Europe, Migration and Globalisation - What About the Workers?

Summary

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Podcast Summary

LSE: Public Lectures and Events

Episode: Europe, Migration and Globalisation – What About the Workers?
Date: 23 October 2007
Speaker: John Monks, General Secretary, European Trade Union Confederation
Host: LSE Film and Audio Team

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Overview

This episode features John Monks, a prominent UK and European trade union leader, addressing the impact of globalization and migration on European workers. Monks explores the consequences (both positive and negative) of economic liberalization, migration, and the shifting balance between politics and markets. He scrutinizes the role of trade unions, the evolving structure of work, and the significance of maintaining a robust social dimension in Europe’s approach to globalization.

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Main Themes & Discussion Points

1. Defining Globalization from a Worker’s Perspective

(02:00 – 06:00)

• Three Senses of Globalization:

  • Job Migration: Movement of jobs from richer to poorer parts of the world.
  • Immigration: Influx of workers willing to work for lower pay, sometimes affecting local wage levels, especially in unskilled roles.
  • Financial Capitalism: Rise of investment funds, private equity, and hedge funds driven by short-term returns, undermining traditional long-term commitments to workers.

• Consequences:

  • Erosion of political power and rise of market dominance.
  • Growing inequality, job insecurity, and political disillusionment – “Politics has become subservient to the market.” (08:00)
  • Emergence of protectionism in response to perceived threats from global markets and foreign ownership.

2. Migration and Protectionism

(09:30 – 15:00)

• UK generally open to migration, with trade unions leading in integrating and supporting migrant workers.
• Elsewhere in Europe (France, Germany, Italy), tighter controls prevail; national champions are protected, and there is more explicit economic nationalism.
• Increasing anxiety about job security, erosion of stable employment, and the introduction of “flex-security” models that workers often suspect mask the proliferation of insecure, precarious jobs.

3. Globalization: Not Just Doom and Gloom

(16:00 – 20:00)

• Europe as the Original Globalizer:
  Monks offers a historical perspective, noting that a century ago, most of the world was dominated by European powers. Now, complaints from Europe about rising competition are met with skepticism globally.

“Only 100 years ago… the world was clearly dominated by Europe, and for Europe to complain now because others are doing better is rightly seen as gross hypocrisy.” (17:00)

• Europe's Economic Standing:
  • Germany as the top global exporter.
  • The EU as an economic superpower with rising living standards, especially in Central and Eastern Europe.
  • European integration lifting poorer nations (e.g., Ireland, Spain, Poland).

4. The Darker Side of Globalization

(21:00 – 24:00)

• Despite gains, globalization has led to:
  • Child and slave labour in developing countries.
  • Poverty wages and poor working conditions.
  • Displacement of the unskilled and older workers in developed economies.

5. What Can Europe Do? The Social Dimension

(24:30 – 30:00)

• The importance of adding a robust “social dimension” to globalization:
  • Strong unions help distribute productivity gains and act as a brake on inequality.
  • EU should promote trade unionism both within and beyond its borders.
  • Acknowledgment that social progress has lagged behind market integration in the EU, risking disillusionment and boosting support for nationalist and xenophobic politics.

“If it’s all left… to the forces of enterprise and capital, the results… will be rising protectionism, disenchantment with democracy, and an opportunity for the reemergence of strong anti-democratic forces.” (31:31)

6. Q&A Highlights

Q: Is protectionism justified in developing countries?
(34:49)

• Monks: “I can see the case for protectionism in a developing economy. The Asian economies would not have grown like they have grown had they have had the kind of free trade principles pressed on Latin America… and thereby their own industries tended to be destroyed and multinational companies completely dominated it.”
• Supports some protection during development phase, but warns economies must “open up” eventually to avoid stagnation.

Q: On Impact of Labour Liberalization via Trade Agreements (e.g., GATS mode 4) and the Lack of Debate
(42:54)

• The audience criticizes the lack of information and debate on labour migration through non-EU (trade agreement-driven) routes and its impact on labour standards.
• Monks acknowledges: “I draw the attention… to two things. One is I think it’s better to have an agreement through the WTO on trade than not… [but] these are difficult issues. …It is generally the case that ILO standards are a condition in EU trade agreements, but not all countries will accept or enforce them.”

Q: Public Sector and Globalization
(47:13)

• Monks: The public sector is “outside the single market” but under threat from privatization and commercialization through various reforms. European treaties recognize some protection for public services, unlike the UK context.

Q: How can trade unions support integration of immigrants and balance their participation & contributions to the welfare state?
(53:41)

• Monks highlights vigorous campaigns against racist organizations and consistent advocacy for equal treatment: “When they get here, they're equal. They are not second class citizens, they are first class and they deserve the same wages, conditions, protections, labor law and so on.” (54:58)
• Welfare inclusion: Supports system where “whatever Britain offers its own citizens should be extended” to legal migrants, with qualifications via contribution for some benefits.

Q: Defining the National Interest and Constraints on Foreign Acquisition
(54:58–61:34)

• Monks criticizes the UK’s management and laissez-faire approach to foreign takeovers, especially by private equity and hedge funds, citing a lack of long-term vision and commitment.
• On limiting private equity: Expresses skepticism of their short-termist, get-rich-quick models, and highlights the risks when companies are left with assets they cannot manage or sell.

