Lecture Topic The Global Division of Labor May 20, 2008

1. POLS/ECON 426 International Political Economy Lecture TopicThe Global Division of Labor May 20, 2008 Professor Timothy C. LimCal State Los Angelestclim@calstatela.edu

2. Dynamics of the World EconomyGlobal Division of Labor What is the Division of Labor? The division of labor is the specialization of production in specific, circumscribed tasks and roles, intended to increase the productivity of labor. The division of labor has a number of advantages…. More efficient in terms of time Reduces the time needed for training because the task is simplified Increases productivity because training time is reduced and the worker is productive in a short amount of time Concentration on one repetitive task makes workers more skilled at performing that task Little time is spent moving between tasks so overall time wasted is reduced The overall quality of the product will increasingly bring welfare gains to the consumer

3. Dynamics of the World EconomyGlobal Division of Labor What is the Division of Labor? Given the clear-cut economic advantages of the division of labor, it is not surprising that, as capitalism has expanded across borders, so too has the division of labor Today, we can speak of … • An international division of labor • A global division of labor } How do these two concepts differ? In a global division of labor, particular kinds of work are not confined to specific countries. For example, otherwise poor countries may be a large source of high tech jobs, while rich countries may have concentrations of “sweatshop” labor. Highly “mobile” or migratory labor is an increasingly important part of the global division of labor. In an “international” division of labor, geography is still very important: it suggests a world divided into very distinct, non-overlapping labor zones, whereby the poorer zones are responsible for low-skilled, low value added manual labor, and the richer zones responsible for higher technology, higher skilled and higher paid labor

4. Dynamics of the World EconomyGlobal Division of Labor What is the Division of Labor? An Aside Labor Migration and the Division of Labor: “Developed countries are becoming more and more dependent upon migrant labor and immigration to fulfil their labour needs. Foreign workers are in demand because of two developments.” First, the birth rate is so lowin developed states that their population is shrinking (seenext slide) Second, the population is rapidly ageing which means that there will not be enough workers to pay for the pensions and healthcare demanded by the older generation

5. Dynamics of the World EconomyGlobal Division of Labor What is the Division of Labor? An Aside For most developed countries, their birthrate is below the replacement level; this means that their population is shrinking!

6. Dynamics of the World EconomyGlobal Division of Labor What is the Division of Labor? An Aside Japan, a case in point: Based on current trends, Japan’s population will shrink by as much as 54% by 2090 (from 130 million to 60 million)

7. Dynamics of the World EconomyGlobal Division of Labor What is the Division of Labor? One more, less obvious aspect of the division of labor is its gendered character: What does this mean? “Men tend to be grouped into different jobs from women. Gender refers to the idea societies have about what social roles and forms of employment are most appropriate for men and women …. In the global economy, women are the majority of workers in export processing zones and mean are the majority of managers.” Women factory workers in Vietnam, Mexico and Jamaica

8. Dynamics of the World EconomyGlobal Division of Labor What is the Division of Labor? According to the authors, it’s no accident--but it’s also not “natural”--that women occupy particular niches in the global economy Consider the reasons why women predominate in export processing zones and other low-wage, low-skilled sectors of the global economy Women workers: Easier to control, exploit or oppress?

9. Dynamics of the World EconomyGlobal Division of Labor What is the Division of Labor? In addition to a gendered division of labor, there are also racial and ethnic divisions of labor The categorization of labor along racial, ethnic or gendered lines has the same basic objective: to legitimize their different (and less privileged) social, legal, and economic status and to justify exploitation Historically, the practice of slavery is a brutal example of a racial division of labor, as was apartheid in South Africa; today, immigrant workers--both legal and illegal--play the central role in the racial and ethnic division of labor Migrant workers in the U.S., Korea, Europe and Saudi Arabia

10. Dynamics of the World EconomyGlobal Division of Labor Theoretical Perspectives We have already discussed the economic advantages of the division of labor: for liberals, these advantages are central to their argument about the social benefits of the division of labor at the domestic, international and global levels Of course, economic nationalists and radicals have a different view: the problem, again, is not with the principle, butwith the practice Critics highlight the role of …* POWER * It’s their favorite five-letter word

11. Dynamics of the World EconomyGlobal Division of Labor Theoretical Perspectives: A Quick Review The greatest improvement in the productive powers of labour and the greater part of skill, dexterity, and judgment with which it is anywhere directed or applied, seem to have been the effects of the division of labour Smith’s basic argument is straightforward and difficult to dispute. It is also important to recognize how Smith saw the division of labor as integrally connected to trade, and he understood that both contributed to society at large

