Decent Work in Global Supply Chains

Unit 3, Lecture 4 - The impact of development: public services


Labor forces competing with each other because there is the belief that if you don’t lower your wages or lower the taxes a corporation has to pay then capital can invest in another country.

Taxes are designed to provide public services to citizens and are used to redistribute income and deal with inequality

PSI (public services international)
- opposes the idea of tax competition. They argue that their should be a minimum corporate tax base – reform based not on national or corporate interest but on public interest.
- believes tax arrangements should be transparent … calling on governments to report to parliament each year on the tax incentives and the tax breaks and tax holidays it gives to corporations to operate within their jurisdiction… gives the citizens the opportunity to make the assessment openly whether or not the incentives actually provide the benefits that are claimed

Trade in Services Agreement (TiSA) – these trade agreements reduce risks for capitalists. This idea of ‘regulatory takings’: any time a government regulates in the public interest it must compensate any private company that is affected by it. Idea of expected profits: if a country passes a regulation then it needs to compensate not just for the loss profits but any future expected profits of a corporation. TiSA is being negotiated in secret.

‘tragedy of the private’ – inappropriate application of the logic of private business, based on maximizing profits, to the management of shared resources, natural and social and the meeting of social needs.

‘tragedy of the commons’ – an attack on the idea that people can effectively manage common resources together for shared benefit

‘potential of the public’ – awareness of mutual dependence and an ethics of stewardship, mutual care and collaboration

concept of ‘public value’ – the meeting of social needs as the central criteria for effiencieny in the management of public services

significance of US-dominated international bodies as institutions through which free market ideology has spread and reinforced the process of privatization. The US in particular has used its power in international bodies to impose privatization as part of the international neoliberal regulatory regime. The regulatory regime is backed by:
- law
- treaties between government representatives
- conditions of loans
- implied financial sanctions
- withdrawal of US aid
- investment strikes by US companies

In 1999, the US tried to build ‘a global constitution’ with the WTO at its center.

The starting point of the efforts to improve public services through a democracy-led transformation is the know how and creativity of the public services workers and those who use the services. ‘productive democracy’ – strengthening democracy, making the process of democratization essential to public efficiency

South Africa:
After the end of apartheid, there has been a very small narrowing of the gap between black and white people, there has been a widening of the gulf between rich and poor – and the majority of the poor are black. The enormity of the injustice that was supposed to have been conquered with the end of apartheid, and the extreme social consequences of a market unleashed and facilitated rather than re-regulated and constrained by a state based on majority rule, has made South Africa a particularly stark indictment of the market-led politics.

Across the world, every public service has been threatened with privatization, broken up and sold off or turned into a corporate-dominated PPP as a consequence of economic policies driven by corporate interests rather than public needs. In the process, public service workers become defined as a ‘cost’ to be cut.

The African National Congress (ANC) chose marketization and privatization as the main means of reconfiguring the apartheid state – commitment to the private sector as the diver of economic growth, to opening up capital markets, reducing state expenditure and introducing privatization.

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