During a forum Thursday evening, professors on both sides of the international labor issue debated the merits and evils of corporate investment in Third World nations, as well as the University’s role with monitoring groups.
Two economics professors supported the idea of multinational companies moving to foreign markets for labor and production, while two other professors with backgrounds in anthropology and foreign policy criticized what they said was the corporate role in human rights abuse and enduring Third World poverty.
While the professors disagreed on the issues of a global economy, all agreed the University should become a member of both the Worker Rights Consortium and the Fair Labor Association.
The University Senate’s ad hoc committee, which is researching the University’s role in labor issues, held the forum to provide more background information for its members. The group will deliver a recommendation to the University Senate in March as to whether the University should join the WRC, the FLA or both.
Bruce Blonigen, an associate professor of economics with a background in international trade issues, began the forum with a defense of multinational businesses.
“Multinational firms are more often than not a cause of positive change in their host countries,” he said.
The public perception of a multinational corporation, Blonigen said, often involves a ruthless economic colonist that both destroys local societies and is responsible for extensive environmental damage.
He said this image is both false and misleading because multinationals often provide a better way of living for local people in Third World countries and maintain environmentally friendly business practices.
By providing higher wages and better benefits than local firms, foreign companies ensure their employees are more productive, Blonigen said.
He added it is often more cost-effective for corporations to retain environmentally friendly business operations mandated in domestic operations, than to change their business practices to take advantage of lax environmental codes in a Third World country.
Blonigen concluded that it was then feasible for a corporation to be “consistent with profit maximization,” but not degrade the quality of life in a nation.
Following Blonigen was Professor Ibrahim Gassama, a native of Sierra Leone, who has spent much of his career involved in various international causes pertaining to human rights and international economic development.
Gassama said corporations have a strong role in “enduring poverty” in Third World countries, despite providing jobs for the people of those countries.
He said while the firms do offer some of the only opportunities for gainful employment in the poorest regions of the world, they represent the power structure that left those countries behind in the first stages of globalization during the 1940s.
At that time, Gassama said, there was a split in priorities between economic and social development.
“Human rights was placed on a second track and considered a junior partner,” he said.
He pointed out that even as the rest of the world is growing steadily richer, “Third World workers are alienated from the fruits of their labor even more.”
But Gassama said globalization is a mixed blessing. While it may have left most of the Third World behind economically, it also has helped fuel political movements in industrialized nations. One of these was the drive during the 1980s that helped end apartheid in South Africa.
Economics Professor Emeritus Henry Goldstein brought two points to the discussion. He argued that foreign investment does not mean higher unemployment in domestic industries, and broached the theory that while foreign production jobs may seem horrible by U.S. standards, they are often the best jobs in the Third World.
Goldstein explained that by moving jobs into other countries, it gives those countries the “wherewithal to purchase more,” thus ensuring a strong demand for production in the home sector.
“A nation is capable of generating job opportunities regardless of trade deficits or surplus,” he said.
He used the North American Free Trade Agreement as an example, pointing out that the “great sucking sound” that Ross Perot mentioned in his failed presidential bid in 1992 would signify jobs heading south for Mexico that never materialized.
In regard to working conditions, Goldstein pointed out that all the jobs in foreign factories are voluntary, and while they may be miserable by standards in the United States, they are the most attractive in Third World countries.
Anthropology and international studies Professor Lynn Stephen, who has extensive experience in Mexican labor issues, said it was vital that corporations be held accountable. While foreign companies may offer higher wages, Stephen said the same companies also drive down the average wage for a country.
“We have to look at the total effect of these corporations in the total economy,” she said. “In general, workers in Mexico have lost ground.”
University Senate President James Earl also offered his opinion on the matter by describing his experience of spending a year in a small village in India. He said he soon noticed how the village’s economy and society were based on sustenance and not on amassing large amounts of wealth and possessions.
“When I hear ‘India is in need of Nike factories,’ from my own experience that just doesn’t compute for me,” he said.