12. Dynamics of the World EconomyGlobal Division of Labor Theoretical Perspectives: A Quick Review “Central to Smith, and liberal ideology, is the idea that the benefits of the division of labour and liberal policies flowed down to the lowest members of society. Smith argued that the difference between a prince and a peasant in Europe is not as great as between a peasant and an African king.” So, what’s the problem with this view? How do questions of power, if they do, change Smith’s basic premise? Background Image: A pin factory, circa 1950

13. Dynamics of the World EconomyGlobal Division of Labor Theoretical Perspectives: A Quick Review The authors highlight three basic critiques of the liberal view, which come from these three schools of thought … • Dependency • Economic nationalist • Gender Dependency scholars argue that the “division of labor” is little more than a justification for inequality: the contemporary division of labor is product of Western domination and power, going back to the days of slavery and colonialism. As French historian Braudel put it, the “past always counts.” Dependency scholars argue that the division of labor locks poor countries into particular roles

14. Dynamics of the World EconomyGlobal Division of Labor Theoretical Perspectives: An Aside The sugar cane plant was the main crop produced on the numerous plantations throughout the Caribbean through the 18th, 19th and 20th centuries, as almost every island was covered with sugar plantations for refining the cane for its sweet properties. The main source of labor was African slaves 1700 alone, approximately 25,000 Africans were enslaved and transported across the Atlantic Ocean. Up to two-thirds of these slaves were bound for sugar cane plantations in the Caribbean, Mexico, and Brazil to produce "White Gold." Over the course of the 380 years of the Atlantic slave trade, millions of Africans were enslaved to satisfy the world's sweet tooth Sugar the the Global Division of Labor

15. Dynamics of the World EconomyGlobal Division of Labor Theoretical Perspectives: A Quick Review The key point is not that the past explains everything (it does not), but rather that the division of labor is product of power--always has been and still is In other words, “political authorities in the form of states have a role shaping where their populations [and the populations of other societies] ‘fit’ in the division of labour” This is a point upon which both radicals andeconomic nationalist agree: the “problem” withthe liberal view is that it legitimates and even naturalizes an international/global division of labor that privileges the rich over the poor, the more “developed” over the “less developed” economies

16. Dynamics of the World EconomyGlobal Division of Labor Theoretical Perspectives: A Quick Review Feminists agree with other critics that the division of labour is created and sustained by unequal power relations and is reproduced on a worldwide basis. Importantly, the exercise of power is usually less obvious and understood: it operates through patriarchal systems, which naturalizes the subordinate positions such that few even question this subordination Men in dark suits: feminists tell us that it is no accident that positions of power are dominated by men

17. Dynamics of the World EconomyGlobal Division of Labor The Global Division of Labor: Key Issues Earlier, we discussed the issue of increasing migration and the underlying reasons driving this process … It is important to recognize that transnational and internal worker migration are part-and-parcel of the global economy and developing global division of labor: worker migration has become a permanent feature of the global economy It reflects a restructuring of the global division of labor, but is not the only important change ... Equally important are the ways in which two huge, populous countries are becoming increasingly integrated into the global division of labor China India

18. Dynamics of the World EconomyGlobal Division of Labor Key Issues: The Rise of China and India Some Questions. What are the implications of the simultaneous rise of China and India as major centers of global capitalism? What does the inclusion of hundreds of millions of new workers--both skilled and unskilled--mean to other workers in the global economy? Is the rise of China and India a “good thing” in terms of the global division of labor?

19. Dynamics of the World EconomyGlobal Division of Labor Key Issues: The Rise of China and India Implications of Chinese Economic Development Internal unrest in China as a result of mass migration from countryside to urban areas A dramatic shift of economic activity from other parts of Asia to China, which will put pressure on … • Global labor standards and wages • All those countries and workers producing labor-intensive products similar to China Further solidification of gendered workcategories 1 2 3

20. Dynamics of the World EconomyGlobal Division of Labor Key Issues: The Rise of China and India Implications of India’s Economic Development Although India’s growth is also premised on industrialization, in terms of the global division of labor, the country has focused increasingly on business services sector, the so-called “outsourcing” sector • Indian outsourcing competes with “white” and “pink” collar employment • Technically skilled Indian workers have alsobecome part of the global migration flow, asmore and more Indian workers move to the U.S.and other western countries to work directly in the high tech sector

21. Dynamics of the World EconomyGlobal Division of Labor Technology has made even the most mundane tasks subject to outsourcing: consider this story about outsourcing homework

22. Dynamics of the World EconomyGlobal Division of Labor Key Issues: The Rise of China and India Implications of India’s Economic Development: Outsourcing Watch this short video on outsourcing … Is outsourcing creating new divisions of labor? Whose interests does outsourcing serve? Is outsourcing likely to increase? What is the argument for outsourcing? Against? Video removed intentionally See CourseSite