TRANS Nr. 16: Pietro Merli-Brandini (Rome): How to preserve social cohesion in an era of uncertainty and unsecurity

Globalization tends to continuously spread from the national to the international marketplace. A phenomenon which translates itself into an out- and an in-flow of investments from a set of countries to another set of countries. It is simply for the sake of self-protection, therefore, that "delocalization" and "outflows of Foreign Direct Investments", tend to be rejected by workers and their unions all over the world.

But, countries which delocalise, can try to compensate their losses by creating attractive conditions for capital inflow in new sectors where new type of jobs might well grow.

Another fact must yet be considered: that, as far as the mobility of capital and of labor, is concerned globalization’s effect are certainly asymmetric.

Capital is much too mobile, working people not. And he consequences of such a fact are heavy, in terms both of restructuring and of personal and family adjustment.

Theoretically, reducing social costs demands measures capable of controlling (regulating) the speed of capital mobility. The so-called Tobin tax is a good example of a possible way to cope with the problem.

And Stiglitz’s proposal for a bankruptcy law to help developing countries cope with financial creditors goes, more or less, in the same direction.(1)

A set of measures helping increase labor’s propensity for mobility might help provide the balance needed to reduce social costs. Active manpower policies of the so-called Scandinavian type are a good example of such possible measures.(2)

In any case, any possible improvement of such a situation seems to imply as essential an attentive and timely consideration, and then deliberation, among and by social partners.

The impact of globalization on the relevance and applicability of national (and supranational) regulation is also very strong. Many are the rules that have become obsolete. Therefore a set of new rules appear necessary. Over the last, few decades, regulations have changed in many sectoral markets. Energy, telecommunications, air travel, food safety, financial services, have been the sectors more involved in privatization and liberalization. There is no doubt that unnecessary bureaucratic costs of regulation are a real brake on the economy both at the European Union and national levels. Complex legislative jungles and bureaucratic costs must be drastically reduced. The deregulation spreading under globalization, leaves an empty space, which otherwise will and is being filled by multinational or other "strong" powers. Here, the need to restore a balance is of vital importance.

In other words, a more attentive social orientation of globalization implies a new approach, a new type of international regulation whether mandated by law or by agreement. The concept of subsidiarity, both vertical and horizontal, is clearly involved. Governance and Government procedures must also be improved. International rules and jurisdictions can provide equity, first of all for the weaker subjects of our societies, the poor and working people, and grant some balance of power among different types of interests. A definite priority is that of warding off monopolies and other kinds of market exploitation.

Social problems, their nature and the need for

As Prof. Hepp stated, the main consequences of globalization are instability and deterioration: various forms of wear and tear of the social fabric. Social uncertainty, insecurity and precariousness have now become prevalent also in many developed countries. Germany, France and Italy are particularly stressed by the present evolution.

How do we face social instability and uncertainty? Can we actually confront such problems at the sole national level? Is it sufficient to go only for a strong defence strategy?

Can we defend ourselves from the inferences and interferences of global economic political and social pressures through protectionism? Or, is it true that protectionism, an inevitable necessity for a totalitarian State, cannot be invoked by a democratic State? It is in effect risky to move in this direction.

In effect, after the second World War, Germany and Italy readapted their regulating framework opening themselves to a social market economy.

Through the adoption of such a strategy and their opening to the external context, Germany in particular did reach full employment, built up an excellent welfare system preserved from the disturbances and troubles of uncertainty. The problem we have to-day is similar to that of yesterday.

Any solution cannot be based but on a new mix of national policies and of those emerging in the international markets.

Social goals and social action in the global era

Globalization defines a new era, imposing a rapid process of change without much consideration, or none, for associated and related costs. The economy is affected by major changes, mainly because of technology and through knowledge. Changes are fundamentally of the the international kind.

In conclusion, changes involve and affect culture and behavior, rules and governance, economic and social structures. They impose a transition from a national oriented system of thinking to an international one. Which is not easy, by far, for millions and millions of human beings.

All of us, today, must face the problem: accept the costs of change in view of possible opportunities, or refuse but, then, just as possibly run the risks of deteriorating conditions, material and immaterial? These are central questions of our time for any and all national economic and social systems. The answer is difficult, above all, for countries with a prevailing conservative attitude.

In my view, it is more profitable to face the costs of change, than resist. The evidence, in most developed countries, shows that they, more or less, accept changes.

"Panta rei", the "permanent shift" in Heraclitus’ words, is a truth, a reality which cannot be avoided. In other words, if there is no positive alternatives, the ones that are available are negative, inevitably equal decline.

The emerging social problems in the developed countries may be identified as follows:

Use education and mobility as the most appropriate instruments: education must produce skilled workers to cope with knowledge and with technological progress;

cut red tape by deleting obsolete laws and bureaucratic procedure: it is necessary for competitiveness and growth;

Concerted action among parties and governments on economic and social problems remains a basic tool for social progress.

In developing countries the birth of trade unions and their cooperation in national as well as in international union associations is a pre-condition to their economic and social take-off. Education and training are always part of union programs.

This is the beginning of enhancing and starting social legislation and collective bargaining, and this is the socially based commitment of unions.

Unions in developed and developing countries must also learn to delegate to international unions part of their power, in order to reinforce social dialogue with the I.M.F., the World Bank, the World Trade Organization, the International Labor Office.

Only organized labor has the status and historical experience necessary to represent and promote working people’s interests in wage, conditions, welfare, and employment advancement through rapid economic growth.

In the end, only when and if globalization becomes conditioned by social dialogue at both national and international levels, in a climate of mutually negotiated and therefore accepted adaptation to change, social goals of equality and justice for all will not be an utopian goal any more.

(2) T.L. Johnston, Economic Expansion and Structural Change, A Trade Union Manifesto - George Allen & Unwin Ltd, 1963.

For quotation purposes:
Pietro Merli-Brandini (Rome): How to preserve social cohesion in an era of uncertainty and unsecurity. In: TRANS. Internet-Zeitschrift für Kulturwissenschaften. No. 16/2005. WWW: http://www.inst.at/trans/16Nr/01_3/merli-brandini16.htm

How to preserve social cohesion in an era of uncertainty and unsecurity

Globalization, shift in economic structures of labor institutions

Social problems, their nature and the need for

Social goals and social action in the global era