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Notable Quotes

• On political disillusionment:
  “Politics has become subservient to the market… UK taxes on large businesses and the super rich seem ever more to be a matter of voluntary donation rather than obligation.” (06:00)

• On Europe’s past and hypocrisy:
  “For Europe to complain now because others are doing better is rightly seen as gross hypocrisy in other parts of the world.” (17:00)

• On the role of trade unions:
  “Strong trade unions have the effect of sharing productivity gains much more fairly than any other mechanism, and they act as a brake on inequality.” (28:00)

• On the dangers of laissez-faire globalization:
  “If it’s all left… to the forces of enterprise and capital, the results I prophesy will be rising protectionism, disenchantment with democracy and an opportunity for the reemergence of strong anti-democratic forces.” (31:31)

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Key Timestamps

• 02:00: John Monks outlines three main meanings of globalization for workers.
• 09:30: Discussion of migration, protectionism, and effects on wages in the UK and EU.
• 16:00: Historical context – European colonial legacy and hypocrisy complaints.
• 21:00: Acknowledgement of the “dark” side of globalization, including exploitation.
• 24:30: The need and role of a “social dimension” in European and global economic policy.
• 31:31: Warning about leaving globalization to ungoverned market forces.
• 34:49: Q&A on protectionism and global trade unionism.
• 42:54: Audience challenge on non-EU labour liberalization and need for open debate.
• 54:58: Practical union responses to immigrant integration and welfare access.

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Tone and Style

Monks combines dry humour (“My lecture sounds like the sequel to Les Misérables…”), direct critique, and candid policy analysis. He is both optimistic about European achievements and realistic (or pessimistic) about existing threats. The discussion is practical, sometimes candidly self-critical, and always focused on the reality of worker experiences and interests.

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Conclusion

John Monks closes with a call for balanced optimism and activism: trade unions and governments must work together to humanize and guide globalization, rather than leaving it to market forces alone. Deliberate political action, he argues, is crucial for preserving both democracy and social cohesion in the rapidly changing European and global landscape.

Transcript

[A]

Good evening, ladies and gentlemen. I'm very pleased to invite you to this second in a series of public lectures organised by the new Department of Management which now includes what used to be the Department of Industrial Relations at lse. We like to see this as a reverse takeover. This evening our speaker is John Monks. John spent much of his career at the Trades Union Congress. He was head of the Organisation and Industrial Relations Department for a number of years, became Deputy General Secretary and then was elected General Secretary in 1993. He filled this role very prominently for 10 years and then in 2003 was elected as General Secretary of the European Trade Union Confederation, which has 60 million members in 38 European countries. Naramba's growing all the time. I think John has chosen as his topic tonight, Europe migration and globalization. What about the workers? I'm sure this will be a very stimulating and challenging talk. It's a topic which is a burning issue in Europe today. So without more ado, I'd like to hand over to John to deliver his address. Thank you.

[B]

