Sociology

In the wake of the 1970s throughout the new millennium, there were wars, economies declined, disasters were seen as opportunities for economic restructuring and states began acknowledging the presence and necessity of dealing with a global market wherein state-ownership surrendered to privatization. This economic theory became known as neoliberalism where governments may still play a big role in developing their states economies but a huge part of their economic power are now relinquished to private interests as well as global markets (Crotty 2000 1).

    However, while some theorists argue that neoliberal globalization is moving toward a unified model of capitalism that all states adhere to, others would argue that there are actually varieties of capitalism that characterizes the present and not only one model, framework or theory that is being followed. This paper will outline some of the arguments supporting both assumptions while highlighting how these arguments are apply where labor is concerned through different case studies.

    In Turkeys movement toward embracing neoliberal principles of a globalized or national capitalism, it was the workers that suffered the consequences. Turkey pursued neoliberalism after the 1980 coup and the transition from a military to a civilian regime has revealed much of how neoliberal framework was embedded in the Turkish government long before the military government stepped down. Cosar and Yegenoglu (2009 8-17) described how neoliberal policies were developed while Turkey was still under the military regime and how these policies were used to justify economic restructuring after Turkey was turned over to civilian rule to the elected Justice and Development Party (JDP). When JDP began its rule, it began changing existing economic policies making the most impact on the existing social security system. According to JDP, the existing Social Security System has to be changed because its costs were out of control, the system was fragmented, and it made the labor market less flexible. These three points were all based on neoliberal thought. The first point was to increase the contributions and lower the costs by setting a high price on premiums, extending the duration of the period when contributions are made, and setting a limit on the benefits received. Since the social security system is for the workers, they would have to bear the consequences of the reform. The second point argued that the fragmented system upon which the Turkish social security system worked creates hierarchies among the beneficiaries of government insurance, JDP sought to solve this problem by standardizing the right to health where any government insured citizen, regardless of the institution he or she belongs to, can apply for treatment at any private or public hospital. The third point was to decrease informal employment by giving work security primarily to the employer because it would make the employer appear stable and able to employ a fair amount of employees. While these reforms appear to seek no more that economic improvement with the workers welfare in mind,

Neoliberal ideology considers social security spending to be an injurious intervention into the functioning of the market. In a market setting, every good has a price and social security is no exception. To ensure this, neoliberal policy makers around the world, with support from international agencies such as the International Monetary Fund, World Bank, and World Trade Organization, inaugurated a rigorous attack against state-sponsored social security systems. To a great extent, they have succeeded in attaining their objectives. Definitive in this turn of events was the rigid and unyielding power of capitalism, which demanded an end to working-class security, as well as the exclusion of a greater part of the population from the social security system. The result has been the deepening and diversification of poverty. (Cosar and Yegenoglu 2009 30)
       
    Onaran (2005 1-29) also criticized neoliberal policies in relation to labor. He discussed how labor in most of developing countries in the desire to increase capital. Neoliberal policies, according to Onaran, promise to restore employment after the decline in employment in the 1980s after the wars and the Great Depression. This will be achieved if the market is free from government control and if the cost of labor is low such that capitals will increase. However, these promises are yet to be fulfilled. Instead of employment increasing, it was unemployment that made high statistics. Onarans study also showed that neoliberalism does not have favorable effect on the economies of the ten countries that he studied. In fact, the economies of these countries declined owing to the poor performance of the workers due to the low wages that they are earning. In Onaran (2005 29) words, Neoliberal policies have so far failed to deliver their promises in terms of creating jobs and a fair return to labor. This study shows that, in all of the ten countries, as opposed to what neoclassical theory claims, the lower wage share has had no positive effect on unemployment, and unemployment is primarily driven by the goods market conditions, as suggested by Keynesian economics. Aggregate demand deficiency explains the decline in the wage share as well as the increase in unemployment.

    Meanwhile, as Lerche (2007 425-452) argues that there are various forms of capitalism and inasmuch as there are developed and developing countries, there is also such a thing as developed (full-blown) capitalism and developing capitalism. He shows this through a critique of the attempt of neoliberal organizations such as the International Labor Organization (ILO) to globalize concepts much like what neoliberalism is doing. The ILO was formed with a primary aim to abolish forced labor. Lerche criticized ILOs approach in attempting to point that all free labor are forced labor and that all states, developed or developing, should do away with forced labor. ILO, for Lerche, is building a global alliance against forced labor. He presented two arguments, the first stating that there is unfree labor and forced labor are but one and the other stating that they are different. Nonetheless, those two arguments acknowledge that there are variations of capitalism found in every country. Lerche argued that instead of setting dichotomies that only confuse rather than help clarify concepts we should accept the fluidity of the actually occurring levels of unfreedom. He also pointed out we can only understand the actual relation of labor to neo-liberal globalization if we succeed in building a fully-fledged historically specific analysis of free labor (Lerche 2007 447).

