The establishment in 1919 of the International Labour Organization and its secretariat, the International Labour Office, marked the beginning of an important globalization process Ë the establishment of international institution to deal with labour affairs, as well as the dawning consciousness that the very process of globalization would entail profound social changes which such an institution needed to address.¹ The notion that world industrialization and growing international trade required an organized world response was of course nothing new at the beginning of the twentieth century; predecessors to the ILO included the First and Second Workers� International, the International Federation of Trade Unions , and the International Association for Labour Legislation, founded in Basel in 1900. The ILO, however, was the first inter-governmental organization to tackle the problems of world labour, signaling a recognition by most states that global economic processes had indeed reached a point where an international  response was needed. More interestingly, it was recognized that such governance could not just be provided through traditional diplomatic negotiations by representatives of  governments. Rather, the ILO was established on the principle of tripartism, according representation to governments, workers, and employers, and it was to be managed by a Governing Body which recognized the steering function of member states of øchief industrial importance.Ó ²

            There are numerous ways of approaching the history of such a large institution with such a broad mandate. This paper attempts to provide an overview of ILO history by examining the general labour economic paradigms which arose out of the discussion on setting international labour standards, one of the chief functions of the ILO.³ This discussion fell into three distinct phases in the last 80 years which corresponded to changes in world economic paradigms, international relations, and the rising and falling bargaining positions of the various actors involved. Secondly, the paper attempts to chart the bargaining positions of the participants in the dialogue, which included governments, employers, workers, interested commentators from both developing and developed, socialist and liberal nations, and — despite its formal role as the secretariat of such discussions — the International Labour Office itself.

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            The first phase of the development of an international labour paradigm occurred after the founding of the ILO in 1919 until the reestablishment of the world order in 1945. The first heady ten years after the founding of the ILO were marked by the triumph of liberal democracy, set against the rising menace of world socialist revolution. Indeed, one compelling reason for the establishment of the ILO was to create a bulwark against revolutionary socialism. Albert Thomas, the first Director-General, saw the role of the ILO offering a moral alternative to the øjacobinismÓ of  bolshevism, a quasi-religious function which included a ømoral power, comparable to the papacy of the Middle Ages, able to intervene and impose peace in social conflicts€Ó.⁴ Thomas, the French Armaments Minister during World War I, and his assistant, Edward Phelan, a former official of the British Labour Department�s Intelligence Division, were both personally aware of the importance of social peace for national economic efficiency and national defense.

            Despite this immediate political motive for its creation,  it was also clear that the ILO was to be an organization dedicated to the governance of global labour economics. James T. Shotwell, an American delegate to the 1919 Peace Conference, observed that øthe title [of the ILO] was a misnomer. What was created was an international economic organization to deal with labour problems.Ó⁵ Shotwell also noted that there was a ørealization such as has never before existed of the economic interdependence of the various nations and their responsibility one to another for satisfactory labor conditions throughout€Ó.⁶ Indeed, Shotwell, much as John Maynard Keynes had remarked a decade earlier, was well aware of the increasing role of international trade, which had reached unprecedented levels by 1914, in world politics.⁷ The regulation of labour conditions through international labour standards thus had two purposes. The stimulation of international trade was widely-recognized by the ILO�s mostly European founders as the best vehicle for recovery for war-ravaged Europe, and means were sought to ensure that the anticipated competitive race for access to international markets would not result in a race to the bottom of labour standards, alienating millions of workers and possibly driving them into the arms of socialist revolution. On the other hand, international labour agreements would also ensure that nations with lower labour standard would not unfairly profit from this advantage. Thus at its very outset, the poles of the debate which were to define ILO dialogue on globalization were established: labour standards would, as one American economist put it in 1927,  prevent øsweating ø and a ødrift of industries to those places where labour conditions are the poorestÓ. At the same time, however, they would introduce rigidities into the labour market, making it difficult for less developed countries to øadvance industriallyÓ and for øcapitalists to adjust labour standards downwardsÓ.⁸ In other words, standards might act as trade barriers which would prevent developing countries form cultivating their comparative advantage of lower production costs.

