Speech on Globalization and the Market--Knoxville

May 13, 2005

Dan Swinney

Center for Labor and Community Research (CLCR)

dswinney@clcr.org

www.clcr.org

Presentation at Global Studies Association

This is the outline of a speech presented at the annual meeting of the Global Studies Association at the University of Tennessee on May 14, 2005. There are greater details on all of the stories on CLCR’s web site www.clcr.org and particularly in the paper, “Building the Bridge to the High Road.”

Globalization and Market Power

It’s a privilege to speak to you this morning and to be part of this conference.

1. Introduction:

A. Main Points:

1) The Global Studies Association is a very important network of intellectuals that can have enormous impact in our intellectual communities and, in turn, our society;

2) I believe we are in a very volatile period internationally and domestically that has the potential for great change—either positive and progressive, or dangerous, destructive and reactionary.

3) To ensure that we move in a progressive way requires a social movement that has and fights for a contemporary transformative model for global change.

4) I’m going to argue for globalization—a High Road movement for international sustainable development that can successfully compete with the dominant Low Road and unsustainable model.

5) This model requires that we must contend for our program in the market as well as in the state and in civil society.

6) Our movement’s failure to organize and contend in the market is the main reason our movement for change remains marginal.

B. Personal Learning Curve: My life has fortunately spanned two periods that witnessed a growing international activist movement for fundamental change—the 1960s and today. My experience in the activist movement of the 1960s laid the foundation to what I believe today.

Now, like then, it wasn’t difficult to find something to oppose. There was the right moment for militancy and action—for resistance—whether it was against the war, the draft, the legal and cultural props of white and male supremacy, illegal repression, and the exploitation and abuse of working class people.

I had the fortunate opportunity to meet with members of the international community as well as the best domestic leaders of the civil rights movement in our country. The veterans were all praiseworthy of young activists like myself, but sober in their advice. The most profound lessons that I learned from my exchanges with the older generation was:

v If we were really serious about our opposition to racial oppression and these kinds of wars, we needed to change the fundamental policies of the US;

v Big changes require the support of the majority of people and that can take decades to build with patient and persistent work around a positive program the majority of people can come to support—and take risk to achieve; and

v There’s no short cut.

I’ve spent the last 35 years pursuing those objectives of fundamental change. Today, the need for fundamental change couldn’t be clearer as we see the devastating impact of neo-liberal economic and political strategies throughout the world and in our own country on people, their communities, and the environment.

In other parts of the world, resistance has and is being converted to system change. Yet in our own country, the social movement remains marginal despite deepening anxiety among the majority of our people. We see this in the movement against the war and globalization, in the environmental movement, in the electoral arena, in the struggle for democracy, and certainly in the labor movement.

C. The liberal and left influences that have marginalized our movement: I believe that a major reason for this marginalization lies in the powerful intellectual influence in the liberal and left community that:

v Is comfortable in being only opposed to the current model of development but fails to get about the work of creating a competitive model for sustainable development that is consistent with our vision of social justice. Finally, the mass of people are only willing to organize and take the risks that go with change if there is a practical, comprehensive, and positive alternative that is available; and

v Is an intellectual and liberal left that is uncomfortable with the market—seeing it only as the arena for the corrupt and greedy rather than a required terrain for our work.

This morning, I want to take you through my learning curve that has led me to believe that:

v The market is not simply synonymous with low-road capitalism;

v The simplistic generalization that sees the “corporation” as the enemy is the most destructive intellectual construct in our movement. It denies us critical alliances and diverts us from information and work that are fundamentally important and productive in building a competitive model to the neo-liberal policies. Of course, we have corporate enemies that must exposed and blocked; but there are important tactical and strategic corporate allies in the business community that we must align with and bring into our movement; and

v As a movement for change, we must prove our ability to successfully contend in the market as well as the state and civil society.

With the advice of the veterans of the late 60s, I made the decision to not attend law school, but to take a job in a factory to learn about productive work and how to organize working people—an obvious pre-requisite if you wanted to bring about system change. I spent the next 13 years as a production worker and in-plant organizer—8 of those as a machinist and union leader at Taylor Forge in Cicero, IL.

