OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO : A REFLECTION UPON OUR FUNDAMENTAL COMMITMENTS

Brian Langille

International Labour Office Geneva Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 1

“Justice is the first virtue of social institutions, as truth is of systems thought.”

John Rawls, A Theory of Justice (1971) 3

“There is a deep complementarity between individual agency and social arrangements. It is important to give simultaneous recognition to the centrality of individual freedom and to the force of social influences on the extent and reach of individual freedom. To counter the problems that we face, we have to see individual freedom as a social commitment.”

Amartya Sen, Development as Freedom (1999) xii

“We cannot adopt a system in which the macroeconomic and financial is considered apart from the structural, social and human aspects, and vice versa. Integration of each of these subjects is imperative at the national level and among the global players.”

James Wolfensohn, “A Proposal for a Comprehensive Development Framework” (January 2, 1999) 4 Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 2

What is the normative salience of the of freedom of association and collective bargaining at the turn of the millennium? The timing of this question could not be more provocative or interesting. We are at a moment in time in which the tectonic plates of our normative thinking are shifting into a new alignment. Spurred on by both the threats and promises of our increasingly integrated world, received ideas about our most fundamental questions concerning the governance of human affairs - the relationship between the public and the private, between markets and politics, and between the economic and the social - are now subject to a refreshing scrutiny and reappraisal. Our task here is to make a critical contribution to that scrutiny and reappraisal by focussing upon the foundational values of freedom of association and the right to collective bargaining. We seek to clarify what is at stake and here, to sort out our basic social, economic, political and ethical commitments concerning these values and their relationship to our ideals of human progress and development. In the end, the fundamental claim made here is that we now see, as perhaps we have not for some time, a deep complementarity in our ethical beliefs in areas in which we had hitherto considered as engaging different values and contradictory commitments. The subject matters of this Global Report have gained in normative salience and relevance to our times.

This document is not an exercise in philosophical rumination as an end in itself. This critical reappraisal of our thinking is part of what is required in order to fulfil the ambitions of the ILO Declaration on the Fundamental Principles and Rights at Work. Our goal of clarifying our thinking is in aid and support of the purposes of the Global Report - “to provide a dynamic global picture ... and to serve as a basis for assessing the effectiveness of the assistance provided by the Organization and for determining priorities for the following period ....” In turn, the Global Report as part of the follow-up mechanism in general, does not exist in a vacuum. It is designed to support the purposes of the Declaration itself. The Declaration is, at its roots, a recalling to fundamental constitutional ideals and purposes - constitutional duties which exist in virtue of ILO membership. These constitutional duties are not, and expressly not, the “specific rights and obligations in Conventions, even those “recognized as fundamental both inside and outside the Organization”. Rather, the constitutional commitments to which the Declaration rededicates members are at the level of “fundamental principles and rights”.

The Declaration is a statement of institutional values but it is more than that. The purpose of the Declaration is not only to articulate the fundamental principles and values of the ILO, but to recall that, in virtue of membership, there is a constitutional duty to “respect, to promote and to realize, in good faith and accordance with the ” those fundamental values expressed at the level of fundamental principle and fundamental right. Moreover, the Declaration recognizes not only obligations upon members, but obligations of the ILO itself to assist members in the realization of their constitutional commitment to the fundamental principles and . That is the project to which the follow-up mechanism in general, the Global Report more specifically, and this effort to clarify our fundamental thinking in relation to the subject matter of the first Global Report, must be dedicated. Our fundamental thinking is then, in aid of providing a dynamic global picture which can serve as a basis for assessing effectiveness of ILO assistance to members, with a view to determining future priorities in that regard. Effective assessment and assistance can only be possible if it is erected upon a sound and clearly articulate normative foundation. A clear understanding of what we are trying to do and why it is important to do it is a necessary precondition to effective action. As Neitzsche is reported to have said, “the most common form of stupidity is forgetting what it is you are trying to do.”

But the ILO Declaration, primarily in its Preamble, is not silent on this foundational issue and does stake itself to a set of normative claims - claims about the world and its values - about the economic, the social, the political and their complex interrelationships - and about the normative centrality of the fundamental principles and rights. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 3

Moreover, and perhaps more importantly, the Declaration has made implicitly, and in its very structure another normative claim. This is a claim that our commitment to the fundamental principles and rights remain in many ways aspirational and unrealized. It is a confession of at least partial failure, of imperfect recognition and realization of those rights and principles. In short, it is a claim that we have some distance to go in securing actual realization of those rights in the lives of citizens throughout the ILO world. The purpose of the Global Report is to be one vehicle for crossing the chasm which yawns between our current condition and our constitutional commitments.

The claims made in the Preamble to the Declaration offer us our starting point for our fundamental thinking about the current normative salience of the fundamental principles of freedom of association and the right to collective bargaining. Our task here is not to justify post hoc what we have already said or done, but to critically assess the currency of our thinking thus far and hold it to critical scrutiny. Our aim here is to assess the true significance in these times, of freedom of association and the right to collective bargaining. It is to understand why we are committed to those ideals. Only then can we effectively advance their cause. The claims made in the Preamble to the Declaration are of fundamental importance. The view taken here is that it is critical that we understand how correctly to interpret the claims made in the Preamble. This is because there are two very different ways of reading the normative claims contained in the Preamble - one shallow and one deep.

