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(unpublished paper for a seminar on Industrialization in a June 1989)

1989 Abstract

This article was written in 1989 and is reproduced unchanged below. The abstract for the 1989 was as follows:

This article was prepared to discuss industrialization which for the purposes of this article is defined as an increasing proportion of the labour force in industry accompanied by an increasing proportion of GDP derived from industry. A review of the "stage" theories of industrialization is undertaken revealing that they are based on increasing productivity and assumed decline of worker protest at the higher stages. It is then argued that productivity is determined by systems of labour control and that these require state or corporate intervention to deal with organizations of producers/workers/employees. Finally the intervention practiced by so-called state corporatism were not successful as they resulted in the development of unofficial or oppositional worker organizations which were lead by Lech Walesa in Poland, "Lula" Inacio da Silva in Brazil and Kwon Chung of South Korea. It is suggested that the emerging models of political economy centered on either the corporation or state will eventually have to deal with the inevitable process of workplace organization.

2009 Introduction

Jeffrey Harrod has continued publishing to the current time. Most of his work is under copyright and a list can be viewed on his webpage http// only unpublished works can appear on Scribd at the moment.

This paper was written in 1989 before the symbolic end of the centrally-planned economies of the USSR and Eastern Europe and the world wide reduction in the in the variety of models of economy and society (models of political economy).

In the period 1950-1990 there flourished in the world a number of socio-economic models to which the name "corporatism" was attached. Corporatism can be considered as the situation when somewhere at the top of the governance of the

society there was room for legitimate organizations of workers (unions) and employers presided over, with differing strengths and practices, by the government. Thus the model in Continental l Europe with its "social partners" was called social corporatism. In the USA and the UK where the unions, employers and government interacted within a less structured bargaining process the name "tripartite" corporatism was applied. In some Eastern European countries in which the Soviet central planning system was not fully implemented ( there were different systems dealing with labour - self-management in Yugoslavia, piece work in Hungary and less state farms in Poland) socialist corporatism was even suggested as a description of the model. While the corporatist label was not applied to what is now known as the developmental state in Japan there were elements of corporatism in Japan although mediated through the vertical organization of managers and producers in large enterprises.

In what was then called the Third World the corporatist model was known as "state corporatism" because although workers organizations were permitted they were legally and often severely constrained in both membership and action. For this reason in almost every case there developed "unofficial unions" and by 1989 the leaders of these unions were emerging into mainstream politics.

Partly because of the political efforts of the unofficial union leaders the corporatist models largely disappeared or weakened after 1989 to be replaced by varieties of the neo-liberal models. While there may have been many different models before 1989 three dominate subsequently - the neo-liberal or Anglo-Saxon models - Continental European model and the Asian Developmental State model.

Is this article then relevant to this currently situation?

Possibly - and for the following reasons: first, the neo-liberal variations are weakening after two decades and current turbulences , second, partly as a result this weakening there is emerging in the Global South leaders and regimes not prepared to opt for any of the extant models. The Chinese model has no name, and the countries of Latin America which have resisted the neo-liberal demands of the Washington consensus are pragmatic in their approach to economy and society.

These regimes however will eventually have to deal with organistions of workers, employees and producers for reasons described in the article. Industrial and social employment always everywhere creates work place organizations. How will these new model experiments deal with this development? If they try to incorporate, tame, or formally legitimize such organizations without a serious and meaningful role for the expression of human rights in the workplace and indeed for the wider social and economic demands which eventually emerge , then the trajectory recounted in this article up to 1989 may be repeated. Leaders and persons who express the contemporary version of the needs as those demanded by Lech, Lula and Kwon two decades ago will most likely emerge again.



Jeffrey Harrod

A seminar discussion paper June 1989


It must be emphasised that this is a discussion paper and not a completed academic paper. Within a short time delay I have applied my current work to the topic of industrialisation, even though I have been working on its application to international political economy. It has only been possible to present some speculative questions rather than definitive findings.