            The contours of the early phases of this debate were shaped by a restricted number of actors. ILO membership before 1929 consisted of mostly European and industrially developed countries, governed almost entirely by classically liberal or social-democratic regimes, and represented by a unified government and employer front, seeking to ømaintain world production and to raise it where it has been destroyed.Ó⁹ Workers were mostly organized in a socialist opposition. Characteristic of the workers� position was one attempt at the Paris Peace Conference by the Italian delegation, supported by the workers, to establish a Commission to regulate the distribution of raw materials, seen as an important cause of unemployment.¹⁰ Developing countries at this stage played no significant role in the dialogue, although by 1927 the High Commissioner for India in London attacked European notions about øancient and decadent AsiaÓ which covered up the fact that the region was developing at a rapid pace.¹¹ This foreshadowed later efforts by mostly Asian countries to take themselves out of the paternalistic discussion of colonialism and to cast themselves as rapidly-industrializing players in the global market

            Despite a general alignment between governments and employers in the ILO constituency in the first 15 years, the ILO was able to tackle a number of issues high on the list of worker concerns: the abolition of forced labour, the elimination of child labour, the eight-hour work day and 48-hour work week, the establishment of minimum wage-setting machinery, maternity protection, and the regulation of night work. The primary reason for this success was the continued recognition, especially among European nations, that consensual solutions toward labour problems were øessential conditions of a just peaceÓ and therefore a political peace in Europe as well.¹² Due to this initial success and the growing importance of participation in international bodies for national prestige and power projection, the ILO also grew in  membership. By 1929 the ILO counted several developing countries as members, including China, Japan,  India, Persia, Thailand, and South Africa.

            The rise of fascism and the onset of the Depression in 1929 broke apart the initial optimism of Western powers that social conflict could be averted through the international regulation of  labour and trade. Already in 1923, the ILO was unwilling to discredit the fascist-run Italian Confederazione Nazionale delle Corporazione Sindicali, which had suppressed the free Confedrazione Generale del Lavoro.¹³ In 1927, a discussion about a possible instrument to guarantee freedom of association, supported by workers in Eastern Europe and Asia, foundered on the reticence of Western trade unionists, who feared that it might introduce instability in the market and jeopardize stagnant economic growth in Europe.¹⁴ These two episodes revealed aspects of the ILO�s structure which were to have an impact throughout its dialogue on globalization. The ILO was ultimately beholden to its constituents; if the constituents themselves did not enforce labour standards and accredited trade unions which were not truly representative of workers� interests, the ILO could not do much about it.  Secondly, with the fragile economic situation in Europe throughout the 1920s, the primacy of economic efficiency remained high among Western delegates, including workers sufficiently tied in to corporatist arrangements with employers and governments. 

            This pessimism about the international regulation of labour reflected the general pessimism about the international economic order after 1929. As the world slid into a deep depression, many of the ILO�s founding States sought autarchic means of stabilizing their economy through increased tariffs and the devaluation of currency.¹⁵ With the scaling back of international trade and  the cultivation of primarily domestic markets, the international regulation of labour lost its importance as a guarantor of fair trade, a trend further accelerated by the collapse of the international system, highlighted by the League of Nation�s inability to deal with the Italian invasion of Ethiopia, and the withdrawal of Germany, Italy, and six further Latin American countries from the ILO in the1930s. As states adopted radical Keynesian strategies of demand stimulus in the mid-1930s, only the function of labour standards as guarantor of social peace remained relevant. Thus the organization was able to adopt a number of significant Conventions in the 1930s, including standards on the forty-hour week, paid leave, and unemployment benefits. Yet the willingness to apply these standards remained weak as the world economy foundered throughout the 1930s. Despite the adoption of new Conventions and the joining of further members to the ILO, including the United States and the Soviet Union in 1934, the level of ratification of Conventions leveled off, indicating a decline in interest in promoting these standards.¹⁶ The consolidation of power of fascist regimes in Europe, and the search for corporatist economic solutions in France, Great Britain, Germany, the USA and Sweden led to a nadir in the ILO�s work on labour standards and the virtual disappearance of the dialogue on world trade and the international economy. At the 1936 Conference, workers noted that øthere perhaps has never been in workers� circles€such a feeling of powerlessness, such a feeling that the future holds no more hope.Ó¹⁷ The ILO�s remaining area of interest was employment promotion, and it fully embraced Keynesian ideas of public works and the maintenance of stable wages. Departing from Keynesian orthodoxy, however, the Director-General in 1939 called on member States not to raise trade barriers, expressing the belief that only through a continued encouragement of international trade could employment be stimulated.¹⁸ Thus the discussion of globalization, embraced early after the war by developed nations as a means for reconstruction, was virtually abandoned by 1939 as Europe embraced economic autarchy, trade barriers, and ultimately war. Only the International Labour Office continued to advocate free trade, in combination with Keynesian employment stimulation, as a way out of the economic impasse.