Well, thank you, Richard. Ladies and gentlemen, gratified to see such a good turnout. I understand I'm up against a former Greek Prime Minister who has given a lecture in a neighbouring part of the lse and more importantly up against Kiev versus Manchester United on the television. And I'm not sure I wouldn't have been looking for another date myself had I known that when I accepted Howard Davis invitation to come along again. Come back really to the London School of Economics. Well, there's very few words in the trade union dictionary that cause so much alarm as globalization. Conveying a range of meetings and nearly all of them are negative. The first one, the first meaning is that jobs are emigrating from the richer parts of the world to the poorer parts of the world to cheap locations. And the opening up and economic most impressive rise of the Asian countries producing goods and services much more cheaply on a vast scale is perhaps seen as the main threat. A number of workers participating in the world economy has trebled since 1990 as walls came down and the world economy became a world economy for the first time for many years. We've seen the impact for a long time on industries like clothing, textiles and footwear. But the range of industries and increasingly services that have been affected is widening rapidly as technology makes them tradable across very large distances. And of course the so called emerging economies move up the value chain, often with former students of the London School of Economics somewhere in the vanguard of that. The second sense of what does globalization mean is large scale immigration into the richer parts of the world. Workers who are willing and able to work more cheaply, in some cases more determinedly than the locals. And there's already evidence in the uk, which has been an open society, and Adair Turner recently has pointed this out, that levels of migration are undoubtedly influencing and depressing real pay, or at least reducing pay increases at the level of unskilled work in particular, but also in some skill trades, particularly construction. Maybe a third meaning of globalization is what we're noticing, perhaps rather belatedly, the rising power of financial capitalism as opposed to the old style industrial capitalism with investment funds and banks and their provisional wing private equity and the hedge funds hunting through the world for high returns, virtually nowhere where they can't go. And since the collapse of communism, they've got the world at their feet, no competing ideology to worry about. They're the new titans of the world economy. And they are, to put it mildly and diplomatically, unsentimental about the kind of practices that industrial capitalism came to appreciate, often reluctantly, by the way, in the face of union and governmental power. The practices of making long term commitments and building mutual obligations to workers. These are the kind of things that the big companies, the Ford Motor companies of this world came to do. And financial capitalism, by contrast, is often promiscuous capitalism characterized by short term exploitative relationships. And as we've seen in recent months, it can be highly unstable. Seeing Jack Dromey, just as I started that passage over there from Unite, I just think we've probably got a competition about who can use the rudest words about private equity. But anyway, we continue our competition. Jack, anyway, add all this together and what do you get? I think first, and this is where people, not just trade unionists, should be worried, you get a sense of disillusion with politics. Politics has become subservient to the market. It's widely held, it can't, and it shouldn't interfere much in the economic sphere. And the orthodoxy, and it's certainly the case in this country, is the market must be free, that entrepreneurs must be given full license, otherwise they might emigrate and take the money and the jobs with them. By the way, in any case, venerable British companies in a venerable institution like Lloyd's of London have emigrated recently their tax base to Bermuda. Very patriotic gesture that was. UK taxes on large businesses and the super rich seem ever more to be a matter of voluntary donation rather than obligation. And you can see the tax base eroding not just here but in other European countries. And politics can't do much about it. It doesn't seem to be able to do much about it, or indeed about rising inequality or the increasing sell off of British business to foreign ownership. On this last point, 50% of British people who work for public limited companies now work for foreign owned companies. That's a huge increase in the last 20 years. And this sell off of UK assets, or in some cases, like Airbus, a sellout of British interests, is watched rather helplessly by the government that can only say rather lamely that it's a matter for shareholders. That's one consequence, a disillusion with politics. What can be done about it? Nothing can be done about it. You've just got to go with the flow. The second consequence of this is you can see it more strongly in some countries than ours, a tide of protectionism. If this free trade is threatening our jobs, then we should do something about it. Politics should do something about it. We saw this in the French referendum on the EU constitutional treaty, and it's evident in many other countries too, with debates about national champions who must be protected from the operation of the financial markets. And indeed, in some cases, we see in calls for trade protection not especially evident in the uk. Our nationalists instead worry furiously about major about marginal changes in the UK's relations with the EU, as expressed in the Reform treaty which was agreed last week in Lisbon. But when it comes to foreign takeovers of key companies, they're absolutely indifferent. They don't care. They don't care that what a famous Conservative prime minister called the family silver is being sold off, or what a famous socialist minister called the commanding heights of the economy are increasingly owned in France, Germany, the United States, the Netherlands or China or the Middle East, Russia. They take very little interest in sovereign wealth funds. They're indifferent to this real challenge to national sovereignty, preferring instead to tilt at the windmills of Brussels. Now, in other countries, it's a different story. Germany has recently put down some tight limits as to which foreign takeovers would be permitted in France, which has got a theory of the national champions in a number of sectors. And it would be unthinkable for some French companies to be allowed to fall outside French hands. Italy and Spain. Spain recently got London's airports, by the way. And of course the United States have their systems too informal to protect key industries. Even a relatively benign sovereign wealth fund like that of Dubai ran into big trouble in the United States with its purchase of a British company. P and O, which happened to own some American ports, had no trouble whatsoever in Britain, but it had trouble in America. And I note a German senior businessman was asked for his view about this British openness to foreign ownership. And he said, I'll tell you in 20 years, if this unique experiment has worked, it's one hell of a risk. A third consequence of globalization is that there are some signs of rising concern about migrant workers and there are some new restrictions to come on workers from outside the EU in the British context. But I'm very proud to say that the toleration of migration generally in Britain, and particularly I think, in the trade union movement, has been admirable. And the TUC and its affiliated unions, some of whom are represented here today, have been in the lead on this, have maintained a generous policy. Does reflect the fact that there's a lot of vacancies in the British labour market. It would be harder, I think, if unemployment were higher. But nonetheless, it's very much, I think, to the credit of the British labour movement of what has gone on. But there's other consequences of globalization as well. A sense of unease, a sense that things are a bit beyond people's control and despite the growth in prosperity. Prosperity which is unevenly distributed for sure, but is nonetheless very real. All the polls seem to show that these rising levels of insecurity and dissatisfaction, not going into all the reasons for that, beyond my scope this evening. But the economic and labour market context has some effect. The rise in inequality, the fact that people are feeling that jobs are insecure, that employers are shifting risk onto workers as far as pensions are concerned, that employers have got a short term orientation, feeling no sense of obligation to the people who work for them, all these things are contributing very much to that. And this is something of a background on a current debate in the European Union, not so much again in Britain, but a concept of flex security, which is a concept that's been used to describe the very successful Danish story of changing the basis of their economy from agriculture and marine engineering to environmental engineering and high grade services and a strong science base. And this concept of flex security is already causing concern among a lot of workers that it's a device to abolish the regular job, a steady job, and replace it with more temporary, precarious employment. The European Commission actually made some alarming statements recently about a job for life being a thing of the past. I was able to point out to the president of the European Commission, not in the European Commission, it's not a job for life. A lot of people there with 40 years service clocked up. And the other bit of rhetoric that they use is that if you've got a steady job, somehow you're an insider keeping out the outsiders, the young who are looking for work, the migrant who's come to this country concerned, and maybe women returning after having children out of the good jobs and making sure they stay in precarious work, as though to work in a low paid, low status job is some kind of privilege. And again, this has been causing a lot of concern, particularly in some countries like France and Italy. Well, last week we actually agreed a joint analysis with Europe's employers, which actually corrects the balance and is against zero hour contracts and insecure working and the growth of these kind of practices. But that sense of insecurity has been encouraged already in some countries and damage has been done. Well, so far, I guess my lecture sounds like the sequel to Les Miserables. Globalization's all gloom and doom and perhaps can only be survived by a stoic and stiff upper lip. In fact, I've spent a significant part of my life telling trade unionists that actually globalization is not Les Miserables part. And although it's got worrying features, it's got positives too. Now, firstly, Europeans need to be aware that globalization was invented by Europe for Europe. I mentioned this. Richard seen me do this before, but I found an old school atlas of my father's, dated 1907, and I opened it, looked at a map of the world, and There was only six countries in 1907 that were not European, were not European colonies, or were not former European colonies. Now, come on, a bit of University challenge. Lse name me those six countries. Shout out, they're not European, they're not European colonies, and they're not former European colonies. Argentina, Spanish colony. Thailand. 1. Russia was a European country, is a European country. Japan. 2, 3. Abyssinia, I think it was called, but you're quite right. So we got three. Liberia. Could be a seventh, actually. Liberia. But it was an American creation for freed slaves and so on. But it's not on my. You could be right, technically. Right. Liberia makes it seven.