The basic approach and material is derived from ongoing which has so far produced two of the books in the series one by Robert Cox of York University, Toronoto, Canada and one by Jeffrey Harrod of the Institute of Social Studies, The Hague.( R. W. Cox,Production, Power and World Order:Social Forces in the Making of History (New York, Colombia University Press, l987) and Jeffrey Harrod, Power, Production and the Unprotected Worker (New York, Columbia University Press, l987)

While this project may be seen to have many objectives one of the important ones is to present a new approach in social science which could be termed the multiple social relations or power relations in production approach. The basic argument is that categorisation of a workforce or population by occupation, class, gender or skill, ignores the multiplicity of power relations which govern the nature of production and the distribution of income from them. Such categorisation, upon which so much policy and planning is based, obscures social, economic and political processes the knowledge of which are essential to the understanding of history and contemporary social and economic development.

Such an argument has far-reaching implications for social science. For example, while all macro-economic policy is made with distribution, and therefore power and income groups, in mind these assumptions are rarely made explicit and the mind-set of most discussants of macro-economic policy remains rather crude. Revealing or changing these assumptions is in effect an attempt from the standpoint of political economy, sociology and political

science to rewrite the famous aphorism of Keynes that "practical men are

usually slaves

of some defunct economist" to read: "practical men, and defunct economists are usually slave to some obsolete theory of social class and political process." It is to begin to consider why an economist such as Amartya Sen can note that the "rational economic man" on which market theories are balanced, appears to be closer to a "social moron"


Part of the argument here and elsewhere is then that social action and therefore inflation, productivity and industrialisation will not be determined either by economic man nor by social morons but by the consciousness, world view and parameters of action which emerge from the multiple power relations in production.

I.Introduction: Objectives and Title

Industrialisation in the title needs little explanation and any of the conventional definitions, using criteria such as the proportioin of the labour force in industriual production or the amount of GDP produced by industry will suffice.

Productivity is in the title because labour productivity shares with distribution a position as

a crucial variable which all groups with power over processes of accumulation and

industrialisation seek to maintain and enhance, in the case of productivity, and to control in the case of distribution.

The Lech, Lula and Kwon in the title of this discussion paper refer to Lech Walesa of Poland, "Lula" Inacio da Silva of Brazil and Kwon Chung of South Korea. What each of these persons has in common is that they emerged in l98l in Poland and Brazil and l986 in South Korea as the leaders of "independent" trade unions in each country and in opposition to the official trade unions which then existed. One of the objectives of this discussion paper is to provide sufficient analysis and data to suggest that they are similar figures in a similar process - the conflict between power relations associated with state corporatism with those of enterprise corporatism.

More speculatively, and arising from the above is that stages of industrialisation in third world countries will possibly be subjected to similar social events and process as those which precipitated Lech, Lula and Kwon.

II. Stages of Industrialisation and Organised Social Protest

The material analysis of the level of industrialisation is underdeveloped in the existing packages of theory relating to stages of industrialisation and the social events that they

might produce. These latter are the determinants of labour productivity and the transition

to a further stage. There are several important theories which directly relate stages of

industrialisation with organised social protest: the most important of these are associated with the names of Marx, Rostow, Kerr and Perlman.

For Marx, industrialisation organised by capitalist principles of accumulation resulted in a social polarisation to such an extent that the civil war between classes would halt the

capitalist process of industrialisation and substitute for it a socialist process in which the polarisation was first muted then eliminated. At what stage this would occur is not precise although it seems to be at a fairly advanced stage when the organic composition of capital was such that it set in motion the pauperization of the mass. The existence of the pauperised mass was essential to the organised social protest which would bring an end


the capitalist accumulation process.


this scenario there was only room for class, not social organisations nor social action

outside of the party as the sole true representative of class. Trade unions were most likely

to become economistic unless led by class-based parties. Marx's notion of a polarisation

of income between classes at a certain stage in the process of industrialisation has been widely accepted. But at what stage this might occur, and to what degree and its consequences have found no such agreement amongst observers and theorists.