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            World War II nearly extinguished the ILO, as it had the League of Nations. By 1939 most of the Axis countries had withdrawn from the organization, and the complete isolation of the Geneva headquarters forced the organization to flee to Montreal with a skeleton staff in 1940. Despite these hardships, however, the organization continued to survive and hold annual conferences. As the eventual Allied victory became clear, the importance of a regulated international trade based on international labour standards was once again perceived as the foundation for peace and for the reconstruction of war-ravaged economies. At the ILO�s 1944 conference in Philadelphia, Roosevelt�s Secretary of Labor Perkins stated that ø€an orderly and continuous expansion of world trade is an indispensable part of an international programme aimed at the elimination of wantÓ.¹⁹ The ILO was seen as an organization which could ensure fairness in free trade and maintain social peace in a growing and more closely-knit international community. A clear vision was already emerging of what different parties wanted in a new international economy. Women, empowered through their recruitment into the world of work in the wartime industries, sought to be integrated into the world economy and to receive guarantees of equality. European governments maintained that that the post-war world economy should be based on measures adopted in the mid-1930s, including the encouragement of high consumption and public spending, so to maintain high levels of employment at all costs. In a consensus forged by war, governments of both developed and developing countries and employers sought the maximum stimulation of the employment and the maintenance of a strong welfare state to ensure social peace, especially in light of the undetermined role of the Soviet Union after the war. Sweden advocated high wages to stimulate savings; France a semi-controlled economy in order to administer reconstruction; and Poland and  Mexico supported strong social insurance, as provided by ILO Conventions, in order to guarantee social peace.²⁰ Hoping for an era of prosperity and peace which would follow the war, delegates also called for the maximum stimulation of free trade and reduction of trade barriers.²¹

            New participants in this dialogue also added their voices. Colonies, anticipating eventual political independence, sought to ensure economic conditions which would permit them to attain economic independence.  At the same time, the culture of development, launched through the fifth principle of the Atlantic Charter (and later Point Four of Truman�s 1949 inauguration address), held forth the promise that the United States would provide the same economic assistance to the rest of the world as it was anticipating to give to Europe in its reconstruction efforts.²² India, for example,  reminded the Conference that its economy should be developed with assistance of the West so as to øensure that the standards of living of those masses are raised, and that the large body of persons become, as they should be, large consumers of the world�s productive capacity€Ó²³. The entire Indian delegation (government, employers, and workers) suggested that the West provide economic assistance, reduce trade barriers, and loosen international labour standards so as to allow the maximum development of Indian industry. The worker delegate duly reminded the Conference that doing so would ensure that øfifteen hundred million customers are awaiting every one of you.Ó²⁴  Workers in other developing countries raised the socialist anti-colonial banner. A number of Latin American countries suggested that a fair international labour regime could not be ensured until all countries were free of colonial dependency; the workers from Chile, for example, proposed a world economy based on commercial cartels under tripartite management.²⁵ Finally, the United States government staked out its position as a proponent of free trade with labour regulation, drawing on faith-based language which had become the fabric of its visions of a future world economic development: øAn economic order can never, for anyone, be a platter of privileges. It must be regulated through the recognized responsibility of each to make the greatest contribution of which he is capable‹all of which simply comes down to the teaching of Christian civilization that man must live by the sweat of his brow.Ó²⁶ Thus the majority of delegates at the 1944 Conference embraced free trade and a global opening of markets: the developing countries through Western financial assistance, socialist-leaning countries through redistribution of wealth based on international cooperation, and most European countries the creation of strong welfare states. The Declaration of Philadelphia, adopted at the 1944 Conference, consequently contained a mixture of social visions, including the socialist view that ølabour is not a commodityÓ, a Keynesian call for full employment, the developing countries� demand that the world øshare the fruits of progress for allÓ, and free traders� desire for ømeasures to expand production and consumption€and to promote a high and steady volume of international tradeÓ.²⁷ In this respect, the ILO set itself out to be a complement to the Bretton-Woods institutions and the GATT established after the war.

