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Globalization or Corporatisation: Labor and Social Forces in the Global Political Economy

Jeffrey Harrod

International Studies Association
March 1998

Abstract

This paper argues that contemporary power relations in core societies have shifted dramatically in favour of the corporation. Such a shift has called into question the role established for organised labour and governments which had been involved in triparatite power relations for the last four decades. The evidence of corporate power is strong enough at the level of the global economy to argue that the central discontinuity in so-called globalisation is the increase in the power of multinational corporations. However, more important, is the increase in domestic power in core economies, although here the evidence is weaker. Distinguishing between markets, capitalism and the corporation the latter is seen as large powerful producing organisations in oligopolistic positions increasingly driven by organisational dynamics. In the exercise of direct and indirect corporate power new rationalities, new social forces and new contradictions are produced which create the arena in which organised labour and other such contenders must operate.

Introduction

(1) Organised labour has consistently been given the position of a social force involved in the change and development of the nature and structure of discrete societies or social formations. It has therefore been considered as having a substantive impact on the development and direction of the global economy and contemporary history. Organised labour has been a key component in the theories of successive stages or models of capitalism and the hegemony of different production and regulation regimes which were associated with dominant economies. (eg. Rupert, 1995; Berger & Dore, 1996; Ruigrok & Tulder,1995)

In the early part of the century labour was considered as a "sui generis" social force opposing capitalism and creating a labour (social) movement with the stated object of changing the system through its own social power. In the 1930s a process of legitimisation of organised labour (which had been heralded earlier at the global level by the foundation of the tripartite International Labour Organisation in 1919) in the core economies. The acceptance of Keynsian economic control in the 1940s consolidated the dominant power relations which surrounded mass production into the form which became known as tripartitism.

Tripartitism ended the notion of the labour movement as a free, spontaneous (if not chiliastic movement) arising from a reaction to dire material conditions. Organised labour became an institutionalised social force dependant on, associated with, and interacting with other centres of power.

Viewed from a material - realist position it would appear that the power of organised labour was sufficient to force recognition by the two other dominant powers in core economies - the state with government as its organisational manifestation and capital with the corporation as its organisational form. The trade union became the organisational form of the power of labour and the tripartite constellation of union - government-employers was thus consolidated.

Within this relationship there were substantial differences of power and behaviour. It has been these differences which have produced the different models of economy and society within the tripartite framework. Thus the "social partner" model is one where corporate power is constrained by norms of cooperation and accomodation promoted and reinforced by the state. (Albert,1991) The so-called anglo-american model in which the relations are more contentious or conflictual rests upon an assessment of the potential powers of the "partners". (Thurow,1992) These forms of tripartitism appear in the literature under the heading of neo - corporatism or social - corporatism

Clearly the pattern of power relationship change if one or other of the powers substantially increases its power to the elimination of one or both the others. The pre - existing pattern has been transformed as, for example, when the state presiding over a declared or undeclared system in which the corporation and the worker organisations were essentially dependent on state power - so-called state corporatism. This brief, and therefore inadequate, review of the power relations of tripartitism has been presented for two purposes 1) to emphasise that organised labour must, in the contemporary period, always be considered in power relational terms and 2) that the contemporary transformation of power relations in the past decades declared as "the decline of organised labour" or of the "disappearing state" could also be seen more as the phenomenal rise in the power of one of original (contained) powers in tripartitism - the corporation.

Considering organised labour in power relational terms means that other power entities are equally, if not more important, as the study of organised labour itself. For this reason the remainder of this paper will be devoted to first, a discussion of the structural change in power relations in contemporary core political economies, second, a consideration of the power of the corporation and the emerging ideology of the changed structure. A note is made, In conclusion, of the emergent social forces of the contemporary situation.

