Citizenship in work is a continuous process of sustaining and fighting for just social rights. The argument here is that currently a major impediment to this democratic process at work is the practical and ideological imposition of economic liberal policy, conceived for and by dominant class interests. This article discusses the idea of citizenship, its antithesis economic liberalism and its synthesis Keynesianism and the welfare state. Then it asks what these and other ideas bring to the debate about citizenship and work in a global society?
La citoyenneté au travail est un processus continu de lutte pour les droits économiques et sociaux et de maintien de ces mêmes droits. Nous soutenons ici qu’une entrave majeure à ce processus démocratique au travail réside dans l’emprise d’une politique économique libérale au service d’une classe économique dominante et conçue par cette dernière. Cet essai se veut une discussion de l’idée de citoyenneté, du libéralisme économique comme son antithèse, du keynésianisme faisant figure de synthèse et, enfin, de l’État-providence. Nous cherchons également à savoir si ces idées et d’autres ont ou non une incidence sur le débat concernant la citoyenneté et le travail dans la société mondiale.
Le caractère souhaité d’une notion démocratique de la citoyenneté au travail, servant de guide aux politiques publiques et à l’action privée, dépend de sa capacité à faire reconnaître sa légitimité dans le discours public et chez les décideurs politiques. Il existe deux sources importantes de résistance à cette notion de citoyenneté au travail. Une première, qui origine d’une pensée de gauche est à l’effet que, dans un système capitaliste voué à la recherche du profit pour un petit nombre, l’idée de citoyenneté démocratique au travail est impossible. Une deuxième source vient d’une idéologie de la droite. Enracinée fortement, bien alimentée et largement soutenue, cette source de résistance prétend que la citoyenneté démocratique au travail conduit à une perte de profits et, par conséquent, elle est indéfendable. Comme la droite détient le pouvoir économique, elle possède aussi les moyens d’ériger en idéologie dominante sa logique anti-démocratique et hostile aux travailleurs qui est celle du libéralisme économique.
Comment ces notions de citoyenneté et de travail sont-elles définies ? Dans un premier temps, il faut rappeler que la conception marxiste du travail renvoie à celle de l’exploitation des travailleurs. Celle-ci est inhérente au système capitaliste, parce que les employeurs rémunéreront les travailleurs seulement de façon à ce qu’ils puissent se reproduire, eux et leurs familles, indépendamment des profits que les entreprises peuvent réaliser. Dans un système aussi hautement compétitif, les employeurs vont nécessairement déprécier le travail. La technologie, plus précisément celle de la ligne d’assemblage, fonctionne de manière à aliéner les travailleurs, à les priver d’une activité créatrice. Des travailleurs aliénés sont plus faciles à manipuler, jusqu’au moment où ils forment des associations et revendiquent des droits afférents à la citoyenneté.
Dans un deuxième temps, la notion de citoyenneté est un statut conféré à des personnes nées dans un pays donné ou naturalisées. Ces personnes vont partager des droits réciproques, des responsabilités, des privilèges, des obligations et des besoins de supports et de services. La citoyenneté, sous l’angle d’une théorie en évolution, est souvent associée à la pensée sociale-libérale de Marshall (1950), qui soutient que la demande des travailleurs pour la reconnaissance de droits politiques et sociaux transformera l’identité de classe en une nouvelle identité prétendument fondée sur la citoyenneté; cependant, les libéraux prétendent qu’une telle transformation représente des coûts trop élevés.
Les principales théories à l’enseigne du libéralisme économique viennent contrer ces idées de citoyenneté et cette conception du travail par celles du travail qu’on retrouve dans les théories de l’avantage absolu, de l’avantage comparatif et de l’avantage concurrentiel. L’idée d’avantage absolu tire son fondement de l’édification de la richesse d’un État-nation sur l’efficacité de l’activité de travail, non pas sur le commerce comme le soutiennent ceux qui partagent une vision mercantiliste. L’activité de travail devient spécialisée dans le procès de travail inhérent à la fabrication d’un produit reposant sur la division du travail. Les entreprises, également, s’organisent autour du principe de la division du travail en fabriquant de façon coopérative des produits meilleurs que ceux qu’elles produiraient individuellement. L’avantage comparatif renvoie à l’idée d’une exploitation plus poussée des travailleurs et de la mécanisation du travail; elle implique cependant une différenciation de la production d’un pays à un autre. Les entreprises vont mener à bien l’avantage comparatif dont elles disposent et organiser leurs activités commerciales en fonction de ce dernier. L’avantage concurrentiel réside dans une standardisation aux plus bas coûts de production, plus particulièrement, des coûts de main-d’oeuvre, pour que les entreprises puissent se donner un avantage concurrentiel dans un marché mondial.
