Labour and social movements confronting neo-liberal attacks

by Asbjørn Wahl

Good morning friends.

First of all, thanks a lot for inviting me to this important conference. I am very happy to be here. It is an honour to be invited from the other side of the Northern hemisphere to come here to speak to this conference.

Since I come from the other side of the planet, my experiences are probably different from yours. On the other hand, under influence of the so-called globalisation, more and more of our experiences are similar; we face the same international institutions attacking our way of life, our economy, our livelihood and so on. Actually, one of the unintentional positive side effects of the so-called globalisation is exactly that the realities we face are more and more similar across the globe, something which also makes it possible to unify our struggles.

I am going to talk about labour and social movements confronting neo-liberal attacks. However, as things have developed over the last one and half years, neo-liberalism is in deep trouble. What people are talking about these days is the financial crisis, and the economic crisis. It is probably not neo-liberalism which is the main enemy today, but the financial and economic crises. There is, however, a connection between the two, as we will see later on.

Joint analysis

In order to develop our struggle it is important also to have a joint analysis of the current situation. So I will start by identifying some key developments of the last fifty, sixty years. Let me start by going back to the situation before the neo-liberal offensive started around 1980. In Europe, and particularly in the Nordic countries, where I come from, we had the so-called post World War II welfare regime. This was based on an historic, specific compromise between labour and capital, and it influenced the economic situation all over the world.

It was a situation in which private capital became strictly regulated. The Keynesian, regulatory policy was a response to the crisis. The depression of the 1930s, which delegitimized the existing economic order, combined with a strong labour movement, created the situation which made it necessary to curb the capitalist economy. Private capital was in a way ring-fenced by regulations; capital control, fixed exchange rates, regulation of credit volumes and investments at the national level, public ownership of important infrastructure and other regulatory measures were used. A great part of the economy was taken out of the market and made subject to political decisions – in the form of a huge and growing public sector. The labour market was regulated by laws, collective agreements, and so on. It was this regulatory regime in the post-war period which made it possible to develop the welfare states in the Scandinavian countries, and most of Western Europe.

Then, in the 1970s, the economy again became crisis-stricken, and the neo-liberal offensive started. Capitalist interests were able to carry through a very rapid deconstruction of this regulated capitalism. Firstly, the fixed exchange rate disappeared, when the US government one-sidedly withdrew from the international monetary system. Capital control was abolished in the 1980s in most countries. Regulation of trade was pitched down. Particularly the US, the European Union and other rich countries put pressure on other countries, including developing countries, to deregulate their economies and to open their markets for US and European goods and services. Regulation of investments at the national level disappeared in the 1980s and 1990s. A huge public sector was turned into a shrinking public sector, labour legislation was attacked. After twenty-thirty years of neo-liberal attacks, the regulated Keynesian capitalism became extensively de-regulated and partly privatised.

This development has created a lot of new challenges for the trade union movement. Within ten years, the dominant social democratic hegemony that we experienced in Western Europe in the post-war period was replaced by a neo-liberal hegemony. And it was surprisingly easy for the neo-liberal forces to carry through these changes. There was no strong opposition, not even from the labour movement in Western Europe. The trade union movement was taken by surprise, and was not able to mobilize much opposition or resistance.

Then capitalist production went through a very rapid restructuring at the global level. Integrated chains of production were developed all over the world, so that the multinational companies could shift from one country to the other, to avoid high wages, costly social systems and so on. One of the effects of this development is a rapid growth of unsecure and atypical (precarious) work. It seems almost as if capitalist are aiming for a capitalism without a working class, as they are trying to change workers into so-called self-employed in order to weaken the possibility for workers to organize and fight as wage labourers. I will come back to that.

Another important tendency is the development from industrial to financial capitalism. In the post-war period, the way capitalists achieved a return on their investments was by investing in real productive activities, in factories and so on. Now, after twenty-thirty years of neo-liberal offensive, capitalism is driven by financial, not by industrial, capital. I will come back to that also.