For Rostow writing one hundred years later the accumulation process was smooth not, it appears, marred either by a pauperised mass nor a social upheaval detrimental to long- term labour productivity. At the take off-stage, in his five stages of development, human capital had developed to the point where constantly increasing productivity created a positive sum distributional situation which avoided income polarisation and obviated the need for class action.

Clark Kerr and associates in Industrialism and Industrial Man (1960) accepted that there was a danger of polarisation at the beginnings of industrialisation but they too saw the mobilising elite adhering to political ideologies (which they saw as a function of the social dislocation of industrial development) being replaced by a modernising elite as the industrial process "took off". For modernising they meant the culture and thought structure of western secular humanism and therefore they postulated a theory of growth from `there to what we are now'. Political action by any trade unions or groups was seen as a sign of immaturity and elites would "grow up" as industrialisation developed.

In fact this "maturity" thesis of trade unions had been developed sometime before by Selig Perlman, considered as a major labour theorist of the USA. For him, trade unions which developed at the "polarisation" stage of industrialisation were imbued with socialist and political principles but the development of industry was such that these ideas gave way to "job-oriented" unionism.

Essentially it seems that in answer to the inevitable polarisation thesis of Marx and Marxists the opposition notes that polarisation is postponed or delayed for ever if growth in output outstrips the development of producer frustration and deprivation resulting from the initiation of the industrialisation process.

Despite the dated nature of these works this view still prevails. Lieberman, after a sophisticated social and historical analysis of labour movements in Western Europe and United States published in l986 concludes:

"The more backward and poorer the economy, the more solidly it is anchored to the traditional status quo, and the slower its rate of growth, if any, as perceived by the workers, the greater likelihood that the working class in that economy will center its attention on politico-social theories of change and the greater will be the probability that such workers will form a number of labour organizations advocating different social and ethnic ideologies. In this case the labor movement will show increasing fragmentation and will attach as much importance to political as to economic goals. The greater perceived rate of economic growth and the more rapid the process of industrialisation, the smaller will be the the interest of workers in political and social change and the greater will be their effort to obtain a larger share of rising national income."(Lieberman, l986:268-9)

There are a number of points which can be made about these stage theories. First, they are all based on a perceived historical process followed by first the UK and then others of the older industrialised states, Second, they omit vast social events which occurred in this history as if they had little to do with the process of industrialistion - especially war, civil war and ethnic conflict. These defects, however, have been explored during the relativist stage of the development of contemporary thought and were the targets of the anti- ethnocentrics and those who rightly argued that the contemporary third world societies would not, nor should not, follow the paths of the older industrialised societies.

There are, however, two assumptions in these stage theories which have not received such careful attention as those mentioned above. The first assumption is that the industrialised sector is, in the long-run, subject to increasing returns. The second is that in the macro and abstract discussions the intervention of the state and the corporation are underplayed. These have resulted in a lack of emphasis on 1) the form of labour control as the determinant of productivity and 2) the social impact of the intervention of the state and the corporation in the industrialisation process.

III. Productivity and Labour Control

There has been a great deal of debate as to both the empirical fact or the theoretical validity of the notion that labour productivity increases as output increases in the manufacturing sector, in contrast to the law of diminishing returns in agriculture. (cf. Weiss, l988).

Nevertheless, most of the stage theories and the discussions in social science subscribe to the productivity increase assumption. In doing so the notion of a social moron is introduced; productivity would continue to increase if the same worker applied the same energy and intellectual skill to the task continually and all subsequent workers would apply such equal amounts even under conditions when the capital labour ratio has increased and the economies of scale and mass production are being realised.

