Daily Archives: June 29, 2007

What to make of the Change To Win’s Visit to Beijing

The surprise spring visit of Change to Win leaders Andy Stern, James Hoffa and Anna Burger sparked headlines across the globe as it was the most important high level visit of American union leaders to China in modern history. The visit was a shocking reversal of American labor’s steadfast opposition to regimes like China’s that crush genuine labor unions and ignore basic human rights.

This post is an attempt to assess the meaning of this event.


China right now is a powder keg – on two fronts – one is financial and the other is social. Change to Win (“CtW”) ignores this reality and could easily look foolish for having allied itself with the regime if there is a major upheaval and the ACFTU collapses. In the meantime they are doing damage to the reputation of the global trade union movement.

A gauntlet of a sort has been thrown down by Andy Stern. Imagine what would have happened had a delegation of American unionists gone to Poland in 1980, just a few months before the emergence of Polish Solidarity? The idea is truly unimaginable. Yet at some level that has now happened.

A. There has been a wave of labor and rural worker unrest there for the last several years. That reality, of course, is ignored by CtW in an act of what can only be called cognitive dissonance. The social reality does not fit their agenda because they actually respect – more than any Maoist could – the apparent “success” of the ACFTU. Hoffa told the press during the trip that the sole criterion to judge a labor movement is whether or not workers lives have improved. Of course, by that criteria one could have said kind words about some of the worst authoritarian regimes in history.

Now, one can squint and perhaps conclude that the coastal sweatshops in China represent some kind of improvement relative to rural life. But I met not long ago with a visiting Chinese workers compensation lawyer who represents hundreds of injured young workers (missing limbs or eyes, crippled arms and legs, burned skin, poisoned lungs and blood) who straggle back home after months or years in these plants and I think they would have a different story to tell. And, of course, this does not take into account the overall decline in living standards when one adds in the devastation across the aging state owned industrial sector.

I imagine the young women workers stuffed into dormitories after 12 hour days on the assembly lines producing iPods would have a story to tell as well if truly given the chance. An ACFTU branch was recently organized at Foxconn, the company that makes iPods – it immediately elected the company’s public relations manager as its head! He, in turn, dutifully promised to run the new union in accordance with the dictates of the Communist Party, of which he is a loyal and longstanding member, of course. ACFTU at Foxconn

But it is not as if the workers have been quiescent. Isabel Hilton wrote a brilliant and moving profile of worker unrest for Granta not long ago. And U. Michigan sociologist Ching Kwan Lee says there has been a “veritable labor insurgency” underway there for the last few years. She has a new book out based on her four years of fieldwork. Against the Law: Labor Protests in China’s Rustbelt and Sunbelt She dismisses the ACFTU and points to the fact that it is completely a party instrument and also helps gain much needed cash for the ACFTU due to the 2% tithe employers must pay whenever a “branch” is organized. And she notes the crossover of their local leadership with management representatives.

As the ACFTU lost a significant chunk of its membership due to industrial job loss over the last decade, the more Maoist types within the party who view the ACFTU as a counter-weight against the neo-liberals in the party, pushed the ACFTU to move into the foreign sector. I do not know the details but my guess is that there was a bitter fight within the regime about this. I think the idea that the regime needed some leverage over that growing sector won out. The ACFTU did not make the move into companies like Wal Mart and Foxconn, which have been the savior of the regime in the post-1989 period, without party clearance and support.

So the scissors that the regime is caught in is whether it can suck in enough foreign investment to replace the aging state owned sector at a sufficient pace to make a full-scale rebellion less likely. The ACFTU’s role is to help create a balance between these two forces – help attract foreign investment yet legitimate the brutal industrial revolution now underway in China in order to prevent a genuine social revolution. Only time will tell if they are successful, but when one considers the other possibility – financial implosion – it seems quite likely that they will fail.