Breakdown of the social pact

An important effect of this development is the breakdown of the social pact, or the class compromise. This social pact was established between labour and capital, particularly in the Nordic countries, but in the post-war period in most Western countries. It was the result of a long period of struggle in which the trade union and labour movements gained ground and became stronger. It was this shift in the balance of power which led to these social compromises.

Capitalist forces only enter into this kind of compromises, if they have to. As the social struggle developed in the 20^th century, capitalists were put under pressure and stroke accords with labour movements in order to try to weaken and damp their radicalism. A class compromise like this is in other words a result of a strong labour movement. This social pact, however, has gradually broken down during the last thirty years. It is not the labour movement which has withdrawn from the compromise, it is the capitalist forces. They have withdrawn because they do not need the compromise any longer. Now they feel strong enough to attack at the same time as they are under enormous pressure to increase the rate of return. This is the reason why they have started to attack what they previously accepted as part of the class compromise.

On top of this, over the last few years, we have got the financial and economic crises. These developments have completely changed the situation for the labour movements and for trade unions all over the world. The economy and our societies are going through a great transformation. We are facing completely new situations. It will most probably continue to be like this for a long time, and trade unions and labour movements all over the world are lagging behind. Therefore we have to try to develop our own policies, to develop a common understanding of the situation and to start to develop more offensive strategies in order to mobilise for a counter-offensive. It is a huge task, but it is possible.

One of the new corporate trends we have seen is that big multinational corporations use the opportunity they have got to freely move wherever they want on this planet. They have broken out of their chains, and they use this opportunity to relocate and to outsource production to avoid high wages, strong unions and high taxation systems. If taxation and wages increase in one country, they go to the next, as we have seen in this part of Asia where they have shifted, for example from Korea to Vietnam and so on, in order to further hunt for lower wages.

Precarious work

Another trend is, as I just mentioned, that workers are replaced by self-employed or precarious workers. Obviously, many companies seem to keep a small core of ordinary workers. But others are outsourced to other companies, made individual contractors or hired on short-term contracts. Thus, a rapidly increasing number of workers are made more and more precarious. This split between core and precarious workers is one of the biggest challenges we face in the trade union movement today. We have to deal with these problems – that less and less workers are on ordinary long term appointments, and are turned into self-employed or precarious workers. We have to include all these workers into our notion of the working class. Actually, the working class over the world is increasing, but under new conditions. The new freedom to move wherever it wants, has made it possible for capital to outflank labour. This makes it necessary for us to reassess the situation, to regroup our forces, in order to hit back.

We have to realize that there is an enormous shift in the balance of power that has taken place – in favour of capital. We cannot close our eyes for these realities. We are on the defensive today. This has to be the starting point, if we want to develop new strategies and build new strength. We have to face reality. So-called atypical, precarious work (which is becoming more and more typical) means that full-time jobs with a permanent contract are the reality only for a minority of the working class in the world today. And it is decreasing. In this part of the world, in Asia, only a minority of workers are in ordinary full-time jobs with permanent contracts. All over the world, workers are pushed into the precarious labour market; short-term work, part-time work, on-call work, self-employed, whatever notion they use for it.

A lot of these so-called self-employed and contracted workers are fake self-employed workers. They do everything that ordinary workers would do, but their legal situation is different. For example in the transport industry, which I know best, there are many of these multinational companies; UPS, DHL, etc. Some of them push truck drivers into becoming so-called self-employed owner-drivers. But these self-employed drivers still use the same company uniform. They still have the same logo on their lorry and they are in the same dependent relation to the company as before. They are fake self-employed workers. This is done quite consciously by employers in order to undermine the possibility for workers to organize and struggle together as wage labourers.

