Sweeney in Switzerland
Source Dave Anderson
Date 99/05/01/22:49

/* Written 9:14 AM Feb 26, 1999 by in igc:labr.all */
/* ---------- "Sweeney in Switzerland..." ---------- */
Date: Fri, 26 Feb 1999 09:41:18 -0700 (MST)

Remarks by John J. Sweeney
President of the AFL-CIO
1999 Annual Meeting World Economic Forum
Davos, Switzerland
January 30, 1999

It is a delight to be here once more, and to have this opportunity to share
with you some of the perspectives of the 40 million working men and women
in households represented by the AFL-CIO.

We've been asked to talk about how to "manage the social impact of
globalization." But let us not think of globalization as a natural
phenomenon with regrettable social side effects. The forces of
globalization now wracking the world are the creation of man, not of God.
Our task is not to make societies safe for globalization, but to make the
global system safe for decent societies.

This is not a quibble about words. As we meet, about a third of the world's
economy is in recession. 100 million people who thought they were part of a
growing middle class have been brutally thrust back into poverty. And, as
recent events in Brazil have shown, the crisis is far from over.

Global deflation is now the nightmare of central bankers. Too many goods,
too much productive capacity chasing too few consumers with too little
money. In the crisis, the US is the buyer of last resort. But US consumers
are already spending more than they make. US manufacturers are in
recession. In recent months, 10,000 steelworkers have lost their jobs to a
flood of imports, their families disrupted, their communities devastated.
The US trade deficit is headed to unsustainable new heights.

The terrible human costs can have one good effect. They can sober the
debate about the global economy. For two decades, conservative governments
have been on a binge, dismantling controls over capital, currencies, and
corporations. Now we awake the morning after, our heads aching, our hearts
burdened by the destruction that we see around us.

Globalization --- in the extreme, corporate dominated, de-regulated form we
have witnessed --- is not the scapegoat of the current crisis; it is the
cause of it. After two decades, the results are very clear. The global
casino of capital and currency speculation has generated booms and busts of
increasing severity and frequency, as World Bank economist Joseph Stiglitz
has warned. And it has produced slower growth and greater inequality in
countries large and small, developed and developing - as governments
scramble to protect themselves from the global storms.

In its current form, globalization cannot be sustained. Democratic
societies will not support it. Authoritarian leaders will fear to impose
it. The so-called Washington consensus is no longer the consensus even in

Over the last year and one-half, workers, environmentalists, consumers ---
reflecting the opinion of the vast majority of Americans ---- came together
to block the president's request for fast track trade authority not once,
but twice.

We insisted that enforceable worker rights and environmental protections be
central to any new round of trade negotiations.

And we were right. Now US Treasury Secretary Robert Rubin calls for a new
"architecture" to limit instability. President Clinton pushes new
initiatives on child labor, on core labor rights, and on the environment.
America's voice, I suggest to you, will either sound a new note in any
future round of trade negotiations, or it will be muted in spite of itself.

When you are in a hole, the first thing to do is to stop digging. If the
newly sobered global community has stopped digging, we're still left in the
hole. Working people across the world understand that if nothing is done,
corporate globalization will continue, unchecked and uncontrolled. We need
to go a different way.

Calls for greater transparency, better accounting and more generous safety
nets are satisfying, but not sufficient. The essential building blocks of a
new internationalism can be seen in the struggles of workers and citizens
across the world..

People are demanding protection from the havoc caused by currency and
capital speculation. If this is not done at a global level, it will be done
at a national level --- as we've seen from Hong Kong to Malaysia to Chile.

While curbing speculators, we must get the global economy going again.
Recent efforts to lower interest rates in Europe and the United States, and
to pump up demand in Japan should be seen only as first steps.

In this crisis, as the IMF recently admitted, enforcing austerity on
indebted countries only makes things worse. The Fund and the Bank should
help restructure debt and stimulate growth. And as the growing Jubilee 2000
movement has called for, industrial nations should move to relieve the debt
burdens on the poorest nations, while increasing investment in sustainable
energy, education and health care.

At the same time, we need to create the conditions for sustainable growth.

That is why it is vital to empower workers - to enforce core worker rights
in the global market- the right to organize and to bargain collectively to
improve one's lot, the prohibitions against child labor and forced labor,
the elimination of discrimination.

Empowering workers strengthens democracy. It is also vital to sustaining
prosperity, to making markets work.

When the famed US labor leader, Walter Reuther, visited Japan in the 1960s,
he saw that Japanese autoworkers were riding bicycles to work. "You can't
build an automobile economy on bicycle wages," he warned the Japanese. But
of course they could, by exporting their automobiles to the United States.

Now the limits of that export-led growth model are apparent. A vibrant
global economy requires consumers -- workers who capture a fair share of
the profits that they produce. The struggle to do just that is taking place
in offices and shop floors across the world. As President Clinton has said,
global rules are crucial if we are to keep the global market from becoming
a race to the bottom.

Finally, this debate can no longer be contained in closed rooms in
luxurious hotels. It is already being waged on the streets, the shop floors
and the computer screens across the world. As the cloistered negotiators of
the Multilateral Agreement on Investment discovered, trade and investment
agreements must gain public support if they are to go forward at all. Open
covenants, openly arrived at is not simply a slogan --- it is a growing

We are entering a new era. We will either build a new internationalism that
empowers workers, protects consumers and the environment, and fosters
sustainable growth - or we will witness a harsh reaction as desperate
peoples demand protection.

I urge all of you to join us in our effort to bend the forces of
globalization so they help workers everywhere build a better future.

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