The claims contained in the Preamble to the Declaration begin with the Constitutional reminder of the most fundamental of ILO beliefs – “that is essential to universal and lasting peace”. Following this direct echo from the original 1919 Constitution, the Preamble goes on to make other claims about our understanding of the world:

· “Economic growth is essential but not sufficient to ensure equity, social process and the eradication of poverty.”

· “... in the context of a global strategy for economic and social development, economic and social policies are mutually reinforcing components in order to create broad-based sustainable development.”

· “In seeking to maintain the link between social progress and economic growth, the guarantee of fundamental principles and rights at work is of particular significance in that it enables the persons concerned to claim freely and on the basis of equality of opportunity their fair share of the which they have helped to generate, and to achieve fully their human potential.”

· “... it is urgent, in a situation of growing economic interdependence to reaffirm the immutable nature of the fundamental principles and rights embodied in the Constitution of the organization and to promote their universal application.”

The fundamental question is - how are we to read these claims? One view, the shallow view, is that these claims contain no challenge to a view which has dominated and structured much of recent public policy debate, both domestically and internationally, for some time. On this view there are two spheres - the economic and the social - which are segregated. The projects of economic and social development are seen as being autonomous and sequenced in a certain way. Economic growth is, on this view, a self-contained problem, to be managed on its own terms, which if we are successful in that regard, will generate the assets Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 4 with which to purchase what might be viewed as a set of “luxury goods” in the social sphere, should we be moved to do so. In practical terms this has resulted in an in policy debates between the economic and the social. On the shallow reading the claims contained in the Declaration's Preamble, declaring a connection between the economic and the social, is merely pragmatic and strategic. On this shallow view any perception of a “link” or a “mutually reinforcing relationship” between the two spheres is not based upon any thing more than the perceived need to avoid a “backlash” among the world's populace based upon the mal-distribution of the benefits and costs flowing from an integrated global economy. On this view the normative foundations of the economic and the social are different, and indeed contradictory, and the problem of governance is one of managing in a strategic way these fundamental contradictions. On this view of the world the economic is prior to the social, and this sequencing results in a purely redistributive role for social policy, rather than a role in creating economic success in the first place. Moreover, there is often a “big trade off” between fairness and efficiency - one comes at the cost of the other. This is not a view held only by those pursuing the economic agenda. It is a view often shared by those in opposition, who also see a zero-sum game at stake, but desire a different outcome.

A second, and deeper view of the Declaration's normative claims in its Preamble rejects this interpretation. On this view the Declaration's Preamble accurately reflects a deeper understanding, recently gaining recognition and affirmation. On this view there is not a segregation of the economic and the social, but rather an integration. On this view the economic is not prior to the social, and the social not simply a set of luxury goods to be subsequently purchased with the gains of economic growth. Rather, recognition of fundamental social rights and principles is both and simultaneously the necessary precondition to, and the goal of, human development. Our normative architecture does not rest upon two foundations, but rather one. Our normative commitments are not in contradiction and our task in managing them is not merely a strategic one. Rather, our task is to be true to our deep human commitments which are comprehensive and unified in nature. [This richer understanding reveals that, properly conceived, our economic and social goals cannot be traded off for they are the same.] This is not a triumph of the social over the economic, nor of the economic over the social. It is about seeing both clearly. In what follows the compelling nature of the deeper view is explored. To get at this deeper understanding of the normative claims of the Preamble involves going back to first principles, and sorting out our means from our ends. We are fortunate in these times to be offered a clear chance at this normative reassessment. But there is a danger, evident in the aftermath of Seattle, that as our need for clear thinking becomes more obvious, entrenched interests on both sides will dig in and become more blinkered. The task is to convince both sides, hitherto segregated, that they share common ground.

The focal point of this normative re-evaluation is upon our commitment to the fundamental values of freedom of association and the effective recognition of the right to collective bargaining. Attaining a deep understanding of their role in our unified view of economic and social progress will ground and put on a sound footing both our description of the world contained in this report, and our make for effective formulation of plans of assistance to member states possible. [The three central claims examined below are as follows:

1. The fundamental principles of the rights of association and effective recognition of collective bargaining are of increasingly profound importance in our beliefs about effective and sustainable human development. This is true not just as an academic matter, but as a real world, public policy, phenomenon. It is increasingly the case that these fundamental values are conceived as additional to and not just instrumental to, but constitutive of, human progress. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 5

2. But we have a long way to go. Clarification of our fundamental normative thinking is but one precondition to effective realization of the constitutional aspirations to which the Declaration rededicates ILO members.

3. While we increasingly appreciate the significance of the recognition of the right to freedom of association and collective bargaining, we live in a time in which effective advancement of these constitutional values is subject to new threats and challenges, but also ripe with new opportunities. , conceived of as deep economic integration, has both helped to bring forward our new appreciation of the normative underpinnings of global , but also generated significant discontents. It is of critical importance that these discontents not conspire to create a roadblock to real global economic progress and reform.]

