Ronnie D. Lipschutz

Regulation for the Rest of Us?

In the context of globalization, transnational social regulation is increasingly the product of private (as opposed to public) interventions into the sphere of global trade. In recognition of the widespread failure of corporations to sufficiently address the socio-economic externalities borne by workers (inadequate wages, poor working conditions, forced overtime, child labor, and lack of the right to free association), various non-governmental organizations have begun to design and implement systems of rules intended to influence corporations and bring to an end a transnational "race to the bottom." Drawing on recent empirical research in Southeast Asia, I propose that what matters as much as improvements to life on the factory floor are "spillover" effects whose force extend beyond building walls into the broader society of the host country. I question whether consumer behavior alone can create the conditions in which workers will be free to exercize their rights as guaranteed by both domestic law and International Labor Organization conventions. I conclude that what is needed is greater interaction between global civil society and trade unions. For the moment, the basis for effective labor law lies within states, and activism must focus on improving legal, political, and social conditions for workers in the host countries, rather than trying to affect corporate behavior through consumer pressure.

1. Introduction

A critical set of issues arising from contemporary globalization are those organizational, social, economic, and environmental externalities that accompany production chains undertaken across national borders (Lipschutz 2002). While globalization 2 is much discussed in terms of the mobility of capital and production, its disruptive impacts on labor conditions and social organization are as important, if not more so. Such impacts include low wages, substandard working conditions, forced overtime, child labor, and lack of the right to free association (union organizing). I argue that these effects constitute externalities, in the standard economic sense, because workers are forced to bear their costs while producers benefit from not having to pay for higher standards.

These externalities are a consequence of major changes in the contemporary capitalist system of production, trade, sale, and consumption, associated with globalization. In historical terms, the present phase of capitalist expansion and development is only the latest in a centuries-old process of worldwide economic integration, and these effects are not new or unique. In combination with the rapid growth of international trade, consumption, and communication, however, we are seeing the broadest and deepest impacts yet on social, political, and economic organization and practices. In effect, through export of manufacturing operations, industrialized country corporations are recreating many of the working and operating conditions characteristic of the worst periods of the Industrial Age of the 19^th and 20^th centuries.

To date, however, these externalities have not been extensively addressed either within the existing international system of regulatory conventions and regimes or by states themselves, where regulatory power is presumed to be vested. In recognition of the widespread failure of both states and corporations to address such effects and associated conditions, non-governmental organizations have begun to design and implement systems of rules intended to influence corporations and bring to an end an international "race to the bottom." Capital has responded with what is called the "corporate social responsibility movement." As a result, transnational social regulation 3 is increasingly the product of private (as opposed to public) interventions into the areas of global trade, corporate behavior, and consumer preferences (Haufler 2001; Pearson and Seyfang, 2002).

The campaigns and projects I discuss in this paper are directed primarily at American apparel companies and their subcontracting factories abroad and represent attempts to regulate the negative social impacts for labor associated with production of apparel, in developing countries, for the U.S. and European markets. Such campaigns take several forms, including consumer education and boycotts, inducement of corporate "good behavior" through codes of conduct, auditing and monitoring of working conditions in factories subcontracting for particular firms, and the establishment of unions in specific plants. It is often thought that these campaigns have significant impacts on labor conditions and empower trade unions, but it is not clear either theoretically or empirically that this is the case. Indeed, there are good reasons to believe that such campaigns and codes, if successful on their own terms, only serve to more deeply reproduce the arrangements that first gave rise to the conditions they are intended to address.

Drawing on fieldwork and interviews undertaken in Southeast Asia during summer 2001, I contend in this paper that what matters as much as improvements to life on the factory floor are "spillover" effects, whose force extend beyond building walls into the broader society of the host country. I question whether consumer behavior alone can create the conditions in which workers will be free to exercise their rights as guaranteed by both domestic law and International Labor Organization conventions. I argue here that reliance on market devices will necessarily fall well short of aiding efforts on the ground to effect a broader (political) transformation of the status and autonomy of workers, unions, and local communities.