This contrasted with all that is now known about human energy, ergonomics, attention span, morale, and motivation and social action -all of which point to a declining input of strength, care and attention per unit of labour over time, other things being equal. The neo-classical answer to the maintenance of labour input was simply that first, the labour market would censure lazy, incompetent and lower productivity workers by denying them work which threatened their subsistence and second, declines in labour input would be adequately made up by the additional output secured by larger applications of capital.

These latter two neo-classical assumptions, however, were not accepted by pratical men who, by the turn of the century when industrialistion was maturing, realised that neither labour market not applications of capital would sustain increasing productivity. At this point Frederik Winslow Taylor, an engineer, noted that if higher productivity were to be achieved by application of capital to labour, labour would have to be applied to capital in a precise and certain way. In this scheme the pace and energy input of labour would be

determined by its direct relation to capital leaving no room for declines of productivity in the short or long term outside of sabotage.

When it became evident that sabotage did in fact take place and that although rational in its assumption labour, not being social morons, would not sustain scientific management, the emphasis switched to motivation. The human relations school, associated with the name Elton Mayo, argued that productivity could be maintained if you treated people right; productivity is enhanced with participation, coloured rooms, humane systems and soft management. This thesis was found to be lacking but the rapid increase in industrial growth enabled the next move to dispense with the labour market entirely and to override scientific management and human relations by material incentive. Keynesian economics then placed the emphasis on material incentives through the idea of the creation of effective demand. Keynes then succeeded Taylor and Mayo as having found the secret to continued productivity increases.

By the l970s, however, ergonomics, motivation and material incentive had no effect on the decline in productivity in the lead economies which set in the late l960s.(Harrod, l988) As is often the case in such circumstances the reaction was to return to the original solution which had failed in the l89Os - namely labour market discipline. Paul A. Samuelson, of neo-classical fame, speculating on the now endemic decline in the rate of productivity growth in industrialised countries noted that part of it could be blamed on the lack of the "hungriness motive" in workers. (Fortune, 3/12/82 -80) At least in the United Kingdom and the United States successful efforts have been underway to restore the hungriness motive. Labour market discipline could not be restored without restoring the labour market which meant the attempted destruction of those organisations built to defeat the operation of the labour market in the first place - the trade unions.

The point that has been argued here then that increasing returns in industry are not determined merely by combinations of labour and capital but by the nature and system of labour control and motivation; accumulation and reproduction are productivity-dependent and productivity is labour control and motivation dependent. In short, theories of industrialisation which do not take into account the variety of social relations in production which the processes engender cannot be the base for any meaningful policies in which some predictive quality is necessary.

For the purposes of this paper then, the argument has been that labour-related phenomena, such as Leche, Lula and Kwon, must always, as a first step in the analytical process, be seen as a manifestation of a form of power relations in production, undergoing transformation or being manipulated in the overall attempt to maintain or increase productivity in conditions when it is likely to be "naturally" declining rather than increasing.

II. State and Corporation

The second assumption or omission in the stage theories of industrialisation noted above is connected with the social role of the state and the corporation in industrialisation and industrial policy.

This is especially the case with discussions relating to industrial development within the capitalist framework of accumulation. The state is either seen as a source of capital, planning or incentives while the corporation is reduced in its political and social power by referring to it as a large enterprise. Yet the ongoing processes of industrialisation within third world countries are mediated by the political, economic and social power of both the state and the corporation.

The viewpoint from this paper is that the state and corporation are at the centre of both partial and macro patterns of power relations in production, at the centre of labour control and the varieties of policies, operations and manipulations relating directly to labour productivity.

In state corporatism, for example, the state control of trade unions is designed to prevent the assumption of Lieberman's political war cries but at the same time accepts Keynesian material incentives as goads to productivity. That it can, at the stage of industrialisation in which it introduced, only apply this to a small section of the workforce is part of its instability and the source of its relationship with the corporation.

The corporation as a large employer, usually vertically integrated and a socially dominant force in the lives of employees, attempts to solve the productivity problem by a combination of material incentives, extracted by its oligopoly position from the rest of the population through pricing or sub-contracting, and breaking links with national worker organisations in favour of a sifted established workforce.