We have to counteract this development. We have to face the real situation, namely that these people are still workers. They are our colleagues, and we have to include them in the struggle. The situation reminds me of an old South African saying, maybe it is a saying which we can find all over the world, and which goes as follows: If you see a creature that looks like a duck, walks like a duck and sounds like a duck – it is most probably a duck. It is the same with these so-called self-employed workers. If you see a worker that looks like a worker, is supervised like a worker and is dependent like a worker, it is most probably a worker, not a self-employed. Today 25 to 30 percent of the workers in the US and Europe, and more than half of the workforce in most of the rest of the world are so-called atypical, precarious workers. This means that the majority of the workers in the world are today not full-time jobs on permanent contracts. We have to take this into consideration when building the new trade union and labour movement.

Broken promises

When neo-liberalism won hegemony in the 1980s, it was accompanied by promises of a bright future. If we only released capital from its regulatory chains, if we only removed all barriers so that capital could freely move to wherever the profits were highest, it would result in higher economic growth and better economy for you and me. That was the promise. What we have seen is the opposite. Neo-liberalism has not delivered as promised. What we have seen is increased inequality between countries as well as between people in countries, and continued and increased exploitation of the environment in a situation in which we face a potential catastrophic climate change. And now, over the last couple of years, this economic model has led us into the deepest financial and economic crises since the 1930s. This is the disaster that neo-liberalism has brought to us so far.

Let us take a look at what has happened in terms of economic growth in the world since they promised that everything should be better if we deregulated. The above graph is based on the International Labour Organization report on The Social Dimension of Globalization (2004). It shows the growth of gross national product per capita globally over the last 50 years. The highest growth was in the 1960s, when capitalist markets had the highest level of regulation. So, while we have been told now for 20-30 years that regulation destroys economic growth, reality tells us something else. During the economic crisis of the 1970s the economic growth was halved. Then they started to deregulate in order to increase economic growth and bring prosperity and wealth to everybody, as we were told. What happened was exactly the opposite. Economic growth has gone down and down. And this does not only represent a period of economic stagnation; it represents a systemic crisis of the capitalist economy.

Financialisation

Another feature of this systemic crisis is the enormous accumulation of financial capital over the last 20-30 years. There has been a lack of real assets to invest in, not because people’s real needs are met all over the world, but because people have not had enough money to buy the goods and services which were produced. Over-production and an extensive redistribution of wealth from the poor to the rich have produced an enormous amount of financial capital in a desperate hunt for profitable investments all over the world. This has resulted in financial speculation without precedence in the history of capitalism. We have never seen anything like this, neither at the end of the nineteenth century, when there was also a quite liberal economic regime, nor in the 1920s or the 1930s. It is so enormous that it is almost impossible to comprehend.

The need for expansion is a built-in force of the capitalist economy. It has to expand or to die. However, this need for expansion cannot be solved in the same way today as it was at the end of the nineteenth century. The way they solved the enormous need for expansion of capitalism in the nineteenth century was by creating colonies in Africa, in Asia and in Latin America. But this geographical expansion is limited today, because the companies are already there. They are in most countries, all over the world. So where are they going to expand, if they can't expand geographically? They cannot go to Mars; they cannot go to the Moon!

Actually, today it is the public sector which represents the biggest potential for expansion. It amounts to more than 40 percent of the economy in Europe today. Therefore, if capitalist interests are able to turn these public services and assets into the markets, it will make possible an enormous expansion of capitalism. This is the most important driving force behind the pressure for privatisation. We are faced with a lot of other rhetoric, but the root cause of privatisation had been the enormous pressure from the growing surplus of financial capital, hunting for profitable investments. Behind that again is the crisis in the real economy, because the financial crisis is only a symptom of the crisis of the real economy.

This is a very telling graph. The bars on the left for each year represent gross national product at the global level. The ones on the right are financial assets at the global level. You can see what has happened during the last 30 years. In 1980, total financial assets at the global level were about at the same level as total real values. This is how it should be. Financial capital is only paper value – a share, an obligation, a bank note – in other words just pieces of paper. The reason why these pieces of paper are valuable is that we have decided that they represent values in the real economy. We can exchange them into real values. This means that it should not be much more financial capital in the world than real capital. That was exactly the situation in the 1980s. But what has happened after the deregulation of the capital markets?