I begin this paper with a general discussion of the conditions that have led to the imposition of so many externalities on workers in Eastern Europe and developing countries. I then turn to a description of the various types of campaigns intended to address these effects. In the third part of the paper, I report on our findings and conclusions from our research in Southeast Asia. Finally, I conclude by arguing that what is needed is greater interaction between global civil society and trade unions. For the moment, the basis for effective labor law lies within states, and activism must focus on improving legal, political, and social conditions for workers in the host countries, rather than trying to affect corporate behavior through consumer pressure.

II. Affluence and effluents: Globalization, externalities, and the state

As noted above, a major cause of contemporary social dislocation for host country labor can be found in recent changes in patterns of production, trade, and sale of commodities, manufactured goods, and knowledge associated with globalization in its contemporary material form. The organization of production has become much more complex, with raw materials, commodities, semi-processed materials, parts, and finished goods moving among locales and plants in different countries according to both interstate/interregional and intrafirm logics of comparative advantage (Gereffi 2002). As the forms and organization of production, trade and consumption have changed, a set of negative consequences follow. Following the terminology of neo-classical and resource economics (Pearce and Turner 1990), these can be called "externalities." The standard economic definition of an externality is a cost or benefit that accrues to the producer of a good but for which she does not pay. The classical example is a factory owner who gets free use of the air and water as waste dumps and does not bear any of the costs of pollution.

Industrialized country clothing companies whose goods are produced under subcontract in low-wage countries enjoy a positive externality in the cost differential they realize from sourcing offshore (the costs to the workers involved are, evidently, of only limited interest; see, e.g., Klein 2000). Workers, lacking bargaining power in a highly-competitive global system, yield up some part of the value of their labor beyond what would be the case were they organized. While low wages are generally rationalized through the concept of "comparative advantage" and relative factor costs, it could be argued that such advantage should not undercut the level necessary to the reproduction of both worker and household—that is, labor should receive a "living wage." The extent to which workers are underpaid relative to their income requirements—a level that is contested and challenged—results in an unjustified and possibly inefficient benefit to both producers and consumers.

The imposition of externalities need not be an inevitable requirement of the reorganization of production and capitalism; rather, it results from a deliberate and conscious decision by both capital and states to downplay such impacts and to disregard the embedded and largely-obscured capital accumulation and transfers that result. The reasons are not difficult to surmise: holders of capital and power tend to benefit from these capital transfers and have little interest in sharing profits or control with labor. Most governments seek foreign investment and pay greater attention to the demands of capital, except in situations in which labor appears to threaten political stability. Indeed, given the rise in attention to "shareholder value" and the exigencies of intra-corporate competition, corporations would be foolish, on their own, to use their profits to pay for the costs of these externalities.4

What, specifically, has changed? During much of the 20^th century, finished goods in the cloth and clothing industries were manufactured in factories owned and operated by the companies whose name appeared on those products. While many workers could not afford, even then, to purchase the clothing, they were, eventually, able to organize for improved working conditions and better wages. But the competitive nature and thin profit margins in the clothing industry motivated a continual search for ways of reducing production costs. Some of these methods were made illegal (child labor, piecework rates, minimum wage levels); others were not (automation; relocation; open shops). The claims made by capital have been that, even so, costs were too high and labor too strong. The first response by corporations was to move production to locations with lower wages and unregulated labor standards; the second was to dispatch with production entirely.

