Michael Huberman on Globalization and Working Conditions.

23 04 2012

I’d like to bring your attention to an important new book on economic history by Professor Michael Huberman of the Université de Montréal.

Here is the abstract:

It has become commonplace to think that globalization has produced a race to the bottom in terms of labor standards and quality of life: the cheaper the labor and the lower the benefits afforded workers, the more competitively a country can participate on the global stage. But in this book the distinguished economic historian Michael Huberman demonstrates that globalization has in fact been very good for workers’ quality of life, and that improved labor conditions have promoted globalization.

Huberman shows that the growth of international trade in the pre-1914 “golden age” of globalisation was accompanied by the introduction, in many countries, of a wide range of regulations designed to protect workers. e.g., factory inspection, mandatory safety equipment, child labour laws, workers’ compensation legislation.The really controversial part of the book is the part where Huberman argues that the timing here wasn’t coincidental either– the globalization drove the adoption of these measures.

This is one of those works on economic history that has some pretty direct relevance for public policy: it suggests that continued moves towards globalization will NOT result in the erosion of workplace standards. To my mind, this book qualifies the argument made by  Dani Rodrik that there is a tension between globalization and social protection. Rodrik’s reading of economic history is that: democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full.

This is an interesting book and I plan to incorporate it into a lecture in my history of globalisation class. However, I’m still a bit skeptical.

I have two initial reactions/criticisms of Huberman’s thesis.

1) Huberman’s evidence is a bunch of data points mainly from the West, the North Atlantic world. This region was the centre of the world economy in this period, as is suggested by the title of the famous book Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy by Kevin H. O’Rourke and Jeffrey G. Williamson. What about today, when the BRIC nations are an increasingly important part of the world’s manufacturing system?

2) I seem to recall that starting in the 1870s, British manufacturers tried to persuade the British government to impose health-and-safety and child labour laws on factories in British India. Their aim in doing so was to undermine the competitive advantage that unregulated Indian textile mills had over mills in Britain, where child labour had been banned. The Indian entrepreneurs resisted this move by the British. Indeed, as Lord Salisbury said,

There is no subject more commonly discussed, and writers 
in the native journals dwell on the wickedness of the 
English who are trying to stifle native manufactures in 
India under the guise of philanthropy. I am, therefore, 
glad that my noble friend is coming forward in this matter, 
for his philanthropy is, at all events, above suspicion ; 
he cannot be suspected of joining in the dark conspiracy 
and trying to stifle the infant manufactories of India in 
the interests of Manchester...

quoted in J.C. Kydd,  A History of Factory Legislation in India. [Calcutta]: University of Calcutta, 1920., p. 7

How does the episode of child labour legislation in British India fit with Huberman’s thesis?

You can read a summary of Huberman’s findings here.



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