Just before the ongoing financial crisis started, total financial assets represented three and a half times the value of the real economy. This is the casino economy, the economy of madness. How are economic values created? The values are created in the real economy of course, value added in the production process. There is no value added in exchanging paper values between people. So, all this enormous amount of financial capital has to get its profits from the same source – from values created in the real economy. I presume that all of you will understand that this just does not go together. It is impossible.

So how do they solve this problem? By creating speculative bubbles. These speculative bubbles are necessary results of this development. The financial crisis is not a natural disaster. It is not something which comes surprisingly, although most people were surprised, and most mainstream economists were surprised. There have been some few critical economists in the world that have tried to convince us for some time that this would happen. But most mainstream economists, most politicians, all the neo-liberalists themselves, they were surprised by this crisis. How could they be surprised when total financial capital represented three and a half times total real values, and all these financial assets in principle should be possible to exchange into real values?

We are in a situation in which financial capital has taken the upper hand. It is a new phase in the history of capitalism. Financial capital was meant to be a servant to the real economy. Banks were set up to give credit to people or companies that wanted to invest in the real economy. Now financial capital has changed from being a servant to being the master of the economy. It is no longer so that banks and financial institutions serve the economy. It is the real economy that serves the financial economy in order to give as high profit as possible to the investors. They buy companies, not primarily to contribute to the real economy, but to part them and restructure them and sell them again with a profit – in something they call realising values. It is a desperate hunt for profits. Financial bubbles and the current financial crisis are necessary results of this development. It is not only a result of 'greed' that somebody tries to make us believe. It is a systemic failure.

The sources of financial capital

Where does all this financial capital come from? A German economist, Jörg Huffschmid, has identified four different sources for this enormous surplus of financial capital. Firstly, there has been an enormous redistribution of wealth from the bottom to the top over the last 20-30 years. The wage quota of the economy has gone down, the profit has gone up, and on top of this, tax cuts have put enormous values in the pockets of the rich over the last 20 years.

Secondly, there is the accumulation of pension funds. Ever more pension funds are created both by establishing new pension schemes, but also by reforming old ones. In many countries in Western Europe we had pretty good pension schemes in the public sector – based on the so-called pay-as-you-go system. A pay-as-you-go system means that those of us who are working today pay the pension of today's pensioners through taxation. There is no fund. When we get old, our children do the same to us and so on. This is the best way to organise a pension system. However, this has been changed under pressure from financial capital. Country after country have gone away from this pay-as-you-go system and started to say, "we have to save money for the future, and build up funds”. Thus, pension funds have been used for speculation all over the world. They have actually become some of the biggest sources of the wave of speculation that we have seen.

Thirdly, the deregulation of credit policies which increased credit volumes immensely as banks pushed loans with low security on people. Fourthly, the abolition of capital control which made it possible for capital to move across borders without any problems. Most countries had capital control in the post-WWII period. This means that if capital owners wanted to export or import capital, they had to ask for a permit. It was subject to political control, exercised by the national bank in most countries. This was probably the most important tool for keeping democratic control of the economy. Thus, the abolishment of capital control in the 1980s represents the most important economic deregulation in our countries over the last thirty years. It opened the possibility to use capital flight as a pressure towards trade unions, towards government. If you do not reduce taxes, they say to governments, we will have to move to another country with a more friendly taxation regime. If you are not willing to reduce your wages, they say to trade unions, we have to move this factory to another country.