[C]

China.

[B]

No, not including China, because in 1907, the coast of China, all the major estuaries were all colonies of European powers or the United States or Japan. Tibet. Correct. Sorry, Tibet's not a country. Oh, my God. Yeah, okay, right. I don't know what it was. What was it in 1907? Always been part of China, has it. All right, okay, well, before I. Maybe we substitute Liberia for Tibet, I say diplomatically, keep my list of six going. Japan. No, I'm not sure about Bhutan. But anyway, You've Got four. And the two you haven't got are Korea, which was the colony of Japan, I think, and others at the time, and Persia, Iran, I think someone shouted that. Did they? Oh, sorry, not very loud. And Persia as well. But the point I'm really making, apart from testing your history and geography, is that only 100 years ago that was what the world looked like. That's not so long ago, is it? The world was clearly dominated by Europe, and for Europe to complain now because others are doing better is rightly seen as growing gross hypocrisy, I think, in other parts of the world. And it's not accurate, actually, that Europe's doing badly. On the contrary, Germany is the world's number one exporter. It's got a huge trade surplus. That's not the case in the States or in the United Kingdom. The euro area countries have a balanced trade position as a group and are holding their own in the face of rising competition. Living standards have soared in most countries, not least in Central and Eastern Europe. One of the great successes at the present time are the growth rates in Poland and the others. In the UK, real earnings have risen by 24% in the last 10 years. And with all its problems, the EU is an economic superpower, as President Hu Jintao mentioned recently in his speech to the Congress of the Chinese Communist Party. So it's simply untrue to suggest that all globalization is bad news. And there are currently more winners than losers from the opening up of markets in the past 17 years or so, and many of them are in Europe and in Britain. Indeed, I think the greatest achievement so far of the European Union is the way it spread prosperity in Europe. Poor countries have caught up with their richer neighbours. Italy was the first to do that in the context of the old Common Market, caught up with France and Germany. Ireland's been a Spectacular performer since 1989 in Europe now on some indices surpassing the United Kingdom. Spain is a big star at the present time, and the new member states who came in in 2004 are showing high growth rates and rapidly rising living status standards. Attractive markets now for other economies as well. We don't know quite how it's done. There's some transfer funds, but they're not that big in terms of their effects on gdp. We know the single market has an effect, but in any way it's clear that EU membership has been a huge benefit for the new and the old member states. And the new member states, by the way, are not just growing economically, but also democratically, and that's rather a contrast with the countries to the east of the eu, like the Ukraine or Belarus, where the influence of Russia remains very powerful. And Russia at the moment anyway is not promoting the creation of strong, independent democratic neighbors, which has been the approach of the European Union. And just imagine for a moment if there was no eu, which is what a lot of people in this country really want, what the pressures would be in the Baltic states, even in Poland, in the face of a more assertive Russian approach that we're seeing at the present time, it would be an area where Russian foreign policy would be clearly dominant. And the EU has been a sense of force for greater equality in a world that generally has been going in the other direction towards inequality. But just as the negative trends and concerns I began with don't mean that globalization is a disaster, you can't say it's an unalloyed good either. There's a dark side, particularly evident in the developing world, where there's, in some parts of that there are bleak pictures of child, sometimes slave labour, appalling health and safety practices, grinding toil exploitation and poverty pay. And there's losers too, in the west, the poorly educated, the unskilled, the workers in manufacturing and those parts of manufacturing and services which are emigrating. And then there's the older workers who just find it hard to learn new tricks. And we see both faces of globalization and we have to make a judgment about what the right conclusions are. And I think that Europe and the west have still got some time to shape the direction of globalization much more purposefully and fairly, but we haven't probably got much time to do that now. Currently, in the world and European trade union movement, the new International tuc, which is a fusion of the old ICFTU and the World Confederation of Labour, is leading the argument for a social dimension to globalization, which currently is very weak. It's true. We have the International Labour Organization, which has its own 90th anniversary in two years time and that's done a lot of good work in raising social and labour standards. The reconstruction of Western Europe after World War II was based on ILO standards, standards on the welfare state, on public services, on strong independent trade unionism and collective bargaining. And in turn, actually the ILO owed much to the ideas of the leading British trade unionists of the today, like Ernest Bevin and Walter Citrine. But today the ILO is rather marginalised by other bodies concerned with global governance. The imf, the World bank, the World Trade Organization in particular, they don't believe in including social and labour standards in their work. And of course, those of you from the developing world will probably know too, that those standards are often seen as some kind of European duplicitous protectionism, with traditionally strong advanced economies trying to use labour standards, for example, to reduce one of their few competitive advantages, that is cheap labour for many of them. And India leads the way on some of this. ILO standards linked to trade amount to European and perhaps North American protectionism. I don't know how we're going to get round this problem unless there's a concerted effort to do so. And at the moment the will is certainly lacking the will to do that. But I do know that the EU needs to do more in that particular area. At our recent congress of the ETUC last May, we signalled the intention to mobilise to make the case for an EU which promotes trade unionism not just in Europe, but in the world. It already does that in Central and Eastern Europe and in the neighbouring countries to Europe, both on the north side of Africa and the countries to the east of the eu. But we are arguing the case that strong trade unions have the effect of