SEPTEMBER 1997 · VOLUME 18 · NUMBER 9
B O O K N O T E S
The Judas Economy:
The Triumph of Capital and the Betrayal of Work
William Wolman and Anne Colamosca
Reading, Massachusetts: Addison Wesley, 1997
$25, 240 pp.
THE CLAIM THAT INCREASING CAPITAL MOBILITY has undermined the well-being of workers throughout the world will not strike readers of Multinational Monitor as a novel insight. But hearing it come from the chief economist at BusinessWeek and a former staff writer at the leading business news magazine may come as a surprise. A pleasant surprise, because the message is delivered in the The Judas Economy, perhaps the clearest and most cogent book-length exposition of the thesis that the increasing ability of corporations to move production anywhere in the world in search of lower wages is fundamentally tilting the balance of power between labor and capital -- in favor of total dominance by employers.
Capital's overwhelming power also causes, and is caused by, restrictive monetary policy, the book argues. Alan Greenspan of the U.S. Federal Reserve and his counterparts in other rich countries obsess about the danger of inflation -- which erodes the value of assets of wealth -- while ignoring the costs of low growth to working people.
The most disturbing component of Wolman and Colamosca's message is: Things are only going to get worse. "A hardheaded look at the world suggests that the betrayal of work is only beginning. In the global economy of the mid-1990s, no country can stay ahead for very long without continuing strenuous effort on the part of corporations to cut costs, reorganize their workforce and shed employees."
Sure, the United States is doing relatively well by conventional measures now, they say. But it is doing so on the heels of sharp declines in wages over the last two-and-a-half decades, and only following the massive downsizing trend of the early 1990s. All the benefits of this period of relative prosperity are flowing to owners, almost none to workers.
Soon, Wolman and Colamosca predict, Japan and or Europe will surge back to the front of the "competitiveness" race -- but only after betraying their own workers, cutting jobs, wages, benefits and social guarantees.
Without global reform, the process will be never-ending. The authors ridicule the notion that the downsizing, outsourcing and "reengineering" of the early 1990s offer an escape from downward wage pressures. Calling reengineering a "sick joke," they conclude, "When the costs and benefits of the reengineering movement are eventually totaled up, the evidence available to date strongly suggests that although it has succeeded in increasing the profitability of American business by providing a rationale for suppressing wage costs, reengineering has not led to any improvement in the rate of productivity growth."
And there is no saving grace in high tech for the United States, or any country with high-wage aspirations, they argue. They reject the claim that the new "knowledge industries" will raise up a newly well-educated workforce, and they even dismiss the more modest notion that an elite class of "mental workers" in industrialized countries will escape the wage-suppressing effects of global competition.
The future is now, contends The Judas Economy, and it is located in Bangalore, India. Bangalore is the center of India's burgeoning software servicing and development industry. Although they lag now in creativity and effectiveness, Indian programmers -- paid a fraction of U.S. counterparts -- are now doing software servicing work once done in the United States. Within a decade, the book contends, Bangalore workers are likely to be competitive in software development -- and Microsoft workers in the U.S. Northwest are likely to see the sun set on their golden age.
The Judas Economy is scathing critique of conventional economic wisdom. It views its mission as deconstructing standard economic claims, rather than posing alternatives. In brief concluding remarks, the authors suggest there can be a reconciliation between labor and capital if industrialized countries coordinated expansionary, pro-growth economic policies. But these remarks are sketchy and inadequate. Hopefully Wolman and Colamosca will focus on alternatives in a subsequent work with the same verve they bring to The Judas Economy.
The Reality Behind Corporate Environmentalism
By Jed Greer and Kenny Bruno
Penang, Malaysia: Third World Network, 1977
$14, 258 pp.
The period from 1990 (year of the huge twentieth anniversary Earth Day) to 1992 (when the UN Earth Summit was held in Rio de Janeiro) saw Big Business master the art of greenwash -- the use of environmentally friendly rhetoric and the implementation of superficial environmental reform to obscure ongoing corporate destruction of the planet's ecology. Before the 1990s, corporations had been readier to resist environmental demands tooth and nail. But growing support for environmentalism convinced business to look to a strategy of cooptation over confrontation.
Greenwash contains 20 case studies of the world's leading corporate polluters, contrasting their environmental advertising and rhetorical claims ("Protected by Shell," Mobil's "Target: Environmental Excellence," Dow's "Developing environmental solutions that make a world of difference," Sandoz and other chemical companies' support of the industry's Responsible Care initiative and on and on) with a record of environmental horrors.
The concluding chapter of this useful resource outlines the principles of a thorough agenda for genuinely cleaning up corporate environmental performance.