All these four sources of the enormous surplus of financial capital are linked to the neo-liberal regime, the deregulated, so-called self-regulated capitalist economy. Thus, the financial and economic crises are necessary results of this development. One important effect is the breakdown of the class compromise or the social pact between labour and capital in Europe. The consensus policies of the social pact are gradually being replaced by confrontational attacks from capitalist interests. It is not labour, but capitalist forces, which have withdrawn from the social pact. The problem we face in the Nordic countries and Western Europe is that trade unions are still clinging to this social partnership ideology, even if the so-called social dialogue is being drained of real contents. Thus, trade unions and the labour movement in Europe are in a deep political and ideological crisis.

Two possible outcomes

I should like to make some points on the role of the state in this transformation. Many people say that the states have been weakened; the neo-liberal state has withdrawn from the economy, as prescribed by Adam Smith. Is this a true picture? Obviously, the state has withdrawn from some areas of the economy. But is it a weak state we face? Yes, in some countries the state has been considerably weakened, particularly in a number of developing countries, which have been under enormous pressure from the US and the European Union. But has the state been weakened in the US and in Europe? No, not at all. You have to have a strong state in order to deregulate the economy. You have to have a strong state to privatise all these public services and assets. You have to have a strong state if you want to undermine trade unions, weaken labour legislation and so on. So it is not a weak state.

Rather than to be weakened, the state has changed character. It has completely become a servant of the neo-liberal economy. The state tends to reflect the balance of power between labour and capital. The enormous shift in power relations, from labour to capital, which we have experienced, has influenced the state immensely. The state has changed, but it is still a strong state that supports the market and undermines trade unions.

In the wake of the financial crisis, many people seem to believe that regulatory, Keynesian policies are coming back again. As US and European governments are taking over banks, even international magazines and newspapers are insisting on the same. So do many representatives of the labour movement. Neo-liberalism is bankrupt, they say, now it is back to state interventionism again. I am not sure of that. I do not think that it is social democracy or a step towards socialism because Georg Bush takes over some bankrupt banks. Bush has most probably not changed that much in a couple of months. To believe that state interventions like these mean that Keynesianism is back again, is a dangerous illusion. It must rather be seen as state interventions to save the existing economic system from its own crisis and internal contradictions. There are at least two different solutions of the on-going economic crisis, and they can both be supported by state interventions, dependent of the political power relations within the state.

One possible solution is the authoritarian one. The expensive packages of support to the financial institutions have not been given in order to develop a more social responsible system, but to bail out the banks and their shareholders. The governments are in a way nationalising the losses and privatising the profits. At some stage, these financial packages will have to be paid for. The bill will surely not be directed to the rich and wealthy that have benefitted from the casino economy. As always before, ordinary people and workers will have to foot the bill. Some of it will probably end up as extensive cuts in public budgets. To pave the way for such an enormous redistribution of wealth, trade unions and workers' rights have to be attacked, since trade unions are still considered to be the main barriers to such anti-social policies. Thus, the result could be a more authoritarian state to defend private property and capitalist interest.

The other possibility is a democratic solution – our solution. It means that we respond to the crisis by democratising the economy and disarming financial capital. The public sector should be used to damp the crisis and stabilize the economy. However, only active social movements, including the trade union movement, are able to force through a solution in this direction. Our ability to mobilise and to take action is therefore decisive. The crisis has created an opportunity. It is possible to influence this situation. It is possible to choose the democratic solution, but only if we, the trade union movement and other social movements are able to mobilise. If not, the authoritarian solution may gain ground. Whether it will be the one or the other solution depends on what we do. It is not fate, but social struggle which decides.

On the defensive

The biggest problem we face in the current situation is that the trade union movement is on the defensive. We have to realize that. The balance of power has changed considerably. The class compromise has broken down. Trade union rights and regulations are being undermined. The level of unionisation has gone down, dramatically down in many countries. In Britain it was halved during the Thatcher era, from about 60 to about 30 percent. In Germany, it is now just above 20 percent, used to be between 30 and 40. In France, less than 10 percent of the workers are unionized (the low figure does not tell us everything though, because France has another tradition in which trade unions negotiate agreements which applies to all workers at a workplace, whether they are organized or not). The private sector in the US unionizes less than 10 percent. Because the public sector is somewhat stronger, the total level of unionization in the US is about 13 percent. This is the situation we face, and it is quite serious.