Quelle incidence ces théories ont-elles sur la citoyenneté et le travail ? Les principales idées libérales au coeur des trois types d’avantages (absolu, comparatif et concurrentiel) comportent toutes une recherche optimale de profits pour les propriétaires d’entreprises. Keynes soutient que ces politiques économiques libérales accentuent la crise. Leur antithèse, c’est-à-dire l’intervention radicale dans le marché pour amorcer la demande, est une façon de promouvoir la production, d’appuyer financièrement l’État-providence, d’établir une rémunération à caractère social et de reconnaître des droits aux travailleurs. Ceci, mais non la doctrine économique « stricte » des libéraux, est en accord avec la thèse de Marshall (1950) qui revendiquait la justice au travail dans son combat pour la reconnaissance de droits protecteurs.
Que peut-on faire alors ? La première chose à faire est d’élargir la conception dépassée et restreinte de la citoyenneté chez Marshall. Ceci représente un bon point de départ. Cependant, comme les droits sont conçus ici comme provenant du sommet vers la base, les travailleurs deviennent des sujets passifs, reconnaissants de ce que le système leur procure. Pour que la typologie de Marshall puisse fonctionner, elle doit inclure le travail rémunéré, plutôt que l’appartenance à une société, comme étant la base de la citoyenneté sociale. Ceci implique un combat pour les droits économiques et les droits des travailleurs tels qu’on les retrouve à l’intérieur du cadre de protection de l’Organisation internationale du Travail reconnaissant les droits d’association, de négociation collective, d’élimination du travail obligatoire ou forcé, l’abolition du travail des enfants et l’élimination de la discrimination sur les lieux de travail.
Nous devons passer au crible les irritants du libéralisme économique afin de saisir plus précisément ce qui constitue l’idéal d’une citoyenneté internationale. La notion d’une citoyenneté au travail, si elle est conçue à l’intérieur d’un cadre théorique cohérent, pourrait servir de base à une vision politique alternative qui viendrait remettre en question la légitimité de l’idéologie libérale et constituerait le coeur du défi à la suprématie libérale.
La ciudadanía en el trabajo es un proceso continuo de fundamentación y lucha por los derechos de justicia social. El argumento aquí es que, actualmente, un obstáculo mayor a este proceso democrático en curso es la imposición practica e ideológica de la política económica liberal, concebida por y en función de los intereses de la clase domínate. Este artículo discute la idea de ciudadanía, sus antítesis del liberalismo economico y sus síntesis del keynesianismo y el estado providencia. Se interroga entonces, ¿en qué esa y otras ideas contribuyen al debate sobre la ciudadanía y el trabajo en una sociedad global?
The desirability of a democratic notion of citizenship at work, as a guiding principle for public policy or private action, is dependent on its ability to gain legitimacy in public discourse and amongst policy makers. There are two major sources of resistance to this notion of citizenship in work. The first from the left is that within a capitalist system, driven by private profit for the few, democratic citizenship at work is endemically impossible. The second, coming from the right, is powerfully funded, highly resourced and numerously held; and is also adamant that as long as democratic citizenship in the workplace means loss in profits that it is equally untenable. Since the right hold economic power they have the means to make their anti-democratic and anti-worker rationale—economic liberalism—the dominant ideology. This is dominance in the sense Marx used when he argued: “the class which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of mental production are subject to it” (Marx and Engels, 1932: 47). The first type of resistance is ultimately the more interesting (and largely outside the scope of this work) but the second is where we are now—that is accepting the challenge of how to make our working lives bearable whilst the political economies in which we live are dominated by economic liberal ideologies of work. And an answer to this problem is to focus on the fight for established and new rights within the contestable arena of citizenship in work.
The argument here is that democratic citizenship in work is limited by economic liberal policy and its implementation by and for the dominant class. What is economic liberalism? Economic liberalism is typically a commitment to policies that lower inflation and maintain fiscal balance (achievable by reducing public expenditures and raising interest rates), to have flexible labour (achieved through the removal of labour market regulations and by cutting social welfare), free trade markets, financial deregulation and privatization. The starting point for this article is the need to know where economic liberal ideas come from, who devised them and in whose interests they work so that we can knowledgably enter into an arena of openly hostile debate.
This debate parallels the lifetime of capitalism from the sixteenth century onwards. At its centre is the following problem: How can citizenship be used to legitimate (liberal theorists) and ameliorate (social democrats and some Marxists theorists) the extremely unpleasant world of work within a capitalist system? In order to explore the different contributions to this debate and the possible ways to enhance citizenship at work, we first examine the definitions of citizenship and work, then turn to perspectives on the welfare state, the liberal challenges to social rights and the critique of those challenges, before exploring what still needs to be done to concepts of citizenship in order to enhance their meaning for workers (see Figure 1).
Citizenship at work
What is Work?
Work within capitalist society is a social exchange whereby a worker sells his or her labour power for a wage to an employer. In turn the employer is free to sell the good or service produced by the worker. The commodities produced from worker’s labour can be bought and sold much the same as their labour power can—to the highest market bidder. Although technologies (the latest robotics for example) assist labour in the completion of their tasks, it is only labour power that creates value (computers still need human brains to program them). The circuit of production in which these interactions take place is described by Marx (1856 and1880) as a sequence M→C [mp + lp]→C’→M’.