Nowadays, many industrialized country apparel companies neither own nor operate any factories of their own; their role is limited to design, ordering, wholesaling and retailing. Instead of producing, they subcontract with specific plants—often owned by companies based in Japan, South Korea, and Taiwan—in host developing countries, such as Thailand, Indonesia, Mexico, and the Philippines (a practice generally known as "outsourcing"). Indeed, the assembly of articles of clothing may take place in several different countries, each one chosen for its particular cost advantage. The spreading out of the apparel production chain represents, in part, an effort to spread risk by externalizing it onto others. As Edna Bonacich and Richard Appelbaum (2000:9-10) point out in their work on apparel production in the Los Angeles area,

Much of the industry is driven by fashion, and sales of fashionable garments are highly volatile. The production of apparel is generally a risky business, which discourages heavy capital investment and limits the availability of capital for firms that want to expand or upgrade. The riskiness is augmented by time. Fashion can change quickly. Apparel manufacturers want to be sure that any demand is fully met, but must be wary of overproducing garments that may fall out of fashion. The industry needs to be especially sensitive to changes in consumer taste, to respond quickly to these shifts, and to cease production in a timely manner.

It is in this light—the changing landscape of the global economy and industrial production as well as the volatility of demand for fashion—that the position of large U.S. and European apparel corporations, and their subcontractors should be seen.

The regulatory standards faced by individual corporations vary greatly among countries and production sites even though many states have ratified most if not all of the relevant basic conventions of the International Labor Organization. The owners of the factories where clothing is made are, of course, obliged to observe the laws of the jurisdiction in which they operate. At the same time, however, no one is legally required to exceed the minima established by those laws and, if they can get away with ignoring those laws, there is no compelling reason not to violate them. Indeed, the absence of monitoring and enforcement of these laws by governments, the tendency of responsible agencies to turn a blind eye to violations of the law, and a general lack of political support for labor rights, only makes violations a necessary and normal part of "doing business" in a competitive global economy.

Such notional constraints on practices as may exist in host countries are further weakened by the practice of outsourcing and subcontracting. When apparel corporations do not own the plants with which they subcontract, they need not demand or require that relevant regulations be observed by their subcontractors, although they may, as part of an agreement with the subcontractor, require that certain rules, or "codes of conduct," be followed (Fung, O’Rourke & Sabel 2001). But even these are weak constraints inasmuch as codes of conduct and corporate behavior are not very binding: from one day to the next, subcontractors may post and remove codes of conduct as a function of whomever has ordered a specific production run.

One result of weak standards and minimal enforcement is the revival and globalization of the "sweatshop" model of manufacturing. The term is used to cover a broad range of operations and working conditions, ranging from small establishments to large plants. The U.S. General Accounting Office has defined a sweatshop as "an employer that violates more than one federal or state labor law governing minimum wage and overtime, child labor, industrial homework, occupational safety and health, workers’ compensation, or industry registration" (GAO 1994:1). This definition applies to operations in the United States; developing country status is not a prerequisite for their existence. As Edna Bonacich and Richard Appelbaum (2000) have shown, sweatshops are as much a function of industry structure as general economic development. To a significant degree, their existence is a result less of appropriate regulations or their weak enforcement, and more a result of corporate desire to wring maximum profit out of the deal.

While concerns about the social and organizational externalities generated by globalization and under-regulated market activities have been most visible in the demonstrations and protests in Seattle, Boston, Washington, Geneva, Prague, and elsewhere, these are only the tip of the new global regulatory "iceberg." As states have shed their responsibilities in the area of labor protection, some are being taken up by other organizations and institutions, a growing number of which are private or semi-public, organized by civil society actors, corporate organizations, and business associations (Cutler, Haufler, and Porters 1998; Cascio, Woodside, and Mitchell 1996; Haufler 2001). These are, for the most part, developing outside of the framework of already-existing interstate regimes—the United Nations, World Trade Organization, International Monetary Fund, and others, such as the International Labor Organization and various human rights conventions (Lipschutz 2002). I argue, in essence, that these regulatory projects, initiated by various groups, organizations, associations, coalitions, and corporations, operating under the rubric of "global civil society" (Lipschutz 1996) represent an effort to re-establish political authority over self-regulating markets (Polanyi 2001). Private and semi-public regulation are nothing new, even at the transnational level, but there are reasons to think that we are seeing something of a resurgence, and certainly an expansion, in the privatization of international regulation (Cutler, Haufler, and Porters 1999). In a sense, these arrangements constitute a "new international division of regulatory labor" (see Table 1).