Some of the strongest trade unions which have been able to mobilise social power over the last ten, twenty years are from developing countries, like COSATU in South Africa, like CUT in Brazil, like our comrades from South Korea. But successful trade union struggles are still exceptions. We have seen a lot of concession bargaining. In addition to that, many trade unions face ideological crisis as well. They have problems in analysing and comprehending the situation.

There are different trade union tendencies, based on different traditions, and different histories. The dominant tendency in Europe over the last 50 years is the so-called social partnership, social dialogue trade unionism, a result of the widespread class compromise. It was a success in a short period of time. It gave us the welfare state, it improved workers' conditions and it improved the livelihood of millions of workers. But it was a short term gain. Now it has been undermined and weakened by the neo-liberal offensive. The social partnership ideology, however, is deeply rooted in the trade union movement. This ideology is therefore still dominant, in spite of the fact that the class compromise itself is breaking down.

Then we have the so-called business unionism. It is particularly strong in the US, but we have also seen a growing tendency in Europe over the last twenty years. It means that unions join forces with their employers and work together in order to increase the company’s competitiveness on the global market. Sometimes the workers can gain something from it, if their company wins the competition. But it is very short-sighted, and it is splitting the working class both along national borders and between different companies. The long-term effect is, of course, a weakening of the trade union movement and a lack of solidarity between workers.

Then we have some few tendencies here and there of more progressive and anti-capitalist trade unions which are still fighting. Over the last twenty-thirty years we have also had discussions of new forms of trade unionism. This has often been raised as an effect of the current crisis in the trade union movement. On is the so-called social movement trade unionism. This is being used on trade unions that work more like social movements. They do not limit their activities to wages and working conditions, but they are taking a much broader social perspective. They tend to take responsibility not only for themselves, but for all poor people, for other groups of people in society. I must admit that I am quite sympathetic to the idea of moving towards social movement trade unionism. In the current situation, we do need broad social alliances in order to change society. Social movements are decisive, not least because the traditional labour parties have moved to the right politically and become almost irrelevant as organisers of social struggle.

A new compromise?

The problem we face in my country and in most of Western Europe is that the class compromise, which started as a tactical tool, has become an ideology. There is nothing wrong in social dialogue and negotiations with employers, quite the opposite. We often have to negotiate with the employers, and we do make compromises with them. Every wage agreement is a compromise. But we have to see these negotiations and the social dialogue as tactical tools. These tactical tools were turned into an ideology in Europe in the post-war period. Social partnership became an ideology, and that creates a huge problem today, because the material basis for the compromise, the balance of power, is now longer there.

So, which is the way forward then? What is the policy of the international trade union movement these days? What does the international trade union movement want us to fight for? A fair globalisation for all, they say. What is this fair globalisation? The word globalisation itself is rather meaningless, since it is being used to mean anything and everything. Everybody puts their own contents into the notion of globalisation. However, many people make globalisation sound more or less like a law of nature. It is something that has come to be, and that we have to adapt to. Of course, this is completely wrong. Rather than to use globalization, I prefer to talk about the neo-liberal offensive, the deregulation of markets. That is the most important real content of globalisation. So to talk about a fair globalisation is a self-contradiction. There is not such thing as a fair, deregulated capitalism. We should rather talk about taking democratic control of the economy.

Another tendency in the international trade union movement is the demand for a new class compromise, a new New Deal. We had the New Deal in the 1930s in the USA, President Roosevelt’s New Deal. In Western Europe the class compromise formed the basis for the welfare states in the post-war period. Now many trade union officials are looking for a new class compromise. But this is an illusion. A compromise is not something you enter into from a weak position, but something you can tactically consider in a strong position. If we are weak and the other part is strong, there is no possibility of any meaningful compromise.