Paid work occurs when an employer has money [M] with which he or she buys raw materials (e.g. cloth) or commodities [C] to which they apply the means of production (e.g. the factory) and labour power (e.g. factory worker’s time, energy and skill) [mp + lp]. From this is produced a new commodity [C’] (e.g. the coat) which is sold for more money than its cost to make, therefore there is a money profit [M’]. To make sure that profit is gained workers are paid as little as possible to make the coat, with factory costs being kept to a minimum with old markets having to be secured and new markets continuously found. This leads to undercutting workers wages, making conditions of work poorer, cutting costs to a minimum and continuously searching for new local, national and ultimately global markets.
In this model of work, exploitation of workers is endemic to a capitalist system because employers will only pay workers the least amount possible for them to reproduce themselves and their families irrespective of their profits. Employers necessarily degrade labour in a highly competitive system: “[t]he manner in which labor is deployed around the machinery . . . must be dictated not by the human needs of the producers but by the special needs of those who own the machinery” (Braverman, 1974). Machinery, particularly assembly line machinery, operates to alienate workers from the creativity of work. Alienated workers are easier to control and manipulate until they join together collectively and demand the rights associated with citizenship.
What is Citizenship?
Citizenship is a status given to a person who is born or naturalized in to being a member of a country. Commonly involved with the status of citizenship are reciprocal rights, duties, privileges, obligations and the need for “jobs, services and supports” (Maxwell, 2001: 1). Working class struggles associated with gaining rights—social, political, economic, civil, sexual rights for women (Stark, 2005) and ethno-racial minorities (Bloemraad, 2004; Smith, 2003; Carens, 1987)—are generally considered progressive. Certainly they are viewed as progressive by liberals like T. H. Marshall. Marshall’s work (1950: 8–15) traces the progressive emergence of civil, political and social rights, as justifiable and fair claims, to what he considered full citizenship:
Civil rights emerged in the seventeenth century. These were necessary for individual freedom and encompassed the right to justice, freedom of speech, thought and faith, the right to own property, the liberty of the person and the right to conclude valid contracts. Crutthers and Ariovich (2004: 23) suggest that property rights are the basis of the classical liberal axis of law, economy, the state and culture. Legal rights through the civil courts of justice made civil rights a reality.
Political rights associated with gaining the right to vote in a free election for a representative parliamentary body were gained first in the modern western world in the eighteenth century (in the US and France), then this movement gradually filtered to the rest of Europe to include non-propertied men. The franchise won for male workers the right to organize in political parties, the right to be free of military control albeit from a foreign power or religious groups, to petition, to assemble, and to hold public office. By the twentieth century, these political rights extended to women and later to indigenous peoples. Political rights need to be, but are not always, extended to ethnic and religious minorities to organize and function in their own communities with their cultural value system (e.g. refugees in detention centres in Australia). Legal systems are held to sustain these political rights.
Marshall (1950) believed that when the working class achieved civil and political rights then its members looked onward for new processes to achieve social equality too and they were able to do this by demanding their social rights.
Social rights are associated with membership of viable local communities and functional associations essential to work. “Social equality involved free collective bargaining over wages and working conditions, insurance against unemployment and in health, and the guarantee of minimum standards of housing, employment, and health care” (Rex, 2004: 163). The successful fight for these rights came after the very bleak period of the great 1930s depression when the demands of political agitators and/or the oppressed for a new, fairer economic system with more equitable distribution of resources was conceded to by the ruling class. This was not because of their innate fairness but because of the evidence everywhere of the bankruptcy of the system with so many people with so little purchasing power living in embedded cycles of poverty. A breakthrough came when John Maynard Keynes devised a fairer system set out in his book The General Theory of Employment, Interest and Money (1936). This work explained why economic liberal policies were bad economics and suggested a number of alternatives.
Liberal Economic Ideology and the State
Keynes and Social Rights Realized through the Welfare State
John Maynard Keynes (1883–1946) argued that liberal economics exacerbated crisis within the capitalist business cycle and he challenged their prevailing orthodoxy that capital formation governs the rate of savings (Von Hayek, 1933). Instead, he suggested that investment or capital formation governs income accumulation. The full utilization of the capital goods industry and full employment stimulate the output of consumer goods. The greater the propensity of society to consume, the greater is the stimulation to increased primary investment. Crisis occurs because of “doubts arising about the reliability of the prospective yield” or because “current costs of production are thought to be higher than they will be later on” (Keynes, 1936: 321–322). In other words change occurs due to psychological factors associated with expectation. The down turn of the economy brings about a decline in investment, which has a multiplier effect, spreading as a malaise, through the private sector and depressing employment. Consumption decreases and income falls. As capital stock and surplus stock are consumed, then the efficiency of capital begins to rise again and stimulate further investment. This is the business cycle. The obvious policy prescription to counter this is to pump demand particularly in the down phase of the recession. This means fiscal and monetary manipulation of the market to keep up spending and achieve full employment.
This advocacy of radical intervention into the market to prime demand led to the creation of the welfare state and the social wage for workers. The idea of the welfare state was not original to Keynes but built on Count Otto von Bismark’s (1815–1898) welfare state model. The German model was a social insurance model promoting limited worker welfare with the added benefit for the state of keeping the German economy operating at maximum efficiency whilst staving-off radical socialist alternatives.
