Freedom of Labour vs Freedom of Capital

I read this thread on Plastic, about how a secret memo shows that IBM are planning to move huge quantities of their best jobs out of the US and into India over the next few years.

The big issue for me here is not so much the relocation of manufacturing and productive jobs from the core of an empire to peripheral client states. This has happened before (Roman Empire, United Kingdom, and so on) and will happen again.

No, for me the real issue is one of freedom of movement for labour versus freedom of movement for capital. Because of their many advantages, corporations are “gaming” the international political system to produce labour arbitrage. They have lobbied hard for their right to move capital between countries at will. What we have now is globalization that serves corporations, not globalization that serves people.

This is the fundamental ideological underpinning of this discussion. Corporations and politicians have structured a political system that implicitly and irrevocably favours the movement of capital over labour. Why should this be so? Could it be different? These are questions that need to be addressed. Different political movements are examining them in different ways.

Meanwhile, for ordinary people who, for the most part, have no greater or more fundamental asset to offer than their labour, their options are a lot more restricted. US companies send jobs south into Mexico with minimal regulation because of NAFTA, but Mexican people are not equally free to move their bodies north into the US. This unequal treatment creates the exploitative arbitrage that the corporations milk for profits.

This also explains a fundamental difference between the USA, NAFTA, and the European Union project. I’ve noticed most Americans really don’t “get” the EU because their expectations are constrained by NAFTA and the halting of the US expansion within North America.

At its core the EU project is very simple, but very powerful. It holds out the promise of regional improvement by granting freedom of access to a unified market for both capital and labour. As it expands, relentlessly it seems, it allows poorer countries to join, once they restructure their political, legal, and social systems to bring them into some degree of harmony with the EU consensus. In return for this social transformation, all the citizens of member countries can enjoy free and unfettered movement throughout all other EU countries. Very similar to the freedom of movement that US citizens enjoy throughout all 50 States.

This is a powerful lure. For all the talk of “old Europe” and “new Europe”, the former Soviet Bloc countries are not clamouring to create bilateral trade agreements with the US… they are fighting tooth and nail to join the EU, and so submit their trade relations with non-EU countries to the fiat of Brussels. This yearning for EU membership has produced and is producing massive social and political change across eastern Europe.

However, it seems that the US project has stalled at its current borders. I don’t see the US engaged in a determined effort to expand south, to create a distributed American citizenship that would be a beacon for social progress and political aspirations throughout the Americas. Immigration isn’t the answer: it’s tedious, socially disruptive, and over-regulated. Try opening the floodgates, as the EU has done for its member countries, and within a few decades the improvements in both old and new member States will be enormous!

But that’s a fantasy. People today in the poorer countries of Central America, so close to the US, nonetheless know explicitly that their relation to the US and the member States within can never be based on equality and access, but will instead be permanently structured as clientist and dependent. For many USians, the sheer idea that Honduras or Nicaragua could one day join the United States (if they met stringent legal and political requirements) is nonsensical, ludicrous, and vaguely repellent. Puerto Rico still languishes in an indeterminate, politically weak state many decades after such harmonization began.

So to end this discursion, within the EU all citizens are free to move. If a company isn’t paying you enough in Poland, you can move to Ireland and try your luck. This encourages companies to offer increased social benefits and working conditions throughout the EU. If it works on a common market of 350 million people, I say this is a good thing. Let’s expand similar multi-national citizenship projects across the world and see how it works for a market of 1 billion. Then 2 billion…