    Varieties of Capitalism (VoC) have been discussed by Pinto (2007 8) as a framework having two classifications Liberal Market Economies (LME) and Coordinated Market Economies (CME). LMEs have short-term market relationships and this setting is conducive for products and processes that change radically. CMEs have long-term market relationships where interactions are strategic with the goal to come with innovations that will yield high profits. Pinto illustrated how VoC can, indeed, characterize the present state of world economies whereby developed countries like Sweden and US belongs to LME and Newly Industrialized or Developing Countries like South Korea and most East Asian countries. In essence, the VoC is a framework that shows that there is more than one way of organizing capitalism even in countries with advanced or developed economies. It also explains that even with free market operations, the playing field is not really even as there are countries who are more advantaged than some, economically speaking.

    In analysis, therefore, the premise that neoliberal globalization is moving towards the formation of national capitalism paints a deceitful picture of an evened playing field. Practically, every entity can compete in the global market whether these entities are come from an economically well-off state or not. On the other hand, the premise that there exist variations of capitalism takes into consideration that there are particular entities that can compete with each other while some will have to cooperate in order to be at an advantage or in order to be at par against some of the competitors. Both premises, however, can be illustrated more clearly when we take labor as a commodity. 

    In the first premise, we have seen how labor is exploited yet the exploitation is justified as something that will help the economy develop. The working class may have to tighten their belts a few notches but the economy will soon grow and develop and they, as the working class, will reap the rewards. Nonetheless, this promise of neoliberal globalization has not yet been fulfilled. We are still confronted with children working for a few coins at shoe factories where the shoes they help put together would be purchased by Angelina Jolie for a hundred times more than what was paid to them. We are still confronted with issues of the third world countries being the suppliers of raw materials while the first world countries develop these raw materials into something that they can sell back to the third world for a ridiculous price.

    In the second premise, we see a more cooperative global market. Since some countries are more than a few steps ahead than most, what the others can do is embrace capitalism but make sure that they can catch up with those ahead through cooperation and strategic interaction. Labor is still supplied by developing countries but they are protected through such means as international organizations that acts as a night watchdog such that workers rights are not ignored or violated. Nonetheless, even with the existence of such organizations, workers are still being exploited both in developed and developing countries. Often, those who hold the final say are the members who contribute the largest amount of funds.

    Between the two, however, I agree more to the second premise because it paints a more realistic picture of what neoliberal globalization is really likea competition but a competition that one cant win without the willingness to cooperate. This way, the disadvantaged becomes more proactive in confronting the challenges of neoliberal globalization. Petras and Veltmeyer (2009) say it more accurately this way

The globalization discourse hides the class realities behind it. The press, for example, consistently talks about national interests without defining whom exactly is getting what and how, under what policy or decision-making conditions. Thus, American workers are told that the Chinese are taking their jobs. But the China threat, in fact, is but another global business partnership, in this case between Chinese commissars who supply global capital cheap labor and the U.S. and other foreign capitalists who supply the technology and much of the capital used to finance Chinas exports. Workers in Latin America are told that it is their inflexibility and intransigence, and government interference in the free market, that hold them back from engaging meaningfully or at all in the many benefits of globalization. Many, including on the Left, view globalization in this way. However, it would be better to see it for what it is a class project vis--vis the accumulation of capital on a global scale and as imperialism vis--vis the project of world domination, a source and means of ideological hegemony over the system.

    Moreover, the disadvantaged third-world is now playing with more advantages as the first-world becomes reliant on the labor supplied by the third-world. There are more and more Asians and Latin Americans who serve in the care-giving department because there less and less first-world citizens who are willing to gain expertise in that area. Another example would be piracy, the revenge of the third-world. First-world music and movie industries are slowly declining because third-world countries prefer to consume pirated products more than original ones. If the first-world countries do not succeed in eliminating piracy, their movie and music industries would not only suffer but would soon go bankrupt.

In the final analysis, VoC is a framework that paints a more realistic picture of neoliberal globalization yet it fails to account for such situations previously mentioned that can be considered as a threat to those who developed the neoliberal think-thank. It is something similar to Marxs idea that Capitalism would someday self-destruct but not exactly because capitalism would only gain a new face or a new leader. Today, the US economy is struggling to stay awake while the China, the sleeping dragon, is slowly waking and it would only be a matter of time before it becomes fully awake to take over the all capitalist economies.