Does this welfare state provide social rights for workers? Yes, because a welfare state provides citizens with access to social services (e.g., health, education and welfare) provided by the state, not given by grace and favour as in the feudal system or not at all as in the earliest phase of capitalism but as a right to working people. Funding from taxation gives the state the means to accept universal responsibility for the care of all of its citizens not just the residual safety net for those who can prove need. Welfare, funded by the state, can then be provided by a combination of independent, voluntary and government services.
Marshall (1950: 259) argues that workers’ demand for civil, political and social rights will transform their class identity into a brave new citizenship identity but economic liberals argue the costs of this transfer are too high.
Challenges to Citizens’ Rights
The earliest economic liberal challenges to citizenship rights in work came from the classical economists Dudley North, Adam Smith, and David Ricardo. They were the earliest mouthpieces of capital—enthusiasts but not blind ideologues, unlike their twenty-first century economic liberal followers who notably blame the working classes for the slow down of global economic growth (Brenner, 1998).
Classical economic liberalism emerged as a seventeenth-century response to what was seen as the meddlesome interference into bourgeois affairs by the British aristocrats. Classical economics was the anti-thesis, in a dialectical response, to the Mercantilism that was the legitimating thesis of the British aristocrats (Rubin, 1929). It could be argued, but Liberals would strongly deny it, that Keynesianism is the synthesis.
The Origins of Mercantilism
Mercantilism, derives from the Latin words mercari meaning to “run a trade” from merx meaning “commodity” (Wikipedia, 2004: 1). Mercantilism developed with the growth in the fifteenth centuries of three-masted, heavily armed sailing ships, capable of carrying substantial crews and cargoes over long distances. These new European ships pushed forward both international commerce and naval warfare spreading out across the globe in search of profits and plunder. Mercantilism or the mercantile system built on the belief that a nation’s prosperity relies on its acquisition and supply of gold and silver. This theory of bullionism is that precious metals equal wealth. The government’s role is to actively discourage imports and encourage exports through the stringent use of tariffs. Mercantilism justified the plunder, often through pirating, of other countries not only for their gold and silver but also slaves for labour. A key feature of this merchant stage of capitalism is that it provided not only the markets but also the wealth that fed the industrial revolution that began in the mid-1700s (Magdoff, 2003: 1).
Mercantilists (e.g., Thomas Mun (1571–1641) who wrote England’s Treasure by Forraign Trade, 1630) were often active in trade and acted on boards. Mercantilist writers wrote to legitimate their own and their sovereign’s wealth, and to identify their upper class and the state’s interests as one. Full-fledged mercantilism used protectionism in the form of excise and customs duties to inhibit foreign trade and encourage domestic growth. But mercantilist plundering increasingly became recognized as an inefficient way of supplying the needs of the emerging capitalist class. Capitalism was born in a [small] world economy where old and new colonies were increasingly recognized as a more reliable way of extracting for the mother country raw materials, labour and expanding markets. At the same time, wool manufactories replaced cottage industries in England and the European demand for wool increased the growth of foreign trade to satisfy that need. New markets grew with English and foreign demand. Wool production signaled the beginning of capitalism, the beginning of a money economy and the very beginnings of capital’s global integration.
Free Trade and the Small State: Dudley North
Anti-mercantilist writing began with Dudley North (1691) in his book Discourses Upon Trade. Against the central tenets of mercantilism, North argued that free trade and non-government intervention “since it is impossible to force men to deal in any prescib’d manner” were prerequisites of good business (North, 1691 cited in Rubin, 1929). North formulates the first ideas of free trade and the small state; ideas incorrectly credited to the originality of Adam Smith. What North and Smith share in equal parts was a crusading zeal against mercantilism: that is, for production not plunder and for the unfettered market and the development of emerging industrial capitalism.
Magdoff (2003: 1), following Marx, argues that although industrial capitalism developed at different times in different countries and its features are not identical it does share underlying laws of motion that demand a degree of balance between investment, consumption and finance. Smith (1776) sought to explain, exploit and manipulate these regularities found in capitalism.
Absolute Advantage: Adam Smith
In An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Adam Smith (1723–1790) makes at least two original contributions to a theory of how the wealth of nations is developed on the basis of free trade. First is the theory of absolute advantage. This means the ability to produce a good or service more cheaply than it is produced elsewhere by using fewer labour hours, specialist skills and more advanced tools. This theory developed from his second major contribution to the literature, his theory of the division of labour. This latter assigns specific, partial tasks, to producers to complete one task; so that rather than each individual producer producing an entire good or service, workers specialized in doing a part of the operation.
The concept of the division of labour informs assembly line production; a method of speeding production and enhancing profit that became a strategic method for capitalist production. These ideas led many years later to Taylorism with its logically related time and motion studies to speed work and enhance profit and to Fordism. Fordism is identifiable by Aglietta (1979) as capitalism’s early intensive accumulation regime that “revolutionized social productive powers without simultaneously transforming social consumption norms and the real living conditions of the industrial working class” typically found in the United States of America.