From Tripartitism to Enterprise Corporatism

There have been historical periods in which corporations have achieved near predominance in core economies - in the British colonial period and in the USA in the first part of this century. (Korton,1995) In both these cases dysfunctions, and the social forces they engendered resulted in the emergence of different power elites if not as counter forces at least as competitors. In the postwar period, however, it was in Japan that there developed a pattern in which the social force of organised labour was absorbed within the corporation rather than impacting the state and nation. This is the pattern of power relations in production which Cox (1987) and Harrod (1987) referred to as enterprise corporatism. It was characterised by substantial corporate power, enterprise worker organisations with weak national bargaining power. Such a pattern was dominant as it set the material conditions for other patterns, especially the surrounding production found in small enterprises in which the largest proportion of the labour forces was concentrated.

The power relations between management and employees within the corporation was organised though a combination of material incentives, including security of employment, as well as normative rewards for loyalties to the corporation. This pattern implied an oligopoly position of the corporation which could therefore distribute internally the "rents" gained from oligopolistic pricing. This in turn required an acquiescent state unprepared to effectively enforce competition rules or public interest price regulation. Enterprise corporatism as a non-dominant form had existed in large corporations in the USA since the 1920s and could also be found in Europe. While the European corporations remained enclaves within a tripartite neo-corporatist macro level framework, the USA corporations often developed bipartite relations in which the organised labour linked to national unions bargained with a single corporation and then extended the result across other large corporations. In both these latter deviations the dominant power of the tripartite system remained intact.

In the 1980s this basic structure of the social formation began to change. It is not in the scope of this paper to analyse the origin and trajectory of this change but it should be footnoted that the origin can be found in the beginning of a period of lower rates of economic growth in the 1970s. The slower economic growth upset the distributional patterns of tripartitism and pushed organised labour to use its power as a veto against unequal redistribution. The result was inflation as the relationship between unemployment and reduced inflation was weakened. This inflation set off a chain reaction, including, for example, the oil price rises of the mid-1970s, which profoundly affected the contemporary history of the global political economy.

The result of this transformation has been the replacement of the competitive coalition of organisations of tripartitism with the predominance of the corporation, or from a situation in which tripartite power relations were predominant to one in which enterprise corporatism is predominant.

The new structure of power relations will result in changes within the institutionalised social force of organised labour, the development of new social forces and, in each case, a change in strategies and tactics of both. It therefore becomes important to examine the nature of the transformation and change and this is perhaps best evidenced by the development of the power of the principal organisation of the corporation, internationally, nationally and its associated ideologies (rationalities).

Disguising Corporate Global Power: Globalisation

Most accounts of globalisation point to an allegedly increased pace or size of economic activity or a change in the notion of space and time. However, the economic and statistical evidence are produced by inter-state organisations in the form of state-derived statistics often in turn derived from national balance of payments data. Such a practice disguises the role of the major non-state organisations of the global economy. Thus to refer to "international" trade when 70% of global trade is controlled directly and indirectly by corporations is misleading: it should be intra or inter corporate trade. A more critical examination of the three corporate-associated areas of economic "globalisation" - investment, trade, and markets - suggests that so-called globalisation is in fact a substantive increase in power of the corporation over key inter-state transactions - in short the corporatisation of the global economy.

Foreign Direct Investment (FDI) or Corporate Foreign Direct Investment (CFDI)

Global statistics on investment are represented as foreign direct investment. Corporations with subsidiaries abroard, or establishing subsidiaries abroad, account for over 90 percent of so-called FDI. As with the trade example mentioned above, a more accurate definition therefore would be Corporate Foreign Direct Investment (CFDI). Corporate foreign direct investment may be defined as that investment in direct production facilities in countries outside the headquarters' countries. In general, most multinationals still have more than 50 percent of sales and assets in the countries of the corporate headquarters, thus their global spread is still seen as an "export of capital". The substantive change in the corporate foreign investment pattern occurred almost 10 years ago. Corporate foreign investment had been running at an average of about $50b per year between 1981 and 1988. Yet in 1988 the total was $168 and since that time has been around the $200b moving to $350 by 1996. (World Investment Reports, 1994 1995, 1996, 1997)

It should be noted that this change did not originate in the corporations' search for cheaper labour because, until 1993, the bulk of this increase was towards other high- wage and industrialised countries within the main headquarters' countries. The USA was the main target for foreign corporate investment throughout the 1980s. The incentives for this investment were based on lower investment risks, protection of global market shares and alliancing in anticipation of regional arrangements.

