Chris Harman, Revolution in the 21st Century, London: Bookmarks, 2007. Pages 57-59:
It is often argued workers cannot fight back as they once did because globalization of the world economy allows firms to shit down operations and re-open somewhere else. Globalization certainly means finance houses and speculators can move massive amounts of money from one country to another at the click of a computer.
There is a also a trend for firms in one country to buy into those in other countries. But it is harder to move production from country to country than it is to move money. Productive capital is made up of factories and machinery, mines, docks and offices. These take years to build and cannot simply be carted away. Sometimes a firm can move machinery and equipment. But this is usually an arduous process and, before equipment can be operated elsewhere, the firm has to recruit and possibly train a sufficiently skilled workforce. In the interim, not only does investment in the old buildings have to be written off, there is no return on investment in machinery.
What is more, few productive processes are ever completely self-contained. They depend on inputs from outside and links to distribution networks. So before a firm sets up a car plant it has to ensure there are supplies of quality steel available, secure sources of nuts and bolts, a labor force with the right level of training, reliable power and water supplies, a trustworthy financial system and a rod and rail network capable of shifting finished products. It has to persuade other firms or governments to provide these things, and the process of assembling them can take months or years of bargaining. Multinational companies do not simply throw these assets away and hope to find them thousands of miles away because labor is slightly cheaper or governments slightly more co-operative. Such moves take time and effort and involve writing off costs. Productive capital simply cannot be as footloose as people often suggest.
The claim that firms find it easy to move production overseas is widespread in the US. But economist Tim Koechlin reports that less than 8 per cent of the US productive investment goes abroad. Job losses are mainly the results of firms cutting the number of workers they employ in existing plants, or closing some plants so as to concentrate production in those that remain.
In Britain, the pattern is much the same. The manufacturing workforce has been cut in half over the last 30 years, but total output has not fallen and each worker is producing twice as much as 30 years ago. In other words, each worker is more important to the system now than in the past. There are many important jobs that cannot be moved abroad – for example, in construction, newspaper printing, the docks, the civil service, post and telecommunications, local government, education, refuse disposal, food distribution and supermarkets. Even in the case of call centers, where some work has moved to India, the employment sector in Britain continues to expand.