Smith’s famous pin factory example (in the first of his five books in the series) sells the advantages of this method: workers on assembly lines developing greater dexterity, with no time lost between operations and in-depth association with one task enabling them to develop advanced tools for that task. This division of labour was not only recommended to take place at the factory level but also between enterprises within the same branches of production. For example, different factories could specialize in different parts of wool production: some were merchants obtaining the wool, others dyed the wool and others were carriers, etc.
Smith argued that these two levels of the division of labour (that is, within a company and between companies) were the same because they produced an absolute advantage (Czinkota et al., 1996: 29) by raising the productivity of labour. This was Smith’s mistake (Rubin, 1929: 180) because the social relations behind these divisions were very different: within the company the labour was organized and regulated by the capitalist but in the division of labour between the factories, the social relations were disorganized, spontaneous and regulated through the market. Smith also extrapolated wrongly from the division of labour within the factory to social organization in the wider society. This was wrong because it was premised on the economic forces (i.e. self-interested man) being the eternal drive of all economies everywhere, whereas what Smith was observing was the greedy socialized behaviour of early industrial commodity producing man in a very raw capitalist regime. Rubin (1929) argues that not only was Smith’s assumption ahistorical but the division of labour is not exclusive to commercial behaviour for this cooperative pattern of interactions takes shape in any number of other human relations.
These two concepts of the divisions of labour ideas (in the company and between companies, as above) were related to the wealth of nations in the following way. The nation would make products that it excels in producing cheaply. In England, its advanced technology (i.e., this was the spinning Jenny) gave them an advantage in the production of wool. Commodities are made more cheaply with the benefits of the division of labour. From this combination an absolute advantage is achieved leading to the development of the wealth of the nation but implemented through the labour of citizens (rather than the plunder or trade factors that were the basis of mercantilism).
Smith recognized working class man, not just as a commodity for producing value but also as a theoretical construct. Class had been previously identified by the physiocrat Quesnay in his work Analyse du Tableau Économique (1766). Quesnay identified three classes—landowners, producers and people in commerce. But Smith following Quesnay built on his ideas and was the first to identify the wage labourer or workers as a category (see Table 1).
The sterile classes were the entrepreneurial capitalists and the third class the landowners. For Smith there were two ways that wealth could be made: (1) through a rise in individual worker productivity, and (2) when the number of productive workers increased as a ratio to population. This was the beginning of the Labour Theory of Value.
Comparative Advantage: David Ricardo
Smith was the economist of early industrial capitalism whereas his follower David Ricardo (1772–1823) was the economist of the industrial revolution and the machine. Ricardo’s commitment to Smith is clear in his work On the Principles of Political Economy and Taxation (1817). In this work, Ricardo seeks to show capitalism as the best means to liberate people from the economic oligarchy of the privileged land-owning class (a belief shared by Smith). In his opinion, the surest way to achieve the greatest amount of individual human happiness is to liberate the productive forces from the landowners (the aristocracy and the monarch).
Ricardo’s key contribution to debate on work and globalization is the idea of comparative advantage that is that the gains from specialist work flow into specialized trade allowing an economy to achieve superiority in a product (Samuelson, 1969). This builds on Smith’s idea of absolute advantage though Ricardo argues that a country should specialize in key products that it can produce most advantageously. If a country is relatively better at producing wool (although it is presently exporting both wool and wine) then, even if it is not the best producer of that commodity, it will gain from specializing in just that product, for it can then have a profitable exchange with its neighbours, who in return have different, but complementary specialties. For example, England can exchange its cheaply produced wool with France’s cheaply produced wheat. Even though neither may have an absolute advantage, they can exploit their relative advantage. Ricardo believed that every country has a relative or comparative advantage in something. Specialization allows each country to make (and subsequently consume) goods beyond the limit of its own production.
Bryan (1995) however finds three major problems with this comparative advantage strategy. The first is that it naively assumes a level playing field amongst the players whereas corporate players in real life have very different strengths and weaknesses. The second is that it never delivers the desired results for the countries with some of the best natural resources globally. The third problem with the strategy relates to the expectation that the deregulated exchange rates (the floating exchange) can be used to rectify current account balances. Neither deregulation nor regulation necessarily have positive effects on current account deficits. and capital therefore has to look for alternative strategies and economic liberals seen the development of competitive advantage in this light.
Competitive Advantage: Michael Porter
Littler (1998) defines competitive advantage as securing a differentiation of your organization and its products “in some way in order to gain preference by all or part of the market. This may result in a higher market share and or [higher] margins than competitors. In general, competitive advantage will be obtained through offering higher customer value” (Littler, 1998). The literature tends to break into the advocacy of two sources of competitive advantage—assets (accumulated endowments of the company) and capabilities (deeply embedded into organizational routines) (see Diereckx and Cool, 1989). Zysman and Tyson (1983) coined the name competitive advantage in the context of American industry policy but today it is usually associated with the work of Michael Porter (1985, 1986 and 1990).