Table 1: Some Current Global Social Regulatory Campaigns

It is into regulatory gaps in the apparel industry that campaigners, such as those in the "anti-sweatshop" movement, have stepped. In the case of organizations campaigning with respect to the apparel industries in both the United States and Europe, the movement has gained growing visibility and support in its efforts to shame, cajole, bully or entice apparel companies into paying more attention to the conditions in their subcontractors’ factories (Lipschutz 2002). The primary mechanism by which this is to be accomplished is not, however, through enforcement of existing laws in the host country or the promulgation of new ones. Instead, the incentive rests almost wholly on implied impacts on a company’s market share and its profits. By threatening to reduce market share through their influence on consumer preferences, such movements are relying increasingly on economic means to achieve political ends. In this respect, activist campaigns can have an impact but, for the most part, only on the targeted corporation and its subcontractors. The extension of such social improvements to other companies and labor sectors within host countries is neither inevitable nor, it would appear, even likely. In other words, efforts that do not address the political context within which violations of labor and other social regulations are taking place—that is, within specific state jurisdictions—are likely to have only limited effects and, therefore, to impact societies only very weakly. I return to this point below.

These campaigns involve three forms of market-oriented activity. First, some encourage consumers to boycott specific companies in order to generate pressure on market share and to embarrass company executives by publicizing human rights violations in subcontracting plants. Second, some campaigns seek to develop certification programs whereby apparel produced under acceptable conditions may be labeled to this effect. Finally, companies are being urged to adopt and implement "Corporate Codes of Conduct," which stipulate a set of minimum working conditions that must be met in their own and their subcontractors’ factories (see O’Rourke 2000; Fung, O’Rourke, and Sabel 2001). Each of these methods has advantages and drawbacks, but they all rely on market tools, rather than political ones, for implementation and effectiveness.

For the moment, there are two broad segments to "clean clothes" movement. On the one hand, organizations such as the Fair Labor Association, an effort originally cosponsored by capital and the Clinton White House with the participation of a few non-governmental groups, and the Global Business Responsibility Resource Center seek to foster corporate good behavior and codes of conduct to be implemented in manufacturing plants. On the other hand, activist, pro-worker organizations such as Sweatshop Watch in the United States and the Clean Clothes Campaign in Europe, attempt to use consumer boycotts and education to force companies to improve working conditions in factories. Groups in both sectors have also developed certification programs, whereby companies and factories will be inspected, monitored and given clean bills of health (when deserved), and whose logos can be affixed to products (Table 2).

To what degree do these projects of global civil society, largely applied in selected plants, serve to change the fundamental political environment for labor in host countries? A number of questions may be raised in this regard: If labor conditions are improved in one factory, what are the impacts on corporations’ other operations within specific countries and without ? If conditions for labor are improved in plants sub-contracting for one apparel company, does this lead to improvement in the plants subcontracting for others (sometimes, of course, one plant produces for more than one company)? If labor conditions are improved in the apparel sector of a given country, do they improve in other industrial sectors? And, most important, do selective improvements in some factories enhance the overall power of labor in relation to state and capital? That is, do market-based activist campaigns intended to impose global social regulation on transnational capital lead induce national governments to regulate the very markets in which social externalities of concern have emerged in the first place?

Table 2: Organizations engaged in private regulation in the apparel industry

In other words, under activist pressure, apparel corporations may be seeking to impose codes of conduct on subcontractors in developing countries. They may be providing a variety of incentives to improve labor conditions in specific factories. They may even be paying wages above the legal minimum requirement and providing the space in which workers can organize (Connor 2001). This is all fine and well, but it is no more than would be expected of any enlightened business. But is there evidence, to date, that activist campaigns and corporate actions have resulted in major regulatory responses by states or a more supportive state stance toward labor, especially in terms of the right of free association?

