Neoliberal and neostructuralist perspectives on labour flexibility, poverty and inequality: A critical appraisal

Abstract

Click to increase image sizeClick to decrease image size Notes 1. By ‘neostructuralists’ or ‘neostructuralism’, I am referring specifically to the Latin American variant that flourished after 1990 under the auspices of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), better known by its Spanish acronym of CEPAL. A number of books have discussed the emergence of Latin American neostructuralism. Patricio Meller's The Latin American Development Debate: Neostructuralism, Neomonetarism and Adjustment Processes (Westview Press, 1992) and Osvaldo Sunkel's Development from Within: Toward a Neostructuralist Approach for Latin America (Lynne Rienner, 1993) are outdated and woefully one-sided. More recent works such as Duncan Green's Silent Revolution (Latin American Bureau/Monthly Review Press, 2003) Robert N. Gwynne & Cristóbal Kay's Latin America Transformed: Globalization and Modernity (Arnold, 2004), and Peadar Kirby's Introduction to Latin America: Twenty-First Century Challenges (Sage, 2003) offer a more useful description without deeply probing Latin American neostructuralism's conceptual underpinnings and societal outcomes. 2. The World Bank's 1997 World Development Report: The State in a Changing World, and its 2002 World Development Report: Building Institutions for Markets, both represent a turn away from dogmatic neoliberalism. 3. David Ruccio, ‘When Failure Becomes Success: Class and the Debate over Stabilization and Adjustment’, World Development, Vol. 19, No. 10 (1991), pp. 1315–34. 4. I borrow the term ‘Radical Political Economy’ from James Rebitzer's article ‘Radical Political Economy and the Economics of Labor Markets’, Journal of Economic Literature, Vol. 31, No. 3 (1993), pp. 1394–494. Some of its early US proponents have abandoned RPE's original thrust by embracing neoclassical concepts and methodology. For an account of this process, see David Spencer, ‘The Demise of Radical Political Economics? An Essay on the Evolution of a Theory of Capitalist Production’, Cambridge Journal of Economics, Vol. 24, No. 5 (2000), pp. 543–63. Nonetheless, I believe that the term should be preserved, along with its original intellectual aim of understanding power relations in capitalist production, expanding it also to the reproduction of labour, both with a transnational perspective. 5. ‘The Unraveling of the Washington Consensus: An Interview with Joseph Stiglitz’, Multinational Monitor, Vol. 21, No. 4 (2000), pp. 13–21, emphasis added. 6. ECLAC, ‘Social Panorama of Latin America 1999–2000’, ECLAC Notes, No. 12 (September 2000), p. 1, emphasis added. 7. Inter-American Development Bank (IADB), Good Jobs Wanted: Labor Markets in Latin America (IADB & Johns Hopkins University Press, 2004), p. 2. 8. Ibid., p. 166 9. Among the many studies, the following four are representative: Eduardo Amadeo & Susan Horton, Flexibility and Productivity in Latin America (Macmillan, 1996); Sebastian Edwards & Nora Lustig, Labor Markets in Latin America: Combining Social Protection with Market Flexibility (Brookings Institution, 1997); Suzanne Duryea, Olga Jaramillo & Carmen Páges, ‘Latin American Labor Markets in the 1990s: Deciphering the Decade’, Inter-American Development Bank Working Paper, No. 486 (IADB, 2003); and IADB, Good Jobs Wanted. 10. The migration of ECLAC functionaries into key Concertación ministries and economic posts started in 1990 under the first Concertación administration led by Patricio Aylwin and continued under the Frei (1994–1999) and Lagos (2000–2005) governments. During the first Concertación administration, Andrés Bianchi, who had been Director of ECLAC's Economic Development Division and ECLAC Deputy Executive Secretary, was named Central Bank president; Ricardo Ffrench-Davis was named Director of Research at the Central Bank (1990–1992); Carlos Massad, who had held numerous posts at ECLAC, was named Minister of Health in 1993, and then Central Bank governor (1996–2007). Other prominent ECLAC functionaries that have served in different Concertación administrations have been Roberto Zahler (Central Bank), Nicolas Eyzaguirre (Minister of Finance), Osvaldo Rosales (Director of General of External Economic Relations), Ernesto Ottone and Eugenio Lahera (both as advisors on public policy and strategic issues to President Lagos). Of these, Ffrench-Davis, Rosales and Ottone have returned to their posts at ECLAC. 