In the Competitive Advantage of Nations, Porter (1990) closely follows Schumpeter (1934) who also suggested that innovation drives and sustains competition. In Porter’s diamond typology of natural advantage he argues that the following four major components make up a company’s natural advantage.
Factor conditions are the ability of the nation to continually upgrade, create, and deploy its factors of production (particularly labour) successfully. This is more important than any reliance on a natural endowment.
Demand conditions relate to the amount of competition and health the company first displays in the domestic market. Firms that survive the home market are likely to have developed a competitive edge. It is the character of the market (demanding customers) not its size that is most important in promoting the competitiveness of the firm.
Related and supporting industries relationships must be close, cooperative and with constant information interaction with suppliers. This is essential for an end product that is attractive and appropriate to the needs of the customer.
Firm strategy, structure and rivalry are the conditions in the firm in its home nation necessary to make or break the international competitiveness of the company.
In a critically assessment of this model, Bryan (1995) suggests that competitive advantage has two outstanding characteristics. First, it aims at an international standardization of low cost labour. Second, it stresses the importance of selective state intervention (in the form of subsidies) to individual corporations (not sectors or nations), which then allows these businesses to compete globally.
The justification for the strategy of competitive advantage is its potential to ‘fix’ the high current account deficit of western nations. In the American context, industry would become more internationally competitive by minimizing and standardizing costs. However, Bryan’s (1995) work on the balance of payments shows that net income outflow, not the balance of trade, is the predominant source of the current account deficit. Competitive advantage signals that the gains must be at the level of production, for companies to become most competitive. When they have the best productivity, with the most flexible labour force, plus the greatest product innovation, the best technology and the best services, then they are most competitive. But increased productivity is not sufficient in itself. Rather, the productivity increase must be greater than in other countries. The nation state has a role in reducing the deficit by nurturing a cultural and social climate of productivity, technological development and service.
In sum, the primary difference between the theories is that absolute advantage is based on building wealth for a nation state on the efficacy of labour, not trade as with the Mercantilists. Labour becomes specialized in the production of one product through the division of labour. Companies likewise become organized around the division of labour producing better products cooperatively than they could as individuals or individual enterprises. Comparative advantage is the further exploitation of labour and its mechanization, but it entails product differentiation between countries. Companies work out what productive advantage they have and then they organize their trade around this advantage. Competitive advantage means the standardization of the lowest costs of the factors of production (particularly labour) so that companies can establish a competitive advantage in a global market place.
Liberal Economic Ideology and Citizenship at Work
What Do these Theories Mean for Citizenship and Work?
These key liberal ideas of absolute advantage, comparative advantage and competitive advantage have all got at their kernel the drive to enhance profit for owners of businesses. This theoretical and practical drive conflicts with Marshall’s (1950) clarion call for citizenship through the acquisition of civil, political and social rights. This is a problem for liberals concerned with justice through the acquisition of citizenship rights because the underlying economic liberal philosophy is for the advantage of the few who own property not for citizens generally.
On the other side of concerns about the economic liberal model amongst social democrats is that the social liberals’ drive for more comprehensive rights through acquiring civil, political and social rights is seen as setting up a passive framework of top down relations (Chia and Patmore, 2004); wherein governments give rights to citizens who only have minimal expectations that these rights mean active civic and political involvement. Cox (2005) suggests that this model: “regardless of its virtues, is rightly criticized for its paternalism, its evolutionary assumptions and ethnocentrisms.”
Let us examine the particular concerns that social democratic theorists have about the liberal construction of citizenship rights and their realization through the exercise of civic, political and social rights, as constructed by Marshall (1950).
Civil rights, that is, those rights necessary for the right to justice, freedom of speech, thought and faith, the right to own property, the liberty of the person and the right to conclude valid contracts. Crutthers and Ariovich (2004) suggest that property is ubiquitous and that the idea of private property suffices classical liberal thought. Property rights to ownership of the means of production (the factories, the shipyards, the mines, etc.) are the basis of the social relations of exploitation. Liberals exacerbate patterns of work inequality because the market is “fundamentally anti-democratic, conferring votes on dollars rather than people” (Burgmann, 2004). Where workers are defined as commodities on the job market, or valued only as consumers, all work relations are subordinate to corporate profit. According to Merrifield (2000: 25), even when work develops and uses innovative new technologies with potential to revolutionize the labour process by de-stressing the working day; by shortening it, creating abundance for everyone, liberating people from drudgery and providing limitless free time for intellectual and artistic nourishment and by creating environmentally clean and green environments, it does not. Why? Henwood (1997: 18) suggests the reason is because there is a “dramatic misspecification of the enemy: instead of capital and its lust for profit, innovation and cosmopolitanism themselves are demonized.” Capital accumulation strategies such as competitive advantage, comparative advantage and absolute advantage are sanctioned by economic liberal theories of the free market and competitive individual gain. With gainers there must be the corollary—losers—and unfortunately for the liberal theory of citizenship these losers are citizens too.