For the purposes of this discussion, I call this effect—the general sector- and countrywide upward ratcheting of labor rights as a result of improvements in some plants—social and political spillover. If such spillover is taking place, it should become visible in host countries as a result of (1) reforms instituted in specific factories, (2) emulation by other plants and enterprises not affiliated with contracting transnational apparel companies, (3) increased respect for workers by state and capital, and (4) growing public and private support for the right to unionize both inside the factory, across the apparel sector, and throughout industry.

If there is no obvious spillover, or if evidence suggests that the state and capital continue to disregard labor laws and even violate them (by, for example, sending police into factories where strikes are taking place), it is reasonable to conclude that the campaigns and corporate reforms have not had (as yet) a significant domestic social and political impact in the country as a whole. The more likely result, I would argue, is some combination of these two outcomes, in which workers have organized independent unions in some factories, in which some sectors are being organized more broadly, and to which there continues to be resistance by both state and capital. Given that state recognition of workers’ right to unionize took well over half a century in most industrialized states, it should not be surprising that unionization and upward ratcheting of labor standards might, so far, remain limited. I propose that evidence that campaigns and codes are having spillover effects within and across countries would suggest that market-based approaches to instituting labor rights are effective in accomplishing broad political change. Conversely, if evidence of spillover is weak or lacking, this would suggest that there are structural problems with applying market methods for political ends. In the final section of this paper, I explore the implications of this second proposition for market-based activism.

Consider, for example, the impacts of activist campaigns on the Nike Corporation. there are at least a dozen civic action and social activism campaigns underway, aimed at the Nike Corporation (Conner 2001). All are meant to improve health and safety conditions, provide minimum wages in Nike’s 600-odd subcontractors’ plants scattered around the world, and to set an example for other apparel companies. These campaigns have generated considerable public attention (although it is not clear that they have affected the company’s financial performance), and Nike has responded energetically, concerned about its market share, its competitiveness, and its image. The company has adopted codes of conduct, contracted out audits of its subcontractors’ factories, and permitted independent monitors either to accompany auditors or conduct their own inspections. It has joined the Fair Labor Association and co-established the Workers’ and Communities’ Association, as well as taken a number of other steps to improve both conditions of production and its own reputation. And, while there apparently remain significant problems in many, if not all, of its subcontractors’ operations, there has been a not inconsiderable amount of ratcheting upwards of conditions within the Nike subsystem of global apparel production.

Nike's response to pressure by activists suggests that it continues to be sensitive to the possibility of public disapproval; what is less than clear is whether these campaigns have actually had the desired effect on the company's profits, which might indicate changes in consumer behavior (http://www.nikebiz.com/invest/ar_00/financials.shtml). In May, 1998, the value of Nike's stock dropped almost 27%, perhaps due to a decline in sales growth as a result of bad publicity (although this cannot be confirmed) or, more likely, reports on the effects of the 1998 Asian financial crisis. The company’s financials do not give a clear indication, although a small decline in revenues and income can be attributed to that crisis . Revenues from the United States have stayed flat since a large increase between 1996 and 1997. While this might indicate some changes in consumer preferences, the data do not provide compelling evidence one way or the other. Moreover, the positive media attention generated by Nike’s efforts—this despite the company CEO’s attack in 2000 on a student campaign at the University of Oregon and withdrawal of a sizable donation to that University—and the relative paucity of hard data from more than a handful of plants, seem to have reassured consumers that problems are being addressed by the company.

But what have been the political effects of these campaigns? Nike offers improved conditions and higher wages to the workers in its subcontractors’ factories, but both workers and consumers remain fully-integrated into the regime of consumption that constitutes contemporary globalization and subjectifies those workers and consumers. Campaigns against other apparel companies, and their responses, have had similar impacts. In the host societies as a whole, there has been little in the way of political reform, of stronger state regulation, or greater exercise of labor’s right to unionize. The structures might have received a paint job, so to speak, but underneath, they are still the same old structures. In other words, amidst all of these efforts, almost no attention has been paid to the conditions that led to the demand for social regulation in the first place, to wit, that Northern capital makes substantial profits on the backs of relatively powerless, badly-paid, mostly female workers. It is the very fact that labor is badly-paid and powerless that makes the host countries so attractive in the first place (and has led to the reappearance of sweatshops in Los Angeles and New York; see, Bonacich and Appelbaum 2000).

