscent of its old protectionist approach than of any “new internationalism.” It also overlooks the fact that the impact of this agreement, like Clinton’s whole economic foreign policy, is much greater on China and the rest of the developing world than it will be on the United State–and not in terms of “engagement” for human rights.

As Tyson also points out, while the “deal does not require that the U.S. open its markets any further,” it “locks in market reforms” in China.  Such “reforms,” of course, were the source of the recent Asian crisis in the first place.  The Clinton Administration has carried this barrier-breaking, market opening policy farther than Reagan or Bush.

The team of Clinton and Former Treasury Secretary Robert Rubin targeted Asia in particular after 1995.  The New York Times (February 16, 1999) described it this way:

Clinton and Rubin, who became his Treasury Secretary in 1995, took the American passion for free trade and carried it a step further to press for freer movement of capital.  Along the way they pushed harder to win opportunities for American banks, brokerages and insurance companies.

They got their way, and flows of “capital” to Asia accelerated until they hit a currency glitch and then fled almost as fast. Yet this is precisely what the agreement behind the PNTR/WTO deal is all about-promoting “free trade,” particularly in agriculture, and the “freer movement of capital,” particularly into the financial sector where U.S. banks will preside over the biggest privatization in history.  Rather than focusing on this policy, the AFL-CIO chose the narrower, more traditional tack of making the U.S. the victim (imports and lost jobs) and China the culprit (bad labor or human rights record).

Finally, there is the fact that focusing exclusively on China brings out the jingo and the cold warrior still under the skin of many labor leaders.  This was exemplified by Teamster President Jimmy Hoffa, who invited Pat Buchanan to speak at a Teamster rally on April 12.

Somewhat more surprising was Steelworker President George Becker’s retro Cold War performance.  At a rally in Detroit and in the pages of Steelabor (March/April 2000), the union’s magazine, Becker stated that “Communist China had not changed,” was “our enemy,” and how “Thousands of Americans fought and died in Korea to stop the Chinese Communists.”

This reversion to cold war rhetoric is all the more ridiculous since its is precisely China’s capitalist road that is today’s basis for PNTR. But such language opens the door to right wing groups like Task Force America to preach their twisted mixture of anti-corporate talk with jingoistic diatribes against “red” China and Vietnam.

Because lingering protectionism and persistent economic nationalism within organized labor and the working class remain a barrier to genuine internationalism, the rest of this article will focus on both the roots of working class economic nationalism, and the forces undermining it.

The Lure of Protectionism

I don’t remember who said or wrote it, but the observation that in today’s world capitalist system the average product has more protection than the people who actually made it, is indisputable.

I say actually made it, because the corporations that “produce” many of the world’s marketable products are, themselves, highly protected.  It’s the workers, the real producers, who are under-protected.  The average product that sells somewhere on the world market is surrounded by patents, copyrights, licenses, business secrets, trade tariffs, the police (lest it be stolen), insurance, the entire veil of property law, the courts, the might of the state when needed here and abroad, and now, of course, the World Trade Organization.

Was it an oversight when Marx, in the opening chapter of volume I of Capital, urged us to “turn and examine a single commodity ” and not the patent and the insurance policy that underwrote its value?  How could he, writing in the infancy of worldwide capitalism, have imagined a supranational agency (WTO) that would hand a single enterprise (RiceTech) the sole ownership of an ancient strain of Indian (Basmati) rice and, hence, global protection from both its long dead inventors and living cultivators?[See note 4]

Competition and protection are the twin means to maximizing profits in the world market place.  The more vicious the global competition, the more barbed the wire of protection that capital seeks.  At home, this has meant an increasingly punitive legal system, the narrowing of labor rights, policies that undermine labor’s bargaining power, welfare “reform,” and imposing conformity through fear-mongering about crime and drugs, much of it accomplished by an unholy partnership of the political establishment with the religious right.

In today’s global context, the more capital tears down old national barriers to trade and investment such as tariffs, state ownership, government procurement policies, environmental or labor standards, or developmental plans, the more it must seek domestic discipline on the one hand, and global protection for its products, profits and property on the other.  Typically, the protection capital seeks in today’s international markets is not within the nation, but against regulation by the nation state.  Hence NAFTA, Maastricht, WTO, etc.

