Britain and Globalisation:

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Post 1945

  • Welfare state
  • State ownership of key sectors of econom: 
  • - health
  • - Water 
  • - Energy 
  • - Post 
  • - Rail
  • - Coal 
  • - Steel 
  • Collewctivism 
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1979 onwards:

  • Neoliberal agenda 
  • Deregulation 
  • Privatisation
  • Individualism
  • (Tony Blair, MP): 'globalisation has transformed our economies and our working practices, but its not just economic, its also political and security phenomenon... we live in a world where isolation has ceased to have reason to exist. by neccessity we have to co-operate with each other across nations."  
  • "many domestic problems are cause on the other side of the world... financial instability in Asia destroys jobs in Chicago and in my own country. Povery in the Caribbean means more drugs on streets in washington"
  • "whether we like it or not... we cannot refuse to participate in global markets if we want to prosper.' 
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Foundations:

  • Neoliberal Project - three interrelated parts:
  • - deregulation
  • - liberalisation of trade.
  • - privatisation
  • - promoted by governments acting in rational self interested maner 
  • (Castells: 2001) 
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continued

  • Case for privatisation: 
  • - more efficient 
  • - state ownership crowds out private sector
  • - competition drives technical improvement.
  • State Disengagement: 
  • - Equity sale
  • - Asset sale
  • - contracting-out/outsorcing
  • Impact on service:
  • - highly contested
  • Impact on labour: 
  • - jobs, pay and conditions.
  • - diminution of bargaining power.
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Case for (de-nationalisation) Privatisation:

  • british industry was "overmanned" with "too low earning and too little profit and too little investment" the answer lay in shedding factory workers, which would make industrial companies leaner and free up labour for new businesses. 
  • Private enterprise: 
  • - more efficent
  • - state ownership crowds out private sector
  • - competition drives technical improvement. 
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Privatisation - Conflict Britain:

1984-1985 Miners strike: 

  • 1981 sweeping pit closures were announcec
  • 160,000 miners on strike = lasted a year
  • 20,000 injured or hospitalised
  • 2 killed on picket line
  • 200 served time in prison or custody
  • 966 were sacked on return to work for having been on strike.

Subsequent actions included:

  • 6,000 workers in the print industry
  • 1,000 workers P&O ferrys 
  • workers at GHCQ sacked for being trades union members. 
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Companies bought by foreign owners:

  • Football clubs, Jaguar, Abbey national, British airway, gas, NHS etc. 
  • UKs manufacturing sector has shrunk by 2/3 in last 30 years. used to be 40% now its 10%
  • A million people made cars in UK during the 1960s, in 2009 it was only 180,000.
  • 6.8million people worked in manufacturing when Thatcher came to office in 1979, by 2012 that number was 2.5 million.
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Government intervention in Labour market:

  • 1980 Employment Act (introduced by Thatcher Government) 
  • Effect: to curb power of unions:
  • for example: 
  • - legal prohibition of secondary trade union action in support of other groups weakens labour and strengthens capital. 
  • Neoliberalism argues that the state should not interven or interfere in the free markets.
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Outsourcing and Supply chains.

  • Utilise cheaper labour in different parts of the world.
  • benefit from tax concessions
  • befefit from tax regulations:
  • - labour
  • - health and saftey
  • - environmental.
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implications:

  • One consequence of the race for competitiveness will be a shift of jobs to the third world.
  • In the past 10 years, a labour force of some 1,200 million people has become reachable in the developing countries, at an average cost of less than $2 an hour. The industiralised nations at present employ 350million people paid average hourly wage of $18. 
  • best thing china had to offer foreign investors was cheap, attentive and discipline producers.
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Example from the Maritime sector:

Deregulation:

  • Move to flags of convenience: 
  • - e.g panama, liberia, mongolia
  • - no labour requirements
  • - minimal tax cost
  • - little regulation 

Consequences:

  • Move to crews from developing countries.
  • Unemployment for workers from britain. 
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Example from the Maritime sector:

Deregulation:

  • Move to flags of convenience: 
  • - e.g panama, liberia, mongolia
  • - no labour requirements
  • - minimal tax cost
  • - little regulation 

Consequences:

  • Move to crews from developing countries.
  • Unemployment for workers from britain. 
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Standardisation:

  • not only in cargo operations but also standardised workers
  • cargo - standardised operations and improved communications = greater direction from shore side managers and speeding up operations. 
  • internationally agreed standard of training. 
  • standardised roles onboard.
  • means anyone with relevant certificate can be slotted into a given role. 

CONSEQUENCES:

  • fewers crew
  • longer working hours = 80-90 hours week for 9 months at a time. 
  • less time in port
  • mixed nationality crews
  • worse terms and conditions: 
  • -one trip contracts
  • - longer trips (9 months) 
  • salaries for workers from developing consiberably less that those from developed economies.
  • -little union protection.
  • highly vulnerable and often less well educated workers onboard. 
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Foreign Direct Investment (FDI)

  • its not just british companies becoming leaner and more efficient but also attracting investment into the country.
  • purchase of and investment in exisiting companies.
  • establishment of branches of new companies.

Enticing investors: 

  • creation of special economic zones.
  • reduced tax
  • provide loans
  • easing of planning regulations
  • building infrastructure. 
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States and Corporations:

  • tension between need to appease business and regulate to protect interests of citizens.
  • who has the power? 

where are decisions made? 

  • 1000+ MNC in the UK and nearly 50% of workforce is employed by them.
  • Movement across the world, e.g LG producers of electornic goods.
  • Lg annocunced the establishment of large plant in south wales. At the time in the mid 1990s the largest inwrd investment inwales.
  • 1997, financial crisis involving a number of dymanic Asian econimies. Had impacts on wales - scaling down of the proposals to establish facilities in South Wales and eventual sale.
  • 2012 Tate Steel port Talboy (formerly british steel) announces 600 job cuts. 
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States and Corporations:

  • tension between need to appease business and regulate to protect interests of citizens.
  • who has the power? 

where are decisions made? 

  • 1000+ MNC in the UK and nearly 50% of workforce is employed by them.
  • Movement across the world, e.g LG producers of electornic goods.
  • Lg annocunced the establishment of large plant in south wales. At the time in the mid 1990s the largest inwrd investment inwales.
  • 1997, financial crisis involving a number of dymanic Asian econimies. Had impacts on wales - scaling down of the proposals to establish facilities in South Wales and eventual sale.
  • 2012 Tate Steel port Talboy (formerly british steel) announces 600 job cuts. 
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Starbucks:

  • pays UK corporation tax for the first time since 2009:
  • paid £5million in Tax.
  • the move follows pressure from politicians and campaigners, and an agreement by world leaders last week to clamp down on corporate tax avoidance. 
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Divided Nation?

  • Neoliberals argue for "trickle down effect" when business does well, all prospers.
  • richest 10% of UK households own 40% of wealth
  • 10% of households are 850 times wealthier than the bottome 10% 
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