There is a notable lack of information about the sector-level effectiveness of codes of conduct and impacts of activist campaigns on host countries, although inspections of individual factories suggest some limited improvements (e.g., O’Rourke 2000; Connor 2001). During July and August, 2001, therefore, a graduate student and I traveled to four Asian countries—Hong Kong, PRC, Thailand, Indonesia, and the Philippines—in order to document private and public efforts in Southeast Asia to develop, introduce and enforce transnational regulations designed to address and curtail the harmful social, economic and environmental externalities that are commonly linked to globalization. We conducted 39 interviews, with representatives of government ministries, international Organizations, trade unions, and local and transnational non-governmental organizations (not all of these were related to the apparel industry). These interviews were, for the most part, unstructured and open-ended, although organized around a set of specific questions. Most of the interviews were an hour in length.

Among the conclusions we draw from our fieldwork are the following.

1. Corporate codes of conduct at the factory-level are:

• Most influential symbolically, providing an opening for mobilization by helping to persuade workers that future improvements are possible;

• Occasionally used as a bargaining tool in labor negotiations, inducing concessions by management fearful of outside involvement;

• A source of support for worker resolve, especially in cases where companies openly fail to honor their publicized pledges and workers believe that the force of conscience can be used to their advantage;

• Not a barrier to corruption, which remains a major problem, especially in the context of widespread bribery and nepotism, as well as notoriously poor monitoring of violations; and

• A potential threat to the jobs of low-paid workers under conditions of high unemployment, inasmuch as improved labor standards mean little to those who are faced with the loss of their only source of income.

2. So far as the nature and extent of "spillover" effects are concerned:

• In theory, the ratification of international conventions means that countries are required to respect them but, in practice, such endorsements carry very little weight;

• The wider labor force and community remain unaffected by changes to specific workplace rules, inasmuch as their limited force does not extend beyond the walls of the local factory;

• In contravention of International Labor Organization conventions, union rights are heavily restricted by government authorities; efforts to organize unions are frequently met with resistance, while legal protests in state-run industries are usually halted violently by police; and

• Contempt for the domestic rule of law remains pervasive, as existing regulations are ignored by state authorities and worker grievances are summarily dismissed; and

• The potential for social unrest in conditions of rising unemployment encourages national governments to prioritize job creation, with quantity trumping quality.

3. Where relations between transnational NGOs and local trade unions are involved:

• Care-taking interventions do not help to raise the consciousness of workers or to demonstrate the merits of self-leadership; in the interests of long-term change, there must be a greater focus on empowerment

• Inasmuch as a preoccupation with conditions in the workplace can lead to neglect of such critical issues as education, health, and safety, unions want NGO training and assistance to foster an overall improvement in workers’ quality of life;

• NGOs too often view trade unions only as mediators, whereas they are, in fact, a promising source of strength for workers whose greatest weaknesses are the lack of a unified voice and limited organization;

• While many transnational NGOs are deeply skeptical of international conventions whose enforcement lies in the hands of particular states, the unions themselves believe that the future of effective labor regulations is to be found at the national level; and

• The distributive inequalities that are linked to globalization (and justifiably condemned by NGOs) are frequently ignored by national unions whose particular mandates and bounded constituencies blind them to the regional nature of their struggles. Potential allies in a fight for social, political, and economic rights (groups of exploited workers in neighboring countries) are often working at cross-purposes, viewing one another as competitors in a zero-sum game in which the unfavorable terms—as decided upon by major corporations—are wholly non-negotiable.