The corporations headquartered in the USA, France, Germany, UK, and Japan and other richer countries of the North own 93 percent of all investment in the world. For the last three decades these companies have invested 70-80 percent in each others headquarters' countries.

Since 1989 this 75/25 proportion has began to change, mainly owing to the massive investment being made in 10 countries of Asia. By 1994, 40 percent of multinational corporate foreign investment was in countries outside the Triad. The more this proportion changes, the more it can be said that there is a "globalisation" of corporate investment, that is, the greater the spread around the world. The investment of the multinational corporations in the South, or developing countries, may have lower labour cost as a pull factor but this has, within the framework of globalisation ideology, been exaggerated. Markets, tax, and environment protection regimes are also of considerable importance.

This change in the proportions of multinational foreign investment has occurred only in the past seven years, before that time the investment outside the Triad had been falling, reaching its lowest ebb in 1984. This aspect of corporate power is volatile and dependent largely on political risk to investment. Thus, any social or political disturbances in China and South Asia could put the trend in a sharp reverse, as occurred in Latin America in the early 1980s.

There has also been an increase in foreign investment of multinational corporations headquartered in countries outside the Triad. South Korean, Indian and other corporations headquartered outside the Triad countries have been investing throughout the world. Although this is a new circumstance at the moment it still only represents an insignificant part of total world investment.

These changes in patterns of foreign direct investment do not usher in a new age of globalised production, integrated production or increased interdependency. The changes are neither extensive enough, mature enough or stable enough to justify a renaming of the world economy. (Hirst and Thompson) What is more important, however, that they do mean an increased corporate presence in the global economy and an increase in corporate power in "host"countries but equally a greater power over the international possibilities and constraints of governmental actions in international relations.

International or Intra and Inter Corporate Foreign Trade

One of the most cited statistics of globalisation is the growth in the volume of world trade which has exceeded world growth for the past six years.

There are three reasons for this: first, intra-regional trade, as regional trading arrangements become effective regional trade increases and the internal trade between the EU, NAFTA, Mercosur countries is registered as international trade; second, integrated world production of multinationals means that there is more transhipment of intermediate goods between subsidiaries and; third, increases in exports of manufactures from industrialising and low-wage countries.

These developments, however, have not meant that there is a more even spread of trade. Trade has become "more concentrated" in the last two decades. In 1992, 74 percent of world trade was "between" the Northern, rich OECD countries. In 1994 this figure was 77 percent. (UNCTAD, 1995)

Furthermore, the increase in exports from low-wage countries is volatile. Thus the World Trade Organisation reported, even before the financial and economic events in Asia of 1997, that there was a substantial slow-down of trade growth from Asia, including China.

What has really changed in the trade world is the increased control by multinationals. By 1994 it could be confidently stated that multinationals control 70-75 percent of world trade that is, 35 percent of world trade is between corporate affiliates either for sales or further manufacturing purposes and a further 35 percent is produced by the corporations for direct entry to the world market. (World Investment Report 1994).

Thus globalisation in the trade sphere is not so much the growth in trade nor the spread of trade but the increase in the power of multinational corporations over the substance, pattern and development of world trade.

Markets or Global Oligopoly?

The trends in corporate control of international trade have been accompanied by an increase in oligopoly. Almost all international sectors are now characterised by the dominance of five to ten multinational corporations which often control 60-70 percent of world trade output and 50 percent of world output in the sector or product. Nine corporations have produced 80 percent of world car tires and three of them (Michelin, Bridgestone and Goodyear) control over 42 percent. Six corporations, through strategic participation, control the prices of cement in major markets and in the agricultural commodity sector the concentration is even greater. Newer industries begin with, rather than develop, global market control. (Collins, 1997) Other multinationals share markets by detailed product line rather than by a category of product, thus for example, pharmaceutical corporations will each agree to specialise in one complex drug. Thus even though 25 pharmaceutical corporations control 53 percent of world market for prescription drugs, broken down by individual product the concentration is much higher. Any retreat of the state from market regulation merely increases the power of the remaining players. (Dombrowski and Mansbach,1997)

While the multinational corporations, as large domestic corporations, always had some oligopoly power the increased spread of investment and control over international trade consolidates the product market power within total global output.

