nakedcapitalism | The term “economic shock therapy” is based on an analogy with
electroshock therapy for mental patients. One important analysis of it
comes from Naomi Klein,
who became famous explaining in 2000 the system of fashion production
through subsidiaries that don’t adhere to the safety rules taken so
seriously in Western countries (some of you may recall the scandal of Benetton and Rana Plaza,
where more than a thousand workers at a Bangladesh factory producing
Benetton (and other) clothes were crushed under a collapsing building).
Klein analyzes a future (already here to some degree) in which
multinational corporations freely fish from one market or another in an
effort to find the most suitable (i.e. cheapest) labor force. Sometimes
relocating from one nation to another is not possible, but if you can
bring the job market of other countries here in the form of a low-cost
mass of people competing for employment, then why bother?
The Doctrine in Practice
Continuing flows of low-cost labor can be useful for cutting costs.
West Germany successfully absorbed East Germany after the fall of the
Berlin Wall, but the dirty secret of this achievement is the exploitation of workers from the former East, as Reuters reports.
The expansion of the EU to Poland (and the failed attempt to incorporate the Ukraine) has allowed many European businesses to shift local production to nations where the average cost of a blue or white collar worker is much lower (by 60-70% on average) than in Western European countries.
We see further evidence of damage to the European middle class daily, from France where the (at least verbally) pro-globalization Macron is cutting social welfare to attract foreign investment, to Germany where many ordinary workers are seriously exploited. And so on through the UK and Italy.
Political Reactions
The migrant phenomenon is a perfect counterpoint to a threadbare
middle class, given its role as a success story within the narrative of
globalization.
Economic migrants are eager to obtain wealth on the level of the
Western middle class – and this is of course a legitimate desire.
However, to climb the social ladder, they are willing to do anything:
from accepting low albeit legal salaries to picking tomatoes illegally (as Alessandro Gassman, son of the famous actor, reminded us).
The middle class is a silent mass that for many years has painfully
digested globalization, while believing in the promises of globalist
politicians,” explains Luciano Ghelfi, a journalist of international
affairs who has followed Lega from its beginnings. Ghelfi continues:
This mirage has fallen under the blows it has received from the most serious economic crisis since the Second World War. Foreign trade, easy credit (with the American real estate bubble of 2008 as a direct consequence), peace missions in Libya (carried out by pro-globalization French and English actors, with one motive being in my opinion the diversion of energy resources away from [the Italian] ENI) were supposed to have created a miracle; they have in reality created a climate of global instability.
Italy is of course not untouched by this phenomenon. It’s easy enough to give an explanation for the Five Stars getting votes from part of the southern electorate that is financially in trouble and might hope for some sort of subsidy, but the North? The choice of voting center right (with a majority leaning toward Lega) can be explained in only one way – the herd (the middle class) has tried to rise up.
I asked him, “So in your opinion, is globalization in stasis? Or is it radically changing?”
He replied:
I think unrestrained globalization has taken a hit. In Italy as well, as we have seen recently, businesses are relocating abroad. And the impoverished middle class finds itself forced to compete for state resources (subsidies) and jobs which can be threatened by an influx of economic migrants towards which enormous resources have been dedicated – just think of the 4.3 billion Euros that the last government allocated toward economic migrants.
This is an important element in the success of Lega: it is a force that has managed to understand clearly the exhaustion of the impoverished middle class, and that has proposed a way out, or has at least elaborated a vision opposing the rose-colored glasses of globalization.
In all of this, migrants are more victims than willing actors, and
they become an object on which the fatigue, fear, and in the most
extreme cases, hatred of the middle class can easily focus.