sharing productivity gains much more fairly than any other mechanism, and they act as a brake on inequality. And in many parts of the world they need encouragement and support. And I think this should be become one of the key factors of both European and British foreign policy. And if we're going to do that, we've got to start in the eu, which is by some way the most social part of the world, although we're struggling even in Europe to make sure that social progress keeps up with the developing single market. And the objective of harmonizing conditions in Europe has not been been accomplished. That is pretty clear. The EU has been pushing forward a single market very strongly to remove barriers to competition. But the free movement of goods, services, capital and labour is certainly operating. But it risks sometimes being seen more as a threat than as a force for progress. And this result of a failure to ensure that social progress keeps keeps up with the other developments, I think is reflected in this loss of support that we're seeing for Europe in the trade union world, not just in Britain, but in other countries too. And it could be a factor behind a rise in nationalist, protectionist and xenophobic groups as well. Now, the whole European adventure has never been a straightforward process and it. It's had many difficult periods. But I do think that while enlargement has been a big success in many respects, moves to deepen European integration are not making the same progress and if you're British, we understand that because you can see it in the reaction of many people in the UK to the EU Reform Treaty, a rather modest document, as I described it earlier. Yet from a trade union viewpoint, Europe's still got many, many strengths. The region of the world with the highest proportion of the workforce in trade unions, the strongest welfare states and public services, universal democracy is a key component. You've got to be a democracy to be in the European Union. And the social well being and fundamental rights of people at its centre seems to me to be very important. 493 million people within this single market. But the way huge potential if that potential can be harnessed in some kind of combined way. But we won't do that without a strong social dimension. Now, there is a debate still going on about whether Europe's really got a social dimension or a model at all. And the UK government, Labour government, has been among those who question whether in 27 different countries the concept of, of one model makes much sense. That say, given the differences between Sweden, Bulgaria, Italy and Ireland, for example, how can one social Europe be built? Often this seems to us in the European TUC to be an argument to justify shutting down any further regulation at the European level. It's being used too to justify the unjustifiable, like the UK having an opt out from the EU's Charter of Fundamental Rights, the express reason for which, by the way, is to protect the trade union laws, anti trade union laws of Mrs. Thatcher and Mr. Tebbit, which were carried in the early 1980s, and to deny UK workers the same opportunities of representation, consultation and engagement that are the best use European standards. But there is a European social model, and a substantial one at that. It exists in the health and safety area, where EU law, by the way, often reflects in UK practice. In this instance we are at the top of the league, which aims to stop competition between in the single market on the basis of some countries getting away with unsafe or unhealthy working condition. Very important step. It exists in the area of equality law, where the principles of equal pay, maternity and paternity rights, non discrimination are enshrined in EU law. Nobody can discriminate against people for a whole range of issues. It exists in information and consultation rights and in European works councils. There's now 800 companies, more than 800 actually, that have established such council. It exists in laws to protect what used to be known as atypical workers, but are more and more typical part timers, temporary workers, fixed term workers and at the Moment, there's a hard battle going on to try and extend protection to temporary agency workers, who make up quite a big part of the British labour force at the present time. And the social model exists too in relation to migrants. And the Posted workers Directive gives some protection to the migrant worker and what terms and conditions they can expect in the single market of Europe. And these rights and more, by the way, are well set out in a recent pamphlet by Stephen Hughes, mep, and David Lee, an old colleague of mine at the tuc. Now, most of all, however, the reason for a social Europe is we've got a single labour market costs in 27 countries and indeed, if you add in Norway and Switzerland it's 29, Liechtenstein it's 30. So they've signed up to this single market and we are saying that if there's a single market in labour, then some rules, minimum traffic rules, are very, very important and that we need therefore to go further with social regulation. I mentioned temporary agencies, workers, but on our agenda are rights European wide to training, extending consultation rights for workers affected by change, strengthening the worker role in the European Works councils and effective control of working time, which is dangerously long in some countries and is an area where competition is permitted. Now, I'm taking some encouragement from the current EU debates. On the agenda in Lisbon last week, when they agreed the treaty was also a paper entitled Succeeding in the Age of Globalization and that recognized that Europe's social realities are changing and that more effective means are needed, and I quote here, of ensuring rights to employment, education, social protection across Europe and indeed outside Europe, because I think the European model should be spread and exported. I'll be interested in some of your views from outside Europe on that later, because I think it's the right way for societies to go. So, on this whole issue, Richard, of globalization Europe and what about the workers? Am I an optimist or am I a pessimist, Candide or Jeremiah? I guess my rather lame reply is neither. But I'm aware that the trade union job is always to make the best of any situation and that the key to making globalisation work properly is a strengthening of the role and membership of trade unions across the world and also effective joint governmental actions across the world and at European level too. If it's all left as it could be, to the forces of enterprise and capital, the results I prophesy will be rising protectionism, disenchantment with democracy and an opportunity for the re emergence of strong anti democratic forces. Globalisation must not be left to the entrepreneurs alone. Thank you Very much.