The only contemporary global economic phenomena which appears to escape direct corporate power has been financial movements. The substantive growth in international financial transactions controlled by transnational banks and funds is perhaps the only discontinuity which cannot be "directly" ascribed to an increase in corporate power as opposed to that of transnational banks.

The Source of Corporate Power: Capturing the State

The increase in corporate power over international economic transactions is both clear and quantifiable. The more important question is whether this increase in power at the international level is but a reflection of a more fundamental shift in the power of the corporation in core polities. Such a shift would explain more easily the discourse concerning the relative decline in state power, the retreat of the interventionist state, the changing distribution of the funds held by the state for redistribution and the activities of inter-state organisations at the international level.

However, proving the importance of corporate power at the domestic level, especially in core economies which are not external capital nor trade dependent , is more difficult if there is to be some conventional adherence to minimal rules of evidence. There are several reasons for this. The first is the general difficulty in the study of power except when it can been neatly packaged into votes or mapped via sociometry. Second, predominant corporate power over the state and state policy is not legitimate in the liberal democracies and outside of the defunct or declining tripartitism; it therefore tends to be covert. Government capture is even more covert than market capture. Proof could only be precipitated by investigative research. Third, much of the work in progress of examining state-corporation relationships is subsumed under the state-market divide. This means that the corporation is not viewed in power or organisational terms. Much of the current material is provided by journalists and general audience writers rather than by academic researchers. (Korton, 1995, Greider, 1997) Fourth, unlike an examination of the activities of the global activities of corporations, which moves from headquarters to subsidiaries and subcontractors a global picture of corporate power in different states (social formations) would require extensive comparative research.

In the absence of such substantive and detailed work resort must be made to outcomes which would indicate the relative increase of the power of the corporation. Three such pointers would be:- 1 changing distribution of corporate returns internally and externally 2) establishment of national policies favouring large-scale production organisations 3) expression of corporate interests by state agencies at the international level.

Distribution of Corporate Returns

When corporations face relatively weaker power by both organised labour and the state it would be expected that returns would be taken in higher distributed profits and executive salaries rather than passing on the productivity gains to other stakeholders This is indeed the case - in all the major economies of the world there has been a declining rate of wage increases compared with productivity growth. Between 1977 and 1986 earnings increased up to three times that of productivity growth but between 1992 and 1995 the increase was l.3 times or no increase at all. In the case of the USA, for which more complete figures are available, since 1983 workers have not been receiving real wage increases at the same level as their increase in productivity. (Grunberg, 1996)

Conversely internal distributions have changed as a result of lower taxation and increased tolerance in relation to corporate and corporate derived incomes. There is some evidence to show that taxes and royalties payments to states have, compared with previous decades, been changed or unenforced in favour of the corporation. (e.g. Rutledge and Wright, 1997) Likewise, the weakening of progressive taxation systems cleared the way for internal profit making and the increase in salaries, bonuses, and corporation-derived benefits needed to service the growing power of the middle to top management beneficiaries. High "reward packages" are the norm even downstream from the high-media profile Chief Executive Officers in the USA whose average salary and bonus for the year 1996 was $2.3 million. That average, however, is dwarfed by the highest paid executives for 1996 which include, for example, Stephen Case of America Online at $27.6 million and Anthony Oreilly of H. J. Heinz at $64.2. million and in 1997 when the value of stock options and salary for Sanford Weill of Travellers reached nearly one quarter of a billion dollars. (Le Monde, 13 March 1998) Such packages are not necessarily performance-related as executives whose companies under performed by stock market standards still received their high salaries and increases (Business Week ,1997)

National Policies

If the modern corporation is a large-scale production organisation in an oligopoly position then national policies which favour such organisations against other smaller scale, social or public sector organisations would be an indication of increased power.

