Outsourcing, offshoring and global value chains

This chapter explores how the ideas and practices associated with the disaggregation of large-scale organisations have been used as a direct consequence of dealing with the effects of worker collectivisation in single workplaces. Under high Fordism in the mid-twentieth century, unions enjoyed favourable bargaining positions due to the relative ease with which to recruit and mobilise members. Those employers with some veto power – multinationals – began disaggregating from this point on. Inspired by ‘transaction cost economics’ disaggregation began with outsourcing, then offshoring – thus furthering the difficulties for unions in collectivisation. What emerged were global value chains: international networks of production and consumption where the employer takes advantage of the ‘international division of labour’ – seeking low wages and non-unionised workforces in regimes that have low levels of employment regulation. More recently, following the consequences of these global production relocations and especially after the financial crises of 2008, deindustrialisation has brought a response from those deindustrialised areas. First, the hollowed-out local economies are subject to further race-to-the-bottom innovations under the guise of ‘flexibility’ and ‘agile’ which challenge even the notion of ‘contracts of employment’ as the basis of worker rights. Second, on the other hand, the political backlash, while nativist and xenophobic for the most part, also brings into play challenges to the whole outsourcing model, through movements such as ‘slowbalisation’.