[A]

Thank you, John, for a very stimulating and wide ranging lecture. John's agreed to take questions. Do you want to take a few at a time?

[B]

There are roving mics.

[A]

I think so. If you indicate. If you want to speak. I was told there would be moving. Here is a roving mic. Roving. There's somewhere in the second row, then a lady in the front one, the third row back there. We'll take those three as a starter.

[D]

Oh, hello, John. I'm from China. I'm doing a master program at ifc. My question is that you mentioned the protectionism among the developing countries like India or Latin American countries. Do you think is it good thing for their, like, their own countries, like domestic market? Because it's, it's like protect market and promote the like domestic industry growth that eventually lead to a like economic growth.

[A]

All right, your next.

[C]

Yes, Mr. Chairman, I'd like to ask Mr. Monks about developments in global trade unionism. I did hear some time ago that I think the Transport and General Union was thinking of amalgamating or building links with unions in the United States. I just wondered what potential is for this to build a global movement.

[A]

There was someone back there. No, no, no, no. Well, thank you. Thank you. My question's not unrelated to a previous question.

[B]

It relates to the falling rates of.

[A]

Unionization and whether or not the moves to consolidate the peak international trade unions is a reflection of the failure of.

[B]

Unions to meet the challenge of falling rates of unionization.

[A]

I've seen a few hands for the second round. I think I'll let John answer those.

[B]

Yeah, well, all very bright questions, actually, very pertinent ones. I can see the case for protectionism in a developing economy. I think the Asian economies would not have grown like they have grown had they have had the kind of free trade principles that were, for example, pressed on Latin America and to some extent on Africa by the IMF and others, and thereby their own industries tended to be destroyed and multinational companies completely dominated it. So I'm not religious, free trader. I might have been to a Manchester school many years ago, but I'm not a member of the Manchester school of free trade economics. I do think, though, there comes a stage when reciprocation, recognizing that if you're playing powerfully in the world, and China is certainly doing that, that you've got to be very sensitive to what others are doing. And the argument the European Union's got with China at the moment is about an undervaluation of the currency in particular. I mean, it's only I think three or four years ago where the trade balance between China and the EU was about even now it's massively in China's favor and that's leading to calls from European producers for protectionism, which I don't think anybody wants to do. But the currency issue is a big one at the present time. And if you're sitting there holding euros or pounds actually at the present time, with the dollar weak and being allowed to weaken, it reduces American debt if it does weaken and makes our exports more competitive. The position of China's currency as the Chinese economy becomes more and more and more important as it will, becomes very controversial and difficult. But I'd say so am I. I can see the case for some protectionism, but after a certain point I think an economy should open up. However, I don't go all the way with the British government and say it should open up, that you don't care who owns what. There comes a point, I think, whereby there is a sense of the national interest. It's not easy to define it. When the French were asked to define it, they picked Danone, who make yogurt out as a national champion and so on. They're finding it difficult to know what should be open and what they want to try and keep a grip on. But having said that, at the end of the day I'm rather more critical of British managers and owners than I am of any governmental body. The ease with which they suffer out to the highest bidder without any regard for who that might be is something that is almost unique in the advanced world. And I think we also recognise, I don't know whether the trade union colleagues would agree that some of the newer managements are better than the British ones that they replaced on a quite indeed, commitment, long term commitment, more commitment to the community and so on. There's something rotten in the management philosophy, you can't even call it a philosophy that exists in many British companies, which is what's my share bonus looking like? And how am I getting on and where will I be in six months time and so on. The sense of commitment which the great entrepreneurs used to demonstrate and some of the current ones do, is simply not, not there. It's absent and it's not so absent in some of these other countries. Global trade unions, well, should really. Jack Dromey should probably really answer that, but the talks between UNITE and the United Steelworkers of America, which I think are progressing quite well, whether it's to amalgamation, I don't know, but certainly for a closer alliance and there's quite a lot of that going on in the world at the present time, particularly where people are in the same industries and services with the same employers. To a large extent, the unions are looking at how they can get together more effectively. Whether it comes to amalgamation, sharing the money and all the rest of it, well, I don't know. I'd be very, very interested to see how far those talks do get. But it's an important development, that's for sure. There's others as well, I think. Unite and IGA Metal in Germany from time to time have sought to build a similar kind of process. The third question was about the trade union numbers and decline in membership. It's not universal, there are exceptions, but the general trend is down, that's for sure. And there's all sorts of initiatives around to try and reverse that in some countries with more success than others. For example, I was in Holland last week and they're similar economy in many ways to Britain. Their trade union membership now is beginning to grow quite strongly. And based on an individual kind of a sense of the union as your agent is what they have been pressing. Our membership, of course, has been going up a bit as well, though reflecting probably increases in the number of public sector employees rather than anything else. And it's not been going up significantly in the private sector, but it's. I mean, given the degree of job insecurity in some sectors of the private sector, given the fact that many of the jobs are now much more professional graduate jobs than traditionally was the case, I think it's 50% already of 21 year olds in Scotland are at university or the equivalent or just finished their course. It's not quite there in England and Wales, but it's on the way there. That's the government target. And so it's a different world. And unions who grew up in the mines and the mills and the big factories having to adjust, are adjusting, I think, to the new world of work. It's different than it was before. Public sector remains a union heartland, but outside that is perhaps where our major challenges lie. And there's some challenges in the public sector sector. Seeing Nigel DeGrucci over there from the teachers. Teachers are the best unionized major occupational group in just about every country around the world. It's just a fact. Transport workers generally are very well organised too. Both categories know that they're at risk and they need somebody to turn to if they a train driver or someone has an accident or pilot or a teaching gets in some disciplinary problem with one of the pupils. So some are doing well, most are not doing well. Particular worry is Central and Eastern Europe at the moment, which is sort of very American in its business philosophy. But there's a lot of attention, a lot of work going on to try and address the problem.

[A]

There's one in Thunder doing. Did I see one at the back as well on that side? No, one at the front. And I see 2, 3. I see several over there. We might need the third layer, but let's go from the backwards. Oh, yes.