11. The notion of systemic competitiveness was introduced into Latin American neostructuralism through the work of Fernando Fajnzylber of the Joint ECLAC/UNIDO task force. See his seminal article ‘International Competitiveness: Agreed Goal, Hard Task’, CEPAL Review, No. 36 (1988), pp. 7–23. It was adopted as ECLAC's discourse in 1990 with the publication of Changing Production Patterns. 12. ECLAC, Changing Production Patterns, p. 71. 13. See, for example, José Antonio Ocampo, Rethinking the Development Agenda (ECLAC, 1998); Nancy Birdsall, Carol Graham & Richard H. Sabot (eds), Beyond Tradeoffs: Market Reform and Equitable Growth in Latin America (Inter-American Development Bank & The Brookings Institution, 1998); and Andrés Solimano, Augusto Aninat & Nancy Birdsall (eds), Distributive Justice And Economic Development: The Case of Chile and Developing Countries (University of Michigan Press, 2000). 14. World Bank, Latin America and the Caribbean: A Decade After the Debt Crisis (World Bank, 1993), p. 4. 15. Keith Griffin, Alternative Strategies For Economic Development (Macmillan/OECD Development Centre, 1989), p. 39. 16. For an analysis of the passage from structuralism to neostructuralism see James Petras & Fernando Ignacio Leiva, Democracy and Poverty in Chile: The Limits to Electoral Politics (Westview Press, 1994), ch. 4. 17. ECLAC, Changing Production Patterns. 18. Osvaldo Sunkel & Gustavo Zuleta, ‘Neostructuralism versus Neoliberalism in the 1990s’, CEPAL Review, No. 42 (1990), p. 38 19. CEPAL, Equidad y Transformacion Productiva: Un enfoque integrado (Naciones Unidas, 1992), p. 23, my translation. 20. Ibid. 21. Ibid., emphasis added 22. Ricardo A. Lagos, ‘Labour Market Flexibility: What does it Really Mean?’, ECLAC Review, No. 54 (1994), p. 93. 23. Gustavo Zuleta, ‘El Desarrollo Desde Dentro: Un Enfoque Neostructuralista Para América Latina’, Pensamiento Iberoamericano, No. 21 (1992), p. 311, my translation. 24. Pilar Romaguera, ‘Flexibilidad laboral y mercado de trabajo en Chile’, Colección de Estudios CIEPLAN, No. 43 (1996), p. 12, my translation, emphasis added. 25. World Bank, Latin America and the Caribbean, p. 92. 26. Ibid. 27. Ibid., p. 92. 28. Alejandra Cox-Edwards, Labor and Economic Reforms in Latin America and the Caribbean (World Bank, 1995). 29. International Labour Organisation, Regional Office for Latin American and the Caribbean, 2000 Labour Overview of Latin America and the Caribbean (ILO, 2000). 30. See Chris Smith & Paul Thompson, ‘Reevaluating the Labor Process Debate’, in Mark Wardell, Thomas L. Singer & Peter Meiksins (eds), Rethinking the Labor Process (State University of New York Press, 1999), pp. 205–31; Berch Berberoglu (ed.), Labor and Capital in the Age of Globalization: The Labor Process and the Changing Nature of Work in the Global Economy (Rowman & Littlefield, 2002). 31. Classic works on this topic are Harry Braverman, Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century (Monthly Review Press, 1974); The Brighton Labour Process Group, ‘The Capitalist Labour Process’, Capital and Class, No. 1 (1977), pp. 3–26; and Michael Buroway, Manufacturing Consent (University of Chicago Press, 1979). 32. The historical evolution of labour control systems has been studied, extensively. Two studies of its evolution in the US economy are Richard Edwards, The Contested Terrain (Basic Books, 1977) and Christopher Gunn, ‘Workers’ Participation in Management: Capital's Flexible System of Control', Review of Radical Political Economics, Vol. 26, No. 2 (1994), pp 119–26. 33. John Humphrey, Gender and Work in the Third World: Sexual Divisions in Brazilian Industry (Tavistock Publishers, 1987). See also Leslie Salzinger, Genders in Production: Making Workers in Mexico's Global Factories (University of California Press, 2003). 