The point for this paper is then as follows; the process of industrialisation requires continued increases in labour productivity, this can be achieved only by rational intervention in creating systems of labour control and motivation and in current processess in the third world these interventions arise principally from the state and the corporation. More sophisticated theories of industrialisation will then have to incorporate these factors and uncertainties within them.

If the state and corporation are centre points in patterns of social relations or patterns of power relations surrounding production then there are sure to be contradictions within them. It is also evident even from the sketch above that when the two coexist there are contradictions between them. These two sets of contradictions are those in which Lech, Lula and Kwon got entangled.

The rest of this paper will look a little closer at an approach which may help to analytically untangle the events in Poland, Brazil and South Korea as well as those events themselves.

IV. Patterns of Power Relations in Industrialisation

The multiple power relations approach starts with the proposition that any society is characterised by a variety of patterns of power relations in production; by pattern is meant

that the strength of the parties, the modes of operations, the origins of the power and the nature of production will be different. The approach is aimed at the contemporary world, seeking to identify, describe and elaborate all aspects of these patterns - especially how they articulate with each other and how they are transformed into different patterns.

In my_Power, Production and the Unprotected Worker I dealt with six of these patterns in which the power endowments are skewed to such an extent that the subordinate producers in each pattern have little possibility of redress. The hierarchy of extraction, via terms of trade, or directly is what produces the social formation of a typical society following the capitalist accumulation pattern. Although these cannot be ignored within the industrialisation process because each yields a transformed other pattern, for the purposes of this paper it is necessary to concentrate on patterns which develop exclusively within wage labour.

The following descriptions of these patterns are rendered crude by their necessary brevity and presentation as ideal types:-

Enterprise Labour Market The power relations are direct between employer and employee within a productive enterprise but the employment has some structure and stability. Employers' power is manifested essentially by the power of dismissal, that is, the granting or withholding of work, which is the workers' only source of income. There is no worker organisation to temper this power of withholding work, which is used as an arbitrary punishment or system to secure docile labour. One of the common instances of this form is the small, non- unionised industrial enterprise.

Bipartite The formation of worker organisations transforms the power relations based upon employer dominance to that of countervailing or bargaining power between organisations of workers and employers. The power relations are bipartite -between employers and worker organisations with little intervention from elsewhere.

Tripartite The intervention of the state within a bipartite power situation, regardless of which side is assisted or controlled, means that three constellations of power must be considered, those of the workers, those of the employers and those of the state. This is the form that governs the production of the unionised workers in Western Europe and elsewhere.

Enterprise Corporatist Large organisations can sometimes reduce power relations internally to those within an established, unchallenged hierarchy by purchasing cooperation of the producers through granting lifetime guarantees of work and organisation-linked benefits and inducing an overriding loyalty to the organisation. Thus power relations between different levels in the managerial pyramid in the military, civil service and large commercial organisation are subsumed under hierarchy, loyalty, and privileged material benefits to produce a typical enclave enterprise corporatism. One of the better known examples of this form, apart from the civil service and military everywhere, is the large Japanese corporation.

State Corporatist In some cases the state intervenes to control conflict by legitimizing worker organisations and employer organisations but controlling both of them to different degrees. Power relations are between the official worker organisations, employers and state agencies in which the state is almost always, in the last resort, dominant. State corporatism rarely covers the whole of the national labour force, although this is the nominal claim.

All the theories relating to industrialisation discussed basically assume enterprise labour market power relations in which the owner of capital and employer is dominant. For a variety of reasons this pattern results in formal or informal organisations of workers in attempts to control production for their benefit under what I have called "the iron law of worker organisation formation" within industrial circumstance. (Harrod, l987; 227)

The theories also incorporate the "labour movement" that is, the development of bipartite or tripartite relations in which trade unions are assigned economistic roles. None of them deal adequately with enterprise corporatism and state corporatism. They do not therefore provide much predictive force as to the circumstance or stage at which they may be introduced.