There are a number of policy developments in the last two decades which point in this direction. These include a state-induced weakness of competition policy and in consequence a tolerance by the state of oligopolies, historically high interest rates, state preparedness to absorb the cost of corporate restructuring and, privatisation. The increased state tolerance of size and of oligopoly has assisted the corporation to move to secure increased returns, not from selling more through the efficiency of lower prices or higher quality but by lower costs within the context of stable market shares and prices. Operating surpluses are secured from cost-cutting within stable or increasing prices rather than greater sales at lower margins.The market share strategy is a crucial one in the change and transformation of social formation. Nitzan and Bichler (1997) attribute such changes in corporate strategy as key to the collapse of corporatist structures in which the state was the predominant power, as in Israel and South Africa.

Historically high interest rates favour large-scale corporations with ability to raise capital though retained earnings. High interest rates deter small and medium sized business which also support the development of take-overs and oligopoly.

Corporations operating in a legal framework of social legislation have to pay the costs associated with that legal framework. Much of the labour and social legislation developed in the past 100 years manifests as an internal cost to the corporation as a condition of its functioning. The major expense of operating a traditional enterprise corporatist structure ranged from the extreme of "life-time"employment in Japan to the more modest internal labour market arrangements. The possibility of a cost-cutting (labour-shedding) redistribution from the bottom to the top of the corporate hierarchy could only be successful if the costs involved in the shedding labour were to be reduced.

The acceptance of flexible labour market policies raised the possibility to externalise costs. This was part of the dynamic towards changing the welfare state often presented as the "end of the welfare state". But the rhetoric of the decline of the welfare state is not strictly correct. In fact government spending on social security and welfare as a percentage of national income in the highly industrialised countries has decreased only in the case of the USA - in all other countries the expenditure has increased. Expenditure in Japan was 3 percent of national income in 1970 and 8 percent in 1980, in Germany the corresponding figures are 16 percent and 18 percent, and in the UK from 9 to 10 percent.(Bowles and Wagman, 1997)

In many countries what has happened is that there has been a "redistribution" within welfare expenditure away from life support for pensioners, the sick and disabled, towards those workers made redundant in the course of corporate cost-cutting and externalising of costs; from quality of life benefit to unemployment benefit. It is not that welfare expenditure has decreased but that it has not grown to keep pace with the changed operations of the corporations.

At the same time throughout the core economies since 1940 it had been accepted that governments were responsible for the maintenance of full employment. The higher labour costs involved were met with increased productivity and demand expansion. Such policies would hinder the cost-cutting, market share strategy and short term gains strategies of corporations. Now throughout the OECD countries, and despite protestations and rationalisations relating to market and technology, governments have purposefully abandoned active full-employment policies. From this perspective the reason for unemployment is simply the political decision not to sustain corrective policies (ILO, 1995)

Finally It is self-evident that privatisation policies favoured the further creation of more large-scale, often oligopolistic corporations.

States as Corporate Surrogates in Inter-state Organisations

It has been well accepted that the IMF and the World Bank which the governments of the five largest headquartered countries of multinational corporations pursue a package of policies the purpose of which is to open the economies to the world economy especially in terms of entry of foreign investment and increased activity in foreign trade. In the case of the World Bank, it is bound by its constitution, to further the cause of foreign investment. While the activities are largely connected with debt collecting (repatriation of the interest on southern debt has been higher than repatriated corporate profit since 1983) (Harrod,1992; Harrod, 1995) what is missed is that, as noted above, the world economy, especially in trade and direct investment, is managed by the corporations. Thus the policies of the IMF, although wrapped in a rationality of efficiency, in power terms present to the corporations disproportionate opportunities for expanded global activity and power in investment, trade and privatisation.