In the not too recent past these claims would have appeared as radical, and as radically incoherent as either a statement of reality or ambition. This is because in the latter part of the 20th century much public policy has been informed by a view of the normative realm in which markets and market ordering, assumed a dominant ideological authority. The normative case for markets is largely perceived in consequentalist terms in which the value of markets lies in their ability to maximize utility, most commonly expressed as efficiency, which in turn is most commonly expressed in terms of wealth, such as GDP per capita. Atomistic, self-interested individuals maximizing their own utility in a sparsely constructed space of the , will allocate scarce resources to highest valuing users thus maximizing overall benefit to society. At the domestic level this view found expression in a distrust of , of the public, of the social (conceived of often as mere redistribution, structuring perverse incentives to productive market activity), of , in short with any interference with the operation of the free market which was not aimed at correcting some defect in the process of the operation of the market itself. In the labour market in particular this view demanded the rejection of much labour regulation, of much of the ILO's international labour code, on the basis that it constituted perverse public policy unless and to the extent that it could be defended as legitimate legislative efforts to cure for market defects such as information asymmetries between employers and workers. Traditional public defences of labour market regulation, in terms of equitable redistribution, or the need to correct for “inequalities of bargaining power” were rejected both as structuring perverse incentives or conceptually incoherent. Within the economic approach the idea of inequality of bargaining power as a prime justification for freedom of association, unions, and collective bargaining, is perceived as a simple misunderstanding of some fundamental tenets of economic theory. On this view, economic efficiency is perceived as the adequate indeed the dominant metric of social success.

At the international level this neo-classical or neo-liberal economic perspective found expression in what is often referred to as the “Washington Consensus” which held that good economic performance required liberalized trade, macroeconomic stability, and “getting prices right”. In essence this involves dramatic shrinkage of the role of the state and the corresponding increase in the role of markets - sometimes simply put as “getting out of the way”. The typically mandated macroeconomic stabilization policy included expenditure reductions to eliminate or contain budget deficits and high rates of inflation, exchange rate devaluations, trade and foreign investment liberalization, of state- owned enterprises and de-regulation of price and entry controls in many sectors. On the more extreme version of this view the whole project is to marginalize the state, confining its role to the facilitation of markets through the construction of the space for private exchange by structuring and contract rights adequately enforced. While the exact metes and bounds of the “Washington Consensus” is, perhaps, contested,1 its overall policy orientation is unmistakable. The Washington Consensus clearly represented

1 Naim, “Fads and Fashion in Economic Reforms: Washington Consensus or Washington Confusion?” IMF Conference on Second Generation Reforms, November 1999. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 6 the rejection of the post-war paradigm of what has been referred to as “embedded ”2 in which the pursuit of full and a social contract or bargain between capital and labour, was abandoned. On this view institutions of labour market regulation, including the ILO, are perceived a part of the problem and not part of the solution.

The Washington Consensus constituted, in part, what has been called the “globalization of the mind”. That is, it became the dominant paradigm for understanding how best to structure and react to the forces of globalization and economic integration. The Washington Consensus represents, again, a view of the link between the economic and the social, and a view of development, in which there are two autonomous realms serving different and contradictory ends. The Washington Consensus makes possible a separation of debates about economic progress, one the one hand, and progress on other dimensions such as the democratic, the social justice, etc. On this neo-liberal view these are, again, a set of “luxury goods”, which adherents to the Consensus will be better able to afford, should they wish to do so. However, there is a deep concern that adherence to the second agenda might well undermine the first order agenda of economic progress.

The view taken here is that the segregated approaches to both domestic and international public policy are deeply problematic, deeply shallow. They are deeply shallow because the error in this set of views rests not simply in some strategic and/or empirical miscalculation about the degree of social solidarity required to advance the agenda of economic progress, but because they rest upon a deep misunderstanding of what human progress consists in.

It is important to note, immediately, however, that we are not alone in this view. We now live in an age in which the normative tectonic plates of the “Washington Consensus” and its domestic counterpart, are evidently shifting. We are at a time when discussion of foundational issues is possible. Architects of the Washington Consensus now openly discuss what a “post-Washington Consensus” might look like.3 We live in a world in which there is much discussion of a new approach to development - the Comprehensive Development Framework of the World Bank which is explicitly an integrated approach to our issues. Discussions of “second generation reforms” are the order of the day. These policy discussions now talk about “integrated” and “holistic” approaches to economic and social development. Concepts such as “good governance”, “social capital”, “legal capital”, and “process” are being discussed and analyzed as necessary ingredients of successful development. Institutions matter again. There is a richer understanding of the link between the market and the institutions - both explicit and implicit - which structure it and in which it is embedded.

Much of this is encouraging, but also equivocal. There is a view still dominant in some of these new discussions that this new opening in our thinking, and these new ideas, amount merely to an understanding that the Washington Consensus is necessary but not sufficient to achieve global justice. But that is a view which is at home with a continuation of a segregation of the economic and the social and the perception of the link between them as being merely pragmatic and strategic. The view taken here is that in order to truly understand the significance of these developments one must dig deeper. One must see that what is occurring here not a mere addition to our agenda, not a mere discovery of an additional ingredient or two to add to our recipe for successful development, but rather a reconceptualization of what development

2 Ruggie, “International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order” International Organization 36 (Spring, 1982) 195.