Tabb (2003: 21) continues the anti property, anti market argument of social democrats when he suggests that economic liberal rhetoric is part of an “Accumulate! Accumulate! Accumulate!” strategy that specifies a growth model complete with its own extra-economic preconditions for workers. These preconditions (shown by Wolff, 2000, 2002; Gates, 2002: 30–33) include the concentration of wealth out of the hands of workers and into the hands of the few that include the Forbes 400 richest Americans. These men (sic) average daily $1,920,000 or $240,000 per hour or 46,602 times the US minimum wage (see www.forbes.com). This is not just an American phenomenon rather it is a global trend: in 1960 the income gap between the fifth of the world’s people living in the richest countries and the fifth in the poorest countries was 30 to 1. This has increased in 1990, to 60 to 1; increasing again in 1998 to 74 to 1 (Gates, 2002: 30–33). The United Nations global report on what they rate as a human development index shows the scale of the disparities existing between rich and poor nations. Table 2 shows a small part of this scale, illustrating what are the social indices at the global top (i.e., to be found in Norway), the top of the middle (i.e., to be found in Bulgaria) and the top of the bottom (i.e., to be found in Pakistan) and at the very bottom (i.e., to be found in Sierra Leone).
Legal rights, that is, having access to legal frameworks of justice and exercising ‘your day in court’ underlie the realization of all rights—civil, political and social—and do not therefore form their own category. But doubts are thrown on to the possibility that legal rights do underlie civil, political and social rights in the first world. For example, Arthurs (2002) is sceptical that the problems of labour can be addressed by the enforcement of civil liberties in the Canadian court system. Instead he argues that the law courts’ ability to ensure civil rights for labour is in crisis because it has become “unstuck from its ideological beginnings” whereby the “ideal of industrial citizenship has all but given up the ghost” under the assault of globalization because a lack of international clarity creates opportunities disadvantageous to workers (Arthurs 2002: 1). Adding to this distrust of legal rights as being able to deliver social justice, Javilier suggests that labour law instead creates an elitist paradigm of an “industrial setting (a plant which mass produces a finite number of standard product lines), regular employment (long term or life employment, along with seniority and collective bargaining schemes tied to the firm) and the male employee (generally white, young and healthy)” (Javilier, 1997: 102).
Political Rights, that is, the right to vote in fair and free elections, do not do away with sexist or racist attitudes that prevent women, racial minorities or religious groups receiving political power, according to Gardiner (2004). She argues that it is not so much the market as male-dominated structures of power and privilege that subvert active citizenship for women. Like Pateman (1970, 1979, 1988) before her, she clarifies the masculine bias in traditional notions of political citizenship and points out that these abstract rights of citizens count for little if the capacity to exercise those rights is absent or significantly constrained by the persistence of sexist attitudes and structural barriers to shared political power.
Social rights which include free collective bargaining over wages and working conditions, insurance against unemployment and ill health, and the guarantee of minimum standards of housing, employment, and health care, ensure some decommodification of work, health and education in the welfare state. While these social rights are most helpful to workers, they are the special focus of attack from liberals in Economic Liberal governments. This attack revolves around four key ideas. The first is that welfare states or “heavy government” make citizens selfish (Ridley, 1997: 262) and lazy (de Tocqueville, 1835: 58–59). However, economic liberals fail to demonstrate the correlation between laziness and welfare (Davidson, 1995: 14) or poor national economic performance and welfare expenditure in developed countries (Atkinson, 1995; see the opposite evidence in Table 3). Second, Liberals like Milton Friedman argue that the welfare state prevents positive (as in charitable) social development (Freidman and Freidman, 1980: 124). Goodin et al. (2000) argue that this is wrong as on all major economic and social indicators the USA (a low interventionist welfare state) performs worse than the Netherlands (a high interventionist welfare). A third criticism of the welfare state is that it necessitates high taxes that inhibit investment, which in turn impedes economic growth (Ridley, 1997: 262). But the comparison of Norway, which is a high tax-paying economy (Norwegians pay taxes from a tax level of 51 per cent in 1990 growing to 55 per cent in 2005), with the social indicators from the US, which is a comparatively low tax-paying economy, suggests otherwise. Table 3 shows that Norway’s citizens in a high tax economy get better results from their high social wage than the lower taxed US. Norway also has good economic growth.
The fourth most common criticism is that welfare services are too expensive, antiquated and inefficient (Freidman and Freidman, 1980: 131, 138). This thinking validated massive Liberal programmes, policies and practices that privatized public assets, services and businesses. “[D]ramatic changes like mass privatization . . . were clearly intended to alter the social distribution of wealth” (Crutthers and Ariovich, 2004: 29). Van Fossen (2002) argues that if tax havens for multinational companies were adequately policed then their revenue too could be paid into state coffers to defray the costs of national welfare infrastructures from which they so richly benefit.
Expanding the Notion of Citizenship
What can be done? The first priority is to expand the exclusive and outmoded ideas of citizenship to be found in Marshall. Kessler-Harris (1982, 2001) suggests that for Marshall’s typology of citizenship to really work it must include waged work, rather than membership in the society, as the basis for social citizenship.