            While expanding world trade was seen as a panacea for post-war reconstruction by nearly all delegates at the 1944 Conference, the rapidly developing Cold War quickly dampened hopes that the post-war era would be one of unrestricted trade and development as the world diffracted into increasingly antagonistic economic models. The hoped-for expansion of international trade did not occur, as trade levels failed to reach those attained in 1913 until the mid-1970s. ²⁸ The West became anchored to a notion of capitalist start-up development, notably espoused by the American economist Walt W. Rostrow, while socialist and non-aligned countries such as Indonesia and Tanzania sought autarchic or øself-reliantÓ economic development models. As the world polarized into the three main blocks (socialist, liberal, and non-aligned) and a large part of the world became closed to free trade, a true dialogue on globalization withered.

             Thus while as late as 1956 the governments of developing countries such as Costa Rica and East European countries such as  Hungary emphasized the importance of universality in labour standards to promote fair trade and to further development, by the early 1960s the discussion of international economic relations transformed itself into a discussion of North-South direct assistance. ²⁹ As a result, international labour standards soon lost their meaning as a mechanism for the efficient functioning of free trade, and took on their role as guarantors of social peace. The West continued to support an active international labour standards regime in order to appease workers at home and as a strategy to undermine Soviet-style communism through the development of a human rights discourse. Western governments and employers touted financial assistance to the developing world with the express aim of developing private enterprise initiatives, a private economy, and assistance in knowledge sharing and technical training.³⁰ Communist countries (worker and employer delegations included) hardened their position that standards were irrelevant until the underlying economic system which caused inequality had been destroyed (although many ratified ILO Conventions in order to diffuse Western criticism on human rights). Developing countries, often under the sway of socialist benefactors, called for greater direct assistance from the West. The government of Mali, for example, in 1968 carefully analyzed its economic problems and poverty, yet did not address any sort of economic paradigm which might result in breaking the impasse other than further Western financial assistance and debt relief.³¹ As the ideological gulf widened, only a handful of developing countries, most notably in Asia, called for further expansion of international trade as a means of economic development.³²

            The Cold War and the predominance of the welfare state model in Europe until the mid- 1970s on one hand killed the discussion of an integrated world trade and labour system yet at the same time favored the expansion the international labour standards system. In the search for liberal labour model to ensure social peace, the ILO adopted a number of significant international labour standards, including Conventions on freedom of association (1948 and 1949), equal remuneration and discrimination (1951 and 1958), forced labour (1957), employment policy (1964), minimum age (1973), and tripartite consultation (1976), attracting over 3,400 ratifications, mostly from developed countries. In 1969, the ILO was awarded the Nobel Peace Prize for its work on behalf of øsocial justiceÓ. The adoption of the New International Economic Order by the United Nations in 1974, which sought to establish a global development program and assure the redistribution of wealth from North to South, the publication of the Dag Hammarskjðld Report (What Now) in 1975, which declared that øthe primacy of economics is overÓ³³, and the declaration of successive United Nations Development Decades anchored the notion of the global welfare state and ensured the ILO a political position which allowed it to greatly expand its vision of social policy. Although such standards had little influence in countries in the Soviet block and were not uniformly enforced, the ILO was confident enough to declare that its Conventions constituted an øinternational labour code.Ó In 1973, the Director-General called for a greater redistribution of world wealth.³⁴ In 1974, the ILO�s Governing Body adopted a Declaration of Principles concerning Multinational Enterprises and Social Policy, which in essence overrode employers� and governments� interest in foreign direct investment by multinational enterprises to address worker concerns that multi-national corporations would exert a downward pressure on wages and conditions of work by shopping around among countries for the lowest working conditions.³⁵ By the mid-1970s, the ILO appeared to reach a peak in its influence and relevance in its role as a guarantor of social peace. In the decade of 1960 and 1970 alone, ILO Conventions received 1,469 ratifications (due in part to new members), the highest rate witnessed in a decade.