34. John Humphrey, ‘Labour Use and Labour Control in the Brazilian Automobile Industry’, Capital and Class, No. 12 (1980), pp. 43–58. 35. Ibid. 36. These shortcomings have been analysed by Latin Americanists using a multi-disciplinary perspective. Insightful critiques can be found in Viviana Patroni & Manuel Poitras, ‘Labour in Neoliberal Latin America: An Introduction’, Labour, Capital and Society, Vol. 35, No. 2 (2002), pp. 207–20. See also Ronaldo Munck, ‘Introduction’, Latin American Perspectives, Vol. 31, No. 4 (2004), pp. 3–20. These two essays introduce very useful special editions of these two journals dedicated to the topic of labour flexibility and its impact on workers and labour markets in Latin America. 37. Duryea et al., ‘Latin American Labor Markets in the 1990s’, p. 2. 38. International Labour Office, 2004 Labour Overview of Latin America and the Caribbean (ILO/Regional Office for Latin America and the Caribbean, 2004). 39. William F. Maloney, ‘Informality Revisited’, World Development, Vol. 32, No. 7 (2004), p. 1159, emphasis added. 40. Duryea et al., ‘Latin American Labor Markets in the 1990s’, p. 20. 41. See Table 82 in IADB, Good Jobs Wanted. It compares the hourly wages between workers in the 9th decile (D9) to those of the first decile (D1). For example the D9/D1 ratio in Argentina went from 6 in 1993 to 8.4 in 2001; for Mexico it went from 4.95 in 1990 to 6.96 in 2001. For Bolivia it went from 12.60 in 1990 to 39.07 in 2001. 42. IADB, Good Jobs Wanted, p. 6. 43. The fact that a worker ‘contributes’ or is affiliated to a social security system does not imply that he or she has effective coverage. Chile, the paragon of a privatised social security system, provides a good example. See Fernando Leiva, ‘Chile's Privatized Social Security System: Behind the Free-Market Hype’, Network Connection, May–June 2005 (http://www.networklobby.org/connection/index.html). 44. Duryea et al., ‘Latin American Labor Markets in the 1990s’, p. 22. 45. Fernando I. Leiva & Rafael Agacino, Mercado de trabajo flexible, pobreza y desintegración social en Chile, 1990–1994 (Universidad ARCIS, 1994); Marcus Taylor, ‘Interrogating the Paradigm of “Labour Flexibilization”: Neoclassical Prescriptions and the Chilean Experience’, Labour, Capital and Society, Vol. 35, No. 2 (2002), pp. 222–51; Patricio Escobar, ‘The New Labour Market: The Effects of the Neoliberal Experiment in Chile’, Latin American Perspectives, Vol. 30, No. 5 (2003), pp. 70–8. 46. Marcelo Selowsky, ‘Stages in the Recovery of Latin America's growth’, Finance and Development (June 1990), pp. 28–31. 47. Paula Giovagnoli, Georgina Pizzolitto & Julieta Trías, ‘Chile: Monitoring Socio-Economic Conditions in Argentina, Chile, Paraguay and Uruguay’, Documento de Trabajo No. 19, Centro de Estudios Distributivos, Laborales y Sociales, Universidad de la Plata, 2005. 48. World Economic Forum, The Global Competitiveness Report 2005–2006 (Palgrave, 2005), p. xiv. 49. Escobar, ‘The New Labor Market’. 50. David de Ferranti, Inequality in Latin America: Breaking with History? (World Bank, 2004). 51. Magdalena Echeverría, ‘Mejores Condiciones De Trabajo: Un Desafío Actual’, Temas Laborales, No. 2 (Departamento de Estudios Dirección del Trabajo, 1996), p. 5. 52. Malva Espinosa, ‘Sindicalismo en la empresa moderna: Ni ocaso, ni crisis terminal. Análisis de encuesta de empleadores y trabajadores, 1996’ Cuadernos de Investigación, No. 2 (Departamento de Estudios, Dirección del Trabajo, 1997), p. 10. 53. Magdalena Echeverría & Diego Lopez, ‘Flexibilidad laboral en Chile: las empresas y las personas’ (Departamento de Estudios, Dirección del Trabajo, 2004). 54. Helia Henríquez & Verónica Uribe-Echeverría, ‘Trayectorias laborales: La certeza de la incertidumbre’, Cuadernos de Investigación, No. 18 (Dirección del Trabajo, 2004); Eduardo Acuña & Ernesto Perez, ‘Trayectorias laborales: el tránsito entre el trabajo asalariado y el empleo independiente’, Cuadernos de Investigacio´n, No. 23 (Departamento de Estudios, Dirección del Trabajo, 2005). 55. Michel Aglietta, A Theory of Capitalist Regulation: The U.S. Experience (Verso, 2000), p. 391.