The reason why the class compromise was established in the post-war period and gave some important results was that we had strong and radical trade union and labour movements. You do not beg the other part of a compromise. Compromises tend to be established when the other part realizes that the alternative can be worse. Capitalist interests stroke accords with labour in the post-war period because they feared socialism. Employers went into these compromises in order to damp the radicalism of the labour movement. Under the current, quite different balance of power, therefore, a new class compromise is no option.

Another demand in the same street as a fair globalisation or a new class compromise is the demand for corporate social responsibility (CSR). This has become a big industry, in which a lot of non-governmental organisations are engaged. Many researchers are involved, too. The aim is to convince big corporations to behave well. The UN Global Compact and other voluntary ethical standards are in focus.

Is this the only thing we are able to demand now? Is this the only thing left; that we can urge companies and bosses to behave well? There is no legal obligation linked to this corporate social responsibility. There are no sanctions, if they break the rules. More than anything else, CSR illustrates the weakness of the labour movement. What we have to do is to delimit the power of capital and to fight for increased democratic control of the economy. Decent work is the last big slogan of the international trade union movement. However, decent work doesn't work. It is not even a trade union movement slogan. It is developed by the ILO, the International Labour Organization, which is not a labour organisation, but a tripartite organisation. So this demand has, in other words, been accepted from the outset by the employers and by the governments all over the world. The problem of the decent work slogan is that everybody agrees with it, on all sides of the table, employers and governments. Of course they all support decent work because it is not concretised what it is. It has not been given an address. Who is threatening decent work today? Which are the barriers that prevent us from achieving decent work? Is there a problem that somebody prioritises profits to decent work? Why is it that this cannot be said? Why does the decent work campaign need to be so de-politicised? This will not turn the tide for the trade union movement. We have to go further, and, actually, we do really have a historic opportunity today, in the middle of the most severe crisis of the capitalist economy since the 1930s.

A new opportunity

Neo-liberalism is fully discredited today because of the financial crisis. The financial and economic crises create conditions for unified struggles across national borders and across social groups. We have to see the financial and economic crises, not as another problem that keeps us down, but as a great opportunity to unify our struggles. And I ask you; if not now, when are we going to turn the defensive into an offensive? This is the time, and we have to take the opportunity. We have to change our own minds. We have to realize that now is the time. We are obviously not yet up to it. But we should start the discussions; we should start to develop our policies. If we want to build our strength sufficiently to go on the offensive, we have to start now.

The working class today is more numerous than at any time in history. From 1980 to 2000, the working class doubled, if we use a broad definition of the working class. Most of these workers belong to this part of the world. They are in Asia. Never ever have there been so many workers in this world as today. So why are we so defensive, when our potential is so much bigger?

If we really want to change society, we have to go beyond Keynesianism. We have tried Keynesianism. It worked for thirty years, mainly in Europe, but after that it failed. Capitalism ran into a global crisis again in the 1970s. New emancipatory social policies today therefore presuppose a shift in the balance of power in society. The class compromise in the post-WWII period stopped far from taking democratic control of the economy. The Keynesian model was simply not enough.

The main weakness of the social model, which we had in the Nordic countries and in Western Europe, was the lack of democratic ownership. It is not enough to regulate markets. We have to take steps towards democratising ownership. It is only trade unions and labour movements that can force through transformations like that, because of workers strategic position in society. The trade union movement organise those who create value in society. Therefore, if we really want to change society; either organised labour does it, or it won't be done.

Strategies

Let me then toward the end come up with some strategic points for our future struggles. We have to build alliances with social movements. We have to try to unify the social struggle with the struggle against climate change. In addition to the economic crisis, the climate crisis is the second huge challenge we face with potential catastrophic effects. As a social responsible movement we have to take that into consideration. It gives us the possibility to build broad alliances with new groups in society. We also have to develop alternatives to the neo-liberal restructuring of our public services. Through these struggles, the aim is also to shift the balance of power in society.

