Globalization and free-market economics made great promises to create a better life for everyone. Instead they have produced an economy that is increasingly unjust and unsustainable. Indeed, they have produced twin catastrophes — the economic crisis and the climate crisis. And far from being on the mend, each is getting rapidly worse.
“Labor, Sustainability, and Justice” presents a labor alternative for national and global economies. It reflects a common analysis and program worked out by labor movements and labor-allied economists from around the world. It draws on a collection of essays titled Exiting from the Crisis: A Model for More Equitable and Sustainable Growth released this April by AFL-CIO President Richard Trumka.
The Labor Network for Sustainability hopes this review essay will kick off a wide-ranging discussion of how to create a more just and sustainable economy.
Labor, Sustainability, and Justice
1. The Great Recession, which represented the deepest economic crisis since the Great Depression of the 1930s, was not an isolated episode, but rather the predictable result of the policies and dynamics of the last thirty years “” the era of deregulation and global capital mobility known as “neoliberal globalization.” Even as some declare the crisis over, the basic problems that resulted from those policies and processes remain, as do their devastating impacts on working people around the world.
2. While the solution to the problems of the global economy is often described as “growth,” and growth is generally measured by Gross Domestic Product (GDP), in fact GDP does not measure the well-being of people and society but rather the quantity of commercial transactions. It measures some things that should grow and other things “” like pollution-producing processes “” that we would be better off with less of. In order to evaluate whether the economy is growing in the things that we want and shrinking in the things we don’t want we need a new economic guage. Fortunately, there are models being developed around the world that we can build on to create them.
3. The era of neoliberal globalization has been an era of growing inequality and injustice. A key cause of the Great Recession and our continuing economic difficulties is that underpaid and underemployed workers don’t have the purchasing power to provide strong and steady global demand. Policies to increase the purchasing power of poor and working people are working successfully in some places; applying them worldwide will be a critical part of exiting from the economic crisis.
4. The global economic crisis has hit at the time of a still greater crisis “” the climate crisis. But saving the planet by transforming it to a low- carbon basis can be the motor that revives the kind of economic growth we need. A “global green new deal” can move the world toward full employment while saving it from climate destruction.
5. In the era of globalization, corporations have put workers, communities, and countries in competition with each other to see who will pro- vide the lowest wages, biggest subsidies, and weakest environmental regulations. The result is a “race to the bottom” in which the conditions of all are driven down and global demand is reduced. In response to the Great Recession, countries are desperately pursuing austerity and “beggar your neighbor” trade and monetary policies that aggravate the race to the bottom and produce a downward spiral of inadequate global demand. A global economy requires a high degree of global coordination to provide an alternative to such mutually destructive polices. Globally coordinated full employment policies and global protection of labor rights are essential for reversing the race to the bottom and the downward spiral.
6. The era of neoliberal globalization saw an enormous growth in the financial economy that stunted and continues to stunt development in the real economy. A series of policies ranging from regulation of banks and the “shadow” finance industry to taking some of the profit out of financial speculation with a “financial transaction tax” can help reduce the impact of this leech on the global economy.
7. Preoccupation with immediate short-term profits and stock prices has turned corporations into engines of unsustainabilty. New systems of corporate governance, accountability, and reporting are necessary to represent the interests of a wider range of stakeholders and to make them act in line with environmental, economic, and social sustainability. Expanding these systems is to the advantage of working people and the labor movement, especially if sustainability is defined broadly to include labor rights and the reduction of poverty.
8. Most current economic policies are continuing or even augmenting neoliberal globalization. They are not only failing to solve the problems that led to the Great Recession, they continue to make the climate crisis more and more catastrophic. The labor movement around the world is in a unique position to propose alternatives that are in the interest of the great majority everywhere. We need a lively discussion of an alter- native to the current economic and climate crises that can offer people real solutions as those crises affect them more and more profoundly.