The introduction of state corporatism has invariably been preceded by a fragmented and militant political activity of worker organisations. It has resulted in the amalgamation of all the unions under strict control of the state over leadership and demands. Most importantly it has only ever been de facto applied to industrial workers in medium to large enterprises.

The introduction of state corporatism is the outcome of the development of enterprise size and the operation of the iron law of organisation within enterprise labour market relations which starts the transformation towards bipartite or tripartite patterns.

This hypothesis may be supported by the fact that the introduction of state corporatism is invariably preceded by the implantation of large scale oligopolistic enterprises practicing enterprise corporatism, that is developing internal labour markets with pay structures departing from the national averages. Every society has within it enterprise corporatist power relations established in the civil service, army and police. The extension of the public sector usually means the extension of enterprise corporatism. When state corporatism intercedes part of its function is to link the large corporations to the external situation. Large corporations and multinationals thus decided whether their labour cost (which is linked to labour control and motivation) is enhanced by conformity to state corporatist labour law and pay structures or whether enterprise corporatism best serves them.

In summary then the model is as follows industrialisation characterised by small-to- medium sized enterprises commences and begins to accelerate drawing labour from the rural areas and developing economies of scale. At the same time, and in contrast to the history of currently industrialised Western Europe countries, large enterprises are created. These developments are accompanied by an increasingly sophisticated industrial

division/organisation of labour which produces its counter social organisation of labour. The social organisation is manifested in weakening productivity coupled with redistributional wage and working condition demands. The setting for polarisation is established although the demands are fragmented and the political orientation is confused. At this time the larger enterprises with high productivity yield to some of the demands of its workforce and wage differentials by enterprise size and sector widen. The established industrial power, both owners and managers, then supports the introduction of state corporatism which regulates wages and provides some stability to the workforce and restores productivity by a regulated, that is non-labour market, disciplining of labour. Under state corporatism the larger enterprises thrive being able to conform easily to the wage and price demands of a compliant state administration.

The stability of the system may seem assured, polarisation between classes involved in the industrial sector muted, and labour discipline and productivity assured. Assured, that is, if it was not for Lech, Lula and Kwon.

VI. Brazil Poland and South Korea

Seemingly these three states are entirely dissimilar. Poland is a socialist state with central planning with a strong redistribution incomes policy, Brazil is a capitalist state which is industrialising within a state corporatist framework and has a deliberate policy of income concentration, South Korea has industrialised through large-scale enterprises in the context of a state corporatism distributing particularly to the lower incomes. One is European one is Latin American and one is Asian. Two are Catholic, one is largely influenced by Confucionism.

But consider the statistics in the appendix. All have almost the same proportion of the labour force in agriculture, all are close to each other in per capita income and although the levels of labour force in industry is different it appears that they are at roughly the same level of industrialisation.

But there is a dominant similarity. All have been industrialising under the tutelage of the state and all have had "official" trade unions. That is, trade unions regulated and legitimised by the state for the purposes of social cohesion, accumulation and industrialisation leaving aside the distributional issue.

It is this similarity which perhaps leads to the striking similarity of Lula, Lech and Kwon. All of them and their movements started in large enterprises, Lula in the auto industry, Lech in shipbuilding and Kwon also in the auto industry. All demanded the dismantling of official unions and the establishment of independent unions.

All of these were heralded abroad as the first step in worker emancipation from the rigors of state oppression, the opening to democracy and as a step towards pluralism - in power relations terms towards tripartitism. Again a step to being more like those who make the analysis.

But consider what happened. Eight years after Lula was the hope of a democratic Brazilian trade union movement he now says he prefers to deal with the official unions as he finds it impossible to talk to the independent unions. Lech has followed a U curve from democratic independent demands though economically inappropriate wage militancy back to macro level democratisation. It is somewhat early to talk of Kwon except to say that non-official unions have been slow to start, that as a result of Kwon's activities across the board wage increases were achieved and the students and parties took up the political issues.