What of the workers?  Those in the developed industrial nations have managed to accumulate a relatively decent body of national protection concerning hours, health and safety standards, collective bargaining, and minimum wages in some places.  But the majority of the world’s workers have never known such protection in practice, even where they exist in law, while those in the industrial countries are being dismantled day by day.

Although more workers across the world belong to genuine trade unions today than at any time in the past, the vast majority still remain outside this first and last line of defense.  With or without unions, workers everywhere face the reality that as the state leaves the business of economic management to corporations, markets and multilateral agencies, the more firmly does it erect new means of domestic discipline over and against the majority.

So far as “legal” international worker protection goes, John Sweeney summed it up about as well as anyone, “It is insane that under the rules governing worldwide trade today you can take action against a company for pirating a Madonna videotape, but you can take no action against a company for employing children, or using forced labor, or violating workers’ fundamental right, or poisoning the environment.” The International Labor Organization draws up international labor standards, but the ILO has no enforcement powers or mechanisms.

Is it any wonder that in a world of deepening international economic competition and insecurity, it is to national boundaries that many workers look for protection?  With trade unions typically on the defensive and internal national protection eroding under the regime of neoliberalism, the border with its tariffs, standards, potential taxes on speculation such as the “Tobin Tax” (proposed by economist James Tobin to dampen the volatility of financial markets), and, yes, armed patrols seems to offer a last line of defense.

The border easily appears as a natural part of daily existence to be “defended” against disappearing jobs, wages and conditions battered by international competition, industries sliding from under our feet, and communities in distress-although, in reality, the U.S. border itself has changed frequently within human memory.

As Dana Frank shows in her history of economic nationalism in the United States, Buy American,[See note 5] protectionism in matters of international economic policy is deeply rooted in the history of the country.  It has traveled the course from a “nonimportation” campaign against British products leading up to the American Revolution, to a deeply and cruelly reactionary current within the working class as well as society as a whole that led to the 1982 murder of Chinese-American Vincent Chin in Detroit, by a Chrysler foreman who thought Chin was Japanese.

The dark side of this working class economic nationalism, running from the anti-Chinese agitation of the 1870s-’80s through the anti-Japanese hysteria of the 1980s and the anti-immigrant scapegoating of the 1990s, has been fueled by its close cousin, racism, since the birth of this class in America.  It is a dagger pointed not only at the heart of foreigners, but at citizens of color as well. These twins energize the deepest divide within the working class of the United States as well as its separation from workers abroad.

Since the First World War revealed both the depth of nationalism in virtually every working class in the developed industrial nations with all its reactionary consequences, revolutionary socialists have been deeply suspicious of, and typically opposed to, any policy that was based on or inflamed economic nationalism.

The rise of fascism in the 1920s and 1930s in Europe and, today, of far right political parties aimed heavily against immigrant workers across many of the nations of the industrial North, one of which was recently elevated to partnership in a coalition government in Austria, has further sounded an alarm for the socialist left and for the labor movement everywhere.

As the anti-racist demonstrations of tens of thousands in Austria show, it is possible to confront such organized movements.  Here the growing harassment of immigrant workers, and ballot campaigns such as Proposition 187 in California that lend it legitimacy, have led the AFL-CIO to reverse its policy with a call for amnesty for immigrants in the country.

But what of the deeper consciousness that underlies the attraction of such movements?  What of the material circumstances that constantly renew economic nationalism and the appeal to the border as the last line of protection that is the “default” reaction to these circumstances?

Material Roots of Economic Nationalism

From a Marxist point of view, it seems obvious that the roots of economic nationalism have something to do with imperialism, and that globalization is at heart imperialism shorn of colonialism and dressed up as inevitability and the free market.[See note 6]

Nationalism, of course, like reformist ideology in general, has many deep, often complex roots in U.S. history and culture, but like much in the daily consciousness of all classes in society it requires material nourishment over time. While it is primarily capital that has benefitted from imperialism, its fruits have, over time, worked their way through the U.S. economy to benefit a majority of the working class enough to cement national loyalty and underwrite reformist consciousness.[See note 7]

It seems clear that for a quarter of a century or more following World War Two, the relative, though uneven, growth of working class living standards reinforced the belief that there was a close connection between living in the United States, being an American, and either experiencing more economic security than any working class in history or, at least, seeing the possibility of attaining that kind of material well-being.