Economic rights, asserts Kessler-Harris (2001), are “the independent status that provides the possibility of full participation in the polity.” Rights for waged workers cannot stop with those most identifiably male but must also include those that benefit women and children such as paid maternity leave. Kessler-Harris’s work shows the legislators, policy makers and justices were consciously or unconsciously motivated by a “gendered imagination” or a deeply embedded sense of what is normal and natural that perpetuates a gendered fantasy of an equitable social order. Part of these economic rights are worker’s rights.
Worker’s rights are found in a protected framework within the United Nations and the International Labour Organization (ILO). These include “the freedom of association and the right to collective bargaining; the elimination of forced and compulsory labour; the abolition of child labour, and the elimination of discrimination in the workplace” (http://www.ilo.org). The ILO has its own enforceable conventions drawn on “as standards in negotiations involving governments, employees, unions and workers” (Blau and Moncada, 2005: 53). A transglobal organization like the ILO that can help structure workers rights is essential because the new migration movements are transnational movements of workers with new citizenship needs (Carens, 1987; Baubock, 1994; Stasiulis, 1997). According to Carens, citizenship in western liberal democracies is “the modern equivalent of feudal privilege . . . an inherited status that greatly enhances one’s life chances” in the first world (1987: 252). The globalization of work and necessary migration has new consequences of transnationalism (see Batch, Glick Schiller and Blanc Szanton, 1994; Portes, Guarnizo and Landolt, 1999) and post-national membership of a global citizenry (Soysal, 1994; Jacobson, 1996) with new needs and requirements. Global citizenry could also make workers movements more aware of exploitation outside their own nation state and sensitive to campaigns that downgrade workers’ wages and conditions in other countries (e.g., buy Canadian or Australian campaigns). Davidson (2004) suggests the new concept of citizenship should be one to empower individuals under conditions that have been transformed by global flows of capital and information. The old rules of labour found in national citizenship are now incapable of answering the needs of those who are necessary migrants or refugees from wars. The acquisition of such rights through naturalization is too slow in a context of rapidly shifting migration to protect citizens working beyond their own country. National citizenship now fails to address the needs of the millions in transit between countries. That’s why Davidson (2004) advocates a “global citizenship” but leaves the job of articulating its new political form or how it would be realized to us (Cox, 2005).
The second priority is to recognize and get others to see and act upon the bad economics associated with economic liberal theories of work. As Li (2004: 22) points out, more than fifteen years of a globalization strategy of economic liberalism have universalized economic stagnation but failed miserably “to provide an institutional framework for sustained global capital accumulation” and left the capitalist countries in the West “exposed to increasingly frequent and violent financial crises.” They have succeeded in relegating their opponent Keynesian regimes into the political dustbin. But where do they go from there? Li (2004) argues that new social reforms to counter the social damage inflicted by economic liberal policies are an unlikely scenario. They will need to be financed by additional taxes on capitalist profits and that these profit cuts will bring about a backlash from capital and yet greater demands on labour to finance them. For Li (2004: 2), social democratic capitalism is not possible without global economic growth and this requires a determined and coherent response from a collectively organized working class movement to take itself forward rather than be dragged backwards to the working conditions of the early twentieth century.
We therefore have to sift through the economic liberal shards and try to clearly see what constitutes the ideal of international citizenship. This entails an ideal going beyond the necessary but limited notions of civil and political rights granted by liberals to look at the “widest possible social good” (Evans, 2000: 435), and one that recognizes and responds to the claims of classes, ethnic groups and nations for social and economic rights. The notion of citizenship at work, if developed into a coherent framework, may form the basis for an alternative policy vision that can challenge the legitimacy of economic liberal ideology and form a focus for a popular challenge to liberal ascendancy.
The individualistic economic rights enshrined in the market place and the supporting ideology of economic liberalism perennially challenge rights of citizenship at work. The work of the early classical economists (e.g., North, 1691; Smith, 1776; Ricardo, 1817), although considerably more humane and sensitive to the working class than current economic liberals, are consistent in their overarching focus on the need to increase productivity by getting labour to work harder and more effectively for less return to them. As the form of this ideological strategy has changed from “absolute advantage” to “comparative advantage” to “competitive advantage,” the substance remains unchanged and continues to reflect the different cyclic needs of capital and the power of the dominant section of capital at any one time, but their aim as strategy is always to get workers to work harder for less. This strategy continues unchanged.
Economic liberal ideology adapts to changing cyclical needs of capital but it also reflects dominant fractional interests within the employing class itself for it is heterogeneous and has competing interests. The strength of any one fraction of capital at any one time will reflect what is happening in the wider capitalist environment. But employers will never give up any of their advantages whatever the global economy is doing.
Workers must expand the demands of citizenship to include greater economic rights (a bigger slice of the pie) but also recognition of global citizenship created by factors such as necessary migration for work. The demand for global citizenship will only be recognized by collectively organized worker movements forcing employers and nation states to see this as a necessity for the right of workers. In the absence of an alternative system, we should take every opportunity to push ideas about the desirability of a democratic notion of citizenship at work, as a guiding principle for public policy or private action, so that it increasingly gains legitimacy in public discourse and amongst policy makers.
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