Perhaps the clearest expression of the state acting in inter-state organisations on behalf of the corporation is in the case of the Trade Related Investment Measures (TRIMS) and the Trade Related Intellectual Property (TRIPS) within the framework of the World Trade Organisation (WTO) These measures, it should be noted represent substantial departure, from free trade theory in which the use of trade as a sanction for matters which were "trade related" would have been rejected. But as important is that both foreign investment and patents - intellectual property - are owned by the corporations and are therefore central to corporate interests. In the event that a government (state) is in violation of investment measures and patent infringement the governments (states) may retalliate with trade sanctions. Thus the government uses its borders to enforce corporate interests. Significantly the other attempts to use trade as a sanctioning device - to enforce labour and environmental standards failed to be accepted; such labour and environmental trade-related sanctions as these would have benefited, in power terms, organisations other than corporations.

The argument that there is a collective national benefit from these activities which would require the state to act needs to be carefully considered. (Krugman,1996) Apart from the lack of a "trickle down" effect from trade originally so important in development studies (ILO,1995) there are some prima facie statistical mismatches. For example, Italy and the United Kingdom have almost the same population, GDP and volume of trade yet the total United Kingdom headquartered corporations have four times the ownership of direct investment external to the UK than the Italian external to Italy and the UK host to four times the level of investment from foreign headquartered corporations than is the case of Italy. (World Investment Report 1996). Compared with Italy then it is difficult to see the benefit to the UK population of the international activities of its corporations unless it is that there is an unknown lack of efficiency compared with Italy which is made up by extraction from the rest of the world.

The purpose of noting these examples is not to suggest that corporate power is proven in each case but that the current structure of the world economy and the nature of the policies sought by states in inter-state organisations is such that there is a logical need to investigate the relationship more than is currently the case.

The Corporate "Rationality": Reification of the Market

Different structures of social formations are associated with different ideologies. In discussing the so-called ideology of corporate domination I prefer to use the concept of a "rationality". Rationalities are mental constructs which attempt to induce an acceptance of the exercise of power which otherwise might be unacceptable. Rationalities explain the unexplainable, excuse the inexcusable and offer a refuge for those who do not wish to deal with or confront power - often by denying its existence. (Harrod 1987 p.33)

In using this concept I am aware that such a perception of politics and social reality is a constant, in one form or another, of almost all who have considered the nature of society and governance. A rationality may be a Weberian unauthentic legitimisation, a Coxian "typical way of perceiving and interpreting the world" (Cox 1987, p.25) a Foucauldian "governmental rationality" (Gordon,1991; Foucault,1978), a dominant discourse or in the words of Hans Morgenthau "those that seek power employ, as we have seen, ideologies for the concealment of their aims. What is actually an inspiration for power thus appears to be something different, something that is in harmony with demands of reason, morality and justice." (Morgenthau, 1967, p.219.)

If there has been a transformation of core social formations in which enterprise corporatism or a variation of it has become dominant this in effect means a transfer of power over the social economy from political elites to corporate elites. Further this means that the dominant institution in the contemporary world is the corporation. Dominant organisations or institutions which are the principal sources of power produce rationalities from which governing norms are derived. If there has been a succession of dominant institutions ranging through the church, the state and now the corporation then the rationality of the church was an all powerful deity and that of the state the all powerful will of the people. In both cases the logic of the rationality was that the state and church were instruments of a higher power and that power would produce a power-explaining rationality.

In contrast to the church and state , the corporation cannot itself easily construct a rationality at the macro level. There is no theology nor raison detat for corporations. The extant corporate rationality of neo-liberalism is incomplete for although it seeks to hide the source and exercise of power it can produce little convincing or socially persuasive constructs to rationalise arbitrary inequalities. Thus neo-liberalism postulates the "market" as the all-powerful source in analogy to the church and state with their deity and popular will respectively but the essential element of rationalising the stress-producing illogicalities concerning distributional justice is lacking.

The rationality of corporate power is the reification of the market. It is a weak rationality inasmuch as it not only denies the source of power but power itself, something that theology and raison never did. Further, lacking a macro level appeal it must still use the nation state and the institutions of the nation state as a shield thus creating the current confusion as to the function and power of the state. On the one hand the state produces the macro level norms of justice, equity and equality, on the other hand it is used to disguise the power which is incapable, even under the best possible governing scenario, of producing any of these.