3 Stiglitz, “More Instruments and Broader Goals: Moving Towards the Post-Washington Consensus” WIDER Lecture 1998. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 7 consists in. This involves a fundamental and deep reassessment of our ends and our means and the discovery of a unity in realms hitherto considered separate and not part of a coherent whole.

In what follows our project is to provide this unified account of development and, in particular, the role of the fundamental value of the freedom of association and the institution of collective bargaining within that structure of thought. It is worth noting that this opportunity to undertake this fundamental reevaluation at the end of the millennium occurs not in the same context as the other great moments in history of the ILO. Both in 1919 and in 1946 fundamental rethinking and new insight was forced upon us by the horrific costs inflicted upon the world as a result of the breakdown of international economic and political cooperation. We do not now stand in the shadow of the cataclysm of a world war. Indeed our situation is almost the opposite. We live in a world in which the “triumph of market ” and the “defeat of communism” constitute the dominant features of our political landscape. Perhaps it is because of the end of basic ideological conflict that we are, however, at a moment when the foundations of market capitalism are available to be examined, clearly, unobscured by the fog of the old ideological debate and illuminated by the bright light of globalization. Thus, as the developing world continues to struggle with marginalization, as developments in Russia continue to perplex, following the Asian crisis, and defeat of the MAI, and after recent events in Seattle, we are being forced and are offered the opportunity to clarify our thinking about the nature and the relationship of social, political, and economic institutions.

What then is the deep, unified, understanding which is implicit in the developments we see all around us at the turn of the millennium? What is the deep understanding of the normative claims contained in the Preamble to the Declaration? More specifically, how do the fundamental principles of freedom of association and collective bargaining cohere with that unified understanding?

We can begin with the familiar observation that the values of freedom of association and collective bargaining have found repeated global acceptance and reaffirmation in the fundamental international instruments of this century. And they have found recent expression in international documents emanating from Copenhagen, from Singapore and in the ILO Declaration itself. This repeated declaration of allegiance and fidelity to the notion of the freedom of association is not just a political judgment, but an affirmation of reality. This is because association is radically basic to not just humans, but humanness. Humans are social animals, not just in the sociological and political sense, and not just as a matter of fact or as a matter of value judgment, but essentially. The basic institutions of humanity are such as they are not available to just one person. Language, for example, is of necessity a public and social institution. So too, are markets. To say that it is a good thing that people are social is rather like saying that it is a good thing that they breathe oxygen. To say human association is a good thing is rather like saying that it is a good thing that the earth's atmosphere contains oxygen. Association is not just a fact which happens to be true, nor an aspect of the desirable, it is a condition of our humanity. If we could completely eliminate association, we would not be human.

But freedom of association, is not only constitutive of the essence of humanity, it has as an aspect of freedom in general, the deepest normative salience for humans. This is a truth Nobel Laureate Amartya Sen has made so clear.4

The significance of Sen's contribution lies in its articulation of a deep and unified foundation for an integrated view of human progress and development. In Sen's view human freedom is both the end of, and a crucial set of means to, human development. It is the destination and the way. Development is the very

4 Sen, Development As Freedom (1999). Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 8 process of expanding the real that people have. Our goal is not the construction of markets, global integration, nor macroeconomic stability, or increasing of GDP per head, nor the creation of an International Labour Code, for their own sake, but rather in the name of expanding capabilities for people to live longer, better, meaningful and productive lives. This is a substantive view of freedom which views freedom as the real “capability” to lead lives “we have reason to value”. The process of development is the process of removing obstacles to this real human freedom.

As Sen points out, obstacles to human freedom come in a variety of forms:

Sometimes the lack of substantive freedoms relates directly to economic poverty, which robs people of the freedom to satisfy hunger, or to achieve sufficient nutrition, or to obtain remedies for treatable illnesses, or the opportunity to be adequately clothed or, sheltered, or to enjoy clean water or sanitary facilities. In other cases, the unfreedom links closely to the lack of public facilities and social care, such as the absence of epidemiological programmes, or of organized arrangements for or educational facilities, or of effective institutions for the maintenance of local peace and order. In still other cases, the violation of freedom results directly from a denial of political and civil by authoritarian regimes and from imposed restrictions on the freedom to participation in the social, political and economic life of the community.5

Our fundamental project is the removal of obstacles to human freedom so conceived. This is the point of our public policy both domestically and globally. This is the one foundation stone of our normative architecture.

