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The delusions of social dumping

Don Flynn argues that views that depict British workers as the victims of social dumping are more likely to derail than aid the fight against capitalist firms

AAt the time of writing the news of the dismissal of 647 striking construction workers at the Lindsey Oil Refinery (LOR) in Lincolnshire is dominating the news bulletins. Though employed by a cluster of separate subcontractors working on a desulphurisation project at the refinery the attack on the workforce has been orchestrated by the management of the oil transnational Total, which owns the whole site. Blogs from the dismissed workers describe a situation which was almost certainly planned by Total after the concessions wrung out of them by an earlier wave of strike action directed against the award of a contract to an Italybased company, IREM, which brought its own, mainly Italianworkforce, onto the site. This happened at a moment when aUK company working in the same project was laying off its own, mainly British workforce.

The slogan ‘British Jobs for BritishWorkers' (BJBW) rallied construction workers right across the UK in a series of wildcat actions which initially seemed to have extracted a concession from Total and hailed by LOR shop stewards as a victory for their cause. The terms of the settlement were reported as being the assurance that British workers would have access to the jobs on the IREM contract, and that no British worker on the site would be laid off whilst non-British workers were being retained. The dispute was reignited in mid- June with news that 51 local workers were to lose their jobs at a time when the union side believed that Italian and other nationalities were still being recruited. A walkout of the LOR workers was greeted with solidarity action from other power and oil industry construction workers across the country. Total's management responded on this occasion with the dismissal notices and refusal to take part on any negotiations until the workers repudiate their action and apply for individual reinstatement on terms set out by the company.

The dispute was closely scrutinised by the left and provoked intense debate about the politicswhich framed the action of the workers, some of which have been aired in the pages of Chartist and the articles written by Andy Morton and myself, which have taken different views on the significance of the BJBW slogan. Andy has set out the argument that the LOR dispute is framed first and foremost by the act of ‘social dumping', a phenomenon which has emerged from the policies and regulations of the European Union. (The problem is social dumping, Chartist 238)

Pejorative as it sounds, social dumping is a fairly technical term used by economic planners to describe situations in which a country competes with others on the basis of the export of goods or services at artificially depressed prices. In these circumstances, the flooding of country, A with washing machines manufactured in country, B at prices below production cost for the purpose of undermining local manufacturing capacity for that range of goods is a perfect example of the practice. Though often used to describe trade in services which seek competitive advantage on the basis of lower wage costs it is apparent that this is not the appropriate use of the term. In classical Ricardian theory, all international trade takes place on the basis of the comparative advantages enjoyed by one set of producers over another, with the relative abundance of cheap labour being one example. But ‘dumping' does not take place in these circumstances.

The trade sector placed at a disadvantage by a lower cost competitor can fight back by raising the productivity of its workforce, which then places the labour-rich producer at a disadvantage. In a genuine case of dumping this option does not exist, because the aggressor is not seeking trade on an economic basis, but is engaged in a powerplay designed to wipe out its competitor. Nevertheless, the allegation of social dumping provides a powerful claim for victim status for the relatively innocent victims of economic turmoil in capitalist nations whose elites have failed to modernise and who have allowed large shares of its domestic markets to be colonised by outside firms and interests. Neither should we assume that these elites only consist of nakedly capitalist interests who are just too bone idle, or corrupt, to do the necessary work of running their economies properly. Complacent, or possibly demoralised, union organisation which has failed to tackle the inefficiencies of trade practices cluttered by subcultures of excessive subcontracting and agency working, and to fight for forms of modernisation based oncooperative work and the stronger entrenchment of public interest, should also be subject to vigorous criticism by the socialist left.

Where does the EU fit in to this? The proponents of the social dumping argument ascribe a fundamental role to the single market, as though its vision was that of a continental region in which the capacity to deliver decent wages and decent jobs is subordinate to the reduction of workers to a state of absolute immiseration. If social dumping is assumed to be the deliberate intention of European policy, crafted out of the posted workers directive and the case law of the Court of Justice, then we have to assume outright insanity on the part ofthe ruling elites. There is a great deal to be criticised about the way the EU works. The chronic weakness of its core institutions means that policies intended to increase rates of growth and levels of integration and raise living standards and provide higher levels of welfare are subverted by the much stronger authority of national states into unfair means of gaining advantage over competitors.

The piratical raids by the EU15 on the vulnerable manufacturing capacity of the Central and Eastern European states in the years after the fall of the Berlin Wall showed the ways in which the system truly has a capacity for the sorts of injustice associated with social dumping. During these years EU rules which were intended to direct investment into basically sound sectors which needed a degree of modernisation, such as the Czechoslovakian car industry, were transformed into smash and grab raids by EU15-based giants like West Germany's Opel, which received huge public grants to aid their activity in wiping out competitors by grossly unfair means. The EU can certainly be criticised for its ineptness in dealing with these situations, but hard core, cynical wickedness was generally the province of the national states.

The dispute at LOR and the other sections of the construction industry in the UK might appearto have moved on since the days of BJBW and we can hope that inits next phase it will focus on issues concerning the extent in which workers control and management of construction sites will be expressed more clearly as being the real heart of the issue. From this perspective it will be possible to address the perversities of a building industry dominated by the interests of a multiplicity of independent contractors, all seeking to subordinate the interests of their workforces to their own needs, and content to use the tactics of divide and rule to achieve these ends.

The posted workers directive, proclaimed by the union bureaucracies as the source of their victim status, is in actuality a very minor episode. The most comprehensive review of the impact of labour migration policies since enlargement, conducted by Bela Galgoczi and a research team at the European Trade Union Institute, a think tank supporting the trade union movement, reported the absence of clear evidence on the effects of the directive – a finding hardly consistent with the claim for the devastation it is supposed to have caused.

The presence of workers of different EU (and probably other) nationalities on worksites like LOR makes it critically important that perspectives on the European Union be properly worked out. This will facilitate understanding of the degree to which EU regulations and state forces mobilised are shaping the configuration of relations between capital and labour. The need to respond to dramatic situations like wildcats, solidarity action, and lockouts in these workplaces will require a principle response from trade unionists and a framework for action which strengthens workers' organisation and the drive towards control and management. It is essential that we properly understand the balance of all the forces involved in these situations and do not make unbalanced, populist appeals to sentiment because it seems most likely to get a short term result. Challenging capitalist power requires that we think in the longer term, and whilst this is never an excuse to avoid a fight when one has to be had, it does mean a responsibility to plan for a war, rather than a single battle.

Reference: EU Labour Migration since Enlargement: Trends, Impacts and Policies, Bela Galgoczi, Janine Leschke and Andrew Watt, Ashgate, May 2009