Lidia Greco - Industrial Redundancies: A Comparative Analysis of the Chemical and Clothing Industries in the UK and Italy

A comparative analysis of the chemical and clothing industries in the UK and Italy

Lidia Greco
University of Lecce, Italy
and
Employment Research Centre
Trinity College, Dublin

First published 2002 by Ashgate Publishing

Reissued 2018 by Routledge
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Copyright Lidia Greco 2002

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A Library of Congress record exists under LC control number: 2002024925

ISBN 13: 978-1-138-73565-1 (hbk)
ISBN 13: 978-1-315-18386-2 (ebk)

This book has its immediate origins in the research that I conducted for my Ph.D. in the Department of Geography at the University of Durham during the period 1997-2000. It is a study about industrial and employment change over space. It examines processes of redundancies and restructuring in the chemical and clothing sectors of two industrial areas, Teesside (UK) and Brindisi (Italy) and seeks to explain why they occur in the way they do.

It became clear to me, as I was exploring these issues, that the central theoretical and methodological apparatus of mainstream economistic literature on such phenomena was inadequate. The conceptualisation of redundancies in terms of economic rationality and market competition simply failed to consider the particular nature of the wage relation and the unique manner in which companies assess situations and set objectives to pursue profitability. It is claimed, in fact, that it is the rigidity of the cost of labour and the institutional regulation of the employment relation which compromize the competitive nature of the labour market and force companies to adjust to adverse market conditions by reducing employment rather than real wages. Similarly, from a methodological perspective, the emphasis placed on economic factors alone implied the uniformity of adjustment patterns and their mono-causal determinants.

The limits of orthodox theory, unable to explain the crisis of the traditional model of waged labour as well as to propose effective policy prescriptions, suggested to reflect on the evolution of capitalist economies and institutional change, that is, the change of social forms that provide a stable framework to economic behaviour and activities. The work adopts therefore an institutionalist perspective; its contribution lies in an understanding of the extent and manner in which processes of restructuring and redundancies are shaped and mediated by specific institutions and the processes through which they take place. It has put the wage relation and institutions that regulate it at the centre of analysis. In accordance with the insights of pioneer old institutionalists such as Veblen, Commons and Clark, it has assumed that the quality of labour and its contribution to production are not reducible to the labour contract and, therefore, cannot be subjected exclusively to monetary exchange. It follows that the formal and informal institutions of labour, a reflection of wider societal arrangements, constitute the critical factors for explaining corporate performance and change. They influence the pursuit of profitability and efficiency as they affect the definition of what is rational according to a specific institutional configuration and compatible with the values that a given society considers socially and economically legitimate. Redundancies and restructuring come to be conceptualised as institutionally constructed processes and, as such, geographically situated. In other words, besides the causes of different nature that lead to restructuring and redundancies, such an approach allows us to account for the institutional framework that governs the relationships between capital and labour and, therefore, the evolution of economic processes in the contemporary phase of capitalist development. Furthermore, it does not simply allow us to acknowledge the salience of institutional configuration on restructuring and redundancies but, more importantly, it helps to explain such processes in the light of the changing societal values that guide economic action. This work does not offer a theory of institutions; it rather seeks to contribute to a conceptualisation of industrial unemployment which is sensitive to the complexity of this phenomenon, to the role of agency and to the inherently geographical nature of processes of industrial and employment change. These are precisely the dimensions that conventional economic analyses do not explain. Two important implications can be drawn from the analysis. First, it allows us to transcend the debate that, in the last two decades, has revolved around the dichotomy rigidity versus flexibility. By the end of the work it will be apparent that the emphasis of this debate is misplaced and concretely misleading. It is misplaced because the key issue for industrial unemployment and restructuring relates to the regulatory solutions that allow certain economic and labour performances to be consistent with the values of a given society. It is misleading because deregulation does not necessarily enhance the free working of productive and market forces; it surely moves the problem of industrial unemployment (the problem of labour) from a collective to an individual level. Second, this perspective puts the theme of the social value attributed to labour back into the theoretical and political debate. The willingness to consider the cost of labour as a variable rather than a fixed cost of production raises questions about new ways of reproducing labour.

The work behind this book has benefited from the help and presence of numerous people that I wish to thank. My gratitude is primarily for Ash Amin and Ray Hudson, my supervisors in Durham, whose critical insights have helped me to refine the theme of this research. Many thanks also to Jamie Peck, and especially to Franco Chiarello and David Sadler for their guidance and encouragement in undertaking the publication of this work. Obviously, it could not have succeeded without the co-operation of the people of Teesside and Brindisi who have been involved in the research. They offered me their help by answering my queries and providing data; their standpoints have been of great value for the work. In Durham, in the Department of Geography, I found a friendly and collaborative environment that has been extremely important in the development of my research; I fondly recall especially Javier Pineda to whom I owe a lot. I would like also to mention Undala Alam and Tariq Elamin Bakheit for their sincere affection over the years. Finally, my thanks go to the editor Valerie Rose and to the Ashgate staff for their professional support.