There are at least five important tasks for the trade union movement. Firstly, we have to break with the social partnership ideology, at least those of us who face that problem. Trade unions in developing countries do not face this problem to the same degree, since they never experienced the same success as the working class of the North. However, there is a tendency towards social partnership ideology also at the global level.

Secondly, we have to bridge the gap between formal and informal workers. We have to organise everybody, and build unity and solidarity between them. Thirdly, we also have to build unity and solidarity with immigrant workers. There are more and more workers in the world, in east and west and north and south. Fourthly, we have to unify local struggles with an international perspective. People often say to me that there is no possibility to win a struggle at the local level under globalisation. We have to fight at the international level, and I agree with them. However, there is no international struggle without strong local bases. International unification of struggles happens if and when there are strong local movements that need to be unified over the borders. Our main task is therefore to strengthen the local movements back home, but also to give the struggles an international perspective and to work together over the borders. Fifthly and finally, we have to organise and to mobilise our members in order to build the necessary social power to change society. That is our important long-term perspective.

We have not been ambitious enough. We must be more ambitious. We have to recognise the potential power of the labour movement. We have to build the broad social alliances of people and movements which are being affected by the current crises; the financial crisis, the climate crisis, the food crisis, the energy crisis and the full-scale economic crisis. This situation gives us new opportunities to build alliances. Many people now face enormous problems because of the neo-liberal restructuring of our societies and because of the new crises.

Solidarity

We should engage in the Social Forum movement, the World Social Forum, the regional Social Forums and the national Social Forums. We also have to build political barricades against the right wing populist tendencies. If we don't do this, if the left is not able to address people's problem, and to organise them to fight for their own interest, the right wing will do it. They have done it before, in the 1930s in Europe. They are doing it today. The second biggest party in Norway today is the right wing populist party. And these political parties grow because the Left is not good enough in solving people's problems, in taking them seriously.

The Labour and Globalisation network that was created during the last World Social Forum in Nairobi in Africa, in January of last year, is one of the networks which are important in order to develop our discussions, strategies and cross-border cooperation. What kind of unions do we need in the future? In order to answer that, we also need a redefinition of work in order to include all atypical workers in our unions. We need to develop a new concept of solidarity - solidarity with whom and in which way? How important is it?

Are we able today to give financial support to a strike in another country? Are we able to take secondary action? Are we able to show solidarity to people outside the labour market? We should be able to do that. We have to develop our tools to do it. Solidarity in one country is not enough. Top-down bureaucratic solidarity is not enough, either. Neither are central committee decisions about solidarity enough. We have to build networks from below across borders. We have to mobilise and activate our members. We need broader perspectives and more political unions.

We need real solidarity. Statements in support of people's struggles are fine, but it is not enough. In many situations financial support is decisive in order to make it possible for people to finish their struggles. We have to build networks of workers within the same multinational companies, but also across borders. We must look for possibilities to have secondary action. One of the most important social struggles in the Norwegian history was an illegal strike that took place in 1928. It became important because the trade unions did not respect a new anti-union law. They continued the strike – and won. In spite of the fact that the strike was illegal, they won, and there were no sanctions against them. This contributed to shifting the balance of power in society and had important effects on the following development in society.

Mutual solidarity and support between trade unions in struggle are important. In order to be serious about solidarity, however, we will have to widen our perspective even further. Particularly trade unions in rich countries also have to fight against their own governments and companies which exploit the resources of developing countries. People and workers of developing countries should have the possibility to build and develop their economies – without being exploited from the North.

This is the end of my contribution today. We are in a defensive situation, and we have to establish a first defence line. Will you join me then in saying; Let them pay for their own crisis. I think we will have huge support in society for this slogan; Let them pay for their own crisis. It is our first defence line, and this is the starting point from which we have to move towards more offensive struggles.

Thank you.

(Contribution made at Okinawa Forum, organised by the International Centre for Labour Solidarity on 29-30 November 2008.)