B. The financial risks stem from the attempt to force workers’ savings into the corrupt banking system where party officials siphon off funds into pet projects or into the aging state owned sector to prevent it from total collapse (recall how the East German economy collapsed when the Berlin wall fell – who wanted a Trabant when real Fiats became available?). That is why I think the behavior of US Treasury Secretary Hank Paulson is so dangerous. He really does not understand what he may be unleashing when he pushes China for full liberalization of its financial system. Frankly, if the PRC liberalized capital fully it could lead to capital flight on a massive scale as rational Chinese savers diversified – the regime certainly seems to think this makes sense as their investment in private equity giant Blackstone suggests. In other words liberalization could lead to a collapse in the value of the yuan and a flood of even cheaper sweatshop products to the US.

But with constraints still in place, the money flows into flimsy investment projects or the domestic stock market. A bubble certainly seems in place and it will burst. So it is only a question of which force will break first and when. My assumption has been that the regime would keep a lid on these forces until after the Olympics in ‘08. But markets are tough forces to control, as are restive populations!


Meanwhile, CtW is living in some kind of fantasy world if it thinks the ACFTU is a real partner for American workers. It is hard to conceive of what CtW is thinking they gain out of the trips to China in ordinary collective bargaining or organizing terms. Most likely they really don’t expect to gain anything on the ground in China (the ACFTU at Wal Mart as an aid to organizing WMT here?? Who could take that seriously?) but rather they feel they need the association with the regime or the ACFTU for some reason, whether they have really thought it through consciously or not.

There may be an ideological connection here to Andy Stern’s view that labor needs to accommodate itself to new forces in capitalism such as globalization or private equity. In the eyes of Stern, the ACFTU is very likely a model for how a labor movement, of sorts, can offer itself up as playing a useful role to employers and the state. The Chinese body may be a disciplinarian, watchdog, and strikebreaker, but hey at least the party and state needs them and they secure that 2% dues cash flow! (The top down approach of the Chinese regime is echoed in the top down politics that dominate the national SEIU – see, for example, the recent controversy within the California nursing home sector: SEIU ends deal with nursing homes)

I have heard some CtW supporters compare the CtW to the original CIO – that may indeed be more apt than they think as it was the CIO that supported the no strike pledge during World War II while AFL affiliates retained an independent view (see Nelson Lichtenstein’s book Labor’s War At Home). They seem to have forgotten that it was widespread militancy and an emerging alternative social and economic perspective among workers was responsible for forcing the employers and the Roosevelt administration to begin cutting deals and resulted in laws like Glass-Steagall, the Public Utility Holding Company Act and the Investment Company Act that reorganized entire industries and protected workers from the dangerous speculative activity emanating from Wall Street.


Today, rapid structural changes underway in finance, corporate structure, and international trade mean that the labor movement must articulate an alternative social and economic perspective. It may not be possible to do this through the trade union structure alone given all of the cross currents among affiliates and the natural defensive role that trade unions play. And it certainly cannot happen within the framework of the two major political parties. But progressive segments of the labor movement could start thinking independently about how to articulate such views about alternatives.

Chinese events are not going to unfold in quite the same way as in Poland or the former USSR, but unfold they will and American labor will be called upon for help. That help will not be necessarily material but political and that requires an independent perspective. If I have a quarrel with China Labor Bulletin and its director, Han Dong Fang, the leader of the movement for a real labor union movement in China, it is that they are sticking to such narrow issues – the lesson of Poland is that the movement did not reckon with what was really going to happen to the economy once the regime capitulated.

Of course, shock therapy shocked everyone. But the praise I heard in Poland in the late 1980s from underground activists for Milton Friedman and Thatcher was truly unsettling. While I cannot imagine such nonsense ideas taking hold among Chinese workers, I also fear that a kind of strategic vacuum could emerge that would then be filled with nationalism or fundamentalism of some sort.

So in my view the best kind of response to the Stern gang is to understand their move as part of a larger strategic vision of labor in the new post cold war globalized capitalist economy. It is a view that says, hey, labor organizations – of whatever sort (Stern is friendly with all sorts of authoritarian labor groups including some close to the proto-fascist Indian BJP) – can be relevant – perhaps as labor brokers (can you say “Bracero”) or as deal makers (reflected in their love/hate relationship with private equity).

So, then, the question is what is an alternative strategic vision for labor in this newly emerging world? From the answer to that question follow myriad tactical moves that the labor movement could make. From that answer can follow the rational proposals for economic and political change that must emerge if the inequity and instability of the new global capitalism is to be addressed.