Sen's great achievement lies in his demand that we begin our thinking about development in human progress at the beginning - by sorting out our important goals from the means we use to achieve them. This is a basic and important point. It is unfortunately all too common in human history for social and political systems to take on a life of their own, detached from the ends they were initially constructed to advance, serving in the end and sometimes terrifyingly so, only their own internal demands. Sen's starting point is required to break out of the dead end of such self-serving ideologies. As Sen puts it,

If freedom is what development advances, then there is a major argument for concentrating on that overarching objective, rather than on some particular means, or some specially chosen list of instruments. Viewing development in terms of expanding substantive freedoms directs attention to the ends that make development important, rather than merely to some of the means that inter alia, play a prominent part in the process.6

But Sen's accomplishment is still greater. Not only does he remind us of our fundamental goal of removing sources of unfreedom, but he observes that human freedom is itself a means to the goal of human freedom and that there are interconnections - mutually reinforcing interconnections - between different sorts of human freedoms. That is, while “what people can positively achieve is influenced by economic opportunities, political liberties, social powers, and the enabling conditions of good health, basic education

5 Sen, Development As Freedom p. 4.

6 Sen, Development As Freedom p. 3. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 9 and the encouragement and cultivation of initiatives ...”, it is also true that “the institutional arrangements for these opportunities are also influenced by the exercise of people's freedoms, through the to participate in social choice and in the making of public decisions that impel the progress of these opportunities.”7

So, for example, Political freedoms (in the form of free speech and elections) help to promote economic security. Social opportunities (in the form of education and health facilities) facilitate economic participation. Economic facilities (in the form of opportunities for participation in trade and production) can help to generate personal abundance as well as public resources for social facilities. Freedoms of different kinds can strengthen one another.8

This is not a view which is in any way antithetical to the value of market ordering of human affairs, and it would be indeed strange if a theory of freedom were so. Rather, it is a unified view which urges us to see free markets as part of the goal of expanding human capacities in general, and as an important means to that end. It is, in fact, a vital reminder of the moral foundations of markets - of the core values on which they are constructed and which they serve. Markets are the often defended in terms of their consequences. On our view there is a common grounding for economic policies and social policies, which is prior to their consequences and rests on the inherent value of human freedom. The economic and the social stand in common cause, not in autonomous realms. They cohere in support of our overall objective, they do not stand in contradiction. We do not have a strategic or pragmatic problem in balancing our fundamental objectives and they are not to be sequenced or traded off. The relationship between the economic and the social is not a zero sum game, because they are one.

This does not mean that the project of expanding human freedom is a simple one, or that complex empirical questions and policy judgments of how best to structure institutions and allocate scarce resources are solved. Our unified view does not solve our problems - it lets us understand them. [We cannot solve our problems unless we understand them.] What our view does is help us see clearly what we are doing when we engage our overall project. This is because this view provides a fixed star in our normative firmament without which there is no method of evaluating policies, either in terms of process or of result, and no way of ascertaining when our means have become self-fulfilling and detached from their true purpose. This normative framework will not provide a map for policy design - a highly unlikely possibility given the embeddedness of our social and economic institution in different histories, cultures and geographies - but it does provide the compass.

With this compass we are able to avoid asking the wrong questions, to avoid taking epiphenomena as our central problems, to see the rich interconnections of social and economic structures and to sort out our priorities. For example, the literature on development has spent much time addressing the relationship between democratic freedoms and economic growth. These empirical studies have yielded mixed results with some finding that promotes, other that it reduces, and others that it has not statistically significant impact on economic growth. Leaving aside an assessment of these studies on their own terms, our important point is that on the integrated view, their problem lies not in their statistical disagreement or lack of empirical clarity, but in the conceptual confusion contained in the question. They seek to answer the question posed by these studies is possible only if we have lost our compass. The question, as a result,

7 Sen Development As Freedom p. 5.

8 Sen, Development as Freedom p. 11. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 10 misses several crucial points. First, it focuses upon the wrong dependent variable - economic growth - which is a means to our overarching end. Second, it misses the point that democratic freedoms are in and of themselves constitutive parts of our goal. Their importance is not vindicated only by their contribution to economic progress. Finally, those who ask this question in this manner have forgotten the most basic point about the significance of market institutions. To focus solely upon the consequence of markets expressed in terms of efficiency outcomes is to miss their foundational normative significance - to fail to see that market freedom is a dimension of human freedom. The fundamental defence of markets rests upon human autonomy and . Preferences not generated in circumstances of human freedom are not expressions of human autonomy and carry no normative weight whatsoever. Any calculation social policy calculation based upon this input is built upon normative sand.9

It is in this light that we can best understand the identification of the core labour rights singled out, identified, and affirmed in the ILO Declaration. This is not a random selection of subjects of interest to the ILO. They have an internal rationality when considered as a whole, and this can only be appreciated in light of our overarching goal of expanding real human capabilities and removing obstacles to human freedom. The fundamental rights of freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced or compulsory labour, the effective of the abolition of , and the elimination of discrimination in respect of employment and occupation, are importantly understood as seeking to establish the basic conditions of labour market exchange on conditions of freedom. They are concrete expressions of the normative foundations of the most basic values forming the bedrock of economic theory and market ordering - human autonomy and freedom. [This is unquestionably the case regarding forced and compulsory labour, child labour and the elimination of discrimination. In some circles freedom of association and collective bargaining will be viewed more critically as potentially serving to interfere with human liberty as well as promote it. This view is discussed below.] These basic human rights and market ordering share the same normative space.