2. The Taylor Forge/GW story: I started working at Taylor Forge as a machinist in 1975 and organized United Steelworker Local 8787 in 1978. Taylor Forge was a healthy, family-owned company that was committed to the company and industry. Taylor was an inventor and we used many of the machines he invented in the company. There was a decent relationship to the workforce and the company was generally well-run. In the late 1960s, he sold the company to Gulf + Western (G+W). G+W was a pioneer in developing what are relatively common Low Road business strategies today. Their business plan was “milking the cash” cow or operating essentially like a slum-lord in the housing market. They took a healthy company and milked it dry—closing department by department as the impact of their refusal to adequately invest became apparent. In the course of their destruction of the company, they complained about foreign competition and labor costs and came to our local union asking for concessions in our wages and benefits. They closed the company in 1982.

3. We Formed CLCR in reaction to the crisis in manufacturing in 1982. Cicero—where the G+W was located—had lost 50% of its jobs in 6 years; and in the 1980s, Chicago saw 3,000 of it 7,000 factories close and a loss of 150,000 family supporting jobs. The huge social crisis resulting from the de-industrialization of our cities and society (now seen as “out-sourcing”) was seen as inevitable, due to “globalization” and “new technology” and beyond our control. The founders of CLCR knew that fundamental changes were taking place in the economy and society, that both the left and the right were equally superficial in their understanding of what was taking place; and that you needed an in-depth analysis based on solid research to determine what could be done for labor and community organizations in this environment, if anything. From being a union leader at Taylor Forge, I learned that opposition and accusation wasn’t enough to lead. In the crisis climate of the 1980s and today, workers will only follow leaders who knew the facts, not just depend on generalizations or slogans.

We are a not-for-profit consulting and research organization in Chicago. We work for unions, community coalitions, local government, businesses and business associations in very practical projects to save jobs and companies, as part of our broader commitment to develop a practical competitive development model compatible to our commitment to social justice.

We are small—anchored in Chicago, but work nationally, and internationally. Many of the components of what constitutes our “model” have been learned from international experience. Our manifesto, Building the Bridge to the High Road, presents our perspective in greater detail and can be found on our web site.

4. CLCR’s Learning curve in the Market

A. We needed to deeply understand what was going on in particular companies and communities to come to our own decision as the basis for proposing action, if any;

B. Looked at hundreds of companies in crisis;

1) We saw some that should close—such as slide-rule manufacturer—a product that was no longer in demand;

2) On the other hand, we saw many companies that really didn’t need to close.

C. Small Companies

1) Bankers Print was a small full-service printing company on Chicago’s South Side. Its founder, Carl Wilson was in his 80s, had cancer, and no one in the family to take over the company. We were introduced to the 20 employees; did a feasibility study on the viability and value of the company; and helped the employees buy it at that price. The company and jobs were saved. Wilson got a fair price for the company, unions preserved their dues base, and we had an interesting example of worker owners reflecting a form of economic democracy;

2) Study on Small Companies: In 1989, CLCR did a study of 800 small companies with less than 100 employees for the Economic Development Commission of Chicago and found that among those companies with a principle 55 years or older, 40% of these companies had no apparent successor and were at risk of closing. We also found that less than ½ of 1% of manufacturing companies had African American or Hispanic owners—a deep and still continuing example of discrimination that’s destructive to our whole society.

3) Market Solution: CLCR worked with both groups of employees as well as Black and Latino entrepreneurs to by companies at risk due to succession problems. Clearly there was a solution in the market place to save companies, jobs, unions, fight discrimination, and promote genuine development that was significant and more democratic than the old way.

D. Sharpsville Quality Products: Successful employee buyouts didn’t always happen without conflict. At a steel company in the Pittsburg area, union members were given three days notice plans to close the factory where they worked. They occupied the company for 42 days, and in the course of the occupation did a feasibility study with financial support of the local religious community, and successfully purchased and operated the company.

E. Mondragon: Our experiences in employee ownership led us to important international models such as the Mondragon industrial cooperatives in the Basque Region in Spain, a story that reinforced our confidence in a market-based strategy. Mondragon is:

1) Not just a handful of worker-owned companies but a network that has become the leading edge of the industrial economy in Spain employing more than 65,000 people in more than 100 companies.

2) Introducing technology such as robotics that expanded employment through expanding market share rather than cutting jobs.

3) Anchored in manufacturing but model is also established in retail—successfully competing with chains like Wal-Mart;

4) Provides an anchor for a range of community institutions including schools, housing, social services and banks.

F. Large Companies: We studied a number of large Chicago companies and found that the emerging Low Road trend was becoming a common practice and doing enormous destruction to our larger companies. As with G+W, it wasn’t the “market” or “globalization” per se that was closing companies but a particular business strategy that could be challenged by another business strategy in the market.

