The political economy of forced labour

‘Confronting Root Causes: Forced Labour in Global Supply Chains’, a new report that call for innovative approaches to tackle forced labour in global supply chains is published today. The first chapter of the report is republished here.

It is by now widely recognised that effectively tackling forced labour in the global economy means addressing its ‘root causes’. Policymakers, business leaders and civil society organisations all routinely call for interventions that do so. Yet what exactly are these root causes? And how do they operate?

The two most commonly given answers are ‘poverty’ and ‘globalisation’. Although each may be foundational to forced labour, both terms are typically used in nebulous, catch-all ways that serve more as excuses than explanations. Both encompass and obscure a web of decisions and processes that maintain an unjust status quo, while being used as euphemisms for deeper socio-economic structures that lie at the core of the capitalist global economy.

The question thus becomes: exactly which aspects of poverty and globalisation are responsible for the endemic labour exploitation frequently described with the terms forced labour, human trafficking or modern slavery? Which global economic processes ensure a constant and low-cost supply of highly exploitable and coerced workers? And which dynamics trigger a demand among businesses for their exploitation, making it possible for them to profit from it?

This 12-part report is an attempt to answer these questions in a rigorous yet accessible way. With it, we hope to provide policymakers, journalists, scholars and activists with a road map for understanding the political economy of forced labour in today’s ‘global value chain (GVC) world’.

The Beyond Trafficking and Slavery study

Why is this important? First, because although awareness is growing that exploitation is structural – in the sense that systemic forces underpin the fact that some people are exploited while others are not – little has been done to explain how these forces operate, what causes them, or why they have not yet been overcome.

Second, while calls to address root causes are now commonplace, there remains a distinct lack of discussion about what precisely doing so should entail. This poses huge problems for policy-makers and activists, because if we cannot understand the issues we face, we are limited in what we can do about them. We are also more likely to mistake symptoms for causes, wasting precious resources on treating the former without ever achieving real gains on the latter.

Indeed, millions are spent every year on efforts to prevent forced labour. Yet that expenditure often amounts to little, since most policymakers and activists lack a comprehensive theory to guide their actions. This deficit causes them to shy away from pushing for bigger and more politicised change, instead favouring small-scale, isolated interventions that can be marketed as concrete and measurable ‘wins’. The resulting programmes are often like Band-Aids which have minimal impact on existing structures of power within the global economic system. Worse still, they often do more harm than good to the people they are supposed to be helping.

What do we mean by forced labour?

This report uses a broader definition of ‘forced labour’ than the standard international definition discussed in the next chapter. We include work brought about by physical, psychological or economic coercion and recognise that, despite lacking the alternatives needed to defend against such coercion, workers’ frequently retain and exhibit agency when entering into coercive labour relations.

It is time for policy and activism to address these failings, to confront the root causes of severe exploitation, and to do so in a systemic and informed fashion. With the hope of sparking a conversation that will help them do this, we have drawn together existing research on the political economy of forced labour in GVCs to provide an overview of its root causes. Our source material has been gathered from across a range of academic disciplines and includes country and industry-specific cases, ethnographic investigations, statistical studies and relevant non-academic data. We also draw upon the canon of historical and theoretical work accounting for forced labour in the modern economy.

The picture of forced labour that we present in this report departs markedly from prevailing discussions of modern slavery. Much recent analysis tends to conceptualise the deepening and expansion of markets as the solution to forced labour. By contrast, we see the problem of forced labour as intrinsically linked to core dynamics of the global economy. Soaring levels of inequality, indecent work, concentrations of corporate power and ownership, shifting legal and governance regimes – these are all factors that render workers increasingly unprotected in the face of ever-harsher market forces.

What do we mean by political economy?

Political economy refers to the underlying social and political mechanisms and principles that structure systems of social organisation. These are the girders and tent poles propping up and giving shape to our everyday lives. Structures that matter for this discussion include race, gender, caste, legal systems, and the market economy.

The study of political economy is the study of these structures. It examines the ‘rules of the game’, rather the actions of any individual player. It is also the study of power and its unequal distribution, specifically the power to affect the shape of the global economy. Today the actors with the power to do that include major corporations and industry bodies, as well as politicians, governments and inter-governmental organisations

Overview of the report

The report is organised around a metaphor – the classical economic metaphor of ‘supply and demand’. Within mainstream economic theory, the price of any particular good is not determined by the individuals who buy and sell it. Instead, the price results from a system-wide balance between how much of it is available in the world (supply) and how many people want it, how badly (demand). The price goes up as supply decreases or as demand increases, and down if the opposite applies. This is a useful way of thinking about forced labour. Rather than a simple consequence of greed or the moral shortcomings of individuals, forced labour in global supply chains is a structural phenomenon that results when predictable, system-wide dynamics intersect to create a supply of highly exploitable workers and a business demand for their labour.

Our report looks at eight of these dynamics: four relating to supply and four relating to demand.

On the supply side, the four dynamics we look at all contribute to creating a pool of workers vulnerable to exploitation. These include:

  • Poverty, which we understand to entail the legally-created deprivation of material and social resources;
  • Discrimination, by which we understand the denial to some people of the rights and status of full personhood, e.g. along lines of race and gender;
  • Limited labour protections, which create pools of unprotected workers outside the remit of state safeguards, who face serious barriers to acting collectively and exerting rights;
  • Restrictive migration regimes, which do the same.

Each of the elements we have chosen to look at on the demand side either create pressure within the market for highly exploitable forms of labour or open up spaces within which that labour can be exploited. All of these dynamics are integral to the nature of global supply chains as they are currently constituted. They include:

  • Concentration of corporate power and ownership, which creates huge downward pressure on working conditions, in part by lowering the share of value available to workers as wages;
  • Outsourcing, which fragments responsibility for labour standards and makes oversight and accountability very difficult;
  • Irresponsible sourcing practices, that put heavy cost and time pressures on suppliers, which can lead to risky practices like unauthorised subcontracting;
  • Governance gaps, which are intentionally created around and within supply chains, opening up spaces for bad practice.

Each of these eight dynamics is dealt with in turn over the subsequent chapters.

Before we take a closer look at these factors, however, we must first lay out the conceptual foundations of our analysis. In the next two chapters, we define key terms and articulate a theory of the concept of freedom. We believe this to be essential both for understanding the root causes of forced labour and for building progressive political responses to them. We also break apart the apolitical history of globalisation, which we argue is a political and historical process designed by and for the powerful, rather than some neutral consequence of autonomous market forces. It is to such theoretical foundations that we now turn.

The full report is available to download here.