On the basis of our meetings and interviews, in other words, we found only limited evidence of spillover. Locally, there is broad awareness that, notwithstanding transnational campaigns and activism, the basis for effective labor law lies within states. Therefore, NGO activism should focus on improving legal, political, and social conditions for workers in the host countries, rather than trying to affect the behavior of transnational corporations through consumer pressure and corporate good behavior. Despite the pressures of international economic competition, the fight for workers’ rights is always a political one, and what is required is greater interaction between global civil society, national trade unions, and national politics. There are some indications that this is beginning to happen, especially as unions in the North come to realize that their survival depends not on protectionism but alliances with workers in the South.

The effects of global civil society campaigns are both controversial and uncertain. Some critics argue that social regulatory standards are a "cultural" feature of specific societies and should not be subject to global harmonization. Some economists point out that labor regulation would reduce the economic attractiveness of host countries, undermine their comparative advantage in low-cost labor, and increase unemployment. Some corporations resent being ordered around by consumers. But even supporters of these campaigns find much to be desired in the consequences of civil society pressures on apparel companies. Many subcontractors have begun to set up model factories, in which the work environment and wages are quite attractive, and to which visitors can be taken while, just down the road, other plants operate under appalling conditions.

Of course, if one company’s implementation of its code of conduct in, for example, Vietnam leads to all other in-country apparel factories adopting the code, and the government of Vietnam monitors and enforces it, and manufacturers choose not to relocate to places with weaker regulation, some degree of social regulation will have been accomplished. Nonetheless, at the end of the day, it remains difficult for consumers to always purchase ethically, corporate good behavior is limited in what it can accomplish, and actual enforcement of labor law remains largely within the purview of national governments, who want little to do with social activism.

As any number of commentators have noted, under conditions of globalization, rules are often promulgated at the international level, but deployment remains within the purview and jurisdiction of the state. States are expected to legislate domestically the laws to which they have agreed in international forums, and to see that they are implemented and enforced domestically. There is, of course, little in the way to ensure that the last two steps of the procedure are followed and, in fact, no great expectation that they will be. For the most part, when international sanctions of one sort or another are imposed on states that violate international law, governments may decide whether the costs of disobedience are acceptable or too high, and respond accordingly. Thus, a state that has signed and ratified those International Labor Organization conventions addressing workers’ rights of free association is under no serious international compunction to fulfill the terms of the Convention, and certainly is not expected to assist actively in their fulfillment.

Under these circumstances, those who would like to see active domestic fulfillment of international law appear to be reduced to two basic strategies. The first is to induce those who are subject to the laws in question to live up to the terms of those laws. Thus, for example, corporations that operate factories in which workers’ rights are routinely violated may be pressured, via various market mechanisms, to obey those rules and laws. The second is to work within a domestic political context, toward effective and active state implementation and enforcement of relevant laws. There is no reason, of course, that both strategies can not be pursued in common but, as seen in this paper, the first approach is increasingly popular, a direct result of the disappearance of politics from global life.

Is this so terrible? Politics, it must be admitted, have come to be seen as a realm of corruption, double-dealing, and personal enrichment. Politicians, of whatever stripe, are regarded as wholly self-interested, power-seeking individuals with no conception of, much less regard for, a common good. Governments are routinely purged in the hope that a new regime will be an improvement, but there is little empirical evidence to suggest that this is more than empty faith. As a result, social movements, non-governmental organizations, and corporations—global civil society—have come to be seen as the "last, best hope" by those intent on providing public governance for general improvement in the lot of those in need of help. Such a hope might not be entirely in vain, but those holding it tend to overlook the political relationship between civil society, state, and market and the role that politics must play in shaping and constraining markets.

The state is central to the shaping and constraining of markets. As Robert Boyer and Daniel Drache put it,

The idea that markets have multiple, continuous and contradictory effects, and hence are unstable structures and subject to the constant need for organization and reorganization, is due to the fact that they emerge out of social relationships…. [M]arkets are like open-ended social spaces constantly subjected to spontaneous countermovements by producers, consumers, owners, workers and government threatened by the price system’s rapacious excesses. When the price system does not work ex mirabulis, society must rely on the state to find ways to stabilize it and the larger economy (1996:11).