There is a deep complementarity between market ordering, the ILO Declaration, and human and social development. But this is because they are identified and coherently brought under the overarching value identified by our normative compass that is in virtue of their constitutive contribution to ensuring human freedom directly, and their instrumental role in advancing the cause of other human freedoms.

The core labour rights represent the most basic level of freedom of association - the ability to enter the labour market on terms of freedom. A freedom based perspective demands that we focus upon this truth, something which theories of development which focus only upon outcomes often overlook. The fixed star of on our overarching goal also forces us to recognize that as important as true market freedoms are, both as ends and means, other economic, social and political freedoms play crucial roles in enhancing the lives that people are able to lead.10 To truly take freedom seriously we must, as Sen says, take it as a social commitment.

There is another and broader dimension to this discussion of the link between economic growth and democracy. It might be argued that if within a non-democratic, authoritarian regime the core labour rights were respected, we could then ask our question about the relationship between efficiency and democracy, Leaving aside the point already addressed that this misses the overall objective of advancing human

9 M. Friedman, Capitalism and Freedom (Chicago, 1982).

10 In particular, it is necessary to pay attention to what Sen identifies as five other types of freedom: political freedoms, economic facilities, social opportunities, transparency guarantees, and protective security. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 11 freedom and undervalues the constitutive value of democratic freedom itself, it still reveals deeply flawed thinking about the ways in which markets are significant enhancers of human freedom. The basic normative questions relevant to market ordering go beyond those addressed to the legitimacy of any individual bargain within the domain of the market. The questions raised involve the question of market domain itself. The connections between political freedoms and economic arrangements are much more complex than simply solving for non-coercive forces within the marketplace. The relationship between market ordering and political freedoms is more far reaching. Market freedoms are an aspect of human freedom, but whether there is a market in health care, in education, in human embryos, in public office, in basic necessities, in social roles, are questions of political and institutional arrangements which are not answerable within the bounds of economic theory. These are questions about markets. They are questions about when to deploy markets as institutions to enhance human freedom. It is necessarily the case that these questions about when to deploy markets are not answerable solely from within market theory. Moreover, the rich differentiation and actual instantiations of market policies, labour market policies in particular, in democratic nations reveal a rich variety of political choices to be confronted. These are choices which not only which have to be made - but which are, more profoundly, simply made available or not made available as choices, in light of social, economic, cultural historical factors. There is no reason to give credence to preferences or choices on such issues constructed or imposed by authoritarian regimes. Assessments of economic choices made in such circumstances - taking them at face value - is to ignore our fundamental reasons for taking preferences seriously in the first place. Freedom, and democratic rights of association, are critical not only to choices in the marketplace, but to choices about the marketplace itself. Freedom of association is, then, on our view both an end in itself as a constitutive human freedom and interconnected with the provision and structure of other freedoms and social arrangements which promote them.

It is in this light that we should understand the well observed phenomenon that in fact within authoritarian regimes there seldom exist the full set of fundamental freedoms set out in the Declaration, especially freedom of association and collective bargaining. This has been because there is a real connection between what is called “horizontal” freedom among members of a society and “vertical” freedom between citizens and the state. This is the lesson of Vaclav Havel's parable of the shopkeeper who puts up a slogan congenial to the authoritarian in his shop window,11 and well explained by Hirschman,

Horizontal voice is a necessary precondition for the mobilization of vertical voice. It is the earmark of the more frightful authoritarian regimes that they suppress not only vertical voice - any ordinary tyranny does that - but horizontal voice as well. The suppression of horizontal voice is generally the side effect of the terrorist methods used openly by such regimes in dealing with its real and imagined enemies. For once, this side effective is intended: it is greatly welcomed by regimes who hope to gain in power and stability by thus converting citizens into isolated, wholly private, and narrowly self-centred individuals.12

Havel's and Hirschman's lesson is that, as is well known, self-interested atomistic behaviour can under-produce the socially optimal because authoritarian regimes can successfully divide and conquer by pitting individual citizens competitively against one another. Here co-operation and association was and is required to break the die of oppression and unfreedom. But how do we know that collective action - co- operation among individuals - is required here - is a “good” thing? Does not market theory predict

11 V. Havel, “The Power of the Powerless” in Living in Truth (Faber, 1987).

12 Hirschman, “Exit and Voice: An Expanding Sphere of Influence” in Rival Views of Market Society (Harvard, 1992) 82. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 12 collusion will lead to suboptimal results?13 The real reason we know the answer is that we have an independent and external criteria for normative judgment. This is what is always required in our judging of human institutions, and this is what the unified view provides. Our normative touchstone, our compass, is that we understand our project to be that of removing obstacles to real human freedom conceived of as the capability to lead lives we have reason to value. With this compass in hand we are at last equipped to assess our institutions in correct perspective, and much more likely to be able to plot the complex interrelationships of various freedoms and social and political arrangements. It enables us to know when and on what general terms co-operation or may be required.