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            The ILO thrived from 1950 through the mid-1970s due to growing economies in the industrialized countries, the absence of a highly competitive global market,  and an interest in an organization which upheld liberal labour standards up against socialism. Once again a new phase of thinking about international labour was ushered in by financial collapse. Although not nearly as severe as the Depression, the oil shocks of 1977 and the ensuing recession and unemployment sparked off a re-examination of international labour economic paradigms and the role of the ILO�s labour standards. With the arrival of Hayek-toting conservative governments in Chile, Great Britain, and the United States, and a centrist consensus taking hold in Germany, Sweden and France, dialogue on labour standards rapidly went into the defensive, much like after 1929. This time, rather than searching for public welfare schemes or autarchic solutions, the welfare state was dismantled and unemployment was fought through a search for higher growth rates, the dismantling of protectionist barriers, and the provision of maximum flexibility for employers. The notion that unemployment was even undesirable Ë a central precept in the post-war consensus — was put into question through the development of such concepts as the natural rate of unemployment. In the search for growth, labour standards became a target, and deregulation became the catchword  in the search for greater flexibility. In 1984, the OECD summed up this new attitude by claiming that øthe greater flexibility of the labour market, the lower the economic costs of adjustment: there will be less unemployment and less loss of output.Ó ³⁶ Among developing world countries, the burgeoning notion of øsustainable developmentÓ and the øbasic needsÓ approach also increasingly prioritized growth, structural adjustment, flexibility, and greater accessibility to global markets.³⁷

            Finally, the collapse of communism and the opening of nearly all of the world to a global market ushered in an unprecedented era of true global interaction. With the apparent installation of liberal economic regimes in former Soviet countries, most countries disposed of sufficiently compatible political and economic systems to allow for a rapidly accelerating pace of interconnectedness in economy, finance, communication, migration, and culture. Unlike in the period after World War I and II, however, there was no revolutionary threat which prompted countries to seek accommodation with workers and consensual solutions. Furthermore, the growing openess of Asian markets and newly liberated work forces caused seismic shifts in the migration of workers and relocation of factories, which were mostly embraced by governments and employers as a solution to high unemployment and stagnant growth. Thus while the world backed away from armed conflict, it plunged into a fanatic devotion to the primacy of economics, leading to an era in which questions were raised as to whether international labour standards should play any role in world trade or in the economies of developing countries at all. The international financial institutions, by adopting the so-called Washington consensus in 1990, made economic growth and deregulation prerequisites for their financial assistance packages.³⁸

            The change in economic paradigm affected the constellation of viewpoints on labour standards that had endured between 1950 and the late 1970s. Workers and governments felt anxiety due to the political changes and the ønew industrial revolutionÓ of the digital age, yet embraced structural reform as it appeared to reduce unemployment and spark growth.³⁹ Development was perceived as dead; direct assistance was seen as only producing corruption and state-controlled economic solutions which were doomed to failure. Almost overnight, ILO discourse adopted the catchword øglobal economyÓ and øglobalizationÓ and calls for reduction in trade barriers and foreign direct investment (though multi-national enterprises) instead of financial assistance. The workers of Indonesia and Malaysia, for example, called for further development of their economies through investment and reduction of trade barriers, putting them on the same wavelength which many employers who had long believed that foreign investment and skill training were better alternatives to financial assistance and loans.⁴⁰  Asian governments introduced the concept of øAsian valuesÓ and pancasila as philosophical justifications for greater flexibility. This promise of a free market utopia had an impact on the ILO labour standards regime. During the 1980s, the rate of ratification of ILO Conventions declined by nearly half from the previous decade, and two countries even denounced fundamental Conventions on forced labour.⁴¹ Strategies of upholding labour standards in the face of globalization shifted, as greater economic justifications for labour standards were sought, and, in some cases, concessions were made that economic priorities would be sufficient reason to consider loosening  standards.⁴²