Without some kind of form or limit, markets quickly degenerate into an economic "state of nature." Boyer points out that, in the absence of monetary and legal systems, both of which are imposed by some kind of authority, "any market will collapse due to the spreading of opportunistic behavior among traders" (1996:101). In democratic market systems, in particular, civil society provides and supports the values that underpin the specific form of and limits on markets, and its members expect the state to follow its dictates in this regard (not that this always happens). It is in this context that the restoration of politics to everyday life becomes critical, not because it can create miracles but because it can show us what is missing from our everyday lives.

Markets are particularly weak arenas in which to seek political goals. While some argue that there is such a thing as "private" political power, which can be accumulated through the market, this seems a somewhat oxymoronic concept. Politics is, by definition, a public, collective endeavor, while markets involve private exchange between individuals. Politics is based on the aggregation of the power of individuals, which markets eschew. And market-based politics rests primarily on attempts to alter the preferences of large numbers of consumers in order to put pressure on producers. Because consumer preferences are not political and are strongly-influenced, if not determined, by the very system of production and consumption that motivates the social disruption and externalities of concern, there is a certain tautological quality evident here. If capital is able to acquire political power, it is more a form of displacement than an alternative: the "corporate citizen" becomes, in a sense, a franchisee able to cast a vote using its dollars.

The core problem has as much to do with the effects on "citizens" of this rupture in politics as it does with questions of distribution and access to entitlements or the proper behavior of corporate actors. To a growing degree, the subject of democratic politics has become the object of totalitarian markets. Consumer has replaced citizen, choice in the market has displaced sovereignty in politics. We select our representatives much in the same way as we select cereal, laundry detergent or, as Milton Friedman once put it, "the color of our tie." We have come to believe that, in line with Smith’s argument about the benefits of a division of labor, politics consists of selecting that which is to each one’s greatest advantage in the hope that some kind of Invisible Hand will generate a greater good. No wonder there is a widespread belief that corporations acting individually, through codes of conduct, can aggregate to better political outcomes without all the fuss and bother of politics.

This is not, of course, an original argument; for generations, if not centuries, people—usually conservatives, in both the old and new senses—have complained about the corrosive social effects of allowing individual appetites to gorge on self-interest. Their answer has been to return to the "old values," under which the lower classes were kept in their place and excluded from political participation. My argument comes from a different direction: in order to secure the stability necessary for capitalists to invest and capitalism to thrive, political actors must be distracted, and consumption is the way to accomplish that end. Bread and circuses for all!

There are, I think, alternatives to politics via markets. In the final chapter, I make a case for what I call "inter-epistemic politics." In Global Civil Society and Global Environmental Governance (1996), I suggested that GCS ought to be viewed not simply as an agglomeration of transnational organizations seeking to regulate and moderate the rougher edges of the international system, thereby participating in governmentality. I also proposed that what was most important about GCS were the local politics of groups and activists, focused on specific places but informed by a globalized epistemology. To put this another way, the key is getting people to take action in those places and spaces where they can exercise some degree of group sovereignty, doing so in full awareness that other groups are acting similarly in other places and spaces. In this way, they also engender and experience what a democratic politics is meant to be, and they learn what is missing from governmentality.

I do not claim that inter-epistemic politics can recreate political sovereignty in the Foucauldian sense or that it can, somehow, overthrow global governmentality. At the end of the day, politics ought to be informed by some kind of ethics, one that cannot rely solely on another form of aggregation to ensure progressive or beneficial outcomes. That is, the epistemic politics of hundreds of thousands of groups will not necessarily add up to a global good; it might, as I described in earlier work on bioregionalism, result in neighborhood hostility and even war, as has happened in Bosnia and many other places. It might be that the best we can hope for is a governmentality that is less obsessed with markets and more concerned with the quality of human life. That might not be such a terrible alternative.

Endnotes