Even the Swedes Are at It: Poor American Employees Are Being Shamefully Exploited. by Whom? Why, by European Firms That Cross the Atlantic to Escape the Social Market. Nick Cohen Reports

By Cohen, Nick | New Statesman (1996), March 1, 2004 | Go to article overview

Even the Swedes Are at It: Poor American Employees Are Being Shamefully Exploited. by Whom? Why, by European Firms That Cross the Atlantic to Escape the Social Market. Nick Cohen Reports


Cohen, Nick, New Statesman (1996)


To people interested in law and order, nothing symbolised the mutation of Britain into a giant public-private partnership better than the arrival of US prison corporations in the mid-1990s. The conventional nation state was defined by its monopoly of coercion. Citizens were charged in its courts and served time in its prisons. Then, from nowhere, penal corporations were all over the criminal justice system, making a nonsense of the old certainties about where the line should be drawn between public service and private profit. These were shocking and extraordinary companies, whose business plans echoed the logic of the slave trade by seeking to profit from human incarceration. None was more shocking than the Wackenhut Corporation of Coral Gables, Florida.

An anti-capitalist conspiracy theorist in a drug-induced dementia would be hard pressed to invent a more sinister firm. If its founder, George Wackenhut, had been further to the right, he would have had to wear a uniform. He opened for business in 1954 at the height of the McCarthyite anti-communist scare. His speciality was to collect information on subversives. By the 1990s, the then-octogenarian Wackenhut had files on four million "subversive" Americans. This was a huge number for such a conservative country. But then Wackenhut's definition of "subversive" was broad: he once described George Bush Sr as a "pinko".

As you might expect, from all of the above, Wackenhut lived in a mock-medieval castle on the Florida coast and surrounded himself with former FBI and CIA men and revanchist exiles from Castro's Cuba. Thus it was shocking in the 1990s to learn that this bizarre corporation was being invited by Her Majesty's Government to open a prison--in Doncaster, of all places. Justice in Britain was being handed over to Dr Strangelove.

There was no doubt that Wackenhut deserved all the attention it got, but the criticism also reinforced a simplistic world-view. On one side was right-wing America, fervently capitalist, restless and dangerous. On the other was social democratic Europe, peaceful, tolerant and always willing to temper the excesses of capitalism.

In 2002, supporters of the European way secured a rare business triumph. Wackenhut's security operations were taken over by the Anglo-Danish combine Group 4 Falck, the world's second-largest private security company. Group 4's professed aims were the antithesis of the paranoid ravings of old George Wackenhut. Its compassionate managers explained to the press, regulators and ethical investors that "at both national and international levels, Group 4 Falck works on the basis of a code of ethics governing such issues as human rights, racism and child labour". The firm was committed to "building social responsibility" by "collaboration with the employees [and] their unions". It set the gold standard for the security industry. "Low-quality, badly paid employees and an enormously high staff turnover rate were features of the US security industry as a whole prior to 11 September," Lars Norby Johansen, the CEO said, as he shook his head at the lamentable irresponsibility of his competitors. The one "notable exception" to the shameful norm was Group 4's Wackenhut subsidiary.

There was some truth in Group 4's claims about its European workforce; none whatsoever in its claims about America. As Harold Meyerson of the Washington Post put it last year:

   When European employers look to the United States, they see roughly
   the same thing that US employers see when they look to China:
   millions of low-wage workers who have all but lost the right to
   organise and a government intent on keeping things just the way they
   are. The erosion of worker power and the growth of employer supremacy
   here have transformed the bottom half of the US workforce into a vast
   exploitable mass worthy of a colonial backwater.

Group 4 is a leading exploiter and has become the target of a fightback by the American labour movement. …

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