These general reflections lead naturally to a more detailed consideration of freedom of association, and, in particular, the effective of the recognition of the right to collective bargaining. There is a natural link between the core labour rights in general, conceived of as a set with a unifying rationality, freedom of association as a fundamental political ideal, and freedom of association expressed as the right to collective bargaining. But the lesson of Havel and Hirschman is critical here. Judgments about when both competition and co-operation are beneficial is always a judgment to be informed by our overarching goal.

Increasing economic integration clearly poses new challenges for the right of freedom of association and the effective of recognition of the right to collective bargaining. These new pressures are complex and expressed in contradicting metaphors of integration and, at the same time, disintegration. The language of global economic integration is one of broadening, of expanding, of the need to attend to less partial, less parochial factors. It invokes the image of homogenizing global forces which pull us towards common and broadbased solutions. But the metaphor of disintegration is equally relevant and finds it expression in the images of fragmentation of traditional patterns of long term employment, of the splintering workers groups by the politics of gender, race, etc., of the rise of new and difficult to organize sectors of the economy, of increased marginalization of workers in the developing world, of the informal sector, and in the realization that traditional methods of regulation are inadequate and that domestic sovereignty is fractured and inadequate. These difficulties for effective recognition of the right to collective bargaining in this context are discussed below [by someone else].

Our questions here are more fundamental. Even if we accept the value of human freedom and the general political value of freedom of association, what is the normative salience of freedom of association connected to the right to collective bargaining which would underwrite the declarations' dedication to effective recognition of that right? We are not here concerned with any of the more particular questions about the rich variations in actual structures or levels of collective bargaining, rather with the effective recognition of the right to collective bargaining considered at the level of fundamental right and principle. Nevertheless, at this level any society must be able to provide, and the ILO must be able to provide, a justification for its answer to the question whether it should oppose, tolerate, or protect freedom of people engaged in productive activity to associate collectively in order to bargain about the terms upon which that productive activity will take place. The Declaration stakes itself to the principle of freedom of association, not just in the abstract, as we have discussed, but in this particular fundamental instantiation at the core of the ILO's historical mandate. There is a constitutional commitment to its effective recognition.

Under our overarching understanding of the Declaration's commitments our understanding of freedom of association of collective bargaining lies, again, in seeing their contribution as a constituent element of human freedom, and also in the complex interactions of these rights with other human freedoms

13 It is no use here to revert to technical discussions of “public goods” in an effort to find an answer within the confines of economic theory, because we will need still to distinguish between public and public “bads”. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 13 and the provision of social arrangements conducive to the production of, and removal of obstacles to, human freedom.

At its most elemental level freedom of association by those engaged in productive activity is simply a particular instantiation of the general human freedom to associate. Freedom of bargaining is also an elemental freedom and as such a constituent element of human freedom. At a most basic level then, there is a straightforward case for our commitment under our overarching goal to the promotion of association and bargaining. Objections to collective bargaining do not, for the most part, focus upon association and bargaining as expressions of fundamental human freedom, but rather upon consequences, especially in terms of efficiency. The neo-classical view of collective bargaining is as a zero sum game, in which unions constitute a monopolistic device for raising wages above the market clearly equilibrium level, reducing efficiency and output. Much the same market meddling view is taken of other aspects of labour regulation as well. This monopoly view has, however, been the subject of extensive theoretical and empirical study for some time. In fact the impact of unions upon organized firms is now recognized as more complex and dynamic than the monopoly view suggests. The productivity and efficiency enhancing impacts of unions are significant and offset increase costs in many cases. But this consequential defence of collective bargaining, while significant, misses the point to which our unified view of the Declaration, and our basic normative compass directs us - that is, the question of human freedom. The mechanism by which unions produce these efficiency gains is widely viewed to be through the device of the exercise of another freedom - what Albert O. Hirschman famously identified as “voice”, as opposed to “exit”. Voice is primarily understood as the political alternative to the market mechanism of exit and is the key to understanding the non- instrumental conception of collective bargaining as a form of democracy. Of course, it would be a mistake to equate voice solely with freedom. Both exit and voice are “complimentary ingredients of democratic freedom”.14 But collective exercise of democratic voice is at the core of human freedom in the modern world.

The question of whether a model of individuals exercising individual choice and exit the marketplace, or whether a model collective and cooperative use of voice is to be preferred, is as always a question which can only be answered in light of whether it promotes our overarching goal - the enhancement of human freedom. This is the best understanding of traditional defences in collective bargaining in terms of “unequal bargaining power.” Assertions of unequal bargaining powers are not meant to be statements within the discipline of economics or internal to our conception of markets. Rather it is meant to be a provocative critique and pointing out of the limitations of, in some circumstances, individual exercise of choice and exit. This is the method necessary to understand the plight of Havel's isolated and alienated shopkeeper. Whether collective voice is required, or whether collusion is to be prohibited, can only be determined by reference to an external normative touchstone. Where some analysts will see, correctly, a well ordered private market, others will see, correctly, a collective action problem. The question of which mode of analysis is correct cannot be, conceptually, determined by the intellectual resources available, internally, to either view. These debates are not answerable from within the limited resources of their own analytics, but only by reference to a substantive normative commitment. The overarching normative commitment of the Declaration is that free association and collective bargaining are, and have been, significant enhancers of human freedom. The democratic process of self-organization, institution building and maintenance, democratic determination of bargaining priorities, are simply exercises in democratic freedom that no employer no matter how benevolent can bestow. The ongoing processes of self government cannot, by definition, be imposed or provided by others.

