Vol. III, Bulletin No. 19. October 22, 1998
International Monetary Fund (IMF) Recognizes Labor Standards
At Long Last Seeing the Light, or a Bit of It
Two words. Just four syllables in all. Yet there they were in a public statement of the International Monetary Fund, written by people who almost never talk that way.
The statement came from the IMF development committee, composed of the world's mighty ministers of finance and central bankers, gathered in Washington, D.C., early in October for the annual meeting of the governing boards of the IMF and its sister institution, the World Bank. Shaken by the global economic crisis, the assembled financial "mandarins" (as the New York Times called them) now were willing to entertain new thoughts. And so, among other things, they gave their blessing to...labor standards.
The development committee, chaired by Thailand's Minister of Finance, emphasized the need for "concerted actions...to help countries to bolster their structural and social policies and institutions," among other ways, by "strengthening social protection." So they called on various international agencies, including the Fund, the World Bank, the United Nations, and "other partners" to work together"to develop general principles of good practice in structural and social policies (including labor standards)."No details, and just two words subordinated within parentheses. That may signal a change in direction. Or it may be only a small verbal concession to intensive pressure from the outside, including the mounting reluctance to provide taxpayer money to international institutions caring more for markets than for people.You can read the IMF Development Committee's press release at http://www.imf.org/external/np/cm/1998/100598.htm.A Malaysian's Advice on New Global Architecture
It's all the rage in financial circles.
Hardly a week passes now without some big shot calling for a "new global architecture" for finance. Disagreements on its design abound. But financiers do agree on one thing: that the new architecture would, above all, guarantee more security and better protection to financiers and their wealthy clients.
Not so fast, says a trade union leader from Malaysia. G. Rajasekaran, secretary general of the Malaysian Trade Union Congress, is all for architectural changes. But he insists that those changes must include a "social dimension," one in which "working men and women could begin to have a fair share of the benefits of increased trade and investment."
One key to achieving that, he argues, is to universalize the basic rights of workers, formulated as "core labor standards" by a UN agency, the International Labor Organization. Another key is to involve both business and labor representatives "in the formulation of social policies that would ensure that working men and women benefited from the wealth generated by free trade."
Rajasekaran presented those ideas to a seminar on labor standards held during the annual meetings of the IMF and the World Bank in Washington. He was there as a representative of the International Confederation of Free Trade Unions. The ICFTU, as Rajasekaran pointed out, issued "early warnings about the down-side of globalization" well before the economic crisis broke out in Thailand in July 1997.
There were about 50 people at the seminar where Rajasekaran spoke. There were uncounted thousands attending the IMF and World Bank meetings.
Unusual Insights into People's Republic of China
It's taken the media a good deal of time to awaken to a Chinese economist's revelations about the sad state of China's economy. Oh, well, better late than never.
Now comes the Washington Post's John Pomfret with an October 20 Style section feature on He Qinglian, author of a Chinese-language best-seller titled "China's Pitfall" in Hong Kong and "The Pitfall of Modernization" in Beijing. (See Ending the Cover-Up About China's Economy in the Oct. 1 issue of HRFW.)
Pomfret followed Ms. He, who lives in Shenzhen near Hong Kong, all the way to Xian in northwestern China, where she was attending a bookfair. Most of the article is about the success of her book, but it does capture some of her substantive insights. For example, Pomfret quotes Ms. He's criticism of people who believe that "as long as China's economy is growing, things will work themselves out." Pomfret quotes her as follows:"These people spend a lot of time looking at figures. Things go up, so they think things are better. They need to spend more time looking at who is getting what,...how power is used or abused."Pomfret comments that "her book constitutes a powerful challenge to many American China-watchers and business executives who have made careers out of convincing people that all is generally well in the People's Republic."
Who might these deluded China-watchers be? No one from the media, of course.
Diary: There's Hope for the World After All
At a time when I felt disheartened about depressing news from Asia and Africa, I heard some heartening news. Amartya Sen, professor emeritus of economics at Harvard, had just won the Nobel Memorial Prize in Economics! And he got it explicitly for having "restored an ethical dimension to the discussion of vital economics problems."
"Wow," I said to nobody in particular. The news wowed me because, in following his work over the years, I had come to see him as a giant in a profession overpopulated with pygmies dedicated to teaching, preaching, and practicing market amorality. Pope John Paul II once called that the error of "economism"--giving economics, or markets, a much higher value than people.
Sen became my personal candidate for the Nobel prize after I read an article about him in the New York Times titled "The Conscience of the Dismal Science." It was January 1994, and he had just been chosen as the president of the American Economics Association. In a letter congratulating him, I wrote that his election "restores my faith in the economics profession, or at least in its potential to do some good for humankind after all."
I asked Sen whether he had done any writing that specifically "contradicts the widespread notion that individual rights are a luxury that poor countries cannot afford." In his reply, he thanked me for an article of mine on child labor that I had sent him, and enclosed an article of his own, "Freedom and Needs," published in The New Republic.
Later that year, I faxed him at Harvard asking for an interview when he would be in Washington, D.C., to preside over the annual Economics Association convention. He personally phoned me upon his arrival to say sorry, the association staff had already booked him solid from early morning to late at night. We talked about my visiting Harvard to interview him, but, regrettably, I never followed up.
In an age when economists are bestowed the kind of esteem and veneration once accorded to saintly theologians, it is reassuring that an economist with a conscience can win a Nobel.
Waving the American Flag Over Imports
Out of the 895 surveyed apparel products sold in Wal-Mart stores across the United States, 80% are made abroad in 43 countries. That was one finding of a report on Wal-Mart made by the AFL-CIO Food and Allied Services Trades Department and the United Food and Commercial Workers (UFCW).
Douglas Dority, UFCW president, charges that Wal-Mart's "Buy American" ad campaign, with its saturation use of U.S. flags and patriotic slogans, misleads American consumers into thinking they are buying primarily American-made products. He has written the Federal Trade Commission and the attorneys general of all 50 states urging an investigation of Wal-Mart for possible violations of deceptive advertising laws.You can read the full report, "Wal-Mart's Buy American Program: Using Patriotism to Deceive the American People," at http://www.ufcw.org/wm.html.Human Rights for Workers: Bulletin No. III-19, October 22, 1998
Robert A. Senser, editor
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