From Club to Mission Governance

“We have to define more precisely, and in a language that workers understand, what we want world leaders to do at this time of crisis!” Yasmin Fahimi, newly elected President of the German Trade Union Federation (DGB), wasted no time in getting to the point. Hosting the L7 Summit for the first time, Fahimi used the opportunity to call for practical action. She proposed measures such as shaping the transformation with workers and create suitable jobs in the regions affected by the phase-out of fossil fuels; making vaccines quickly available via licensing to production sites in the global South; fighting inequality via higher wages and more tax justice. The new geopolitical constellation, Fahimi said, makes solidarity and finding socially just solutions for workers around the world all the more urgent.

A total of 40 trade unionists combined practical demands for workers in the Global North and South with broader conceptual reflection during the two-day Summit at Friedrich-Ebert-Stiftung (FES) in May. Marianna Mazzucato, author of The Entrepreneurial State called participants to focus the debate on “how to create value with public purpose at the centre, and how to distribute that value socially.” Rising to the challenges of our times “requires state institutions driven by social missions”, institutions that take economic decision-making out of the exclusive hands of investors and managers.

In practical terms, this would mean bringing workers to the table to shape the transition to a zero-carbon economy from the outset, and to decide on the means for achieving the jointly agreed targets. Transition councils would play an important role in implementing regional development plans, as would national investment banks or public climate funds. Giving workers real decision-making powers would help overcome one of the greatest obstacles to transformation: the lack of trust that workers put in government and business, particularly in the Global South. A new social contract and modus operandi between business, labour and the state are therefore urgently needed. Mazzucato and union leaders called for rules to be set and adhered to. Conditionalities, for example, constitute a key tool to provide the direction of change: setting carbon prices, linking bailout money to clearly measurable climate goals, or awarding public contracts only if collectively agreed wages are paid.

Rebuilding state capacity

Redirecting value creation, creating new markets and setting the rules of the game requires state capacity. The pandemic has taught many societies a hard lesson. After years of slashing public budgets and privatising public services, health systems failed to cope, hospitals were understaffed, employees had no protective equipment. Many states were incapable of providing effective social protection and compensating staff for their loss of income. Hence, a different, longer-term approach is needed that makes funds available and invests in public services, shortens value chains, transcends selfish national interests and puts societies’ needs at the centre of economic activity. This also holds true in light of the current food and energy price crisis following the Russian war on Ukraine. Consequently, the L7 Statement urges “the G7 leaders to do everything it takes to ensure food security, market and financial stability”.

Making value chains and digitalisation work for workers

The question of how to rebuild and reconfigure value chains to meet the needs of working people repeatedly featured on the agenda. On the one hand, a proactive industrial policy was called for to allow more production of goods closer to where they are needed and to reduce dependencies. On the other hand, fairer trade policy and common standards on companies’ social and environmental obligations are needed to restore a level playing field. Hence, the G7 was urged to “seek common ground on internationally accepted, binding human rights due diligence standards”. German Labour Minister Hubertus Heil expressed his intention to improve access to effective remedy and monitoring systems to protect workers’ rights in global value chains more effectively.

Finally, the current crisis must not overshadow the challenges posed by digital transformation. Christina Colclough of The Why Not Lab shared her analysis of human rights abuses by digital companies and the real threat of “labour becoming a commodity” due to the ongoing trends of datafication, business models of digital platforms and surveillance. She urged union leaders to develop skills within the unions to enable them to help administer the algorithmic systems that are increasingly being introduced in companies without proper worker control and often without any rights to access data generated. Colclough also called for the notion of “free flow of data”, as currently being pushed for in the WTO e-commerce negotiations, to be challenged. If agreed, countries would no longer have the legal possibility to set the rules of the game—the complete opposite of the intention of the L7 debate to put value creation back into “social missions” jointly determined by the state, business and workers.