Labor in the Global Market

Robert Heilbroner writes in his The Nature and Logic of Capitalism that John Locke’s servant, referred to in his Second Treatise on Government, is distinguishable from the Marxian proletariat by virtue of his ability to choose whether or not to enter into an economic relationship with his employer. Heilbroner alleges that this is the true difference between the capitalist and pre-capitalist economies of exploitation (that both involve exploitation he readily admits), this difference being that the servant enters into the serf-master relationship from voluntary action, and is thus not forced into anything. Now, despite Heilbroner’s denunciation of the conservative perspective on the capital-labor relation, he still attempts to distinguish between slavery proper and the wage slavery of the capitalist worker. This distinction is meaningless when real choice is an impossibility. All it takes to illustrate the lack of choice available to the worker in capitalist society is to take a look at the Chinese neoliberal experiment of the past two decades.

Inequality is where the problem of capitalism, as applies to the worker, begins. The Gini Index, which takes its cue from Corrado Gini’s statistical equation to determine rates of income disparity, showed in 2007 that the coefficients in the Asian nations had been growing considerably during the time at which their economies were growing, that is to say, that as the economies of Asia have grown, they have adapted neoliberal policies that, through their disinvestment in services for the poor, have resulted in inequality between the top and bottom of the social strata. The predictable result of these cuts in services is a slow but steady lack of options for the poor, as the labor pool begins to stagnate and provide limited selections of vocations for those with limited education and resources. The situation of the agricultural poor of China, whose forced migration to the cities was a natural consequence of the devaluation of rice production and increased industrialization coupled with cuts in assistance for the poor, is a perfect example of this reality coming to bear.

China is an excellent example of the negative impact of neoliberal policies on the populations whose leaders elect to follow them. The effects of China’s economic boom are deceptively positive for those in the country- so much so that it appears that the United States has been the loser in the trade gap. This is slightly, but only slightly, true. The United States-China relationship is very telling for students of neoliberal globalization policies, not the least because of the fate of the worker in both countries has been extremely compromised by the new reality of the global market. The global market, the globalization of economy around the world, has had the outcome of mobile capital that can pick up stakes at will. What the mobile capital’s motivation is, in general, is labor’s audacity to demand, as inevitably occurs, some measure of freedom and recompense. China is unique in this regard in that while its economy can be perceived as capitalistic in nature, its government is antithetical to the capitalist model. There is no freedom to speak of in China, at least not as is thought of by we in the West.

The concept of pro-poor development is one that is used by globalization’s neoliberal apologists as vindication of global capitalist economic expansion. But as John Miller writes in his article, “Inequality Worsens Across Asia”, in Real World Macro, the threshold for being named a pro-poor growth of economy is embarrassingly low. Thus, as Miller illuminates by a quote that is the equivalent to the rope one hangs oneself by, the Asian Development Bank can say that “increases of inequality are not a story of the ‘rich getting richer and the poor getting poorer’, rather it is the rich getting rich faster than the poor”. This is what qualifies as pro-poor development in the neoliberal vision of economic growth!

But now to return to Heilbroner and Locke, and to undertake tying all these threads together. Let us take, first, the quote from Locke within the Heilbroner book. “The grass my horse has bit, the turfs my servant has cut, and the ore I have digged in any place… become my property without the assignation or consent of anybody”. The emphasis is added by Heilbroner to drive home his point of the freedom the worker in a capitalist society ostensibly enjoys, to illustrate the contractual agreement the entered into unaffected by any coercion. Yet, China, and, to an extent the rest of the developing world displays the lie of that ideological point. If one was truly free to choose one’s occupation and employer, then the inequalities we see in the Gini index would not exist, the market for labor would reflect what everyone could compromise on in the perfect market system, in other words, their would be relative parity between the upper and lower classes. In other words, the Gini index numbers of the globalized world would skew towards the equality side of the equation- if the neoliberal viewpoint was based in any factual reality.

The idea of freedom of the worker, the idea of capitalism and slavery or forced labor being so distinct because of hardly quantifiable differences of contractual freedom, which exist fully in the theoretical sphere, is a fallacy which is long overdue its overthrow. Even Heilbroner, a giant of economics this student has incredible respect for, cannot help but endorse this tired view. So the question then becomes how to change the perspective. The ideal is a revolution of terms, a revolution of concepts and theories by which we can change and inform the mentality of the people. This won’t be easy. But the alternative won’t be any easier.