Behind the East Asian Miracle: Suppression of Worker Rights
In The East Asian Miracle, the World Bank team of economists hails the “High Performing Asian Economies (HPAEs)” and endorses the suppression of worker rights as a key component of their success. In Chapter 4, the study embraces what it calls the “Labor Trade-Off,”
In Japan, Korea, Singapore, Taiwan and China (and to a lesser extent Malaysia), governments restructured the labor sector to suppress radical activity in an effort to ensure political stability. Governments abolished trade-based labor unions and pushed the creation of company- or enterprise based unions…
…Labor movements in Indonesia and Thailand, while not subjected to systematic restructuring, were nonetheless routinely suppressed…
…Singapore courted foreign investment in labor-intensive manufacturing by suppressing independent unions and assuring investors industrial peace.
The World Bank team underlines one of the key advantages derived from the suppression of labor-namely, that it frees government bureaucracies to implement the economic austerity measures and wrenching structural adjustments that open the doors to private investment. This benefit is referred to as “Insulating the Economic Technocracy.” The study says,
While leaders have been authoritarian or paternalistic, they have been willing to grant a voice and genuine authority to a technocratic elite and key leaders of the private sector…
The study goes on to say that “insulation,” which enables technocrats to operate without interference from “politicians and interest groups,” has been achieved in the field of labor as follows:
…Reorganization of labor from industry-wide unions into company unions…has similarly reduced the marginal benefit and increased the marginal cost of collective action. Thus, in contrast with workers in many other developing economies, workers in the HPAEs are more likely to refrain from work stoppages and other disruptions and from lobbying the government for mandated wage increases. Because employers faced fewer demands from labor they, too, have had less incentive to press demands on the technocracy.
Finally, the World Bank team embraces the obvious, stating that the principal benefit of wage suppression is “higher profits” for private firms.
So, there we have the core of the reigning orthodoxy for economic growth through global marketization in the developing world: anti-democratic, anti-labor regimes suppressing wages to benefit private business and foreign investors. Call it market authoritarianism. It is a system in which people, their political and civil rights denied, are treated as inhabitants of global markets rather than citizens of nations. Deng Xiaoping pointed the way almost three decades ago when he told the Chinese people in a speech:
Ordinary people need not say too much; they should just keep their heads down and work hard.