What I suspect we are seeing is not a politicisation of the workers but a combination of two elements a) the conflict between state corporatism and enterprise corporatism b) a revolt of high productivity workers based on i) the sense of power developed within bureaucratically structured employment situations and ii) an anomie derived from the impersonal authority of large-scale mass production.

First a note on the question of politicisation of workers. In the case of Lula an author who has the courage to lament his own findings from a survey of Brazilian workers concludes:

"Their [workers] attitudes towards are largely compatible with any type of regime; they are rather indifferent to the form of regime. They will support or oppose a democratic regime, not because they are democratic or antidemocratic but rather because the particular incumbent governments fulfill or fail to fulfill, their protective function with respect to workers" (Cohen,l982)

In the case of Kwon, the rapid dissipation of the movement after the granting of wage increases seems to reveal a similar situation. In the case of Lech the situation is less clear but is difficult to disentangle from the bias engendered by the hopes of both friendly critics and antagonists of centrally planned economies. Certainly the first demands of the Solidarity groups were for independent unions in the shipyards and not for a new "constitution" enabling formation of independent unions. This indicates more partial and local reactions than those of a broad political movement.

The conflict between enterprise and state corporatism is evidenced by the emergence of the independent union demands within the large company, high-productivity workers. But it also has to do with the function of the state under state corporatism.

In South Korea state corporatism and enterprise corporatism find the most sophisticated and integrated mix. Industrialisation was and largely is directed by large enterprises although at an earlier stage by a large number of very small enterprises. The large enterprises are models of enclave enterprise corporatism: the chairman of the massive Hyundai motor corporations Chung Se Yung notes "Every big company in Korea is a dictatorship, except the Lucky Group,". The state function was then two-fold, to redistribute via social security mechanisms to workers outside the enterprise corporatist umbrella and to control unions via official unions within the corporations. In Brazil, particularly since the acceptance of the Chicago school promotion of deliberate income concentration, the state role was to plan industrial development, control unions but not to redistribute to the unprotected workers but rather to redistribute in favor of the high incomes. In Poland the

large enterprises were established and developed under state control, so that in terms of power centers in the society enterprise corporatism was robbed of the political power which its managerial counterparts in South Korea and Brazil possessed. Under redistributional development and with redistribution governed by a socialist ideology the state established a greater income equality than in South Korea.

Now it is possible to consider Lech, Lula and Kwon in this setting. In the case of Lula the precipitating causes were declines in real income in the late l97Os and the attempt by large multinational corporations to introduce enterprise corporatism. Up until l975 the multinational corporations which were large-scale enterprises (particularly in the auto and chemical industries) had been content with the existing state corporatism. State corporatism not only kept the labour force in control but also minimized investment exposure by the wider control of investment risk factors such as socialists and nationalists. However, under the impact of real income squeeze and declining economic growth the "official" unions became wage militant, that is, in the large enterprises they demanded higher wages and better conditions of work - devoid of solidarity and political content this was a union demand for enterprise corporatist conditions even to the separation of these official unions from the national syndicates. Even before the strikes of l978 the large auto corporations had started the process of establishing enterprise corporatism through the institution of enterprise based workers councils. But the official union militancy developed too fast and Lula as an official unionist in the Ford plant was removed by edict of the Ministry of Labour and his union run directly from the Ministry. In l981, however, he was invited back as the negotiating leader of the emerging "independent" union.(Humphrey,l987) There appears to be no widespread support from other sectors especially from the labour force in smaller enterprises, casual work or unemployed. The political issues were taken up be the parties and Lula , as noted returned to his position within the state corporatist union structure.

