Contract Labor: The Latest Stage of Illiberal Capitalism

By Prashad, Vijay | Monthly Review, October 1994 | Go to article overview

Contract Labor: The Latest Stage of Illiberal Capitalism


Prashad, Vijay, Monthly Review


Much has been made in recent years about the transformations in the nature of the world. We witnessed the beginnings of a post-Cold War world, the inauguration of a New World Order, the end of "welfare" capitalism, the maturity of transnational corporations, and the atrophy of working-class politics in Euro-America. Through optimistic adjectives, the Euro-American media tell a story that everything has changed for the better and that humanity is soon to enter a realm of freedom hitherto known only in the United States and Western Europe. This excitement has been contagious, being carried to the media of peripheral countries and to intellectuals in the most peripheral domain of all--Academy-land.

Things have changed, even if only in our presentation of the world to ourselves. Yet, we must attend carefully to the glib assurances of the media, for whom the excitement of change is as much a way of making news as the news itself. Where do we begin to explore this world of ours, which at once gives those of us in the United States so much information and yet appears so opaque? We are told that the U.S. economy is in "recovery" given the drop in the unemployment rate (in May 1994 the official rate was 6 percent). Apart from being a conservative rate, the unemployment index does not tell us what sorts of jobs are now available. Most of the new jobs are for low pay, frequently offering a minimum wage which is only 90 cents more than it was in 1979; further, in those fifteen years, the minimum wage lost 23 percent of its value. If this is not bad enough, many of the new jobs are temporary, which curtails job security and prevents the workers from organizing unions.

Since 1992, temporary jobs increased by 250 percent across the United States. In my state, Rhode Island, the largest employer today is a temporary job agency named Manpower. During a period of rapid and heartless deindustrialization, Rhode Island suffered from the decline of manufacturing jobs (notably in the custom jewelry, shoe-making, textile, steel, and tool and die trades). Our politicians surrendered to the nameless and faceless forces, the supposed mechanism of growth. The surrender is not peculiar to Rhode Island, nor can it be to the United States; it is a global phenomenon exemplified by the abandonment of Keynesianism for an atrocious approach to economic management--the valorization of the "free market' and the adoption of the socially irresponsible theories of F.A. Hayek and Milton Friedman. These "free market" theories call for regimes of austerity, a code word which means that organized workers must yield their most basic entitlements (such as health and pension benefits) secured from years of genuine trade unionism. The "free market" nostrums have been forcibly imposed around the world through the aggressive offices of the International Monetary Fund and other agencies of international finance. In the 1980s, liberalization and privatization of the social programs of Third World nations became a price for "foreign" aid. For example, already inadequate health infrastructures were depleted of funds and subsidized food programs, price controls were cut, and Third World states came under pressure to terminate their support for the struggles of their workers against Transnational Corporations (TNCs).(1) Social services to promote the development of people's lives suffer at the hands of the one thing which masquerades as a person in the idiom of the bourgeoisie--GDP (Gross Domestic Product). Welcome to the latest stage of capitalism!

I was in Delhi, India, last year, collecting materials for my dissertation at the University of Chicago, when I was struck by the extent to which contract labor has become the dominant form of labor relations. My research was among the Balmikis, an Untouchable community in north India whose members, for the past century, have worked as municipal sanitation workers. I was interested in their struggles for equality and for social justice in the face of their gradual socioeconomic marginalization. …

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