Employmentweb_low

an historical perspective on labour MarKets
sufficient explanations for rising unemployment. rather, financial deregulation and the subsequent creation of a global financial
marketplace "resulted in a significant increase in risk aversion in the public sector and in the private sector. this, in turn, is the major
source of deflationary pressures and persistent unemployment throughout the world" (eatwell, 2000: 349). subsequent reductions in
unemployment in some oecd countries seem to limit the value of these observations. however, unemployment often fell in a context
of 'flexibilised' employment relations, a retreat from social provision, and rapidly growing inequality in labour market incomes.
'the markets' are an abstraction. their verdict on a country's policies is simply the resource-weighted outcome of choices made
not only by asset owners and managers in london, new york and geneva, but also by a growing number of rich households in lowand
middle-income countries. public policy, including the priority attached to expanding employment and improving wages and
working conditions, is therefore constrained by the prospect of capital flight: the process in which the wealthy shift their assets
abroad in order to avoid "social control" (such as taxation) or risks of devaluation (ndikumana & boyce, 1998: 199; see also beja,
2006: 265). the resource flows in question are substantial. ndikumana and boyce (2003) estimated the value of capital flight between
1970 and 1996 from sub-saharan africa, where many of the world's poorest countries are located, at us$186.8 billion (in 1996
dollars), noting that during the period "roughly 80 cents on every dollar that flowed into the region from foreign loans flowed back
out as capital flight in the same year" (p. 122). they have calculated that the accumulated value of flight capital from 25 african
countries between 1970 and 1996, plus imputed interest earnings, was considerably higher than the entire value of the combined
external debt of those 25 countries in 1996 (boyce & ndikumana, 2001). thus, public debt essentially subsidised the accumulation
of private assets. using a similar methodology, beja (2006) estimates the accumulated value of flight capital from indonesia,
Malaysia, the philippines and thailand over the period 1970-2000 at us$1 trillion.
these examples lend abundant support to sassen's argument that owners of mobile assets traded in financial markets "can
now exercise the accountability functions associated with citizenship: they can vote governments' economic policies in or out, they
can force governments to take certain measures and not others" (sassen, 2003: 70). this argument can be taken too far: the
importance of this constraint depends both on domestic political institutions and on a country's or a region's recent economic history
and position in the world economic system. however, domestic strategies of resistance are likely to be compromised by the
expanding political influence of elites for whom globalisation offers rapid increases in income and wealth, through both labour and
financial markets, even as it contributes to the immiserisation of their fellow citizens.
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