Too Weak for the Job? the Political Economy of the Social Regulation of the Activities of Multinational Companies: A Brief History of Interconnections Between Regulatory Sources; How They're Changing; And Why It Matters for Workers, Citizens and Their Com

The regulation of work and employment can emanate from market, state, civil society, and family spheres – any field in which social actors mobilize and exercise power and produce norms that govern behaviour at work. Sources and forms of regulation vary over time, highlighting the importance of not fixating on particular historical forms prevailing at a particular time. While there is a strong temptation to overload the notion of market forces with an overriding explanatory power, a long line of literature emphasizes that economic and social relations are rarely externally imposed but are rather socially constructed by actors, embedded in institutions that express actor histories and power in different spheres, and are the subject of constant contention and renegotiation.

This paper seeks to explore this proposition through an historical analysis of the political economy of social regulation of the activities of multinational companies (MNCs). In particular, it develops and seeks to explore three hypotheses about such social regulation.

First, over recent decades, and this is not a new phenomenon, we have witnessed a displacement of sources, sites and modes of social regulation. This has entailed a twofold displacement: a) from the public or state sphere to private actors; b) from universal norms set by the state to more particularized norms as established by less institutionalized actors and subject to new and variable forms of agency.

Second, the rise of MNCs, in their myriad organizational forms, and the redefinition of the role of the state highlight the limits of traditional mechanisms of social regulation in this new context of economic internationalization. National industrial relations actors, particularly unions and the State, justifiably think of the regulation of work and employment in terms of national institutions such as labour law, collective bargaining and social welfare centred on the national state. Yet it is apparent that MNCs and their transnational organization of suppliers and service providers are subject to partial and highly fragmented forms of social regulation, the content of which can vary from one place to another, according to the geography of their investment strategies, the relative strength of local actors and the presence or absence of state capacity. These arrangements are themselves highly volatile. There is no global system of social regulation affecting simultaneously all of the component parts of a global firm and making it responsible for all of its activities and this weakening of traditional forms of social regulation is sparking a rethinking of the nature of such regulation in terms of its instruments and its actors. Policy and legal analysis now identify an important shift in the way that, in the context of globalization, “disaggregated” states (Slaughter 2004) or “decentred” states (Braithewaite and Drahos 2000) entail a continual reweaving of the regulatory framework, thus opening up a sphere for agency and actor contention in the hybridization of public and private forms of regulation (Sassen 1996 and 2006, Picciotto 1997 and 2007, Murray 2012, Locke 2013). The internationalization of the economy and the development of the global firm and its networks are heralding a new social order, in which international social regulation has a more substantive role to play but the nature of which remains to be defined and the requirements for social actors subject to experimentation.

Third, we are argue that it is not possible to grapple with the emerging contours of the complex problems associated with the rise of multinational firms without mapping and better understanding the history of social regulation. There is a need to take account the historical interface between public and private sources of law, on the one hand, and national and international sources of law, on the other. We also argue that it is necessary to make the links between social and other forms of business regulation since some potential solutions to current problems might emerge from our understanding of other forms of business regulation. There is a need to grapple with the historical construction of different types and sources of business and social regulation in an attempt to understand the ebb and flow in this process and, thereby, draw out some of the consequences of this historical analysis. It is also important to enlarge our understanding of actor strategies in this process. It appears that our historical model of social regulation for economic activity tis too weak for the job! Such an approach to social regulation is embedded in the very notion of the firm as a complex set of social relations and the notion of regulation as the relations between actors and their resources and power.