In the case of Kwon a different pattern emerged. The initial demand was the displacement of the official union in the large enterprises, coupled with non-distributive wage demands. Kwon himself was at the Hyundai Engine Plant where he had been employed since leaving school 10 years earlier. It is likely that part of the reason for these demands was an anomic reaction to the "dictatorship" philosophy of the large corporations and a manifestation of the iron law of worker organisation which was not being satisfied by the official unions.(AMRC, l987). It was also that while establishing power at the national level the large companies had not moved far enough in rewarding the employees differentially to produce a stability. In terms of labor control a remark of a foreign manager about the Hyundai's plant is revealing. Asked why the Korean worker had such high productivity he replied "It (the plant) has no heaters and when the temperature gets below freezing, the cold creeps up your body from the floor. They've got to keep working to keep warm." (Far Eastern Economic Review, l986). There had, however, been no decline in real incomes although the growth of the economy had not been matched by increases in wages and conditions of work. Unlike in the case of Lula, however, the initial stand of Kwon was followed by 3OOO strikes and increased wage settlement in all sectors and sizes of enterprise. In the final analysis it was a short, wage-militant labor uprising. The growth of the economy and the different income distribution enabled the wage demands to be granted and the political issues to be shifted to the parties.

In the case of Lech the original emergence and demands of solidarity was clearly enterprise corporatist. (Cox, l988; Millard,l987) What blocked the emergence of enterprise

corporatism was the general problem of redistribution and the more generalised dissatisfaction in a variety of groups within the country. Little attention has been paid to what the managers of the larger enterprises felt about the central planning performance of the state. If they also agreed that there was an inefficient and corrupt macro management then the conflict between state and large enterprise at the management level would be

confirmed. The managerial demand for enterprise

redistributive demands by the shipyard workers were seemingly perceived as such by other groups. Either Solidarity was a movement designed to make demands for all those below the managerial level or it was forced to become so because no group was prepared to see the high-productivity workers rewarded at higher rates. Agriculture Solidarity could then be seen as formed out of fear that shipyard Solidarity would put a squeeze on the agricultural workers. Would it have been possible to defeat the solidarity movement but accepting that shipyard workers could have their independent unions and differential wage increases? If so the intervention of the military can be seen as a macro authority intent on preventing differentiation amongst the working people. (Mason, l987; 5OO-O1. Thus in a single-party state with little room for redistribution amongst classes or groups it was inevitable that Solidarity union would become Solidarity party with non-material demands which is the current situation.

However, any

It would appear that the attempts to create independent unions has met with only limited success. Broader political demands have been taken up by parties but it is not clear, except in the case of Solidarity, if these parties are supported or helped by the independent unions. The dominance of the state and corporation remains in tact.


It has been argued that productivity of labour is determined by the system of labour control or pattern of power relations in production and that in most discussions of industrialisation the power relations associated with state corporatism and enterprise corporatism are not sufficiently explored. This is especially important in the context of contemporary industrialistion of third world countries because the state and corporation are centers of political and social power regardless of the formal socio-economic system in which they are situated.

The cases of independent union movements in Brazil, Poland and South Korea highlighted the interplay between state, corporation and mechanism of labour control even though conventional approaches and theorising may seem to have produced (self) satisfying answers.

If the analysis is correct we can expect that most industrialising processes in the future will be characterised by the variables identified but substantive differences of degree will be induced by state policy relating to redistribution. If state intervention in corporatist form is inevitable then the last decade of the 2Oth century is the hour of the official union. But the dynamic unleashed by the corporatist legitimisation of worker organisations may give rise

to enterprise corporatist formation. The last decade of the 2Oth century is also the hour of the enterprise union. The joining of the two to enforce redistributive or liberating policies on the state via aggregating political organisations will be the work of the next generation of social action arising from the workplace.


Basic Data for Poland, South Korea and Brazil (1985/1986) (Netherlands for Comparaison) (all figures approximate)






% Labour

% Labour

$ Per






$ 1986








South Korea


95 billion



















Sources: UN ,Britannica Yearbook

Annual Average Growth of GDP at Constant Prices






South Korea









Per capita





- 4.3%














Source: UN Statistical Yearbook


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