This is certainly true in a macro-economic sense, but on a micro-level it may
mean the loss of thousands of jobs in less productive industries, causing seri-
ous personal anxiety and social problems. No wonder then that many govern-
ments have tried to maintain such industries by means of subsidies, protective
tariffs or other forms of intervention. But in these days of trade liberalization,
globalization of the world economy and economic integration in many regions
of the world, such policies are increasingly difficult to sustain. The world is
moving towards a new international division of labour, a process in which
multinational companies are playing a leading role. In this section we will take
a look at the economic and social consequences of this development.
Reich’s new world orderIn his book The Work of Nations. Preparing Ourselves for 21st-century Capitalism,
Reich (1991) prophesies a new world order. The most important objectives for
companies, including multinationals, are to satisfy the market demand and to
make profits. They can potentially save money by moving production
processes elsewhere. This matters very little to the companies themselves, but
it does have an impact on the social structure and prosperity of the individual
countries involved. Those countries that have nothing to offer in international
competition are doomed to lose out badly. First World countries that do not
have a supply of cheap labour will have to concentrate on the production of
other, more specialized products with a high knowledge and capital content.
This will result in an increasing demand for highly educated and creative
people. A problematic social consequence is that Western nations will be con-
fronted with a large surplus of unskilled production workers who cannot
compete against low-cost labour in (ex-)Second and Third World countries. A
proper education for all citizens (and not only the top 25%) is therefore an
absolute prerequisite for future prosperity in any country.
Professional categories in the new world order
Reich distinguishes three professional categories which in global terms cover
three-quarters of the labour force (the remaining part mainly consists of
employees working in agriculture and in the public sector):
1 Routine production services. The traditional example in this category is
the employee who works on the assembly line performing short-cycle, repeti-
tive tasks. However, according to Reich this category also includes the ‘routine
supervisory jobs performed by low- and mid-level managers – foremen, line
managers, clerical supervisors, and section chiefs – involving repetitive checks
on subordinates' work and the enforcement of standard operating procedures’.
It has often been said that in the present and future information age, this type
of work will become far less important. Cynics, however, remind us that many
information-processing jobs fit perfectly into this category. The raw material of
The International Division of Labour 25