1) Brach Candy Company. In 1987, this relatively healthy company on Chicago’s West Side employed 3,700. It was purchased by Swiss billionaire, Klaus Jacobs. In two years, Jacobs laid-off 1,000 people; lost $100 million; fired his top management team five times; and put the company into chaos. CLCR was introduced to the crisis by local community organizations. Through research, we determined that it was a potentially viable company; we created a partnership of the community, Teamsters union, and past management to try and save the company. The first effort was to try to purchase the company as a management/employee buyout. Jacobs refused to sell. He then tried to break the union during a contract fight. CLCR successfully led a coalition that supported the union and prevailed with a contract that effectively blocked the Low Road approach by Jacobs.

Following the campaign, we proactively launched the Candy Institute, later expanding it to become Food Chicago to demonstrate the way that local companies could be retained through High Road business strategies including employee training, the creation of incubators for micro and small companies, improved services, and supportive city policy.

G. Industrial Decline Not Inevitable: With this type of experience in small and large companies, CLCR is completely confident that local business, labor, community organizations with government support could have saved 80% of the companies and jobs that were lost during the 1980s and ‘90s.

1) With timely intervention that confronted the emerging and powerful Low Road trend in business with an alternative business strategy that preserved production but was guided by our values; and

2) Approaches that addressed the gaps inherent in traditional and passive approaches to development through energized and creative efforts by labor, community, and effective government.

5. Power in the Market Place: Completely confident that our intervention in the market is creating the conditions and alliances that can lead to significant changes in development strategy that will:

A. Contest sharply with the Low Road;

B. Build the capacity and sophistication and breadth of the labor movement.

C. Winning over significant sections of the business, governmental, and civic community.

D. Illinois Manufacturers’ Association and Illinois AFL-CIO Partnership: Even our modest success helped set the stage for state-wide project with Illinois Manufacturers Association representing 4,300 manufacturing company owners and IL AFL-CIO representing 1 million workers on state economic policy that:

1) Embraced by the two most powerful organizations in production and in politics in the state;

2) Is anchored in starting the very practical steps of building an economy that is economically, socially, and environmentally sustainable;

3) Is dramatically overcoming narrow political barriers—Republican, Democrat, Independent;

4) Sets the stage for labor, community, and environmental organizations to be influential and even leaders in the process of wealth creation;

5) Has scale—in a large state that can be a stepping stone to national influence; and

6) This project is in the earliest stages of development, but it’s a start.

6. Lessons from our experience:

A. The market is not simply synonymous with capitalism and particularly Low Road capitalism. The market is an achievement of human civilization that both predates capitalism and will persist for a long time even if capitalism is replaced by another system;

B. For the social movement, the market has too often been one-sidedly, simplistically and tragically viewed as only a terrain for Low Roaders, and this abstention unnecessarily cedes to them a critical arena for production, defining work, technological progress, knowledge, democracy, among other things;

C. The most powerful trend in business is the Low Road trend in business—this creates crisis;

D. But the Low Road trend also opportunity and the requirement for a social movement if to be willing to recognize the limits of strategies focused only on wealth distribution: jobs, wages, benefits; and the need and then necessity to intervene in the wealth creation process and the defense and development of our productive capacity whenever and wherever possible—now is the time for a change in social relations of production. This approach has broad practical appeal if framed and advanced in the right way;

E. The recognition that there is also a High Road trend in business that can be in tactical and strategic alliance with us and including managers, entrepreneurs, owners, investors, and consultants. It is always better to have fewer enemies and more friends;

F. The ability to fight in the market based on a positive alternative has led to successful mobilizations of people and the building of sustained coalitions;

G. Success in the market has increased the strength of our efforts to influence the state.

H. This is the type of transformative program that can energize mass political and electoral organizations as well; and

I. We must be an international movement for High Road global development that takes inspiration from the best international models, that builds solidarity, and that creates joint global projects.

7. Conclusion:

Our world and our country are in a period of great transition. I’m genetically optimistic but not naïve. This is a period of great danger and can be the beginning of decades of darkness; or this could be a moment of explosive progressive change.

It really depends on us and our willingness to develop and contend with a program that represents an alternative model of development. And that requires contending in the market as well as the state, as we transform the character of our movement to represent the interests of a majority of our people—not a movement that skirmishes on the margins of our society.