Precarity in the Global Production System
The livelihoods of workers in the global production system depend on inherently precarious global socioeconomic policy. There is much to be learned about the global economy through the study of individual workers’ lives. Struggles they face can often illuminate larger problems present in the global sphere. This philosophy is especially apparent in Caroline Knowles’ book, Flip-Flop: A Journey Through Globalisation’s Backroads, wherein she examines the lives of various laborers throughout the production process of flip-flops. One commonality that Knowles observes is that precarity seems to be built into the global system of production. While she demonstrates the effects of such precarity on the specific homes and communities she studies, the global markets and indeed the global social economy as a whole show evidence of systematic instability. Precarity may be defined as characteristics that indicate an unsustainable system built on fragile infrastructure and perpetuated by ineffective policy. Moreover, precarity suggests an inherent likelihood of failure on the individual or state level. Knowles’ descriptions of precarity trend towards the individual examples of poverty or fear of future instability, but to gain a complete picture of how precarity is in fact built in to the global production system, it is necessary to consider the larger forces at work.
As Knowles focuses her arguments on individual workers, it is beneficial to consider her claim within the larger scope of the global labor market. With the explosion of multinational corporations comes a fragmentation of production processes that encourages the search for the cheapest inputs, and the global nature of today’s markets allow for these inputs to be sought across the world. For a large sector of lower-income countries, this means that they exploit their comparative advantage in low-wage labor (Aprili and Friedman 185). Describing this quest to reduce production costs as a “race to the bottom,” Alejandro Reuss discusses how “governments are forced to cut taxes on businesses, offer subsidies, [and] weaken labor and environmental protections” as a way to attract investment from businesses (“Inevitable” 3). At the same time, this necessarily forces workers to accept lower wages and fewer benefits or else face losing their jobs. Since nations are so dependent on corporate investment, businesses have much greater sway in the global market, thus destabilizing the work force, which can no longer rely on consistent employment. The Communist Manifesto warns about the dangers of treating workers “like every other article of commerce,” as they become ever dependent on the constantly fluctuating capitalist free markets (Marx and Engels). This dependency is an example of the precarious seat that workers hold in global production processes. Furthermore, there is only so much deregulation and wage cuts that can be enacted before the economy starts to suffer as a whole, and at that point, alternative forms of attracting foreign investment will develop that will not necessarily be beneficial to society. Though this trend of offshore outsourcing may be relatively beneficial to some sectors, there are others that propose “the painful transition costs that hit before outsourcing produces any ultimate benefits” could catalyze economic and political panic (Miller 63). However, despite theoretical discussion, the global market does not seem to be approaching a change to its operations. This lack of awareness towards long-term success is a significant element in the definition of precarity.
Lack of foresight into the future is a concern shared by many of the workers Knowles interviewed in Kuwait, South Korea, and China. Especially in Kuwait and South Korea, where their primary business operations are dependent on the oil market, workers are uneasy about their futures. One worker in Kuwait states that the nation is simply “ticking along, not diversifying fast enough, nor anticipating what will replace oil when it runs out” (Knowles 30). Similarly, Knowles discusses the “fragilities that come with being a major purchaser and processor of oil” present in South Koreans’ lives (57). As such a large market, oil creates global unstable dependencies at the same time that it is dependent on global politics, broadening the scope of the institutions that have effects on the daily lives of laborers across the globe. Just as the global market changed the priorities of governments to attract corporate investment, workers had to develop a skill set that allowed them to remain a part of this specific and volatile labor force. In China, the flip-flop market “relies on a locally available labour force with a range of navigational skills, including the skill of surviving on discontinuous work and fluctuating wages” (Knowles 114). One aspect of this dynamic is the unique rural-urban dichotomy between agricultural villages and urban factory hubs. Even as more farmland is being taken over to build more factories, some rural areas still survive, as they are necessary for “supplement[ing] the fragilities of a life on uncertain factory wages” (Knowles 95). However, as the Chinese government continues to prioritize urbanization and the consumption of agricultural land increases, there arises the danger that the nation as a whole will no longer be able to support the instability of its factory workers’ lives. Furthermore, the divide between the rural and urban populations heightens asymmetries and leads to “a large gap in incomes, living standards and social benefits: all potential sources of social instability” (Knowles 67). Social instability is not to be forgotten in consideration of the precarious lives that inherently arise from the global system of production. How global institutions deal with the problems these workers face is further indicative of such systematic fragilities.
The visible effects of global markets’ detrimental impact on many workers worldwide often prompt the intervention of developmental agencies such as the International Monetary Fund (IMF) or the World Bank. However, though these institutions act in good intentions, their prescribed solutions often only succeed in furthering the problems of global production, thus contributing to the inherent precarity present. One of the common reasons a country looks to assistance from the IMF or World Bank is for debt assistance, but running a trade deficit is a standard practice among countries that “import large quantities of production goods, rather than consumption goods” (Reuss, “Debt” 89). For lower-income countries, debt becomes almost a necessity for participation in the global economy and the continued growth of their own. Unfortunately, debt assistance from international organizations often misdiagnose the problems of the nation and rely on strict austerity measures that “hit workers and poor people the hardest” (Dollars & Sense Collective 104). As Reuss points out, debt service shifts government spending away from domestic needs, and he cites that “each dollar in external debt service is associated with a decrease of about $0.29 in public health spending,” which can have widespread detrimental effects (“Debt” 88). Moreover, the IMF provides debt service in the form of structural adjustment programs (SAPs) that mandate severe policy changes in favor of a free market system. By pushing a one-size-fits-all evolution into neoliberalism, SAPs ignore nations’ individual problems and often exacerbate the situation by eliminating price controls and devaluing currency. In addition to these tangible issues, ineffective debt assistance will “create long-run dependencies,” as countries must continue to rely on loans from the IMF and the World Bank to pay off other debts (Dollars & Sense Collective 106). It is in this self-perpetuating detrimental loop that precarity is evident beyond the global market and the lives of individuals, stretching to include socioeconomic policy by institutions such as the IMF and World Bank.
Knowles presents a version of systematic precarity at the individual and community level while following the flip-flop trail, but this precarity is in fact present across all levels of the global economy. The global race to the bottom to attract corporate investment destabilizes the work force and ignores the approaching long-term effects of such policies. This directly translates into the uncertainty with which many workers go through life, and for many countries that are dependent on single markets, adversity can have an exceptionally negative effect on their overall economies. Such problems then prompt action from international organizations such as the IMF, but their own misconceptions about economic development and global market systems lead to a furthering of poverty that only serves to continue the detrimental cycle. Precarity of all forms are present in this interconnected set of global market transactions, and specific examples demonstrate the unsustainable, self-destructive nature of the global system of production.