            After the Asian crisis in 1997 revealed the harsh effects of deregulation on societies adopting Washington-consensus policies, the ILO�s Director-General Michel Hansenne outlined the what he perceived as the unique historical position of the world economic paradigm:

            The world of work had entered a truly unprecedented era. While for most of its life the ILO had been dominated by a Western liberal consensus on welfare-state economics and free trade, it now was a more open organization which slowly became the advocate of a managed and controlled globalization process. In 1998, the International Labour Conference adopted the Declaration on Fundamental Principles and Rights at Work, which obliges all ILO member States to respect the principles of freedom of association, equality, and the elimination of forced labour and child labour. It provided for a øfollow-upÓ which was to be promotional and not linked to the regular supervision of the relevant international labour standards. While this instrument has been hailed by some as a victory for the universalization of  fundamental labour standards, providing a sort of labour equivalent to the Universal Declaration of Human Rights, the Declaration was clearly adopted in the context of a discussion of redefining the purpose of labour standards in a rapidly globalizing world. The Declaration was supported by most developed countries, including the United States, which saw the reinforcement of fundamental rights as a means of appeasing workers who feared job displacement and as potential non-tariff trade barriers to goods produced cheaply in foreign countries. Employers also supported the Declaration, but were adamant about the use of the Declaration as a promotional instrument which would not interfere in world trade or be linked to trade negotiations, especially through the World Trade Organization. Workers remained divided on the issue. Workers from the developed world welcomed the Declaration and sought to link it with trade policy, protecting in their view unskilled workers in their home countries. Developing countries decried the øeconomy of terrorÓ which had emerged after 1991, but at the same time recognized øthat the economy is fundamental in this day and ageÓ.⁴⁴ Consequently, the governments and a number of workers from developing countries such as Kenya, Nigeria, Jordan and Bangladesh called for a decoupling of labour standards and trade. For them, the Declaration should be used as an instrument to promote trade with a modest amount of labour regulation, according developing countries their comparative advantage of lower production costs.⁴⁵

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            The discussion of international labour standards and world trade, development, industrialization, and finally øglobalizationÓ marked a significant event in the globalization process itself Ë the institutionalization of a globalization dialogue. Throughout the past 80 years, this discussion has revolved around the Western-liberal question of labour standards as trade barriers and protective measures and has depended heavily on the state of the world economy. The periods from 1919-1929 and 1945-1977 were favorable for the development of the international labour standards system, since they coincided with economic stability, the absence of a competitive global market, and a need for social peace in the face of revolutionary threat. The period from 1929-1945 marked a decline in labour standards but also witnessed the birth of welfare capitalism. Developments after 1980 launched a new direction of labour economic thinking stressing competitiveness and flexibility, not only in terms of labour regulation but in labour economic paradigms. After the 1980s, the Keynesian internationalist consensus was replaced with a much more contested notion of market capitalism. While developed countries initially set the tone and benefited from this new world order, increasing insecurity and backlash against it Ë demonstrated in the populist riots in Seattle in 1999 Ë indicate that the new era is not the full triumph of the Western liberal capitalism, as some commentators have suggested, but rather uncharted waters.⁴⁶ For the workers of the world, this is a crossroads. No longer able to avail themselves to a socialist or welfare-state paradigm, and confronted with a neo-liberal consensus among the many of the world�s  governments and employers, they face the historical challenge of conceptualizing a labour economic paradigm of their own to ensure their stake in the ongoing dialogue on governing globalization.