IUF
Uniting Food, Farm and Hotel Workers World-Wide
Morgan Stanley and the New Class War
Posted to the IUF website 06-Dec-2002Share this article.
Morgan Stanley, the US-based investment banking giant, has issued a declaration of war on organized labour. In a recent "research note" to investors, Morgan Stanley US equity strategist Steve Galbraith advised them to "look for the union label�and run the other way." Pension and healthcare plans for employees, declared Galbraith, render unionized companies "toxic" to investors, and their non-union competitors should be rewarded accordingly.
It would be irrelevant to point out that unionized companies have, over the longer term, proven highly successful. Or that the crash of the Enrons, WorldComs and other companies highly rated by the investment analysts was toxic to many shareholders as well as employees. Or that companies with real assets inevitably prove more durable than conglomerations of speculative capital. Morgan Stanley and other large investors will not be influenced by arguments of this sort.
Neither rational arguments nor appeals for a kinder, gentler neo-liberalism will sway these institutions. "Shareholder return", nourished on grossly inflated stock market values and speculative bubbles, has become the mantra of a new breed of transnational investor. Morgan Stanley's new investment doctrine reflects, in concentrated form, the financialization of the corporate mind.
Corporate financialization has been both a driving force in, and a consequence of, the neo-liberal deregulatory project of the past two decades. Ostensibly non-financial corporations now maintain considerable investment portfolios (often eclipsing their manufacturing assets). In the IUF sectors, for example, pure investment corporations incapable of distinguishing a hotel occupancy rate from a loaf of bread trade in the ownership of food processing, food service and hotel and restaurant companies. The inflated share values of the long stock market boom have conditioned a reflexive demand for ever-higher rates of return, to be achieved most easily by "reducing headcount" (i.e. laying off workers) and rapidly shuffling the ownership of corporations by other corporations on a global chessboard. A deregulated global political economy has been fashioned to facilitate the creation of paper wealth and the transfer of income from workers and the poor through the creation of massive debt. It is precisely for this reason that the negotiations over the GATS treaty, the Free Trade Area of the Americas and the WTO "Doha round" center on investment, or more precisely investor "rights". Absolute "freedom" for transnational investors is at the heart of the global deregulatory project.
It is the Morgan Stanleys of the world who are insisting on and profiting from the privatization of social security and public services, and who are intent on bringing world food production into their casino. There could be no better illustration of the socially toxic character of the global finance regime than the dramatic upsurge in hunger and malnutrition in Argentina, a major food exporter, at a time when the IMF is insisting on massive reductions in public health expenditure as a condition of further loans.
Advising investors to flee from unionized companies is, to be sure, morally repugnant, socially irresponsible and, in the final analysis, bad financial advice. But it is the logical expression of the new world order which has been systematically constructed by the new breed of transnational investors. They will be defeated, not by the force of argument, but when labour and its allies have achieved sufficient trade union and political strength to impose a global regulatory system in which genuine investment in wealth creation and human capital prevails over the institutionalized regime of global speculation.