This perception was not simply the complacent consciousness of the white majority, much less of some small labor aristocracy.  It was also in part what drove the social movements of the 1950s and 1960s, above all the African American civil rights and liberation movements.  Even for the excluded, the incredible wealth of the nation and the well-being of so many within it, offered hope-the potential of giving the myth of the American Dream some reality if only the visible barriers of discrimination could be dismantled.

Outside U.S. borders, however, only in a select few countries of Europe and the English-speaking settler nations could workers aspire to such living standards.  For the majority of the world’s toilers, the uneven world created by imperialism meant that the outer possibility was not the struggle up from poverty to prosperity, but only from misery to poverty, so long as the structures of imperialism (globalization) remained in place.

By the 1970s, U.S. and then world capitalism experienced an accelerating crisis of profitability and the deepest worldwide recession since the 1930s, both of which increased simultaneously capital’s movement abroad and its desire to tame labor at home. Yet it was almost a decade before capital’s offensive against the U.S. working class took on momentum and the living standards associated with U.S. international “hegemony” began to deteriorate visibly.

Within the unionized working class, the “Blue Collar Blues” and Black worker rebellions of the late 1960s and early 1970s were largely broken by the world recession of 1974-75-as well as by actions of the labor bureaucracy and the state.  The old collective bargaining institutions, occasionally helped by strikes, however, continued to be able to recoup economic losses for those covered by them until the late 1970s.

With the beginnings of real income decline and, at the same time, the first signs of an import “crisis” in the late 1970s, economic nationalism got a new lease on life, directing attention and activity toward “the border” and protectionism.  The “problem” was easily seen as imports on the one hand, and, somewhat later, immigrants on the other: foreigners, here or there, “taking” American jobs.

For years, as Dana Frank shows in detail, the unions put this message out to their members and the public in various “Buy American” campaigns.  Since imports were real, this view had credibility, just as it does in the case of China or the steel industry today-even if it could be demonstrated that more jobs were lost to domestic downsizing, lean production methods, new technology, and other homespun means of increasing profits.

There was more, however, for the impact of this crisis fell on an institutional setup that already encouraged economic nationalism.  When the CIO abandoned the fight for a broad class political agenda on questions such as housing, education, health care, pensions, unemployment income and mass transportation in the late 1940s, it turned instead to constructing “private welfare states” through industry-by-industry or company-by-company benefits bargaining.

This retreat both abandoned a broader class perspective and laid the basis for a new kind of economic nationalism unique in most respects to the United States.  It was an economic nationalism (and narrow political consciousness) in which the nation, the employer, and the union became intimately intertwined.  “What’s good for General Motors is what’s good for the nation,” was GM chairman C.E. Wilson’s capitalist view of the bonds of corporation and nation.

For the worker, whose health care, retirement and children’s future depended on company-provided, even if union-won, benefits (largely not available from the state in the U.S.), the union was a natural amendment to Wilson’s self-serving equation of capital and nation.  Even after the CEOs publicly broke the corporation-nation equation in favor of the new executive cosmopolitanism and investor globalism in the 1980s, the link between the nation, the company, the union, and the worker’s economic well-being remained imbedded in the negotiated “private welfare state.”

Furthermore, the deterioration of the benefits of that setup could easily be blamed simultaneously on the new cosmopolitanism of the corporation and the external threat of imports.  Hate the company for its betrayal of the economic nation, but defend it from the “outsider” in order to save your benefits.  Appropriate the flag to fight management, as so many strikes have, but look to the defense of the business in the protection afforded by the border.

Thus, we have the rise of an “Us versus Them” class consciousness, tied to an enduring economic nationalism.  This dual consciousness is not limited to the unionized workers, who are directly tied to these “private welfare states.” For the vast majority who accept capitalism as the natural order of things, the equation of company prosperity with national well-being is a long held, unquestioned assumption, drummed into the public mind day in and day out from the classroom to the “liberal” public radio station.

But the fact that those who are best organized and most capable of resisting are also the most directly dependent on the fate of the employer for their fragile (and dwindling) prosperity has long been a real restraint on both consciousness and struggle.  As we will argue, it is a dependency the employers go out of their way to break, but its persistence cannot be denied.

[The conditions tending to undermine economic nationalism, and implications for socialist activism, will be taken up in the concluding half of this essay.]

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Kim Moody is a staff writer for Labor Notes and author of An Injury to All and Workers in a Lean World (Verso).  This is the first of a two-part article.  It was written prior to the Houese of Representatives vote approving Permanent Normal Trade Relations (PNTR) with China.

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