[C]

Linda Cawsher, LSE what I caught of your talk and the debate anyway, generally in the public sphere is about labour liberalisation within the eu. That's generally it's taken. That's what we're talking about with labour migration, and that's irrevocable in its own way as members of the eu. But what doesn't get talked about is the liberalization of Labour, the commitments to labour liberalization that are occurring through trade agreements and for instance, through mode 4 of GATS. This is labour from outside the EU into the EU. For instance, mode 4 of GATS as a WTO agreement will apply to 150 countries. It's the prime objective of the Indian government in the eu. Indian Free Trade Agreement. Without labour liberalisation, there would be no free trade agreement with India. So it's that important. That will also be irrevocable when it's in a trade agreement. Just as labour liberalisation within the EU is by virtue of being a member of the eu, you optimistically to talk the union vision of spreading trade unionism and labour organization from Europe outwards. But you admit in your last answer that unionism in Europe is declining, certainly is in this country. And the sort of labour migration that we're talking about, both within the EU and certainly the labour liberalisation that I'm talking about from outside the EU being put into trade agreements must inevitably affect labour standards. And there is also the crossover with social effects of migration, which are not all positive. So it's quite likely that there's a lot of negative effects there and a diminution of. Of labour standards from such labour liberalization, rather than your optimistic view of spreading trade unionism from the EU to other countries. My concern is the absolute lack of information about this whole level of labour migration, the commitments that are being made in trade agreements to labour liberalisation from outside the eu. There's no debate in this country. Parliament doesn't talk about it, Parliament's not aware of it. There's no awareness raising, there's no media debate about it and the unions don't raise any awareness about it. And whether it's good or bad, it must be that people have a right to know that these commitments are being made when it's going to affect their society. So much liberalization from 150 other countries outside of the EU there is just no debate about it should. Surely it's the trade union.

[A]

Yes, I think you made the point.

[C]

Surely it's the trade union's job to be raising that debate and allowing people to know about it.

[A]

A couple from this side. Yeah.

[D]

Thank you. Chairman, My name is Nigel degreeshi. I'm a retired teacher trade unionist. I was glad that John mentioned the public sector in answer to the first set of questions because I don't think you'd mention the public sector before John. So I would like to invite John to extend his thoughts a bit further because I think so far we've been fairly successful in protecting public sector workers against some of the evil forces of globalization. I just wonder how much longer we can do that. And there's other areas I think where public sector works might be affected, for example in the area of qualifications, particularly in respect to being able to work in certain public services. So I'd just like you perhaps John, if you don't mind, to develop any thoughts you might have in that particular area. Thank you.

[C]

Hi. Hello. Mr. Monks, you mentioned that you think globalization should be shaped by politics but today political left seems to be to have problems. To speak with one voice. What do you think are the main challenges to trade union solidarity and as well to cooperation of trade unions with socio democratic political movement?

[B]

Okay.

[A]

One more round after this.

[B]

No, I've got. Yeah, yeah, fine, good, good. Just. I'll be pretty quick then on some of this. I'm not familiar with all the 150 trade agreements but just to say that I draw the attention of the audience to two things. One is I think it's better to have an agreement through the WTO on trade than not. Because if you don't have one with the multilateral one then you're all negotiating individually with the United States of America or China or the European Union and you rather in an unequal bargaining position. I just make that the multilateral thing and the very difficult to do that because as you mentioned India, Brazil and others South Africa much more assertive than used to be the case and rightly so. And looking after their interests. Their interests include a belief that what the European Union do, by the way in bilateral deals is insist on labour standards. They are generally in the agreements that they make, the ILO standards are a condition. And that's something that was a triumph for my predecessor and the then General Senior Secretary of the icf, TU Bill Jordan. They got the EU to do that and that's still there. Clearly there's a huge argument with India about child labor all the time and nobody doubts the democracy and so on in India. But this cultural difference has come to the point of people not going to trade with India because of it. And the decision has been made that they will trade with India but continue to press and raise it and so on. But it's a difficult issue. Similarly with China in some of the labor practices that are reported in China, which do certainly do not and China is not the ILO standards and not fully in the agreement with China. But there's no doubt about that, that China simply won't accept them for itself and is looking for liberalization measures outside it. But I'm not making the point that I don't think China is all powerful in these things. I think still the west is the most powerful force in this and have done many things to China and India over the years in the interests of themselves, ourselves, which can't be too critical always of the developing world trying to develop practices and protect practices which benefit them. Nigel's point about the public sector, it was an omission, I think, not to say something about that. I mean, the public sector is an area by definition outside the single market, although it's frame in many ways through public private partnerships, privatizations, pressure for commercialization, certain aspects in British terms of the choice agenda and modelling up what is private and public and so on. And I mean we've already got some protections in the European Union for the public sector, but I would say not enough. And the current. One of the nice things about this reform treaty that was agreed last week is there's a commitment to the public sector and public services as an exception to the single market, actually as a principle of the treaty. I'm not sure we'd get that in a UK context at the present time, but it was got in the European one in terms of controlling globalization. And I mentioned governmental action and coming together. Trade union solidarity is also extremely important and things like global councils with big companies. We've got the European level works councils in 800 companies. We could get them in 600 more if the unions wanted them. So we could have 1400 companies covered by the European Works Council, which at least is 493 million people contained within some kind of process, which means that things are not just done in the spirit of a crisis, which is what they're often done at the present time, in the spirit of an instant dispute. We need to be able to react quickly to people's disputes and give them whatever help we can. And this is why, by the way, this Charter of Fundamental rights would have been a very good thing for Britain because it would have loosened our ability to give solidarity support, which is tightly constrained at the present time. Anyway, that's what the red line is designed to stop. And whether it will in the end stop it, I don't know. But that certainly was its purpose. But trade unions have got a major part to play in civilizing globalization.