14 Hirschman, “Exit and Voice: An Expanding Sphere of Influence” supra note 12. Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 14

The significance of free association and collective bargaining by workers has also, as our view would predict, complex interconnections with other freedoms and social arrangements bearing out its significance not simply as a freedom in and of itself, but as a means to other freedoms and societal arrangements. Recently available analyses of the differential responses of various nations to the Asian financial crisis by Lee15 and Rodrick 16 point to complex preventive and curative roles played by organized labour. In part these studies bear out the logic of one of Sen's famous observations - that famines do not occur in . But these studies go further in their observations about the roles of unions and collective bargaining as part of a larger story about the role of democratic institutions in general in our understanding of both the causes of and the reaction to, significant financial disruptions.

Moreover, the complex interplay of the various human freedoms in general and freedom of association and the right to collective bargaining in particular, is increasingly understood not simply in their relevance to traumatic economic disruptions, but to the evolutionary process of development itself. At the heart of this new appreciation, increasingly and explicitly articulated by the Bretton Woods and other international and global institutions, is the idea that free human participation is both an end in itself and important means to securing sustainable progress. The robustness of the connections between participation, freedom of association, the existence of free and viable trade unions, on the one hand, and development, is comprehensive and multifaceted. Unions and institutions of collective representation are increasingly seen and understood not just as institutions dedicated to their express articulated goals, but having general and beneficial side effects which have been identified and analyzed for the number of analytical perspectives. Foremost among these would be the increased appreciation of the role of institutions and in particular institutions of conflict management. As Rodrick puts it:

Healthy societies have a range of institutions which make ... colossal coordination failures less likely. The rule of , the high-quality judiciary, representative political institutions, free elections, independent trade unions, social partnerships, institutionalized representation of minority groups and social insurance are examples of such institutions. What makes these arrangements function is institutions of conflict management is that they entail a double “commitment technology”: they warn the potential “winners” of social conflict that their gains will be limited, and they assure the “losers” that they will not be expropriated. They intend to increase the incentives for social groups to cooperate by reducing the payoff to socially uncooperative strategies.17nn

In connection, trade unions and the institutions of collective bargaining are also understood as prime sites, and at the same time generators, of “social capital”, are “”. Finally and more comprehensive is the understanding of participation as an essential element of sustainable development. If development is viewed as a “transformation” of society then participatory processes are important on an number of dimensions, and in complex interconnected ways.18 The core insight is that development

15 Lee, The Asian Financial Crisis (ILO 1998).

16 Rodrick, The New Global Economy and Developing Countries: Making Openness Work (Overseas Development Council, 1999)

17 Dantni Rodrick, “Institutions for High-Quality Growth: What They Are and How to Acquire Them”, IMF Conference on Second General Reforms (November 1999) p. 8.

18 Stiglitz, “Participation and Development: Perspectives from the Comprehensive Development Framework” (February 27, 1999). Freedom of Association and the Effective Recognition of the Right to Collective Bargaining: A Reflection upon our Fundamental Commitments 15 involves at its core a transformation in the way people think about change and human agency. In this perspective, participation and voice not only legitimize policy decisions by securing the consent of the governed, not only make them more durable by securing the political “buy-in”of those who will live by them, but is essential to the very idea of development understood as a “transformation”. This sort of transformation of a society in its orientation to the world is definitionally only possible with the participation of the members of that society.

The empirical data continues to mount to confirm our deep and long held intuition that justice and freedom are not the enemies of economic development and social progress. Freedom of association and the effective recognition of the right to collective bargaining are now increasingly confirmed not only as valuable aspects of human freedom in and of themselves, but as contributing in complex ways, perhaps not of all which we yet understand, to the reinforcement of other human freedoms and to a world which is both the result of, and the necessary precondition to, real human freedom.

The deep truth of Sen's insight is increasingly clear and widely accepted - “the overall achievements of the market are deeply contingent of political and social arrangements”.19

The Declaration, and its commitment to the fundamental principles and rights in general, and to freedom of association and collective bargaining in particular, is best understood as expressing the ILO's overarching commitment to human freedom. This is a comprehensive expression of the ILO's core belief that “labour is not a commodity”. But this unifying overarching view also expresses a “new global ethic”20 which informs not only the ILO's self-understanding of its role and mandate, but sees it as increasingly coherent with the self-understandings, mandates, and programmes of other global institutions. One of the significant advantages of this view will be to affirm that debates about a “new international financial architecture” and “new international social architecture”, will have to be seen as an express in a more coherent call for what may be called a “new international normative architecture”.

It is this understanding of the rights of freedom of association and collective bargaining which underlies this Global Report's dynamic assessment of these fundamental rights, and which informs its judgments about how best to advance their cause.

19 Sen, Development As Freedom 142.

20 Human Development Report 1999 (UNDP) p. 97.