Thus at the level of the rationality there is a contradiction which contains the seeds of future changes and development. Other contradictions arise from the development and changes of social forces inherent in a transformation of power relations.

Social Forces and Corporate Power

For Cox the crucial universal is "the organisation of production, more particularly with regard to social forces engendered by the production process" (1981:138). Such social forces would be relative to the type of social relations surrounding production. What was of importance with this concept was that "social forces" did not necessarily mean a "working class" as in the two-class marxist model of capitalism or blue-collar workers in tripartite structures. Thus Cox notes: "the scientific humanist elite as distinct social forces" (1987: 206). Further, I tried to show the importance in social change of social forces arising from, for example, production centred on self-employment, casual work and household services production. (Harrod, 1987)

In contrast to the view that social forces arise explicitly from different power relations surrounding production which has been the view of past and contemporary scholars and writers, both marxists and non-marxist, many of those opposed to the policies of neo-liberalism and globalisation seek counter-hegemonic forces within civil society. They seek movements in perception and behaviour leading to empowerment and reformed democracy. They point to already established movements identifiable in the form of established organisations such as the environmental movement or human rights or the networks, norms and ideology which are the external manifestations of the womens movement. (Gill, 1996; Mittleman,1996, Cheru,1997) While it is conceivable that such movements and issue groups will substantially affect the state, their direct links to the power relations of production and thus distribution are weak or non - existent.

What needs to be undertaken is an examination of social forces which will reinforce challenge, change or divert the current development of the bipartite state-corporation relationship. For example, one such potential social force is the diverse stratum of professionals previously subscribing to professional rationalities - this emerging "power elite" has been identified in the work of Perkin (1996), Reich (1991) and Wright (1997) although for different purposes and with different conclusions. This is a strata materially dependent on the corporation but not in the manner of an employee with no competing possibility of income and rationality. The contradictions upon which much of the social events and cultural products are now concentrated are the exercise of corporate power with no other rationality than efficiency and legitimate profit-making and the rationalities of norms of justice and equity in law, propriety in accounting, ethics in medicine, method in science and professionalism in consultancy. As these latter groups move further along the line, which starts with service and ends in extraction, the techniques to secure returns change. The emerging technique is the restriction in the available information and its concomitant of inflated complexities in professional discourse - only the insiders know and understand.

Likewise, emergent social forces can be seen in organisational terms as much as traditional distributional terms the social differences arising from corporate practices relating to security of employment and sub-contracting. These discussion and investigations are under-developed largely because a consensus on the real nature of the current power relations has yet to be developed.

Organised Labour in a Changed Social Formation

The purpose of this paper has been to sketch and make suggestions concerning the changed power position and emerging social forces and rationalities with which organised labour and other formal or informal social organisations must deal. It is a matter of policy how this may be effected. Changed power relations as suggested above, would in any case, require a change in policies, attitudes and relationships with such standard labour issues as labour law, solidarity, protectionism, nationalism, worker participation, company unions, staff regulations, content of collective bargaining, industry loyalty, and corporate responsibility must change.

Organised labour must now deal with a system which yields material returns which is driven as much by an organisational, if not bureaucratic, dynamic. In this new situation it remains the only entity which has access to the inner dynamics and information of the large-scale, bureaucratic, corporations which dominate contemporary society.

The rise to national and international power of organisations which have a single criteria of output, producing disproportionate benefits for those who manage them and those who are managed, increasingly immune from democratic processes and institutional expressions of collectivity, not being asked or forced to consider longer - term, social, environmental or equity issues is the single most important, economic, social and political fact of the last decade of the 20th century.

Notes:

Note 1: Parts of this paper have been taken from two unpublished papers:

(1) J. Harrod "Globalisation and Social Policy: The Corporate Impact", presented at the British International Studies Association, December 1997.

(2). Harrod "In Defense of Real Realism: Unmasking Power in the International Political Economy", February , 1998; and from Harrod,1996 Back.

References