[A]

Two over there and one here.

[B]

Is the football kicked off.

[A]

Do you want to call it today after this?

[B]

People are voting to unite.

[A]

So you're the lucky last three.

[C]

Very lucky indeed. Migration is one of your keywords in your header up there. However, integration is not one. Now, I think that integration is just as important as migration, and the two should go hand in hand. My question is, what can and what are trade unions doing to facilitate this integration and to decrease social conflict, especially seeing as immigrants often seen as a tool for trade union revitalization? Which steps can the government, perhaps trade unions, can make in order to balance between immigrants participation in the welfare state and their contribution to it? Thanks.

[B]

Sorry, could you just say the first bit of that again? I was just tuning into your.

[C]

Which steps can the government, and perhaps trade union in particular, can make in order to balance between participation of immigrants in the welfare state and contribution to it?

[B]

Not sure I understand which steps. I understand that. I'm just. I haven't got the point of the question.

[A]

Inclusion in the welfare state to get.

[B]

People included in the welfare state.

[C]

Yes.

[B]

Immigrants and migrants. And.

[C]

Yes.

[B]

Yeah. Okay. Okay. All right. I can understand the question. I'm not sure I can give you an answer. You indicated some sympathy for protecting the national interest, but you were sarcastic about how the French defined it. How would you define it? And what constraints would you put on private equity funds, sovereign funds, hedge funds, making foreign takeovers of British companies? Okay, Chairman. Immigration and migration. Yeah. They're not the same thing. I realize that. And the. I think reactions to the two subjects are quite interestingly different. On some migrants. Quite good. Immigration, not so sure about. We saw this figure the other day that Britain might have 80 million people, 25% more in relatively short period of time. I mean, there's got to be. I mean, I've never been complete Open door in a country that's already overcrowded. I think it's one of the most difficult things to regulate and there's injustices abound all over the place all the time about it. But having said that, generally I think Britain is done quite well at managing the issue. It's a difficult issue in some parts of the country which are not necessarily always very well articulated. What are the unions doing? I think doing quite a lot. This sort of comes into the territory of the second question. I mean, firstly, there's very vigorous campaigns against nationalists and racist organizations in all the areas concerned. If the British National Party raises its standard, the unions get stuck in. We've always done that wherever they came. Looking again at Jack involved years ago in London on those kind of campaigns and the tuc, I remember going up to when Oldham and Bradford had race problems, we were there to organise the unions across the community and so on and we put a lot of effort into that and we've had quite a lot of success on it. That's not necessarily the answer, but the building contacts across communities has always been a union issue. And treating immigrants and migrants as equal, when they get here, they're equal. They are not second class citizens, they are first class and they deserve the same wages, conditions, protections, labor law and so on. Illegal immigrants, more difficult. But legal migrants, legal immigrants, I think you deserve. Whatever Britain offers its own citizens should be extended to them. The welfare state. Clearly there's certain things that, that you've got to qualify for through paying the national insurance and so on. But in a number of areas there's already fairly easy entitlements, other areas like benefits. I know it gets tougher but it's. I'm not sure of the details at the moment of Social Security law, but it seems to me that the, the British system is reasonable one, if not the most generous. Private equity, I mean exploded into our world and the statistic that they own one sixth of the private sector in Britain at the present time was an astonishing statistic. And it came to light through some roof pruning, particularly somebody who bought a bird's eye fish plant and somebody then who restructured reduced substantially 2,300 jobs in the AA. That was Permira, one of the biggest. But we found after a quick look a wide range of others who are extremely ruthless on not care they remote owners and the deal that they've got, which is they borrow to buy, they offset the interest on the borrowing against their tax, end up paying very little indeed and doing very little Indeed, other than reducing costs, I have to say and to be fair, there are some who are better than that and I think we've found that out. There are some who take kind of a management consultant role in improving the management of hitherto dozy companies. I'm not going to name any names because it might be good in one situation, the assets strip ruthlessly in another situation. But it's not always the same story in every case. We, I think, appreciate that, but it does seem to me that the. I don't know what effect the more difficult to get loan capital is going to have on private equity. I don't think any of us do. But the day when a private equity actually can't sell on a business. We're watching Alliance Boots, very interesting at the present time, which was a KKR deal. The minute they get left with a company that they can't sell, then that's the minute that private equity might go out of fashion extremely quickly. But no company has to bear the particular company as important as Alliance Boots has to bear the costs of their failure in that way. But at the moment the we take a lot of convincing. I think Jack Dromy and I were at some meeting together on it. We take a lot of convincing about this model. It seems to us to be short term, get rich quick and exit. Although as I say, there are a few deals and a few companies are probably a bit better than that.

[A]

Well, thank you very much, John. We're delighted you were able to come to LSE and have given us such a stimulating lecture and have answered a very wide range of questions. Thank you also to the audience for turning up and keeping the debate lively. I've been asked to remind you or inform you that the next lecture in this series is the same time, same place on the 13th, 31st of October, which will be given by Richard Noddy, who I suppose is one of the knowns of private equity on the topic of globalizing capital markets. So we'll see some of you at least here. But once again, thank you very much, John, and thank you for coming.