Trouble for Workers and the Poor: Economic Globalization and the Reshaping of American Politics

In recent decades in the United States, even as inequalities of income and wealth have greatly increased, redistributive programs have tended to be curtailed. In some cases, government policies have begun to exacerbate, rather than moderate, inequality. Since this has occurred not only under the Republican Reagan and Bush administrations, but also in the Democratic Carter and Clinton administrations, it suggests that the politics of redistribution may have been fundamentally transformed. Moreover, evidence from aborad indicates that there has been a shift away from redistributive policies throughout the advanced industrial world. The implications of this trend and the prognosis for the future depend upon its precise political causes. To the extent that it has resulted from changes in contingent political forces -- especially increases in the political power of capital and concomitant losses of power by labor, together with much stronger anti-redistributive stands by business -- one can imagine a revival of redistribution, based on increased organization, mobilization, and political struggle by working people and the poor. Some signs of such struggle have in fact appeared. To the extent that the trend is structural, however -- based on changed technology and such international economic factors as lower trade barriers, extensive immigration, lower transportation and communication costs, and increased capital mobility -- the heightened power of capital and weakness of labor are likely to persist for a long time to come. Moreover, economic globalization may be making it more and more difficult for governments to redistribute income without counterproductive effects such as capital flight, loss of export competitiveness, and increased immigration of low-income people. Thus economic globalization may gravely impair, or even eliminate, the capacity -- as well as the will -- of nation-states to redistribute income or wealth within their boundaries. If this is so, remedies will be hard to come by. The logic of economic globalization implies that only global remedies will work. It is possible that only worldwide organization by workers, or universally applicable treaties and agreements, could effectively check (let alone reverse) increases in income inequality in advanced industrial countries. But such solutions would arouse intense political opposition and would probably face conflicts of interest between workers in rich and poor countries.